tv U.S. House of Representatives CSPAN May 15, 2012 10:00am-1:00pm EDT
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cars. we need to come up with a fair comparison on cars it. i got through that with the help of a lot of companies including general motors. this is a case like that where we have to work out all the we will get there. it will be early next year when you see this go through the house. host: thank you for coming and talking this morning. guest: thank you for having me. host: that is all for "washington journal." we go now to a live, all-day summit on the u.s. economy. chairman petersen is now speaking. we will be hearing from other folks later on today. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> to partner with president clinton and the foundation.
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to see the breadth and depth of the foundation's agenda and, more to the point, the president's extraordinary grasp of every project is clearly a heat -- is truly a unique experience. how can i failed to master the masterful handlings of the 1990's and end up with impressive growths and more balanced budgets and budget surpluses. mr. president, we are so honored to have you appear. you have appeared at each of our summits. we feel better to interview, a titan of politics, then -- who better to interview you, a titan of politics, then a titan of journalism. tom brokaw, in five decades, as a reporter, it also includes 21
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years of nbc's nightly news. he has interviewed every president since lbj. he helped shined a light on the greatest generation. i consider tom the walter cronkite of his generation. tom, i am sometimes a bit defensive about being born and brought up in nebraska, a population of 9000. that is, i was defensive until i discovered yesterday that you were brought up in webster, s.d., a population of 2000. ladies and gentlemen, president bill clinton and tom brokaw. [applause]
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am i supposed to sit on your lap? >> i do not know. i do not give orders to commander-in-cheese, but i'm happy to do that. i am pleased to be here for what i think is one of the most compelling issues. i think it'll be a defining issue not just for the rest of the election cycle. i am very pleased to have the opportunity to interview president clinton, who comes down here because he cares so deeply about this subject today. i just spent the last three weeks, as we were talking backstage, going around america. i did a series of town halls, the midlantic, eastern seaboard, midwest, southwest, far west. i detected a kind of uniform reaction to what is going on in
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this country. there are massive people of the euro described in the middle who are longing to be led. this is a cross political identification -- pol republicans, democrats, and independents a like. if i were to characterize the town, there is a willingness and a wariness about the political system as it is now constituted, especially in this election year and what we have been through this spring. for the first time in my personal and professional life, i have parents and grandparents coming up to me and saying, i am worried my children will not have the lives that i have had. i have never heard that before, until this past year. i've been trying to get the answer to that. recalibrate in a way. maybe we need to think about the quality of life we are talking about here.
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more economic justice, for example. more tolerance in our society. thinking about how we can raise the level of public service in america and get more people to step into the arena at a time when these decisions are hard to make. this is a kind of backdrop for the issues that bring you all here today, obviously. the deficit, and how we begin to work our way out of it. one year ago you said it would be a mistake, mr. president, to fix the deficit when the economy is so broken. do you still feel that way? >> f yes. i also said we should pass a very tough deficit reduction plan now. and provide for it to trigger when the economy has reached 3/4. i think it would do an enormous amount to deal with the problem you just mentioned. this gnawing sense.
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i remember in my last year as president we had a horrible tornado that hit downtown little rock and destroyed a lot of the oldest neighborhoods. i went down to check it out. afterward, at the airport, i have a barbecue dinner with 20 people that i went to high school with. i think two of them had four- year college degrees and only one of them made more than $40,000, $50,000. i asked them what they were most worried about. even then, there were most worried that retirement would undermine their children's ability to raise their grandchildren. we have had a long recession. and because of the debt. what i would like to see them do is do what simpson bowles said. they said, pass our plan.
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they said, pass our plan and triggered when there is clearly the growth. as soon as there is real growth in this economy, interest rates will go through the roof. the cost of a financing the deficit will be staggering. the private sector will be screaming for affordable credit. if we did it now, people would see that we are a serious country. the american people would feel reassured about it. they might have a way out of the box the have gotten themselves in. you see with the eu and all of these recent elections in the u.k., if you oppose austerity when interest rates are 0% and private demand is non-existent, then revenues will drop more than you can cut spending.
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i was really impressed after these last elections that while the political leaders themselves seemed in transit, ordinary greek citizens would say things like, we know we have to cut these benefits and everyone has to start cutting, but we would like to see the benefits of it. that is what i think. i think we should pass a plan as soon as possible, but do what simpson-bowles said. you do not have to convince anybody because interest rates would rise dramatically. >> with a chance of getting anything done before the election. >> probably. i think that the two plants ought to be talked about more. the president should talk more about the medicare savings he has and the defense cuts he has
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proposed. i disagree with this, by the way. he proposes to take discretionary spending to the lowest since eisenhower was in office. i think both the democrats and republicans are arguing over its theological positions. basically, it could support and vulnerable people in a tough bind. we ought to be talking about this stuff. he has at least try to honor the deal he made with the republicans. i think he should talk more about it and they should talk more about it. the gentleman that just defeated senator lugar said something that i found disturbing, although i kind of liked him personally. he is a very appealing sort of person. he said, i am totally against any compromise.
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our world views are irreconcilable. would this have to keep fighting until someone wins it all. if that was a view, there would never have been a constitution, a bill of rights, the capital would not have been moved to washington, d.c., the federal government would not have assumed the debt of the colonies from the revolutionary works and nothing else would have happened. as soon as this election is over, i think it will be for both parties to make more principle compromises than they have in the past. >> the images at in context, if i can. this is from the united kingdom. four recent surveys have found that only 28% of americans are satisfied with the condition of the country. 70% are dissatisfied. seven recent surveys have found that between 69% and 83% of
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americans believe the country is still in a recession, even though it is not. anyone can find grounds for optimism. the first boeing just landed in washington. will be decades before china can make such a machine. the imf is predicting growth for 2012 and 2013. this country still has the world's best universities, more than any other, it is the largest producer of natural gas and the biggest food exporter. granted, this is a government hollowed by the winds of of voters. if we do not do something, we will end with sequester at the end of the year. spending cuts will be automatic. what do you think the chances are that sequester will be activated? >> i do not know. my guess is, we will not know until after the election. i agree with with the economist
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said of the strength of the american economy. they left out the fact that it is very diverse. good thing we have somebody here. a lot of this anti-immigration seems to be abating. i also agree that most people think we're still in a recession because the have not gotten a pay raise and so long. keep in mind, even before the financial crash on september 15, 2008, inflation-adjusted median income produced so few jobs. small people -- small business people were paying for health care premiums. i think the perception is real. people do not feel more secure about their own financial futures. >> at the same time, positions have hardened politically. we're seeing that in wisconsin with the recall movement. you are saying it does well and ohio.
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certainly, around the world and france, the election of a socialist movement and the rejection of austerity. greece is an utter turmoil. we seem to be moving to more deeper and deeper into the extreme cold and leaving out the people. how can you activate that group that does want to do a responsible thing? should there be an extraordinary coalition that goes beyond the simpson-bowles and becomes a political movement and says, we are linking arms and sang, we want something done realistic and urgently? >> it would be great if they could do it. the evidence is that the republicans will be scared to do it. that is what happens to senator lugar, although there were other
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factors that led to his defeat. we will see what happens. obviously, i think there should be a big, bipartisan coalition for the spirit we made is have to wait till the election is over. the american people have to decide. they go around telling everybody, i am sorry. these politicians, they voted for them. one of the problems is that we have listened to the rhetoric of politicians and pay almost no attention to their specifics. i feel sort of sorry. what is the tea party stand at? 18% approval? all they're doing is what they promise to do and they got an overwhelming victory. it is not like they did not tell everybody what they were going to do. but we listened -- we talk about the body language and the likability and the strength and all of that.
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actually, most people you vote for try to do what they say they're going to do when they are running. the american people have got to take some ownership here, too. meanwhile, politicians ought to be talking more about the hard issues. i think this budget issue ought to become front and center, in the presidential election, in all of the debates in very specific ways. >> the opening question of the first presidential debate should be, which of the two of you will activate simpson-bolls? >> could be. obama will say, i thought there were a little excessive on defense cuts. minor only slightly smaller, but i have cut more in the first five years of medicare spending than the recommended. and then you have to go back and say, i guess, but you've done nothing about social security. since then-bowles makes social
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security more progressive. that is one thing i love about it. -- since then -- simpson-boweles makes social security more progressive. that would help if you have the right follow. in other words, you have to get down to, basically, the republicans compare it to too much tax cuts. and the democrats are reluctant to to commit to the longer term savings and do not yet want to touch social security, which i think could be fixed with relatively little controversy in a way that would, if you look at the simpson-bowles plan, it is very clever. it is better for lower-income seniors. >> let's talk political strategy, if we can, for a moment. i know it is a subject near and
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dear to your heart. if you are mitt romney and you emerged from this fire of the republican primary, which u.s. had to skew closer to the conservative wing of the party, how you begin to transform herself coming out of this convention so that you complain much more to the middle and to deal with these issues that may include, in fact, simpson- bowles increases? >> i do not know. it is really hard. a moderate republican friend of mine in new york, who is going to vote for romney, he says, that to give him a promotion. he told the truth. it is like, romney said i'm running for the present student body, and that the real argument was that i could not be their president because i wasn't right wing enough, so had to get over there and pretend that i was. now let me tell you what i really do as president.
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it is tough. but i think he is going to have to fill it out. for example, the budget he put out in the primary, according to independent sources, would increase the debt over and above what will happen by $1 trillion or more, whereas the budget president obama put out, according to the congressional budget office, would take about 3% of gdp out of our annual deficit and take it down to 77%, the debt held by the public and stabilize it. i think it is too much. i like to see them take it down more, but you have to have growth figures in there to get much lower than that. i think he has to start with specifics. he can say, look. i have got to deal with republicans and democrats. we have to do this together.
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but, you know, he is hung with the budget he can now within the primary. the bush cut -- the bush tax cuts were not enough anyone a degree even more s on the job creators after we've not had any jobs. it is a difficult thing. i do not know how he will do it. he had to renounce his own health-care bill as a solution for the national average. an interesting thing about that. massachusetts has expensive health care. seventh highest in the country. before romney signed the health care bill with the individual mandate, it was the second most expensive health care in the country. in other words, since it was signed, inflation and health care costs in massachusetts has been substantially lower than the country as a whole. it would be a good thing if he could embrace that again, but i do not know how he can.
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or, at least, he ought to have some incentive. it depends on what the supreme court does. this is, from the point of view of the budget, i think the biggest item. there is a recession component to this in our debt. where, at worst case, he had spending at 24% of gdp and revenue barely above 15%. if you had 30% growth, it would probably correct to 21% and 70%. when i was president, we had a balanced budget. we had revenues and somewhere around 20% to a little over 19% and spending was always close to 18%. so, what you really need is a plan that closes the structural
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deficit. knowing that, the rest of it will be closed or not, if you have growth. maybe romney can just come out with a new plan based on what i would say is -- the congressional budget office says these numbers do not add up. i do not agree with him because you always get more revenues when you cut taxes. notwithstanding 30 years of evidence to the contrary. [laughter] so, here is my new plan. it is a very big challenge for him. i feel a lot of sympathy for him because the whole primary was about try to find somebody was a true conservative. but they're going to vote for him anyway. i think. they think he is more concerned the president obama, which he clearly is. if i or in his position, i would
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use the congressional budget office numbers to say that my plan to increase the debt, no responsible president can pretend that an independent of his analysis does not matter. that, i think, is at his best avenue into the real world. >> do you think it is possible for him to enlist and activate a moderate republican who is going to vote for him and put together a group around the country that can make a big public statement about what is necessary to get him elected, or has, in both cases, both parties, been taken over by the more dogmatic sense? >> no. that is just not true. there have been two different independent analysis in the last couple months. say inbelieve -- let's my second term, in the senate, the republicans have moved three
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times as far away from that center as the republicans have. and the house, they moved 12 times as far with the democrats have. my party is not blameless. we have to do something about health care and social security in our budget, what ever happens on taxes, in order to free up some investment in the future. that is the key to our growth. there are -- there ought to the corporate tax reform with a public-private partnership. we're but the only major in the company in the world that does not use private capital to modernize infrastructure. i think that, you know, the republican division that tends to prevail was expressed by the chairman who beat senator lugar. he said, i am against compromise. he said, our views are irreconcilable. we have to force the american people to choose which one of us is right.
