this is about making money. it is a mix of money and more strategic things as well but manageable in a commercial way as well. the commercial orientation of the deal is a useful wake-up call as to what america has to sell. host: your report talks about foreign direct investments coming into the united states in 2009. europe made up 63% in 2009. 16.4%, japan made up 11.4% of that. the little slice of bread shows where the chinese investments ranked in terms of money coming into the united states. anthony is waiting on the democrat line.

caller: china is communist. why do we let them invest in our country and we invest in their country when they are our enemy? communism, the main goal is to -- they do not agree and believe in what we believe in. i want your opinion on that. is it just because of the love of money or what? guest: it is china's fault for still calling itself a communist country that people have misgivings. if your manager is china versus united states and capitalism versus communism, the battle is over. it has been one. china is communist in name only. the chinese economy is organized

around market principles. that is what drives how things work. we do have some real problems with china. there are good reasons to think about whether we want to treat chinese investment the same as we do from every other economy. it is not because of communism. it is about industrial policy interventions in the economy such as state control, influence, and ownership over certain sectors. automotive, for example. there's heavy state involvement in many industries in china. we are asking ourselves now. in the past, we did not use that as grounds to say no to other people's money coming into our communities. i think we still should not. maybe in the case of china, we need to revisit that and think about whether our interests are to let this in. it is harder to argue that today than five years ago because the federal government of the united states stepped in in the midst of the crisis and took a

temporary ownership position in a handful of companies to make sure they were not out of business, the recovery. i am sure that is something you talk about all the time here. host: or a visiting fellow at the institute. explain the report, why you did it, and where you get the funding from. it is a new york-based advisory partnership. we do research think-tank projects. i have been part of the peterson institute since 1993. the american open doors study was done with the asia society based in new york. we are releasing a new study. >> "washington journal" errors live every morning at 7:00 eastern on c-span. live coverage on the atlantic

council and the discussion on the european fiscal crisis and its future. 1st introductory remarks. >> the slowing pace of the u.s. economic recovery continuing to dominate headlines. we are glad to have dr. josef ackermann, the newly named chairman, on hand to let us know what is going to happen. you will let us know how he sees the crisis unfolding on the ground in europe -- he will let us know how he sees the crisis unfolded on the ground in europe. he is an old friend of the atlantic council, of mine from my days at the wall street journal in europe, and his advice i have relied on a great deal. more importantly, european leaders and business leaders around the world have relied on it. he launched our series here as deutsche bank chief on mapping

the global financial future. we are delighted to have him back after he stepped down from deutsche bank and has now joined zurich to pick up the thread. we are at a place where last week, european central bank president, i will remind everyone how incredibly careful they are with their words. he issued a stark warning to leaders saying it was unsustainable unless further steps are undertaken. he also said europe's handling of the crisis, where he feels leaders have gotten the fundamental size of the problem wrong at many points along the way, has been the worst possible way of doing things because everybody in subduing the right thing -- ends up doing the right thing at the highest possible

cost. that is from the central bank president in europe. we believe for the u.s. economy to return to a path of sustained growth and for the u.s. and europe to work well together on the world stage, we need europe to regain its politicalanputting and confidence. that is why our program has been so intensively focused on the european debt crisis. we put it together with ideas about the political future. i would like to turn the podium over to atlantic council chairman senator chuck hagel who will say a few words and introduced dr. ackermann. i will not give you his entire resume, but i think it is important to note that aside from being a decorated soldier and senior statesman, he is also .n accomplished business anman

we are particularly proud of the role you played on memorial day remembering the vietnam war when you introduced president barack obama in the ceremony that highlighted the tremendous heroism of vietnam veterans, including yourself and your brother, and this country's continuing obligation to honor their service. on on to parricide -- on the entrepreneurial side, he worked in the private sector as president of mccarthy and company, an investment-banking firm in omaha. he also served as chairman of the board of american information systems. before joining mccarthy, he was president and chief executive officer of the private sector council in washington. he has been a steady and moderate voice of all of the core issues from dealing with

to thenuclear ambitions future role of the west. he is a welcome and a valued partner as we bring together leading experts and policy makers to address the challenges future strategic competitiveness of the transatlantic alliance that underlies all of this for us. [applause] >> thank you. welcome. we're pleased that you are here. we are proud to have josef ackermann with us today. fred explained part of that reason. it was noted as i walked across the street about half an hour ago with an individual, he turned and said that it will be