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if that prevails, we are toast. we will look like a mussolini country. because one party, our party, the democrats will look like they're hanging on to the status quo. our budget will be too weak and balanced, but it will be so much on the baby boom generation and on health care delivery systems that we will be holding on to the past too much. their budget will be in la la land because it will defy arithmetic. were you invest in bonds and try to grow. >> let's talk about politics anymore specific way for a
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moment. wisconsin. it will be a milestone of this year with what happens from the recall effort, money pouring in from both sides. what would have happened if when the governor took such a strong positions on the union's and when he said, we're not going to have collective bargaining anymore, what would have happened if those unions had said, in a voice, which is want to sit at the table with you and work all of this out. we're not going to gather outside of the recall or start a recall, but invite us in. this is our future, as well as yours. we stand on the steps of the capital, wanting to come in to the interchange, sit down with you, and negotiate this in a way that has traditionally been done in this country. with that have been a better strategy? >> it might have been. but there would have wound up in the same place because he was elected on a promise to break
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them. the people voted for him. they voted for him thinking that obama the democrats -- this is like 1994 all over again. the basic thought is, the american people have been conditioned to believe the government will screw up. they have always been skeptical of it. and that has become part of the orthodox of the right since the mid 1970's. they probably should have done that and said, here is what we offer in terms of concessions, because they have the long-term problem spirit of the, their problems and not that severe. the voters voted for the sky. the governor is just doing what he promised to do.
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they often a vote on that the maddox and the direction. -- the thematics and the direction. overwhelmingly, people try to do with this if they're going to do. they do the specific things they promised to do. i think, frankly, they just decided that's they had rolled over and play dead a long enough and someone needed to be to them since they got beat by an extremist, rhetorical campaign. the republicans have taught us that the harder you are and the more extreme you are, and the more demonizing york, the more likely you are to win elections.
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if you are reasonable, they eat you alive in the primary and the general. people think you are weak or wishy washy. they do not know what you stand for. tactically, they should have offered that in the first place. but i doubt if it would have worked. as for 2010, everybody thought the american people was with us on everything. how could we have won all of these elections? and that the liberals thought obama wasn't liberal enough. the conservatives said he was not american enough. bob english got beat in a republican primary, let me remind you, with a 100% conservative record on two issues. after his injury, he said had an
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epiphany and realize he did not have to hate the president to oppose him. he was an american, not a canyon. a christian, not a muslim. a good family man. he liked him, he just thought he was wrong. that was a cardinal sin. the other thing was, he said, i listen to my senator and i think global warming is real, we to do something about it. is it a conservative-market- based solution to bring down greenhouse gases. that violated the theology and they threw him out. this guy was on the judiciary committee that impede to me and it was enough for him. [laughter] he is a very good guy, by the way. [laughter] [applause] i like him. it was just never enough. guys like you always acts like, it must be everybody's fault. our party's problem is that we are always the one to give up
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big gains of the past to create the future. that is a different problem. we have a lot of people in our party will not be drawn down if they depart from the conventional wisdom. i think you could put together significant democratic votes to enhance -- to enact some variation but memberthe numbers have to ad up. the american people have to make that clear if that's what they want. i don't know how they will make it clear before the election. >> is there something to be learned and how you're getting six -- how you were successful in getting welfare reform? protests, but you have to understand most people don't know what happened in welfare reform. i had already given 44 of 50 states waivers to enact welfare reform before the laws had passed.
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and then the republicans wanted to use welfare reform to cut benefits for legal immigrants and to basically block grant food stamps and medicare, health care and nutrition for poor children. the block-granted food grants and medicaid. in the third bill, they got off of that and i ate the cuts in benefits to legal immigrants in return for getting a lot more money for transportation, housing, and job training for people on welfare. there was by 1996 people said that i got rid of the federal welfare benefits. it was there were paying a lessly of three or four
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than they did in 1973. what we did to try to offset what is now happening in the recession is to say that it every state would receive an amount of money for this equal to what they were getting in february of 1994, which was the all-time high in federal reimbursement. and what i did not receive after i left was the states would able to spend money on non- welfare things. -- what i did not perceive. the other thing that was wrong with the welfare reform law was there is a five-year lifetime limit. that should have stopped whenever there was a recession. whenever there was more than six months of negative growth, that is. if we had stopped that and
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harder requirements that require the money to be spent to repair poor people to go into the workforce, it would have worked better. if in a mild recession of 2001, people that went from welfare to work or less likely than employees overall to be laid off. mild recession. they wanted it, i wanted it, and they knew that we were doing it, because 48 states had already be -- been given waivers to do the same thing. >> we have a facebook viewer. has always been on the cutting edge of technology. is is from linda in fort collins, colorado --i am a registered independent. i believe we must raise taxes
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anto make sure that my daughter has what she needs. how do you make sure taxes go up and not just for the rich? this is the essence of what a lot of people in the middle feel. peoplet of all, you ask to actually read what simpson- bowles did on social security. i have read every word of simpson-bowles. you should read it if you have not. on corporate tax reform, i agree with what they did. they would raise slightly more money by flattening rates. the bank want to do that i disagree with is get rid of the r&d tax cut. we are already 17th in the world and we are trying to get
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manufacturing back to america. manufacturers increasingly like to have already done where they do manufacturing. otherwise, those two things are good. on the medicare entitlements, you have two problems. one is demographics. if the baby boomers consume health care at the same percentage of gdp our kids did -- i mean, our parents did, we are sticking it to our kids. about $200 billion of the $1 trillion difference in what we pay under our system that we would pay if we had any other advanced country's system is because of diabetes and other lifestyle-related things that older people and children do. we have to deal with that. i think you can -- the democrats could be induced to do some of
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that, to actually make changes in a lot and in the distribution system of food and what is being done in the schoolyards that would deal with that. $500 billion of the difference is because we still pay for procedure and not for performance. one of the recent i don't want the health care bill to be repealed is at least in as the german in it of the accountable care organizations which are paying for performance and not for procedure. there are lots of them around the country now that have far lower inflation than overall. then about $230 billion in difference is because of the way we finance health care with huge paperwork costs and cost shifting, which will be diminished under this new system. we have already had $1.3 billion in health-care premiums returned this year under the 85% rule.
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so i think the democrats should be willing to gamble that the ideas that are just floating around but not pushed through in this budget, the difference in the obama plan and the one i past is mine had less government, but it did have a very hard health care budget. every other country in the world has one. everybody said bill clinton is trying to ration health care. we ration health care every single day in america, in millions of ways that we don't see. but the president, even with 60 votes to overcome a filibuster, cannot get a budget through. i understood that. the budget cap. i think we could get the democrats into this if they thought that there were not going to be accused of putting the country at risk by taking defense reductions that are basically related to ending the war in iraq and afghanistan and
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shifting to more mobile forces like the special forces like the navy seals that went after bin laden. there's a lot of effort now in training to figure out to deploy mobile force is even more quickly, where technology is going, and we don't need a cold war military structure to do that. so if the republicans showed a willingness to work with us on the defense cuts and some willingness to do something on revenues, i think we could get there. i agree -- i don't think it would kill the country if we have the tax rates -- you could tax me at 100% and you would not balance the budget. we are all going to have to contribute to this. its middle class people's wages were going up again and we had some broken economy, i don't think they would object to going back to the tax rates that we
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had when i was president. the country did pretty well then and very few people thought they were overtaxed, because we had a growing income, tight labor market, low inflation and health care and rising wages. you have to put it all together to make it palatable. again, i think that we cannot be in a position where one of the negotiating partners says that is non-negotiable. not only will we not raise taxes but we want the bush tax cuts and we want more tax cuts and we want the right to disregard what the congressional budget office says what our budget would be. you cannot do that. it's hard to have a deal if there's no arbitrer. i did not always agree with what cbo said when i was president, but we had been through 12 years where the debt had gone up four 4.5 times before i took office and the government always
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had rosy scenarios. officeucted our to be as progressive as the cbo. work out pretty well. i believe you could put together enough democrats if you make a simple argument that you simply cannot spend all your money on t and past. and we may have a better debt reduction plan because the numbers add up, but it is still heavily bog down in health care and retirement costs for the baby boom generation. it is too oriented toward yesterday and today. i don't think it's a good idea for us to have discretionary spending where it was when eisenhower was president when we are 16th in computer download speeds. south korea is four times faster than we are. i don't think it's a good idea when we fohave fallen from
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first to 15th in the world in college graduation rates. the unemployment rate among college graduates is half what it is among people who don't have a college degree. i don't think it's a good idea to take it that low when we know if we retrain even middle-aged unemployed workers for jobs that will be available, with the cleveland clinic is doing on health care jobs that will be there, i don't think we ought to be cutting that. i think it will hurt us significantly with the economy over the long run. it is a piddling amount of money. >> erin burnett at is offstage because she will interview speaker john boehner later, i think the president is helping her out. >> i wanted to speak to me at least later on the flight. >> constituencies and their
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part, i had a little exchange with the a r p when they had a commercial that ran at some length in december of last year or maybe late november in which you may remember the tough guy comes on the screen and says cool and damp i? and the fellow behind him says i am aarp and we need are benefits and we want all these benefits, medicare and social security and it was kind of in-your-face. so i went on meet the press and said something about that. it seems to me there's a better way of dealing with that. we have lots of people in the a r p who could probably afford social security. -- in aarp. >> absolutely. if you live to be 65 in america today, you are in the oldest senior population on earth. a lot of us are not poor, but
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half of the people 65 and older are kept out of poverty because of their social satiric the benefits. so the whole idea behind simpson-bowles is to ask people like you and me either to pay more or do with less, because we don't need it, so that we can bring the debt down and put a little more into the people on a low income and of the scale. robert had an article the other day saying that roosevelt would not recognize social security today because it has been -- a third of the money goes to supplemental security income. i love that program. it does a lot of good and it is targeted toward people who need it, but the rest of us are going to have to ask ourselves whether it would not be better to have this means tested instead of
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income-based than any other change you could make. if you take medicare, the problem i have with the premium support argument, basically to get a voucher and privatize it, is pretty straightforward. medicare costs have gone up 400% in 40 years and private health insurance has gone up 700%. in the last decade, private health insurance went away more than medicare and medicaid did. if you privatize it with a fixed voucher, you are giving people a fixed amount of money, putting them in a more expensive system so there is no way that the whole population will not wind up either being poor or sicker. it will fix the budget problem. it will get medicare off the budget. it will fix the budget problem without organic changes that we need in the health-care system
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that would help the private sector even more than the budget. so i would rather see us show some restraint and increase the copays of people on medicare will have more money to pay for it. those of us who can afford it should pay for it and keep it as a backstop if we need it. you and i have are medicaid card, but i favor that. you just cannot say we want it all just like it used to be. that's the problem in a lot of european countries where they are asking for these accumulated pension liabilities to be ignored into the future. for a very long time when i was -- i was stunned when i became governor of arkansas, which has a conservative pension program, but some people started drawing their pensions at 50. i said, how can this be justified > they said we never had any money, so these people never
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made good salaries, so we made it up to them by letting them retire and then get another job so they could finally end their days with a decent income. a lot of this stuff makes such good sense when these decisions were made and they just don't work anymore because of the demographics. so, i guess we're having agreement on this. aarp's position, i disagree. guest: they have changed it since then and now they have a dialogue about security -- about social security and what people should know about it. >> the most important thing is when you asked me those questions, no. most of my life, i have worked in my foundation and i sell medicines to 70 countries and build health systems in 30 countries, we're doing
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agriculture and energy projects all over the world. it works best when all the stakeholders get together, openly acknowledged their different interests as well as their different ideas, and then talk to each other, like they have half a good sense. i was in brazil last year at the edge of the rain forest. brazil was worried that after stopping 75% of the destruction of the rain forest under president lula it is increasing again for one of two reasons. first, the sugar cane that they groped for ethanol -- that they grow for ethanol, it increases the cattle ranchers in the rainforest. they need more power, but its 85% more hydro. the only places where the rivers run deep enough to build new dams are the rain forests. here's the important thing, there's every electric company, every oil country, every big
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industry, the head of the timber is of commerce, but the president of the green party who ran third in the race for president, the representatives of the native american tribes that are not constitutionally protected, advocates for or people, and they are all sitting around tables talking to each other like they are intelligent beings. to go back to what you said, i don't have a vote in congress. my opinion on the details is not as important as the process. our politics favors conflict and the only thing that is working anywhere in the world are creative networks of cooperation. a san diego has the highest number of nobel prize-winning scientists in america, because they are center of the human genome research. and you have in nasa, defense, nasa, disney, and video game
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companies and they're all supporting this. if you look at america and around the world, getting all the stakeholders together with the goal of making an agreement. it does not ask anybody to change their mind or ask anybody to ignore their interests, it just says in the end a decision is better than an impasse. that may be more important than anything else in this whole thing. these people are plenty smart. there's lots of really smart people in congress. they can figure out how to do this, but their goal has to be to make a deal, not to have a fight. >> i will share with you as we conclude, a couple of experiences i've had recently that worked very well. the president and i talk about these issues for a lot and have known each other a long time. i had the privilege of being on the mayo clinic board, a nonprofit, one of the most interesting things i do. i was in phoenix and they
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brought in a lot of people from the phoenix area, most of them were pretty conservative, a political point of view and we walked run through the clinic that morning in scottsdale putting them in the labs and the icu and showed them a couple of big operations and then gathered for lunch. i was born to stand up and talk to them about the place and the clinic and their lives and -- a place of the clinic in their lives and the health care system of america. i said, is all those laboratory technicians or the nurse practitioners and the surgeon's scrubbing for a very complicated operation or the medical units. did any of them ask you whether you were from august 8 or redstate it? did any of and say are you a conservative or an independent or tea party member? they did not. i was in south dakota the other night speaking to an organization that does a place for troubled boys. my guess is most of the audience was big businessmen doing very
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well out there in so false and we all grew up in a state where they came out here and it cannot a bit more difficult building these communities and putting up barnes and starting farms. i don't remember anyone when i was a kid in which we all put our shoulders to whatever the wheel happened to be in front of us and said are you a anservative or a liberal or tea party member? we all knew where everyone stood. when it came to a common cause, everybody was gone to step forward on that. i think that we have to recapture that in some fashion. >> i gave a speech a couple weeks ago to a big health care group. there were people there for a big health insurance companies running big health-care networks and small health care networks and doctors, all these people in health care. a lot of them i had known for years. i did not know what the division was, but there were plenty of republicans and a few democrats.