a very enlightening -- be very enlightening to have an individual come and explain what the hell is going on in the world. josef ackermann has an interesting and important perspectives grounded in the realities of responsible global leadership. it goes far beyond financial services in europe. as fred noted, at a time when the world is undergoing a fundamental change of order in every way, it is manifested by our politics in all countries. you can take any region of the world and identify the unprecedented historical shift in geopolitics. the last 15 months in north

africa and the middle east and what is still going on is some reflection of that. certainly with dr. ackermann is going to talk about today, europe. it is bigger than just those two regions. it is bigger than just the united states. josef ackermann is as well- positioned to talk about the global dynamic of this as anyone. when the world is experiencing a centrifugal force of a global economy, in gauging the nation- state realities, something is going to happen. what is going on when look at the eurozone and start to analyze it, it is as much about that as it is the currency

itself and all of the factors that play into monetary and fiscal policy. he will talk about that. as was noted earlier, you all know something about josef ackermann's background. this is one of the premier financial services leaders in the world today. it goes well beyond his financial-services. it is business, civics, government. he advises many world leaders. he sits on a number of boards. this is an individual global leader. i say that not without appreciating the significance of ththe statement. he is a global leader with considerable range. we're proud of his association with the atlantic council over

the years. ladies and gentlemen, it is my privilege to introduce you to our guest today, josef ackermann. welcome. [applause] in his typical style, he said let's just do q&a. that is what we're going to do. i will go back and forth to the audience. we will go to the audience quickly. let me start by going back to the statement last week. the washington post said describing his statement that he declared the common currency was unsustainable until further steps are undertaken. is it time to start worrying about the end of the euro?

if so, what should we be thinking about europe right now? >> first off of, i am delighted to be back here. you have organized an interesting environment for the meeting. let me start with a political response. we cannot say yes to this question. it is absolutely key that the eurozone is maintained in the current status. it also has given us tremendous signals that things have to be changed. one of the complacencies in the european setup is that when we started the monetary union, we knew this is not sufficient for very long.

the first 10 years were so successful that we forgot a little bit to push for the next steps, much more integration and coordination and some sort of fiscal or political union. when the financial crisis started and people were focusing more on the quality of countries or companies, we have seen many countries could not find themselves anymore or at levels that made it difficult to maintain their fiscal deficit target. now we are in a position a little bit back where we were at the end of last year. i have said many times that we need several hundred billion euros of banks funding and 700 billion euros of country funding at the beginning of

2012. you could go wherever you wanted to, europe, the middle east, asia, the united states, and ask people if they would be willing to buy some risk or bank debt. the answer was normally know, why should we? we felt we could see some issues in financial markets and beyond that in the economic markets in europe in the first two months of this year. the european central bank stepped in with roughly one trillion euros of fresh money. that calmed the market's. they felt they could fund. some of them sought sovereign risk again. they felt we could now maintain some sort of state of development for the next few months.

then came the greek election which was not necessary. in my view, it was a big mistake. the outcome was unclear and added to the fragility of the situation. since then, we are back to square one. we're talking about everything which has always been mentioned in the united states and other countries. traveling to see major investors and government officials the last three years, you always hear the following five elements. it is interesting to compare what has been achieved in relation to these five requests or demands. the first one was, improve the access and ability of greece. absolutely key and important. the second, put the house in order in italy, spain, ireland,

and portugal. the third one was to ease compensation from one to another to a new equilibrium. you need to stop the spillover effect. therefore, you need a fire wall of around two trillion euros. that is the ballpark number you heard. you have to recapitalize the banks. you have to make the funding of system more certain. you have to start working on better governance in europe. here we are about six or seven months later. we have reduced about 107 billion euros of debt, but it is still a big number. debt to gdp is still around 160%.

the goal of producing up -- the goal of reducing that by 2020 is a big challenge. i am confident they can achieve that, but we're seeing a contraction of the greek economy, about 17% contraction. i think this is a step in the right direction but by no means certain we achieve a more stable that stability in greece. the second in terms of the different countries, i think ireland is by far the out- performer. it is doing well. portugal is not that important but has taken some of the right steps. the same is true for spain and italy. each country is different. the banking system needs more capital in spain and in italy where the debt to gdp ratio is always about 120%.