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but to the person, after i spoke, i said i thought it would be a disaster to repeal this health care law because we would have to go back to square one and come up with 60 votes and right now there was an incentive. to incentive what was the first bill passed in health care after the president sign the bill? obama bipartisan majority to clean up the small business reporting requirements, which were screwed up. why? because once there was a bill and a process, there was incentive to cooperate. so all the health insurers and health care providers came to me and said we really agree. we really think we're making progress now eritrea be forced to rethink the delivery system, they said. which is where half the money is that we spend. we have to create a system in which we say to a guy like speaker boehner, who i think would make a deal, if he did not
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think he would be deposed, that the -- nobody is going to be right about all the specifics. we are living in a complex world. what drives progress is direction. what people are afraid about america now is that we don't have direction because we are going to be paralyzed. you can see it more clearly in other countries. how many articles have you and i read about tahrir square and the aftermath of the arab spring in egypt and now the muslim brotherhood wins all the elections. why? because they have been organized and they go to voters who were not part of the arab spring, who don't understand the need for religious, cultural, and an intellectual diversity. the magnets can pull the middle apart. we need a magnet in the middle
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and it is the process. it is the idea that a compromise is an honorable thing and diversity of opinion actually only works for a society when you bring it into a process with people who there for with you, because you know something they don't, you have had experiences they have not, and if you actually have to work through these things and say, yes, no, yes, no, you wind up with a product that gets you the right direction. that's the most important thing. the app to do it on this debt. if we don't deal with it, we will sooner or later some day or another have growth again and interest rates will go up so fast you will not able to catch your breath and everybody will say why didn't we do this earlier. so we should have a considered plan now. but all of you have to make compromise honorable. >> mr. president, thank you very much.
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>> thank you. [applause] >> ladies and gentlemen, there will be a priest 15 minute break -- a brief 15-minute break. >> a 15-minute break at the peterson foundation on the economy and fiscal challenges. next, the group will hear from a panel including senator robert portman, former budget director, former u.s. trade representative, and the vice chair of the democratic caucus on the house side of your becerra. that panel is in about 15 minutes. -- xavier becerra. john boehner will speak to the
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group at 2:45, the house speaker. we will have that for you live at c-span.org. we will also have it here. we hope to be able to bring you the speaker's comments live on c-span. he is speaking this afternoon about the debt ceiling, saying that the nation must come to an agreement on spending cuts and reforms, saying "this is the only avenue i see right now to force the elected leadership of the country to solve our structural and fiscal imbalance. that is from speaker john boehner. this morning heard from treasury secretary tim geithner, and among the things he said today is that the recent $2 billion loss by j.p. morgan " helps make the case for tougher rules on financial institutions." he spoke to the group this morning for about 20 minutes. we will show you as much of this as we can until the group resumes the summit in about 15 minutes. recycle the secretary we have a
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pretty tough job, we are the warmup act for tom brokaw and bill clinton. the good news is we're not following them, which is a pretty big thing. mr. secretary, i think we are in the post-denial phase of talking about the deficit. democrats and republicans -- you have a few months left in this president's term to get there. a lot of people are wondering why anybody should believe shouldour polarized political system is capable of doing something that touches as many people as this. why should we believe this could happen? >> khyber this will be in huge test of the ability of this political system to come together and make some sensible tough decisions for the economy. you guys will spend a day thinking about this learn term challenge of restoring fiscal sustainability. as you do that, and peter said this in the beginning, we face a lot of talent is in the country. we have to worry about how we're
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going to make growing stronger so we can repair the damage from the worst financial crisis in generations. how are we going to make sure growth comes with more broadbased income growth to expand opportunity? how do we make investments in new and capital and competitiveness to make that necessary? and after think about how to come together and put in place a balanced package that allows us to go back to living within our means. those are all telling disney have to think about as we think about crafting a long-term does school reform plan. that is why it is so important to bring broader balance to this choice. you need to think about the balance in several respects. you want to make sure you are phasing in the reforms so that they don't undermine recovery. you want to make sure that spending restraints and cuts and reforms come alongside tax reform to raise revenue and so you are not putting too much of
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a burden on the middle class or on retirees, on our ability to compete and grow in the future and in public goods and infrastructure and education and things like that. and do it in a way that protects the basic commitments for retirees and low income americans. remember, this crisis hit an american economy where even before the crisis 20% of kids in the u.s. living below the property line. 40% of americans born in the u.s. are born to families qualify for medicaid. think about that as you think about this basic challenge of not just restoring fiscal sustainability, but doing so where there's balance and it recognizes the central challenges of how we grow, how we compete, how we protect that basic commitment to retirement security. >> when you talk about balance, i think you mean it include
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revenue increases and some public investments. the republicans seem not interested in that and compromise seems to become a sign of weakness. so that's a very nice platform you laid out, but is there any chance of getting that through our political system? >> i think reality forces it. we have come to the judgment as have all the other bipartisan efforts to look at this from simpson-bowles to rivlin- domenici to doivlin- this in a way that meets what we face. you can and do it without trying to get a modest amount of additional revenue through tax reform. if you look at how americans feel about this, i think all measures show that recognition is shared by a very broad majority of the american people, including republicans and
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independents, not just democrats. we are not talking about asking americans to embrace increased revenues without other constraints on spending, so we are reducing deficits as we do that. what we are saying is here is a balanced package, where you can say to people who we will ask to pay a modest increase in income revenues, we can ensure them that the contribution will come along side reforms that locked in sustainable deficit for the long run. but at the same time we are asking the vast bulk of americans to recognize we're gonna to have to slow the rate of growth in health care costs. that sacrifice is not want to go to support tax cuts that we cannot afford. tax rates that are not affordable in that context. at the basic balance. i think reality will drive the american political system
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towards that result. >> i'm glad you are endorsing reality. peterson people -- >> mohammad kani has a famous line where he says something like used to come into the ring and "my opponent had a strategy and i hit them." [laughter] muhammed ali. >> the peterson foundation had a contest on facebook to come up with questions to ask you. one of them came from a guy named it polyps from shelburne, vermont -- rick pollock. how close to the edge are we right now? that this question. >> anybody who has had the responsibility of governing has
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to recognize these deficits are not sustainable over the long run. we have a 10-year problem. we have an immediate problem of restoring deficits to a level where the deck starts falling. we also have a pick-your problem and a 100-year problem. those commitments we made are not sustainable and we have to bring them back to earth. but we are in a much stronger position to manage those talented than any other major economy in the world, because we are a younger country. our growth rates are stronger, because we started with relatively low debt burdens before the crisis and because the level of taxes in our economy is so low and because the commitments we make that are still modest compared to the needs of most americans. we are in a much stronger position to deal with these things. we should put this in perspective. we have the ability as a country to knock ourselves in a situation where we commit to an irresponsibley steep austerity
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because of a long-term problem and sacrificed the other major needs and challenges of the country. we cannot put it off forever. we're close enough now for this matter a lot. the cannot run the country on the assumption that the world is going to always have confidence in the ability of americans to act. we have to learn that. confidence that that will require us doing more in the near term to make some progress. >> is there any real progress -- prospect of doing something before the end of this calendar be faced withbewe gridlock again? >> absolute. there's a set of expiring tax measures. the spending cuts should be a partial incentive for people on both sides of the aisle to figure out a balanced package for dealing with this. it is not that complicated. we can do it without asking
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americans to bear an unacceptable pain for an economy still healing. we can do it in a balanced way with expert across the economy as a whole. the scale of the adjustments we have to make on top of what we did last summer, they are significant, but not beyond our capacity as a country. we have the opportunity to do it, absolutely. there's a very strong, powerful incentive for politicians to make some progress on this. >> one of the things that we face before the end of the year is the need to raise the debt ceiling again. speaker lehner in the remarks you made today say that he will go along with an increase in the debt ceiling only if accompanied by customer forms > the increased in the debt limit. host: all that could possibly be said about the debt limit has already been said. one important thing, this
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commitment to meet the obligations of the nation, this commitment to protect the creditworthiness of the country is a fundamental commitment you can never call into question or violate, because it is the foundation for any market economy. it allows us to govern, to fight wars, to deal with crises, recessions, to adjust to a changing world. you cannot put that into question. you cannot put in doubt. you cannot put that at the service. we are threatening to over mine that. only congress can act to raise. the debt raise we hope they do it this time without to the drama and the pain and the damage that they caused the country last . >> can you separate the debt limit increase from the broader fiscal and growth agenda? >> on the current estimates, and
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these are going to change, likely to hit it before the end of the year, congress has given the executive branch as set of tools that buy them some time. those tools will probably take us into the early part of 2013, thus separating somewhat the timing of the expiration of the tax cuts and a sequester with the ultimate need for congress to act. they should do it as soon as they can, but that is the basic sequence. i want to underscore the basic objective, that should be to replace a very large set of expiring tax provisions and broadbased automatic pretty crude spending cuts with a more responsible balanced fiscal stability. that should not be a difficult challenge for a country that has been able to deal with the charter challenges in the past. >> other countries are dealing
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with problems, most notably in europe. it seems they pursue austerity. the more they do, their economies falter. it makes their budget problems worse. but if they don't pursue austere, the markets punish them and rates go up and other budget troubles get worse. what lessons should we draw from what has happened in europe? >> europe is in a fundamentally different situation than the u.s., so it's hard to compare the challenges they face. ours are so much more modest and manageable compared to theirs. but we should welcome the new debate about growth in europe. i think it is a welcome day it. they have a strong set of tools to manage the crisis now in place and that allows them to shift the focus where they should, to how they create the conditions for growth. let me point out three things that are in any air in europe now that are encouraging. you are seeing them talk about a better balance between growth and austerity, meaning some have
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a more gradual path to restoring fiscal sustainability. that is a portrait. you have to respond to every disappointment in growth by cutting spending immediately, then you put yourself in a negative spiral which is very damaging. you have also seen there's some important talked-about try to put in place long-term public infrastructure investments targeted to the countries with the biggest growth talent. the germans and others recognize you need to sustained time when wages rise more rapidly than others. the talks have a long way to go. very difficult of the challenges. they just need to make sure they can convince the world that they are going to manage these challenges. we have a big stake in the managing. but that they're going to manage
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the challenges with less risk of damage to the economies of the rest of the world and the united states. >> if breeze is forced out of the euro before they get to this wonderful package of slower austerity and more growth? is forced out of the euro? >> europe as a whole has a very strong incentive in doing what it's gone to take to make monetary union work. that's what the reforms over the last six months have tried to do. they tried to put in place a set of mechanisms for discipline in fiscal policy and cooperating on fiscal policy, for sharing as of resources, for managing the financial system that need to make monetary union work. i think their decisions, confronted with this fear of broad erosion in your
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experiment, is to redouble their commitment to try to make this thing work. if we believe they have the ability to do that. we hope they manage this process. very difficult set of intelligence. >> to learn anything from their experience or is it totally different? >> the talent is are different, but if you listen to where we started this conversation, what we're trying to do is make sure americans recognize that as we restore grabbing a larger fiscal position, after mature it does not undermine recovery, does not set us back on this path that caused the crisis, and give us the ability to invest in things like education, human capital, and infrastructure, better incentives for investment, for investments in basic science and research. those are things we need to be able to grow and expand opportunity in the u.s. going forward. if we are not successful in doing those things, that our fiscal challenges over the long run will be much more difficult to manage.