it has to be brought down to a lower level. in the sense of the firewall, the big discussion going on right now, what is necessary? we will get deeper into that. this some disagreement between the german view and the u.s. bureau -- view. that is something very important and challenging. i will give you the german perspective of why they think doubling it right now might be a step too far at this time of the development. the bank compensation has made good progress. we should not forget the phasing

in assumption required as a minimum. a lot has been done. it is not true for all the banks. i think the major banks will be around this level. the currency is much better because of the ecb injecting one trillion. on the government side, we have made good progress. we have put more pressure on countries. we have talked about more integration. in essence, all has been done and tried. the key is to be ahead of the curve. let me give you something that reminds me of something. in 2008, you have the world imf meeting in washington where the 400 largest banks and insurance companies met.

we were very concerned. we felt the u.s. was not responding fast enough. i remember hank paulson, a secretary of the treasury at the time, saying you have to move faster. they said we still have a few weeks to go. then christian the guard -- christine lagarde said we will not disappoint. we will have a big program in place in europe. we were very relieved. sometimes from the outside, you are less patient than for those operating on the inside. i am grateful the u.s. is pushing europe in that fashion. out of this one trillion to two trillion euros, everyone expects we have a program in place in

theory of one trillion . if you run the two funds, the new one and the stability mechanism in parallel. the ems is not fully in place. it is not ratified. it is not approved in the different parliaments. if you need it today, it is not available. we have enough funds, about 250 billion available under the first fund that will be used to recapitalize banks or to refinance certain countries for a few months. we think, the germans, this is for the time sufficient. we should maintain the pressure on the countries to do the

necessary structural reforms and financial reforms and reduce the debt. that is the big debate between austerity first and then growth or growth and a little bit austerity. my personal view is we need both. we have to make the fiscal deficits reduced and we have to reduce the debt burden. at the same time, you also need non-monetary stimulus increased from internal markets, innovation, many other things we have to work on to create growth and also reduce unemployment. unemployment is shockingly high in some countries among the young people below 25 years old. roughly 50% in spain. this is one of the big social problems we have in europe right now. i think the impatience i hear every minute in the united states and in some countries in

europe as well is positive and constructive. i think you also have to understand the commitment of the different countries is already very high. i gave you two examples. the u.s. is very proud of the $20 billion, that was 1.3% of the federal budget. the commitment to all the different mechanisms germany has already done represents 70% of the federal budget. these are huge numbers. 211 billion euros. to explain to your people, you need the buying in of your people in each country, that we should do more without seeing the immediate necessity is very difficult. on top of that, we have the

feeling countries may not pushy enough if they know germany and france is guaranteeing everything or transferring more funds. that is the big debate about eurobonds and other measures. germany things we have to see more. i can assure you if it comes to the worst, before the eurozone collapses, everything will be done to bail the eurozone out. destruction is much more expensive than further construction. the demolition of the eurozone would create chaos in europe and probably in many parts of the world, even in asia or the united states he would feel

that. it would not go unnoticed in the global economy for a long time. the numbers of the greek default which many people say will be much easier and everyone supports a from an economic point of view would cost about 500 billion, 80 billion for germany, 50 billion for france, at twice the money for countries that are weaker. it is not just the private sector problem. the private sectors are are remarked down by 70%. we start with the greek exit and then think spillover effects into italy or spain or portugal or other countries, that will be a very dangerous hypophysis -- hypothesis. that is lined with why i am

saying we must do everything to maintain the eurozone. we can try to do it in steps as we did in the last few years as a different approach. it is always important to remember she is not a person that likes to be a front runner. she thinks we ought to decide and have to decide because it is getting close to an emergency. >> is that where we are now? >> i am not sure. the euro is still relatively strong. the currency is above where we started. we started at 118 against the dollar. then we were down into the 80's and into a -- up to 155. now in the last few days, we were around 125. europe as an entity, the jet

reduce debt to gdp is lower than the nine states. we have reduced it. that is a good achievement. the problem are a few countries. in each country, we are doing the right things. the question is whether we should do it directly. we have a mechanism in place. should we do it by governments? the german view is we should do it by governments. others say we should have direct capitalization. we're talking about maybe 50 billion euros. that is not a big number compared to what is at stake if the whole thing collapses. in the u.s., if you complain and criticize that europe does not feel a sense of urgency. you may feel that, but we also

see the necessity we have to continue the reforms. we have to continue making our countries less debt burden to an increasing efficiencies. we are further away from the impatient u.s. and may be asian behavior's right now. >> roger altman writing in the washington post. europe is on the verge of financial chaos. global capital markets are now the most powerful force on earth and are rapidly losing confidence in the financial coherence of the 17-nation eurozone. a market implosion may not be far off. not only with that dismantle the eurozone, it could also issue in another global slump, a second leg of the great recession, analogous to that of 1937.