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>> our fiscal telling this will also be more difficult if growth is slow. do you think we are seeing a global downturn in growth when you look at china and india and concerns about what has happened to job growth here? >> let's start with the u.s.. we still live in a dangerous, uncertain world. but the american economy is gradually getting stronger. you are seeing more strength across the american economy. you are seeing companies rebuild their capital stocks, rebuild their work force, hire people back to work. americans are bringing down their debt burdens were the financial sector is bringing that leverage quite significantly and down. piercing the modest initial steps at state and local level, not just the federal, to try to restore fiscal balance. so we are doing a lot of tough work that you needed to grow our way out of this and dig
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ourselves out of the mess that caused the crisis. growth looks more broadbased and resilience in the u.s. and you can see that in the confidence numbers. but it is still an uncertain world. we should keep focusing on the reality. there's things we'd congress to do now to try to make the economy stronger in the short run. the president has laid out an agenda for congress in that area. we would be in a better position to manage the pressure species from outside the u.s. if congress was able and willing to make more progress in the near term on the growth challenges. -- to manage the pressures that we see from outside the u.s. >> regarding j.p. morgan, what lessons do you draw from that? managebank's too big to and after make them simpler and smaller? this failure risk management is a powerful case for financial reform. we have reforms already put in
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place. test is not whether you can prevent banks from making mistakes. the test of reform should been do those mistakes put at risk the broader economy or the taxpayer? the best way to prevent that happening is to make sure that you force banks to hold more capital against risk, which we have done, to fund themselves more conservatively, to bring down leverage, and to make sure that the rest of the financial system has better cushion against these kind of mistakes. and we have been very forceful and effective early in how we managed the broader financial rescue in try to make sure we are forcing much more capital into the system in that context. we are going to work very hard to ensure that these reforms are tough and effective, not just the volcker rule, but the broader reforms on capital and
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its derivatives markets, so that when firms make a mistake, those mistakes don't put at risk the broader fortune and security of the economy as a whole. >> should be looked at this as an example of the system working, but j.p. morgan could lose $2 billion? or is it an example of bad risk- management that they should not been taking these kind of risks? >> it is definitely a risk management failure, as they have been acknowledged. we have a couple you are serious tests to the financial system of america. you had a profoundly difficult, challenging shots from the european financial crisis. the failure of a pretty large financial institution in mf global. you have the debt limit where we saw money flow into the u.s. banking system. and you have a significant risk management failure. our system is much stronger than it was before the crisis. credit and capital is growing again.
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but still this points out how important it is that these reforms are strong enough and effective enough that they can meet the key test. not to protect shareholders from losses, not to prevent what cannot be prevented in terms of mistakes in judgment, but to make sure no mistakes happen, they are modest enough in size and the system can handle them. we will work very hard to make sure we meet that basic test. >> have you spoken to jamie dimon? >> not since the incident. the fed and sec and other regulators will look at this closely and make sure we review the implications of what that means for the design of these minerals. not just a bowl or rule, which is very important, but the broader set of safeguards and reforms. >> what do you mean about the size of the bowl or roll? >> you want to look at the full complement of protections. capital, limits on leverage, liquidity requirements so they
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are less honorable to losses of funding. reforms in derivatives markets so there's more transparency and oversight. better capacity to understand and see when you see this. i'm confident we will be able to make sure those, as tough and effective as they need to be. makes the case, franklin. >> when you talk about fiscal issues, the one question that we hear often is about simpson- bowles. why did the president not to embrace simpson-bowles and say i don't like all of it instead of what he did? ? was that ? >> -- was that a mistake? >> to complement them, they are aware of this debate started. it's very likely this debate will end on terms verisimilar in terms of broad balance in the package. if you look at the framework the
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president laid out, in terms of the balance of spending reforms and the design of them and the tax reforms in that context, very similar. i will give you a couple of things to modify. the defense cuts in simpson- bowles were deeper than the commander in chief could commit the country to at this moment. the shape of the social security reforms put tpp big a burden -- too big a burden on the average beneficiary. in the president's framework, we proposed as part of a comprehensive set of spending reforms, to raise one% of gdp in revenue through tax reform. that's about $1.50 trillion over 10 years. simpson-bowles proposed a $2
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trillion increase in revenue. as have some others in that context. we are much closer to that string work as are the other bipartisan efforts out there than the plans on the table from the president's opponents. the plant from the president's opponents as the defining features of a very irresponsible is the path of austerity that would damage growth. they have not a dollar of additional committed revenues, which means all the burden will have to fall on medicare beneficiaries, defense, the safety net. but cut very deeply into the safety net and they would deeply erode our capacity to invest in things like education and infrastructure, investments that anybody who looks at a country realizes they are critical to future growth. we have much more in common in our basic framework with simpson-bowles in the bipartisan
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things than the others. you'll hear about the other proposals, so i will not speak to them. do the plans provide a plausible strategy for growth for expanding opportunity, for investing in human capital and education, not just do the restore fiscal stability? >> i think we will end with that. thanks very much for your time. good luck. >> thank you. >> treasury secretary tim geithner speaking to the peterson foundation summit earlier today. we are back live. the group is about to hear from a panel including former budget director rob portman, the senator. and the vice-chairman of the democratic caucus, representative becerra. we're seeing a video now. the speaker of the house john boehner will talk to this group later this afternoon at. 2:45 we will have live coverage
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online at c-span.org. we hope to bring that to you live on c-span as well as the house takes a break this afternoon. >> thank you. the american people are concerned about the issue of debt and deficits and are eager for washington to take action. in a recent survey, the vast majority of americans agree that the fiscal challenges are a top priority, that they want bipartisan action, and are willing to contribute to reducing the national debt. what will it take for washington to reach a long-term agreement? as we highlighted last year at the summit, many solutions exist. but what has been missing is the political will to reach a bipartisan agreement. our first panel today will help us finance critic find answers as to how to build a political will to get along to our fiscal plan in place. to discuss these issues we have assembled an outstanding panel of experts. senator portman from ohio is relatively new to the senate a very experienced in the ways of washington, having served as
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u.s. trade representative and the director of the office of management and budget in the bush administration, prior to joining the administration in 2005 he represented the cincinnati area in the house for 12 years. representative becerra from california served in the house nearly 20 years and is vice chair of the house democratic caucus. in 2010 he was a member of the simpson-bowles commission. last year he served on the super committee that tried to reach a longer-term deficit reduction agreement. kathleen hall jamieson, a professor of communication at the university of pennsylvania. director of the annenberg public policy center whi. the author and co-author of 15 books on policy and communications, she is an expert on how politicians bring their messages to voters and how communication tapes elections and policy. patricia murphy is the founder of citizensjane politics and
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covers politics for the daily beast newsweek. she has her ear to the ground having spent nine years as a hill staffers. she has a key sense of what americans are thinking and asking about what's happening in washington. the panel will be moderated by john taras, editor in chief -- jon harris, editor-in-chief and one of the co-founders of "politico." --john harris. please welcome our panelists. [applause] >> good morning, we have 40 minutes to tackle a pretty big question. the first thing i like our panelists to do. i propose we go down the line starting with senator portman is to look at the premise of this
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panel, which is that it might be challenging substantively, but not really that difficult to solve the mathematics equation of the deficit that people could sit down with a calculator and a legal pad and get it done, but the difficult dimension of this is the political one. this does take place in the context of a year of failure in 2011. there was a hope that you get mature, reasonable people in their room, to throw out the reporters and say don't come back until you have it solved, as was done in 1997 with president clinton and than speaker gingrich and was done in 1990 with republicans and the press president bush. it was done in 1983 with social security. if we could replicate that process and get reasonable
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people in the room away from the clara of the lights, and it's proven not to be true in 2011. simpson-bowles did not do anything to tackle the structural issues. this conversation between speaker boehner and president obama ended in failure and recrimination. the super committee's, on which both of you sit, did not get the work done. anyway, let me ask the question, if you did not have to worry about the political blowback from your own party and public opinion, how difficult would it be for the two of you to sit down and come up with a solution that would be in the public interest and not violate your ideological principles? how hard, substantively? [laughter] >> yuka diluted 20 minutes. -- you could do it in 20
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minutes. it is more difficult than it was in 1997 or 1990 or 1983. the fiscal hole that washington has dug is deeper. for those who say let's go back to what we did in 1997, we had a growing economy, but we don't have that now. we have a weak economic growth and increasing spending on entitlements i particularly. it's at a far higher level. ratio.bt to gdp it is -- it is not been that way since world war ii. we did not have these long term medicare and social security issues that we have now. medicare was not even in existence. so it is a different type of problem and a larger scope. forget politics for second, the changes that we make are going to have to be more fundamental, more difficult, and in my own
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view it has to both spending restraints and you have to have growth. in 2007 when i was the budget director, a benefit from the fact that we had growth in economy. it was 1.2% of the economy, the debt. , and it has harder to be done carefully to avoid having a devastating impact on our economy at a time when we still have the weakest recovery since the great depression. >> so it is substantively hard in addition to politically hard? >> absolutely. >> congressman, what is your view of this? if you could chase all the reporters away, could you get this done relatively easily? >> if we could hang the special interest and sacred cows at the
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door as we walked in and leave our egos behind, is simple mathematics. we have enough templates out there to guide us. whether it is simpson-bowles, rivlin-domenici, both plants are bipartisan and both plans dealt with what most observers must be the elements of a good compromise. on that spending--- that is restraint on spending, increase system real revenue, tax revenue, and making sure that policies into place so you have economic growth. it is not rocket science. i'd think most of us have gone through this and up, whether it was the super committee or simpson-bowles or the biden group or the gang of six, that we have seen this. you can only do the movie so many times in different ways. and so, i think we can get there. most of the folks who get to
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make the decisions are not experiencing the pain that those americans who are on the cost of losing their homes or their jobs are suffering. it is like the situation in iraq and afghanistan where one percent of americans are impacted by these two wars, but we don't feel this. most of the folks on capitol hill don't feel the economic pain that today some american families fighting through to make sure that they persevere. if we did, i think it would be a lot easier to get this done in. the reality is most of us would get a rap -- most of us don't have to worry about that. i would be willing to deal with some of the programs that are near and dear to me because what i've seen them do for families including my parents, folks who had little chance to get dedicateducated. i don't want only cuts to discretionary programs that are for families and working people
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and children. >> we have one view of the problem that is the egos in the boom that makes the grand bargain impossible or at least very hard. i wonder if there's another view that it's not the egos in the room but the divisions within the country that makes this so hard. you have wonyou have an electioo dozen 8 -- 2008 that was to the benefit of that democrats. the 2010 election was to the benefit of republicans. >> what we need is a campaign that aligns campaigns into governance. you bring the electorate along and can government more responsive to be. the question should be, how does the media it use its agenda-
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setting function to focus on the issues? how do we create structures told -- that hold candida accountable? -- candidates accountable? how do we dampen that in third- party advertising. in addition to the presidential debates. you can bring the public up to speed under these issues, to accept the trade-off from the sacrifice, and break through barriers of polarization. they're actually is a consensus here and we will all have to sacrifice. can the public understand it will make the sacrifices, and will see the benefits for future generations? we can campaign and make it
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harder to govern. if we do that this year, we are want to be in real trouble. >> do you buy that? there really is not an elite consensus. there was such an elite consensus, simpson-bowles would have been more successful. the very intense and advanced talks between obama, speaker boehner, would have reached consensus. >> if you define elite as members of congress, there is no consensus. that is clear. if you define elite as the chairman of the joint chiefs who have said art tavis it is a threat to our -- who have set our deficit is a threat to national security, local committees that understand how
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to balance budgets, i think the consensus is among the american people. they are way ahead of their leaders on this. the leaders need to follow their people. anecdotally, when i talked to people, when i talk to people, in cafes, starbucks, people are worried. >> you hear them say i am so worried you should compromise my benefits? >> the people to not know the difference between simpson- bowles and the gang of six. they understand that something has to change, something deeply out of balance. they understand numbers come out the direction the deficit is going, and apparel that the country is in. they understand that and understand congressmembers are
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not making sacrifices with their own constituencies in order to get across the finish line. a lot of voters equi taxation with morality. they see this calcification in congress and are very frustrated. i think the consensus is among the people. there could be some movement on this issue because elective leaders, when they go home -- the question is who are the winners and losers. in 1986, the tax reform, each side gave away a good bit, and they felt they were winning for their constituencies. people are born to have to feel they are getting enough in return.
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you do not see the leadership, not among the supercommittee -- you do not see leadership at the presidential level, that is driving this. president reagan drove this, dan rostenkowski gave the democratic response and said we are here to work with you. we have not heard that. >> i would like to agree with patricia. kathleen talked about the elite consensus and i have not seen it yet. you're talking more about the simpson-balls -- >> we have to be responsible about ensuring we do not take the economy. >> my constituents would agree with everything you just said, and they are ahead of where washington is. when i talk at home, people say
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i have family doesn't -- budgets, and they understand that does not work. there is a sense washington is careening down a path toward a fiscal catastrophe, and there may be less consensus about solutions because of a lack of leadership trips not to be --tisan here, god forbid patricia makes a good point and it is not just about reagan and social security or tax reform. it is about bill clinton and welfare reform. it is about presidential image of, and providing cover to your own party. i will not speak for how the air, but democrats need a little help in terms of the supercommittee. we did not have that. that is the way president obama wanted that done, and that is
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not leadership. it requires a couple things, taking what is a consensus among folks not just the elite that we are in a serious fiscal crisis now. second, leadership and what are the solutions, because people are concerned about raising .axiles if there is a way to a consensus and a solution, people reflect it among their elected representatives and can move it forward, but it requires leadership in terms of solutions. >> you got to jump in. >> two years before president reagan's tax reform in 1986, he worked with congress to pass a deficit reduction plan.
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80% of that relied on tax revenues to work. cannot get in step here in washington, d.c., because of taxes. there is no way to resolve the deficit problem without dealing with taxes. that is where i think the difficulty occurs with well- intentioned republicans and democrats, and rob talked about getting our spending under control and economic growth. i mentioned that spending controls, economic growth, and you'd have to deal with the tax side of things. there is no way you cannot. when the largest contributor to the deficit over the last 10 years has been the bush tax cuts, because they were unpaid for, you have got to deal with it. if you deal with the spending component, the budgetary side, appropriations of what congress does come off the discretionary
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service is an programs, you do not recognize that 2/3 of comeding since 2001 has p from the department of defense, and their people in the house who want to spare the department of defense from any cuts, that means you would have to load all the cuts to services to americans and taxpayers, education, health,, clean air, clean water, and you cannot do it. if you are not willing to top taxes and are trying to unload it all on domestic discretionary services, it will not work. i think you have to be essentially put people in that back room, tell them to hang their egos and special interests pledges at the door and did not come out until you come up with a plan. there is no way that we are to deal with this realistically,
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and none of the bipartisan plans have dealt with without the incorporating taxes. >> have to people who approach this from a more neutral point of view. kathleen, your organization runs fact check. is there an answer -- they're a pox on both your houses, or is one component more responsible for the 2011 failures to get a grand bargain, democratic and transit over spending or republican in tragedy over taxes? is one of those to importance more? >> is not productive to ask who is to blame. the question is how do we need to get where we need to go. when people campaigned for the presidency -- clinton is right
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on that. getting that laid out is important. and when the campaign for taxes and they raise them, they are punished. it is harder to stay in the congress when they embrace taxes. >> it has been said that marriage is a triumph of hope over experience. we have president clinton here, and i am paraphrasing, but the stars might be aligned after the election, perhaps in a lame duck session or early in 2013. you hear this line a lot, and other factors are converging, the debt limit runs out, the tax
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cuts expire, the sequestration measures go into effect, aiming at the department of defense in a big way. what is your guess? is there a grand bargain to be dozen 12 or20 ttwo 2013? >> there is a bargain that will come in a lame duck. there are pieces -- the tax cuts and the sequestration -- and the unknown defects all of those expiring could have on the economy. it will matter and not what happens in the election, which side gets the leverage, which side gets to say we are in charge can take your medicine later. there is no appetite for progress before the election. it is clear. lots of leaders have said sari,
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blamed the other guys. there will be a bargain because each side has so much to lose. they have a lot to gain just by being able to come out of a room with a deal. sometimes in washington the of the people are facing things like this is in a lame duck session, the day things expire, there are agencies watching very carefully. after the election there will be a time for a grand bargain. that will be incumbent upon the new president or the current president to solve this problem. this is the task of a generation. we have kids coming out of college -- you are scared for them, scared about the amount of debt they are taking on. [unintelligible] this is a problem the next president will be able to enjoy
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the people's support. what is most in print about this election? debt is the number-one issue. people are focused on this and it has never been this way before. that is the way it was, people the not care about the budget, and now they do. it has lots to do with the tea party giving to the republicans. i hear it democrats talking about spending cuts in a way you have never heard before. there is change. failure is not done to be fatal, but six months have turned the election will be the only time the next president has to
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change that, and then they will get right back into the election mode. >> what is your sense of timing? >> we should take a swing now because it is difficult during an election year. we have to move forward before the year cost end. i think we know that the economic impact will be devastating if we do not deal with these issues. some say that means kicking the can down their road. maybe, but it should be under a strict deadline. in the senate, we need 60 votes. if we do not that, the fed has told us we're looking at a drop in the gdp. it will be devastating.
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it is a combination of tax increases and a combination of sequester, and we have a debt limit coming up, which for the republican side will require focus on spending, which many of us who voted for the debt limit increase insist there be spending decreases. it is a time when we have an opportunity to make some of these tough decisions. i would say we have no choice but to do it, and i hope patricia is right, that both parties see it that way and move forward. xzvier talk about differences. look, we can have those debates and stick to a fax, and the fact is 24% of gdp expects spending now. we are headed toward 30% by
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2013. we have to deal with the spending cuts. that is where we are. on the revenue side, it is relatively slow. my view is we should not be arguing about bush tax cuts. we should be arguing about tax reform. this is an opportunity for us not to keep the current code and have more tuxes opera -- more taxes on top of that, but have something that results in a better economic -- >> romney is going to give a big speech on this issue. one of the things he says his -- a prairie wildfire -- it is going to burn. he says both parties are to blame. in the spirit of doing painful
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things, i will ask each of you to say how is your party to blame for the current predicament? congressman, you first. >> i think you meant to go to -- to the degree that democrats have had this long standing concern our colleagues were intent on eliminating or privatizing important programs that have helped seniors to live in dignity or children to move up into a productive life, maybe democrats have worked too hard to try to protect those programs from the devastating cuts. doing so perhaps, that has kept us trying to come up with a smart budget. i think patricia said that democrats are talking about
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making spending reductions, and having agreed to the sequester process, did so. all those cuts are on the discretionary side, programs that we find near and dear to most american families, education and so forth. you find democrats are willing to come half way. the difficulty is when -- and i am using cbo numbers when it comes to the size of the bush tax cuts -- we had to borrow money to do that, to do those bush tax cuts, said those were the most expensive elements of the last 10 or so years in terms of what we have spent and what has driven some of these deficits. many of us believe in has to be a balanced approach. he cannot look at one side of the table. if you do so you can do it in a
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way that will spur economic growth. i agree with rob. you cannot talk about reforming the tax code to reform the code without dealing with these living data sets, and the fact we have essentially spent more money than we ever spent to the regular appropriations process -- we have not talked about simpson and bowles talked about the tax loopholes. if we were to get rid of these, we would not do more than twice as much as simpson-bowles did, a lot of this tax breaks, people have become accustomed to. we have to do things in a way that we do not disorient american families. without having to do violence to
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the american family's ability to do what my family did for me cannot be the first in my family to get a college degree. >> lack of spending discipline we have seen in recent years had its origins in the bush administration, there was inconsistent -- insufficient concern for long-term costs for the medicare prescription drug benefit? >> at is accurate, and if you look back at the time, 2001 on after 9/11, there was a sense in this town that more should be spent on homelands occurred the and defense, and democrats were able to spend more on social programs. there was an unwritten agreement to allow the spending to increase. president bush should have vetoed a preparations bills prior to 2006, and at that point
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spending did start to be restrained, and we had growth in the economy, and this is prior to the financial crisis. we got close to balance. we were on track to get close to balance, but we prepared and proposed a plan, and it is public record. there was the sense we were getting the spending back under control, because of the continuing resolutions is not the best way to govern, and there were some changes in that budget on medicare that were new. i think the issue, but democrats and republicans, that they have dropped the ball. some understand it was 9/11, which does not mean it was the right thing to do, and the second thing is on entitlement programs. they need to be strong and a
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safety net needs to be there, but it is frayed. this is the fastest-growing part of the budget, and republicans and democrats alike have been unwilling to touch that third or rail. that is the challenge, and i appreciate the words today. we worked on the supercommittee. in the end, we were rebuffed by a lot of different factors. it has to be a combination. we need more revenue and we ought to get it in tax reform. on the entitlement side, we got to deal with this issue, but otherwise it's bankrupting the
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country. >> polls reflect you have a radicalized center, that independence, moderates are just as anxious and frustrated with the status quo as we see on the left on the right. where we are accustomed to seeing people be more extreme. the last time we had that on this issue was in 1992, when ross perot was running. it seems the conditions are right. where is the ross perot this time? >> dependence -- independents are wondering this. where is the person speaking our language, the people who knows what we are going through and is willing to take a step outside politics and try? i think people were thinking that there could be a third- party candidate, although the thinking was that if the nominee
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was romney there might be a third-party candidate to the right of romney. it is difficult to say. the parties are so strong, and you need so much money to run, there are not the people stepping up. there is the center of raging moderation, of claiming independents, but there are not a lot of good independents to pick from. people from the center are leaving. or they are leaving because it is so hard to be moderate. there is no reward for moderation now in american politics. >> please pick up on that. i would like to inject a note of pessimism.
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at least on a lot of the upper evidence, this problem is not getting easier. you have got moderate senators who are leading the institution because they do not feel there is a workable center. senator, i believe your pac supported senator lugar the other night, and he was defeated because it seemed he was too willing to compromise. fewer liberal republicans -- is this not getting harder as a proposition rather than easier? >> where it gets easier is where the american people begin to realize this is at a crisis stage. if we do not we are likely to be back any recession, and it forces us to deal with not just kicking the can down the road, but with fundamental changes.