he is not a person that deals in this kind of parker below -- hyperbole. i know politically you are saying this is what should happen, this is what people should do, and the importance of europe cannot let us go in this direction. are there a sense -- set of events that could lead us in the direction he has outlined? he is speaking more as a person who has dealt with what he would like to be the outcome? >> roger altman moderated a panel i was on the two days ago. i do not think i convinced him with my arguments. there are two things. first, his analysis potentially

sounds right. then i would say yes. if you had a collapse of the eurozone, it would have a tremendous impact on the global economy. no doubt about it. it leads to a very difficult political situation in europe. the question is, will it help? if you really needed it in the short term -- if you have to have a great election, yes. the outcome will be the government's continuing be austerity programs. they would come back to the eu and the imf and the ec be -- ecb, and they would say, you're not doing what we wanted you to do, but we still want your money. our people will not support

this. you back to continue with the program. that would give someone a little bit more time -- in the worst case, maybe -- but certainly not, the austerity program. if they say that, we don't want to do that, we're leaving the eurozone, that is a very difficult situation, but manageable. absolutely manageable. the losses will be quite big, but as i said, dec be -- the ecb would be affected. i think in the end, greece will be very much of the view that we have to stay in the euro and hopefully we are giving that message very clear and loud.

of course, it is always a bit difficult to have elections just after the austerity program has been announced. people need time to see the benefits of these programs. better exports, higher productivity, more unemployment, and so on and so on. but that was not the case, by having this kind of election at such an early stage in the process. finally comes the big question about the contagion to other countries. if there is a contagion, we have 250 billion euros available. which i think is sufficient for a few months in terms of finding -- funding and recapitalizing the spanish bank that is primarily in the fall of. and we have another 500 billion euros available, but we would

have to go through a process in a relatively short time, and that is the next step in the mechanism. then we would have the imf, which, at least especially conditionality being fulfilled, they would be willing, i assume -- all in all, we have $2 billion-plus available. and then people say what if you have a bank run? if we have a bank run, needing to have a fire wall -- in that sense, to talk about bank runs, it is a different question. if there is a bank run, there is

no other option than to guarantee. there is no guarantee for france and germany and other countries after the lehman collapse. all the savings are guaranteed. no one actually asked whether this is from a size point of view, but it is a reassurance that no one will lose money. that was a very important message. that of course should be done, if it comes to this kind of risk, which i don't see, but the white. the other thing, of course, is the ecb could continue the program which they had. >> the sovereign debt -- >> body in the sovereign debt, which they did some time ago, but they stopped it -- buying the sovereign debt, which they

did some time ago, but they stopped at. then they could use it for credit or for lending. although i have to say, this correlation between the stability of the banking system and the quality of risk is a very problematic 1. -- problematic one it was clear to everyone, also to regulators, because you did not have to allocate capital, that it is a risk-free. this is emphasized in the g 20 meetings and so on. at least until 200014 and so we have the collection policies in the -- 2014 until we have collection policies in the contracts. we have to transfer more funds.

the german government, the finnish government, the dutch government felt that this is not realistic without a private sector model. they negotiated that. we were willing to achieve its. many were completely against the back, including the european central bank come up because to violate this principle means going forward investors always have doubts about whether this asset class is risk free. although it has been said many times that greece is an exception to the rule, people still think that it could happen. of course, if this happens and banks have hundreds of billions invested in sovereign risk, and you are assuming and net value of 10%, 20%, you see the capital base of the bank's.