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>> what do you feel about the indiana result? >> a lot of it had to do but the fact that he did not have a residence in his home state. they picked up other aspects of the race, but missed the fact there was a legitimate concern when he could not vote in his own election. republicans all shared a concern about that. it began to shift, and then obviously been a republican primary, the more conservative candidate sometimes has an advantage and that was the case. maybe i am naive, but it is not so much about your ideologies , but about your willingness to find a resolved. we're willing to help our
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country move forward, and if you go at it with that objective, it is inescapable what the conclusion is. we have got to solve these problems. if we did not, we will not have the economic growth. kathleen, may be the ross perot has to say more about the fact that it is not just about the charts and the numbers, it is about opportunity, and if we did not solve this problem, the uncertainty will not change. we will not have the robust economy that we have talked about, because you have 15% unemployment coming out of college these days. this will not change until we deal with this problem. we have to link these fiscal problems to the economic and opportunity, and that will enable us to get a lot more
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support. >> do you agree with that? there is an argument, as paul krugman said, there is concerned about deficits. >> does what the public has been saying for the last several years root it is not any pull you take the day -- today. >> if you took a swig of castor oil to disarm the on the opposite, it will hurt the economy? >> do not want to do it because a loss of jobs. we want to see a plan that says do not repair those bridges, that the transportation authorization bill would provide. the public is in tune with what
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we need to do. the biggest deficit we face today is a jobs deficit. if you get people back to work, they are paying taxes, and the treasury has more money, lower deficits. if we could agree, and there are enough votes -- >> we will break away with the reminder that it continues online at c-span.org and more coverage a bit this afternoon. yes house gavels in next. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms, washington, d.c. may 15, 2012. i hereby appoint the honorable
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rob bishop to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. pursuant to the order of the house of january 17, 2012, the chair will now recognize members from lists submitted by the majority and minority leaders for morning hour debate. the chair will alternate recognition between the parties with each party limited to one hour and each member other than the majority and minority leaders and minority whip limited to five minutes each. but in no event shall debate continue beyond 1:50 p.m. the chair recognizes the gentleman from florida, mr. nugent, for five minutes. mr. nugents: -- mr. nugent: mr. speaker, i rise today in reference to national police week which is going on right now. in 1962 president kennedy proclaimed may 15 as the national peace officers
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memorial day in the calendar week which may 15 falls in as national police week. this year's national police week is sunday, may 13, through saturday, may 19. 's george w. bush once described it, the peace officers memorial day and police week pay tribute to local, state, and federal law enforcement officers who serve and protect us with courage and dedication. it also reminds us of the ongoing need to be vigilant of all forms of crime, especially acts of extreme violence. on sunday, may 13, i attended the candlelight vigil for our fallen officers from 2011. 163 peace officers gave their lives for sacrifice for us in the line of duty. earlier today i had the honor of attending the 31st national police officers memorialial service right here on the front lawn of the capitol.
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we honored over 19,000 law enforcement officers who have given their lives the ultimate sacrifice in the line of duty. in 2011, as i said, 163 police officers gave their lives for this country. so far this year we have lost over 40 officers in the line of duty. on july 3, this is especially close to me, july 3, 2011, one of those who lost their lives was hernando county sheriff's deputy, john mecklenburg, a deputy that i actually swore in to serve the citizens of hernando county. the john died while in pursuit of a suspect and gave his life, and john left behind a wife, penny, and two children. when he left that evening to go to work for the midnight shift, he had all expectations of
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coming home. but john gave the ultimate sacrifice for his county, for his state, and ultimately for his nation. i served as police officer for 36 years before i came up here. i know what it is to go through the grief of losing one of our own. i want to thank the fraternal order of police for highlighting this and working with the cops organization to actually pay respect to those who have given the ultimate sacrifice. we have been blessed in america and we are protected by people who do it because it's the right thing. not because they are going to make a lot of money. they do it because they truly believe in the citizens that they serve. they do it with honor and dignity. today the president of the united states spoke to all the survivors and police officers and their families that were in attendance on the front lawn of the capitol, rightfully as he
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should. we appreciate the president coming forward because it means so much to the survivors of a law enforcement officer who gave the ultimate sacrifice. once again i say we have been blessed in america, mr. speaker, and we owe a debt of gratitude to our law enforcement officers who protect us 24 hours a day, seven days a week. mr. speaker, i ask we also keep our thoughts and prayers not only to law enforcement officers out there today at this very minute across the united states, putting their lives on the line, but also remember those who are serving in harm's way in our military who also have given some of the fullest measure that they can and that's their life. in defense of this country. mr. speaker, god bless us and god bless america. thank you. the speaker pro tempore: pursuant to clause 12-a of rule 1, the chair declares the house in recess until
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>> it is primary day today in nebraska and oregon with 63 republican dell cats at stake. we'll have results of coverage from those two states after the polls close. you can follow that on our website, c-span.org. also there social media buzz. can you read what the candidates, political reporters, and people like you are saying about the presidential race with links to facebook and twitter. all of that at c-span.org/ campaign2012. the nato summit is this weekend in chicago. former nato ambassador nichlas burns has released a report on the organization titled, anchoring the alliance. in remarks yesterday at the atlantic council, he emin a sized the importance of nato to the u.s. and all its democratic members. he added its crucial there is
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reconfirm and stronger leadership in the future. this is an hour and a half. >>'s terrific to be with you this evening as we aproshe the nato chicago summit and the heads of state and government gathering in chicago for the first nato summit in the u.s. since 1999. the council's been active all year even a little bit beyond that. ever since the lisbon summit and remaining at the forefront of thought leadership on all the issues that will be addressed in chicago. including but not limited to the issues of afghanistan. defense capabilities, and of global partnerships. and of course missile defense. those will dominate the discussion.
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however, as important as those issues are, it was our feeling that something underlies all of this. and the most important thing the alliance from the beginning of the alliance has been the question of leadership and all those baskets of issues will be influenced by the kind of leaders who influence them as we go forward. secretary robert gates made that clear in his farewell remarks in brussels last june where he talked about the alliance facing a dim and dismal future if we didn't get our act together. he pointed out some of those challenges lie with america's allies in europe and canada whose lack of defense spending and political will risks creating a two-tier alliance. last week at the atlantic council's annual awards dinner, the u.n. secretary-general who received our distinguished international leadership award, rightly isolated a dearth of
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leadership as the central challenge facing the international system. quote, everywhere we look, he said, it seems as if we see growing insecurity, growing injustice, growing social inequality, if i were to speak like an economist, he said, i might say we have an oversupply of problems and a deficit of solutions, a deficit of leadership. fortunately we do have a leader on our board of directors, ambassador nichlas burns, who was eager to rise to the challenge of outlining a vision and recommendations for nato's member states to stave off the prospects of this dim and dismal future for the alliance our nations can ill afford. there have been different ways of leading the alliance in the past. there have been many times when the u.s. was way out in front. there's been many times when the alliance has met in a quad, the four largest powers of nato
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after world war ii. and i think in this paper there's a good look at what sort of leadership has to emerge now and from what sort of quarters. nick's worked very hard on this project. traveling multiple times to europe, making numerous visits from his perch at harvard to washington to meet with top officials and experts within the transatlantic community. i was lucky enough to sit on some of those meetings along with others of us at the atlantic council. we are delighted with the product we have been able to produce and look forward to being able to share its findings now in conclusions with you-all. you'll find some of them controversial. i think it's hard to quibble with many of the underlying arguments there. we are also fortunate that this report has the endorsement of a vast array of senior officials who have done some of the most important jobs at nato.
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and in the alliance. such transatlantic luminaries as madeleine albright, lord george robertson, david miliban. three former secretary-generals of nato have signed on to this. they were consulted throughout this effort and the report has benefited from their guidance, their wisdom, and they support the report's broad findings if not each and every one of its specific recommendations. before i turn the floor over to nick, i briefly want to call attention to another atlantic council effort i think is complementary to nick's report. the atlantic council foreign policy magazine survey on the future of nato. the council on foreign policy built a survey which we sent to some of the most senior figures in the transatlantic community to get their thoughts on the future of the alliance in light of some of the challenges i just mentioned.
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i think the survey can give us a sense of the political obstacles facing the alliance which this report argues must be overcome. and you can -- if you didn't grab a copy of the survey coming in, please do so on the way out. before i hand the floor to nick i also want to tell you that we invite you to come back to the council next week on may 24 when we host an event here where you can fill out a report card on how the alliance did in addressing its key issues from chicago at our post-summit conference. now it's a pleasure to turn the floor over to one of america's finest and most distinguished diplomats to talk to you about this report and findings. ambassador burns as i said earlier is an atlantic council board director. he's a professor of the practice of diplomacy and international politics at the kennedy school of government, harvard. he's also the director of the
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aspen strategy group co-chaired by joe nye and chairman of our international advisory board. he retired from the u.s. foreign service in 2008 and is under secretary of state for political affairs and he did that after his 27 years in the diplomatic corps where he served as u.s. ambassador to nato, u.s. ambassador to greece, and state department spokesman. he also served on the national security council staffs for presidents clinton and george h.w. bush, working on russian and east european affairs and underscoring the bipartisan nature of the atlantic council. i do want to tell just one story about nick. the -- just to give you a feeling and not only of his bio but the impact he has at crucial times. he was u.s. ambassador to nato while i was sitting as the editor of the "wall street journal" europe in brussels and it was one of the most
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challenging and historic moments in the alliance's more than six decades of history. he arrived at the ambassador's residence just days before the tragic attacks of 9/11. the next day the alliance showed its unique and enduring relevance to the united states when all allies invoked article 5 of the washington treaty for the first and only time in nato history. it wasn't an easy time to be the u.s. ambassador to nato. and the alliance had achieved an historic and transformational summit at prague but also went through one of its deepest crises ever after -- during the iraq war, which i think nick, at the time, you refer to as a near death experience for the alliance. i think it's likely in part thanks to your leadership, nick, that the alliance got through those turbulent times and is in the good shape it is in now. nick has done more how the u.s. shaped the alliance, he's shaped
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the atlantic council. when i first became president of the council more than five years ago, i met nick at the state department to get his views on what the atlantic council ought to be doing. he was undersecretary of state for political affairs at that time, working with our allies on norging -- forging a common position on iran, and an array of other major issues. nick described his ambition of a transformed atlantic community capable of serving as a catalyst for global action in partnership with the united states on the greatest challenges we face. a lot of the partnership initiative you now see in chicago grows out of that kind of thinking. it was a compelling vision which nick later described in a speech at the atlantic council in march of 2007, can you still find it on our site, just prior to the state department. that vision became the atlantic council's vision. thank you, nick, both for your
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able service to your country but also to the atlantic council. >> fred, thank you very much. good afternoon, ladies and gentlemen. a lot of friends in the audience and i want to thank the ambassador of denmark in particular for being here. a lot of my former colleagues from the united states foreign service are here. i want to start by thanking fred and damon, the president and vice president of the atlantic council. this council is the place in washington where the transatlantic community meets. it has been for decades. but under fred's leadership and damon's leadership, this council has been transformed. and it's not only the center of the he transatlantic relationship in terms of its intellectual depth here in washington, d.c., it's taken new programs in the middle east, in south asia. it's rethought america's strategic interests in east asia. even if i weren't a loyal member
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of the board of directors, i would say objectively it's the fastest rising think tank in washington, d.c. and it is a think tank making a real mark for itself. i want to thank both of my friends, fred and damon, for their leadership. i think all of you have this report before you. i'm going to say a few words about it and then fred and i will sit down and have a brief conversation about his major points and open it up to all of you for your questions and observations. any criticism please feel free to direct that my way, not fred's. i would say this, we at the atlantic council believe in a stronger nato. and we believe the leadership of the alliance has to be reconfirmed and recommitted for the 21st century. that's the basis of this report. our leaders of the 28 members of the alliance will meet under president obama's chairmanship in chicago in a couple days. it's even a broader summit meeting in chicago because our partners, more than 20 partners, will be there, too.
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this summit this weekend represents the combined leadership, power, and involvement not just of north america and western europe and central europe, but the -- central asia as well. that's how big the atlantic alliance is. our belief is that nato needs reconfirmed and stronger leadership. we say that for a couple reasons and we go into this in the report. first, nato really matters to the united states. we wanted to leave with that thought. i'd like to leave with that thought today, because the conventional wisdom in a lot of parts of our own country are that nato's yesterday's story. that nato was our bulwark against soviet communism. that nato was the principal vehicle through which germany was unified in october of 1990. that nato was the organization that stopped the bloody wars in bosnia in 1995 and in kosovo in 1999. and has kept the peace in both
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places since then. nato did all of that, but nato's not yet ready to retire as our former secretary of state, colin powell, used to say. if nato's yesterday's story, why are so many countries knocking on the door to get in? the fact is, we know this through some of the bitter history of the last decade, after 9/11, the bloody and difficult interventions in afghanistan and iraq, the fact is we live in a highly integrated globalized world. it sounds trite to say this, but if we didn't have nato in 2012, we would want to create an organization that looks exactly like it. because the united states has learned we cannot be unilateralists in the world. that doesn't work. and we certainly cannot be isolationists, not in a globalized 21st century. not when terrorism and its juxtaposition of wmd and al qaedas, terrorists groups like that, global climate change, and drug and crime cartels require
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our active involvement and leadership in the world, we can't go it alone. and we have this enormous successful alliance called nato that helps the united states and hopefully the united states helps the allies to negotiate their way in the world and to face these challenges and overcome them. and the common denominator is we are all democracies. we believe in the same things. human freedom. democratic government. the rule of law. and we are in one alliance. if nato hadn't been created on april 4, 1949, we would want to recreate it today. nato really matters. and that defies the conventional wisdom that you often see in speeches by our political leaders and in commentary in many of our leading newspapers. second, europe still matters greatly to the united states. one of the big issues of the last seven or eight months has been the so-called pivot by the obama administration to asia. who can argue with that at face
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value? china and its rise is the biggest story of our time. the challenge that chinese -- china's military buildup represents for the united states and all of our allies is quite profound. we know we need to live with china, engage china, and yet we need to be present in asia and the pacific region. in that sense president obama made exactly the right choice. the problem is that if you're sitting in europe and we interviewed lots of european leaders who believe this, it looks as if the united states is pivoting away from europe to asia. when europe is our largest trade partner. when europe is our largest investor. and when europe is the whole contains the greatest number of allies in the world, 26 european countries allied to us in nato. if there is going to be a pivot to asia, it should be a european-american pivot together to asia. and i want to credit the former foreign secretary of the united
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kingdom for having insisted on that point with us when we interviewed him for this project. we do give him due credit in our report. so nato matters. europe matters greatly to the united states. we are at our core a transatlantic nation by history and by interest. and nato needs new leadership. the core of our report is to ask each of the leading countries of nato to reaffirm that leadership in very concrete ways. we begin with our own country. we ask the united states congress in this report not to cut the united states defense budget. the obama administration's budget beyond the roughly $400 billion over 10 years that has already been agreed. if we go into sequestration, if we are facing in this country over $1 trillion in defense cuts. it will impair the ability of our military and our government to protect the american interests around the world in europe, in the middle east, in
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south asia, and certainly in east asia. we understand, i certainly understand as a citizen, that every part of our society has to uphold the responsibilities of reducing our budget deficit, the military's going to do that with nearly half a trillion in cuts over 10 years. if we go well beyond that, we are endangering the power of the united states as the greatest force for good in the world. as i said before, the second recommendation is that this pivot should be with europe and that the united states and europe should be acting together on a strategic basis to be active in south asia, in the middle east, in east asia. third, there's been a lot of talk of a transpacific partnership. that was part of the president's initiative on asia which i certainly agree. how about a transatlantic
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partnership that goes beyond just nato? but thinks about a greater economic integration between north america and europe itself as a visionary idea for the future? those would be some of the recommendations that we have for the united states. we of course value so much the leadership of france in nato. as fred said i went through along with damon, along with my free close friend, dan, who is an outstanding assistant secretary of state for europe in the bush administration, we went through some very difficult times. the extraordinary act of the european allies coming to our defense on september 12, 2001, invoking article 5 for the first time in nato history. then the near death experience of nato nearly breaking up in our division over the iraq war in 2003. one of the great saving strength of nato in the last five years has been the return of french vigor, french energy, french intellect, and french leadership
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under president sarkozy at nato. i felt that when i was undersecretary of state. i felt it in the iran negotiations when i was negotiating with the russians and chinese over iran sanctions, it was sarkozy's strength and toughness that allowed us to pass those three security council sanction resolutions between 2006 and 2008. there is a new leader in france. of course we welcome the leadership of france with a oland. but the report does say that we hope this new reor thentation of french policy will continue. obviously the president will have an opportunity this weekend at the chicago summit, we hope to reaffirm that france will stand by its nato allies in keeping its troops in afghanistan until 2014. as nato has agreed and not withdraw him by the end of 2012
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as president-elect oland said he would do in the campaign. we hope there is not a division between france and the rest of nato on that issue. we certainly hope that the return of france to the integrated military command, sarkozy returned it, that that will continue. and first and foremost that french steel against iran is badly needed in a very loose coalition of countries, russia, china, britain, france, germany, the united states now facing a second round of negotiation was the iranians in baghdad on may 23. i'm just speaking for myself now not as an atlantic council board member. i did see the press reports that the french leader had been sent by the president-elect to tehran today to have conversations with the iranian government on the nuclear issue. i have no idea what was said in those meetings. i think it would have been
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preferable if he had come to washington to the leading ally of france first about iran before jetting off to tehran. we also mentioned germany in this report. in many ways we have so much respect for germany for his historic leadership of europe, for the role that chancellor merkel is playing in the europe debt crisis, and we hope for sustained german energy and leadership in nato. but i must say as we went around and talked to scores of people on both sides of the atlantic over the last seven months, damon and myself and our colleague jeff lightfoot, we were struck that nearly every person we interviewed, serving officials, former officials said we need a stronger germany. we need a stronger germany in nato. germany is an economic superpower, but in terms of its political and military leadership, it is not a leader
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in any sense of the word. if nato is to succeed, our keystone country, the reason for nato's existence if you think about it, historically, germany needs to lead us politically and militarily. it needs to be right in the middle of the leadership group. i must say just based on my own experience germany is not in that group. it sits in the meetings, but it's not providing the vision and the leadership that we need. you know nato for a long time, to give you one sample of this, for a long time nato has said -- an example of this, for a long time nato has said we should spend about 2% on the defense. exactly three of us are spending 2% of our gross domestic product led by the united states at 4.5% or 4.4%. germany, 1.2% or 1.3% of its g.d.p. you see the gap between the natural leadership position of
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germany and the reality that germany cannot deploy with the u.k. or france much less with the united states because it doesn't have the military capacity to do so. that's an important metric, but i think a more important one that i hope will come out in this report is that we need germany's ambition and germany's leadership and paraphrasing the polish foreign ministercy core i ask in the famous speech he gave last autumn, a polish foreign minister saying, we need a stronger germany. we heard that throughout our conversations. woor convinced that a weaker germany politically and militarily will weaken the alliance and a stronger germany will make us credible and energetic in the 21st century. of course we didn't forget the united kingdom. we spent a lot of time in the united kingdom talking to friends and talking to some of the people who have been directing the government over the last few years.
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we are concerned in our report, we say this, by the extensive military budget cuts in the united kingdom over the last several years. there is no question that pound for pound the u.k. is the most capable european ally in terms of its ability to project power, to deploy its forces and the first rate quality of its special forces, and have they proven that both in basra and southern afghanistan over the last decade. these defense budget cuts, of course we understand that there is a budget, economic crisis in the united kingdom, risk over the long-term, they risk that quality and capacity in the u.k. armed forces. we certainly hope as the economy revives in the u.k. that britain will return to sustain that defense budget and return to the full -- first rank of nato where it certainly belongs. there's one more country that we emphasize in this report and
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that's turkey. if you look at the landscape in europe and the eurodebt crisis, if you look at the realignment and power in the world with the rise of china, brazil, india, globally, regional powers, there is one european country that is rising rather dramatically in its pow earn influence in the world and that's turkey. i would say personally that turkey is more influential in the middle east than germany or france or britain. we have seen a remarkable rise of turkey under the leadership of the president and the prime minister over the last many years. and a willingness of turkey to lead and to be active in the toughest problems. so our report calls for turkey to be treated like a leader at nato. turkey joined the alliance in 1952. it's never been given leadership opportunities. there is an informal group of four countries. the u.s., france, britain, germany that have led the alliance over the last five
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decades. turkey ought to join that group. we believe a turning should be considered to be the next secretary-general of nato. we believe that turkish generals should be given leadership opportunities of our military operations in peacetime and wartime. we believe that turkish leadership is essential. this will rirl an attitudinal change by all of us. require americans to be more open to this, i suspect that will not be an issue given the close relationship between the obama administration and turkey, but in particular it will require europeans to think of turkey as a european power. europe has not made that decision on the e.u., on turkey's candidacy on the e.u., but the transatlantic alliance is given. canada and the united states also have advice. we wanted to reflect a strong willingness of the united states to see turkey play that role. the final point is, fred alluded to this, we need nato not to be
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global in terms of its membership but global in terms of its political orientation and capacity to act. some of our best allies in afghanistan are australiaa and -- australia and new zealand and the united arab emirates and jordan. nato has been constructing a partnership program that would bring nato to a more global or thentation and that's where -- orientation and that's where nato needs to go. morocco will not become members of nato but they can deploy with us and train with us and nato needs to encourage them to do so. in other words, we can't think of ourselves somehow as just an organization that just exists in north america and western europe, it's an organization that has to have the capacity to act globally. that's in our report as well. in terms of how do we put this together, do i want to thank our review board. our review board of
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distinguished european and american and canadian officials. agrees with the major conclusions of this report but has the right to disagree with some our specific prescriptions and not responsible in any way, shape, or form. damon and i are, for the quality of this report. but to have three former secretary-generals of nato support us in writing, to have our former secretary of state, madeleine albright, and former depp spute secretary of state, ann marie slaughter join this board agree with us, steve hadley, president bush's national security advisor. and secretary of defense bill colin, and to see three former u.s. ambassadors to nato, will taft, david, and kirk volcker, and three great people in britain, david millibrand, and
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perry, my former british colleague at nato. we have widespread support for this report. we are very grateful for their intellectual import and personal support. fred, that's what i wanted to say. i have think the plan is the order of battle is for us to have a brief conversation. then we'll be happy to take whatever questions you have. thank you. >> thank you, nick, very much for that. first of all it's important to state the atlantic council is a council doesn't take a point of view on anything because it would just be too hard to get all the members of the council to agree on anything. but i do think one thing we all agree on is a strong alliance and enduring alliance and certainly this report points us in that direction. let me ask probably two questions and i'll go to the audience right away.
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two of the more controversial points of this. clearly what you're saying on germany is tough. and it's saying it to a germany that where many germans would argue aren't we doing the most important thing we could possibly do for the future of europe right now, which is saving the eurozone and putting together this fiscal compact, etc., etc. what's your answer to that? and then, where is this german weakness coming from? is it historical reluctance? is it lack of political leadership? and what's the fix? what do you want -- what do you want germany to specifically do? >> fred, i think i could speak for all of us who prepared the report that we offered this recommendation with the greatest respect for chancellor merkel and her government and the german government in general. we understand job number one for germany is resolving the
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eurodebt crycy, helping europe climb out of a recession and that has to be their first order of business, we understand that. at the same time, the reality is that germany is a global power. it's one of the strongest, largest economies in the world, one of the most powerful nations in the word. it's without any question the leader of europe. if europe is to have a global presence and a credible global policy over the next decade or so, it will have to be led by germany. in addition to resolving the eurodebt crycy, germany will have to do what we have to do. we have our own economic problems. that's our job, number one. but global powers don't have the option of saying we are going to opt out of our global responsibilities. let's take the united states, for example. our citizens, our taxpayers have been funding the first rate military in the world because it's in our interest, because we have global responsibilities. germany has those same interests as we do. we need germany to play that
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role. that is the message that we'd like to get with great respect to the german government and those germans who read this report. where does this come from? you would be better qualified for me answer it except i would say that all of us understand that germany's entry into nato in 1955 was a very difficult and complex operation by the eisenhower administration, the german leadership at the time. but germany has more than proven that it is a -- one of the world's most impressive democracies. it's seven decades beyond the second world war. no country has done more to face the holocaust and face the crimes of the nazi era than germany itself. and its current generation of leadership is undoubtedly, truly decidedly democratic. it's not a lack of trust in germany. perhaps it's an excess in ambition for the role germany must play. we were really struck by the fact that every european we
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talked to said we need a stronger germany. every american leader we talked to said we need greater germany weight in the world beyond the eurodebt crisis, economic leadership that germany has in the e.u. we need to see it politically and we need to see it globally through the gatherman military and nato. one example of that, when the arab league asked nato to intervene in libya last spring, when the u.n. security council blessed it, when there was worldwide support for that, when britain and france and denmark and norway put their soldiers and airmen on the line and led that effort, germany did not support it. and that i thought, the people we talked to, it was rather shocking to see germany not play that leadership role. it's the kind of thing we are talking about. >> on turkey, walk me through this a little bit. i think what you're saying about turkey, i don't think people
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would quibble with, is greater centrality if you look at what's going on in syria, but are you talking about a short-term move to make turkey more engaged? considering to be the next secretary-general of nato? or are you talking something longer term and evolutionary? on the other hand, what does turkey need to do to earn this? one's heard reports that there's turkish veto over israel attending the nato summit. i don't know that for a fact myself, personally, but we do know about the strains between turkey and israel right now. so if you could tackle that a little bit and think through how this might happen. >> we were also struck, fred, in our conversations with the europeans and canadians and americans, how often turkey came up in the conversation. because as i said at the podium, it's a sad fact that in many
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ways this is a time of crisis for the alliance. there is an economic crisis in north america. there is a profound economic crisis, you might even say plilly a crisis in europe about the future of the european union. of all of us 28 of us in nato, there is exactly one country that is now accelerating in its power and influence in the world is turkey. it would be a missed opportunity for europe and america not to essentially say to itself we need this country to play a bigger leadership role in our alliance where turkey has been a faithful member since the mid 1950's. we would be remiss if we didn't take advantage of turkey's influence in the arab world, particularly at a time of transition, during the arab uprisings. so this is really not a controversial recommendation. it may be in some quarters of europe, and we can put aside the question of whether or not turkey should become a member of the e.u., certainly president
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clinton, president bush, and president obama believe that europe should be open to turkey. this is our alliance. this is the transatlantic alliance. to remain credible and effective we need that turkish leadership. nato has an ethic -- a ethic that all 28 of us are equal. that's the way it should be. we operate by consensus. if we decide to go into afghanistan, as we did, in march, 2003, we voted do we send military force to afghanistan? which we suctionly did. every nation had to agree. ice lavepbd which had no military. luxembourg which has a small military, their vote was as born as the united states, that's as it should be. but informally there is a leadership circle. there always has been. it's based on military weight and political influence and global capacity. turkey has never been in it or allowed to be in it. what we are suggesting is by a strategic decision the united
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states, france, germany, britain decide that turkey should be in that leadership circle. there's no easier way to do it than at least to consider a turkish citizen, a turkish diplomat, a turkish politician to lead the nato alliance. to be our leader collectively the next time nato chooses a secretary-general and turkish generals to be given important leadership posts. you've got to not force these issues but you have to make strategic decisions and our recommendations will make this decision. >> the burden on turkey? >> it's a very complex situation. as we got into this, looked at it, talked to turks and others, there are a number of challenges that turkey needs to meet. probably to retain this leadership role. first is the fact that turkey, because of its dispute with israel, its very unfortunate dispute, has been essentially blocking, preventing the maturation of a nato-israeli military leadership a lot of us have worked on.