that creates uncertainty in the system. that is why i think buying risk is not a very good option, which has unfortunately been used by many banks, but also by some countries. this is something which the ecb can do, to have the unlimited firepower of the ecb, and to have funds available that add up to roughly $1 trillion. there is no immediate concern about the collapse of the euro system. of course, we are buying time and we have to use it to improve our set up. is cannot be that -- it cannot be that the situation we're in right now is a permanent solution. there is room for improvement. let me just give you a few

examples. we have a 60% debt to gdp requirements. some countries were twice as high, even three times as high. i mean, if you had not done that, if you had not violated this in such a dramatic way, he would not have the problem which we are talking about. from a financial point of view, you got to ask yourself, why is it possible that greece has 370 billion euros of long-term debt at levels comparable to germany and france? i think you can only explain it with a few factors. one is that people felt these countries are benefiting from all more conservative monetary policy, which brings inflation rates and interest rates down, and that has happened. absolutely. secondly, as part of the

eurozone, there is a growth push. that is true. greece almost double gdp. thirdly, people felt this is a relatively small country. there will always be some sort of bailout. but the underestimated -- they underestimated in my view the contagion, that some not only had to pay the 370 billion bureaus from greece -- euros from greece, but we had nine trillion from italy. it is really a problem of these countries and not as europe as a whole.

>> what would be your advice to the chancellor merkel, who you know well? i was in spain and i felt this urgency that you are saying -- the spanish certainly feel the urgency. they are calling for a banking union. they're calling for federally- insured funds. certainly they would be in favor of eurobonds. would you say to chancellor merkel now, steady as she goes, you're on the right path, or to stay it is time to carry this a little bit further? what would be your advice to her? >> i think if you focus on the short term, but you can focus too much on the long term. it is important talk about integration and we should continue with this work, but right now, we have to give more

compelling answers to how we deal with the crisis if it starts tomorrow. and there are the following things, which we have to do. we have to speed up the process in the eurozone, which adds another 500 to europe. we have to allow them to recapitalize the banks in spain directly. i think that is up highest urgency. because of the sovereign is set in spain -- is a problem for governments to admit they have to go under this umbrella and then the troika comes in and there are monitors. i think it is easier to have direct access to these funds by the bank's. >> it takes some of the pressure of the sovereign -- >> correct. i think germany is against that,

but that will make it easier to recapitalize the spanish bank's -- banks, which right now are the bank's most in focus. -- are the banks most in focus. i think that is happening. giving more capital to the best banks so they can lend more. i think we should also be careful with the regulatory requirements for banks in terms of capital, because i around the world, banks are reducing their lending. that is something that is not very helpful. they need the support from the financial sector for the real economy. i think they have done enough. we are just taking away the

ammunition from banks to go finance the real economy. these are all things we have to do. we continue the discussion about more integration in the european context. in the political question comes up. -- then the political question comes up. these are really longer-term topics. now we should focus on putting everything in place so we can deal with the crisis. so far, we're not there. >> the european-wide system of recapitalization come up -- recapitalization, reregulation, as a banker would to back that idea? or would you say no, not yet? >> i have been in favor of

european supervision for a long time. i think it said that 10 years ago. we need that. there is no question about that. we have to have the same standards everywhere in the eurozone. secondly, i think the project insurance, that is something that has been done on the national level. that is not that important yet, or certainly not that urgent, but over time, i think there should be a europe-wide insurance team. be recapitalization, i would of course be against a tarp program. across the board, we have to differentiate from different banks. but those banks that are in need of more capital should get. i am really talking about some of the spanish banks, some of the spanish bank's. that would help the market quite substantially.

a few things where i would say we have to move fast. the most important thing that we decrease the fire wall and get the ratification of that as soon as possible. >> ok, we will start with questions. if you could identify yourself when you come to the microphone, yes? but i used to be an ambassador to the use several years ago -- >> i used to be an ambassador to the eu's several years ago. one thing i do not understand, because i am not a banker -- when you say we need to recapitalize the banks in spain, but at the same time, we should not tie them to capital standard requirements. i do not understand how you square that? >> one is the concept and the other is the target. if i say you need $10 billion capital and you only have $6 billion, it does not make sense to require $12 billion. but you should give them enough

capital -- >> the british want to go higher. >> yes. you know, we have differenct approaches now. unfortunately, 2003 will be implemented globally, but in a consistent y. if you have different countries going beyond that, you put all the banks under pressure. it is naive to assume a major bank will have over 10% from a regulatory point of view and others can go around the world and say we're operating at 7%. the minimum to maximum will become the minimum for the others. therefore, i am saying we should be a little reluctant to go too far. i know if you talk about the