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secondlying -- secondly, the continuing disagreements within the e.u. over the cyprus issue. turkey is not solely responsible for that. there are two sides to that story on cyprus. but thirdly there are very worrisome developments within turkey itself over the last several months. restrictions on turkish journalists and the arrest of over 100 turkish generals and military officers who now will stand trial. we don't want to take sides in these internal turkish matters, but just to say there is considerable disquiet in the united states, canada, and europe that we heard and that we feel personally about those actions of the sturkish government. i suppose that -- turkish government. i suppose that if turkey is to play this leadership role, many of these deficiencies have to be overcome. >> one other question on turkey. turkey would like an article 4 consultation in chicago on syria. maybe you can explain to the audience, pretty knowledgeable
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audience, but nevertheless if you could explain what that is and why is there such a reluctance of nato to take this on? >> i think as all of you remember, we do have a televised audience, nato 1501. nato, we are all members after treaty, we are committed to it. it obligates us. article 5 is when an alliance member says we are being attacked or we have been attacked, please everyone else come to our rescue, which europe did for the united states on september 12, 2001. i'll never forget that moment. i was frankly worried on the evening of 9/11. our communications were cut off from washington because the state department nor a -- for a time had been evacuated. when i finally reached conde rice, i said that nato was thinking about invoking article 5 and we agreed that would be a tremendous shot in the arm for the american people waking up on september 12, but it wouldn't be such a good shot in the arm if
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nato equivocated or didn't even agree. and to their credit the european allies, i remember the danish government in the lead here, same to very quickly to a decision that they would in essence side with us in a possible war against a foe we hadn't even identified. but in looking at the collapse of the twin towers and the attack on the pentagon and what happened in new york and pennsylvania and washington, the europeans were with us. that's article 5. art erikle 4 is -- article 4 is nearly as important. when an alliance member feels there's a possibility they may be engulfed in a war or attacked by someone else and they say could we meet to plan the possible defense of our country from an aggressor? and in march, 2003, turkey invoked article 4 of the nato alliance and said if there is a war in iraq we are afraid the iraqis might attack us, and we had considerable challenge in overcoming the objections then of germany, france, luxembourg,
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and belgium to invoke article 4 and plan the defense of turkey. we succeeded because the turks are great allies. if turkey was to invoke article 4 in chicago, we should all agree because turkey is a frontline state and the turkish government, the prime minister of turkey has taken a very courageous leadership role. he's opposing assad. he's turned turkish policy around. all of us should agree to invoke article 4, have a discussion in chicago, and protect turkey if need be. i think it's as simple as that. >> thank you. one last from me and then to the audience that's on the u.s. you've got tough love for the turks and germans and french, but you also have some for the u.s. what is your report guard of the obama administration's leadership of the alliance thus far and most specifically as the host nation for chicago? how would you -- we have a few
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days until the summit, but how would you judge performance thus far? >> i should be specific here. i'll just speak in my own capacity just for myself. i don't want to speak for anybody else who wrote this report on such a sensitive issue. i think president obama has been a very creative and active and energetic leader of nato. i admire him for it. i admire the people working for him. the way that the united states was able to convince some of the european allies to lead, britain and france especially, denmark as well, and benefit from the leadership of denmark, britain, norway, france, and libya was maybe not a template, certainly not for all future nato operations, but a positive point of departure where in some instances europe can actually lead the effort. we never had that before in nato. we are really proud to see what dan mark, norway, britain, france did among others. i credit president obama with that decision. our advice from this report is, one, with great respect and
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advice to the administration, i'm very much a supporter of the administration, is this, this pivot is really important it be executed properly and comprehensively. europe's our strongest ally. it will be our strongest ally 50 years from today. no question about it i given our history, given the alliance link, given our economics. and so if we are going to pivot towards asia, it must be with germany, france, denmark, ice lan, luxembourg, all together reorienting ourselves not to 230er get the challenges we -- forget the challenges in europe, trying to finish our work in the balkans, but be present when we must. to be part of the positive solutions in the middle east, south asia, and east asia. the main recommendation to our country is not to turn inward. not to be isolationists because we are having troubles here at home. and to avoid draconian cuts to our defense budget. there are a lot of people here who understand defense far
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better than i do. if the united states loses our military edge, our qualitative military edge, if we lose our power to protect for us and be a force for good globally. our foreign policy will suffer. and countries that we may not like very much may emerge as dominant countries. so the most important part of this report for me is that the united states lead nato and lead by a strong military in the future. $450 billion over 10 years is quite a significant contribution to budget cutting. if we go beyond that, if congress does, i think we'll be in big trouble as a country. i don't want to see that happen. i don't think anyone wants to see that happen. >> if you wait for the microphone and identify yourself. >> i'm harland. nick, there is no more articulate or better spokesman for nato and you certainly demonstrated that today. i have a question about the forthcoming summit in the context in 1999 during that
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summit here we were bombing serbia with uncertain results and bill clinton was being impeached. this summit will be less interesting in that sense. thankfully. but there are three huge issues that are really going to dominate the summit. the first is afghanistan. and some of us have not had very, very good feelings about the way afghanistan is going. dianne feinstein and mike rogers just came back as you know and had some interesting things to say that support this kind of negative view. so you have afghanistan. second, the economic and financial crisis in europe is probably going to get worse before it gets better and will dominate everything. indeed you are going to see even greater budget hits in europe. last, in january, no matter who wins the election, a perfect storm is developing in the united states over sequestration , debt ceiling, bush tax cuts expiring, etc., etc., etc. which may not be resolvable and will lead ought matically to what you fear most and that is a
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draconian cut in the defense budget which is inevitable. how do you deal with those three issues in terms of the summit, afghanistan, a looming and growing crisis in europe economically and what the united states will face in six or seven months when a new administration or current administration takes over? >> thank you. i would just say we did not -- we specifically did not intend this report to be a comprehensive look at the status of the alliance. there have been roughly 862 reports written to take the temperature of nateover the last decade or so. we wanted to focus on leadership. you won't see a lot of details. but in afghanistan there is a real test here. the united states and the nato allies are trying to form a negotiation with the taliban and afghan government as a way to create a peace in afghanistan that would allow us to believe. if the taliban believes that france will end by the end of this year, calendar year, if they carry out their campaign
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commitment, if the allies sprint for the doors, if we leave the impression, the united states, we are not going to leave a strong, residual special operations force beyond 2014, the taliban is going to wait us out. and they are going to think they can emerge triumphant after 2014. we will have invested more time in afghanistan than any other war in american history. so before we rush to the exit, this is a very difficult war for the american people, it is in terms of a loss of our soldiers and the huge economic course, we have to redeem this operation in the end game by making the correct choices. i would think if i were covering as a journalist, i'm not a journalist, i'm not covering the chicago summit this weekend, i'd like at this afghan discussion and say will nato stay the corse to draw down in -- correspond to draw down in -- course to draw down in 2014. and hopefully transition to
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peace talks with the taliban so we can have a peace agreement that ends the war. the taliban won't buy any of that if they see us sprinting for the exits. this is the biggest issue. you're right the economic issue will be front and center. the greek elections were catastrophic. we are seeing a sea change in greek politics with the two leading parties of the last 40 years are now being outclassed and outrun by the democratic left party. and if they gain power and second greek election in the middle of june and rejection the austerity plan, think we are right back into a profound crisis in the european union, likely default by greece, and perhaps the departure of greece from the eurozone. big problems this weekend. you mentioned sequestration, we talk about it in the report. very important the united states remain the world's strong epidemics military power. in a world where china is rising
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to power in asia, that's critz cal for the future of america. -- critical for the future of america. >> thank you. >> i was struck by how skillfully the report builds on and incorporates the assumptions about nato from the -- this administration and the past two. so it's a very useful document with one gap. almost nothing is said about russia either as a challenge, which some in the alliance thinks it is, or as a potential partner which many of us hope it could be. what was your sense about -- what sense did you get about views of russia and potential for partnership? and where does -- if you had to make recommendations for russian leadership along the lines of
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leadership for the other nato powers, what would they be? >> dan, thank you for the question and thank you for your leadership. continued leadership. you mentioned bipartisanship. the last three administrations. i was struck in the course of preparing this report at a time when republicans and democrats agree on very little that there is widespread agreement between republicans and democrats that the united states needs to lead nato and nato's vital force. that was reconfirming for us. when it comes to russia a lot of the comments from our review board why why didn't you say more and do more about russia? it's because we set out not to be comprehensive. we set out to look at leadership within the alliance. obviously if the alliance has to think about it's most important strategic priorities, getting along with russia, working productively and not at variance with russia is going to be vital for us because we still -- europe is free and at peace. that was the vision of helmet
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cole and margaret thatcher and george h.w. bush 20 years ago. but the western balkans are not yet at peace or economically successful. most are not yet on track firmly in the e.u. and nato. that's unfinished business with which russia will have some degree of activity. so we'll want to get along with russia and work with russia for that end. secondly, as a partner, this is what i don't you understand why some people think that russia is the number one adversary of the united states, we need russia in afghanistan. russia is helping us to resupply our forces in afghanistan. we have an interest in promoting counterterrorism cooperation with russia. they are a victim, too. and counter narcotics cooperation. and i would think that iran, which is right now the number one national security issue of the united states, it's the iranian nuclear future. if you look at that p-5 plus one
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construct, russia is the most important country at the table for the united states. china won't be helpful because china's mercantilistic. the european powers have some limited influence in tehran. russia has a lot. if there is going to be an end game on iran where we convince iran not to stop short of a nuclear weapons future, i would bet that putin and the russian government will have a lot to do with that solution. so there is going to be a very close u.s.-russian interplay, cooperation on iran. that means that the nato-russia relationship is critically important. the promise of 10 years ago, we create the the -- created the nato-russian summit in italy. that has not been fulfilled. major order of u.s. and germany, because germany has close tie was russia, is to bring back a good working relationship with the russian government. very important.
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