stability of individual banks, more capital -- although capital is not sufficient. need liquidity and profitability. but more important right now, such banks are in a position to finance the real economy. otherwise, we get into a situation where we have the instability from the financial markets, but on top of that, we do not have banks being capable of landing in the real economy. therefore, i would say, let's stop where we are, which is very challenging. at the end of the first quarter 2013, banks should be required to have 5% core capital. but now the european standard is at 9%. twice as in the short time. to help with that, they did to count to some extent been marking down of the seven risk,

which adds another burden to this capital calculation. dare i say we should not go beyond that. we should stop the banks some would like to go even further. but that would be -- we should stop. someone like to go even further. but that would be counterproductive. >> update. question here. >> ed ketcher, the university of virginia. i would appreciate it if you could improve my understanding of the target 2 assets, which i believe has contributed to the collateral action of the periphery of central banks'. this appears to be a fundamental structural flaw in the ecb system, but i have not heard of any effort to reform our address this. to further clarify, do i correctly understand that the

bundesbank would not have to -- if it attempted to monetize the national central banks? >> we are trying to keep this discussion in the english language, so if you could translate that a little bit for the layman? maybe i'm on a different question, so forgive me if i am, but the level of bundesbank exposure in the amount german taxpayers could fundamentally lose if we have another meltdown? >> the target is payments -- the payment mechanism between different central bank's. it is assumed that if there is a load of capital outflow and the claims go up, and the collection

of the trades export and many others -- it is true that the 's claim ndesbank against the greek central bank is about $100 billion, i think. it is a problem. of course, if you had a collapse or a default, then some of the -- they are not making the full calculation. the full calculation is a much bigger one. also of course, there are the investments in greece, the bank lending to greece, the repo

lending of the european central bank, the greek bank, and so on and so on. our estimate is about 500 billion. that is only for greece. >> $500 billion of losses? >> and then you add on top of that the contagion, which could easily add another $500 billion or so. in the worst-case scenario. and that is, you're talking about very big numbers. and then the question is what is happening in greece? for those of you less familiar with the euro concept, the euro is, by many american academics, considered to be flawed for the following reason. all those countries have the same single currency. one monetary policy. but no integrated fiscal and

economic policies. but they have criteria were you have to comply with certain standards. if you are a country which is less productive, has higher cost structures, and not very attractive products, then you have to compete with the stronger ones. you have no chance to do a devaluation of your currency. many of these countries have struggled to devalue their currencies. now if you look at 1999 until today, germany is still hovering around the 100 it starting point. greece is at 143. in real terms, a bit less, 130. italy is also much higher.

so, the question is, if they devalue their currencies, they could catch up, but now they have to bring the labor policy for the labor cost down, or the increase for the activity, which is very difficult to achieve. you can contribute to that by lending more money to generate more growth, or doesn't need a restructuring of the economy, and so on and so on, in order to increase competitiveness? the german model is they have to cut first before they can have a stimulus program. some others are saying contraction will lead to a worsening situation where gdp is going up and step down. at the states where is -- is that stays where it is, the ndp gets worse. that is mathematically correct,

but it makes you more competitive over time. and i have to say exports and of the numbers are showing an indirect direction to greece. therefore, you can say that people like this and they are on the right track. but it is a very painful and expensive program to go from such an unbalanced situation to a new and equilibrium in the future -- to a new equilibrium in the future. and this is also aligned with very difficult social economic problems. unbelievable unemployment numbers. social pensions. but even that, that is also very important -- no serious party in germany nor other countries is against staying in the euro. if we had major political movements saying we should get

out of it, 70% of the greek people are staying -- saying we should stay in the european bank unfortunate, 70% also think that we should not go through the austerity programs either. about this.k the domestic problems -- isn't domestic politics here the problem? 34% of people in the eurozone think they have not had an economic benefit out of that. you have had nine incumbents voted out of power. in germany you had a new best- selling book out that says "europe doesn't need the euro." you have chancellor mattel -- merkel saying europe will fail if the euro fails. the real question for me is will domestic politics support what

it takes to maintain the euro, or is domestic politics leading as intrinsically away -- centripetal lead away from the euro. >> are there different ways to achieve that? some say we should be ahead of the curve. one of the social democrats, one of the leading figures in germany, said that we should have guaranteed the greek debt, which is an amazing statement. no one from the coalition government would say that. they would clearly say it first, the necessary forms must be done, before we even think about eurobonds or other

measures. if it comes to the worst, if people really see that more is needed from us, i have no doubts that the people in germany will support that. we had the same problem and we had the bank rescue operations. actually, it was 1:00 in the morning when the final decision to get involved as a government in bailing out banks was taken. studies -- that is something that will not be forgotten. but if you ask people right now, social, political, tactical situations. in germany said now, all "well, we are opening up our pandora's box and we have money for rescue operations," first of all, it would be very difficult to get approval for such a behavior or

attitude peeping people would not supported at all. and of course, many would say, why then go on with our austerity programs? why go on with our reforms? we have what we need. and therefore, to keep the pressure up until the last minute is probably not a bad political solution. if it comes to the worst. and ask ourselves -- collapse of the eurozone or rescue operation of the eurozone, and then you can bear benefits and costs, i think the answer will be very simple. a collapse of the eurozone would be devastating. not only with the deutsche mark go through the roof, the same as the swiss franc is doing without heavy intervention from the central bank, but also germany,

yes, china is important and the emerging markets are important, but our exports go to european laborers. they are under tremendous difficulties to not service the debt anymore and they would see a complete collapse of their domestic economy. that would be difficult. they would say, because we -- ot devalue our currency you would see tremendously high inflation rates in these countries. and you would see a collapse of the banking system, because they have their euro obligations, and you would see a collapse in many ways of the social security system, because they're heavily .nvested in the domestic riske

instead of having the euro, you would have the drop, or any other currency. -- you would have the drachma or any other currency. there is a little bit more of a political answer to that. a fragmented europe has no way for self-determination. they have to accept what united states, china, india, brazil would finally define for us. and this cannot be future of our children and grandchildren. simply not. only a united europe can negotiate with all these countries at an eye level, and i think that is something that will come through, but we need a

more charismatic message, like a political message, to explain to people what is finally at stake. unfortunately, we have no president of europe, the same way as you have a european -- you have an american president. we have different presidents, but not someone who is elected by the people and speaks for the european union. that is another thing. even in sports, the united states plays china. but europe never plays india. there is no european team. there is no european -- there's a flag, but it is not as important. we feel as though we are italians, germans, and so on. i think that is a very important next message that we have to elaborate. because after the second world war, the european ideal, which

developed into a single currency, was to have peace and no war any more in europe. for the young generation, that is not a big challenge, because we have not seen more for decades. so, i think we need to find a new vision, a new raison d'etre, and this is a new aspect we need to work on. there might be other ideas. we need something for people to start rallying behind to improve the governments of europe. the crisis may be -- maybe it's a bit optimistic, but if we manage its successfully, it may be the first time that europe solves a problem and can talk about it. therefore, we should really not miss that opportunity in doing the right things. what we're seeing a little bit

in this debate about what should be done and germany should do more and germany thinks others should do more, we are creating sentiments. and the sentiments are not very constructive, because what we need is more social cohesion in order to create this kind of european spirit. i think that is one of the major challenges that goes beyond the financial challenges in the european setup right now. >> that is a powerful statement. i think that is one of the best ways i have heard it but. a fragmented europe has no way for self-determination. the flip side is, if it does not happen, if you will have a situation where people will make a lot of other judgments as well. let me pick up two questions. >> i am former banker, a former

diplomat. as you know, there is a tremendous amount of pessimism in financial markets here. and they are short in your right across the board. do some feel that germany will simply not accept the contention liabilities inherent in the solutions, and others feel the southern european countries will not bring their people long to accept the reduction in living standards that are inherent in their part of a problem? what i am wondering is, is it your view, this possibility the shorting by financial markets could be a self-fulfilling prophecy and bring this thing to a head quicker than most people think? >> let me pick up another question. >> i would like to broaden the discussion a little bit. 1 deposit -- one could posit a financial catastrophe looming.

come the end of the year in united states, and who knows what's going to happen with our debt, etc., etc. give me some good news. tell me why all these trends that look so desperate may just be trends that look desperate, but are not. >> i only have time for one more question. we will see if we have more time at the end of this round. please. >> thank you, dana marshall with american university. maybe this is a question a few people have made. does this put a greater premium on something like the desire of the g-20 to rebalance the world economy? does this make that goal even stronger? >> i think one could pylon to

that -- pile on to that. what is it that markets are looking for that they would respond to in europe? then the last question -- i think it would be good for you to be here, the way that you look at the global economy, to give us your overall assessment. a lot of investors say, well, there's not a bright spot. >> let me start with -- the same is exactly true for europe as well. that is unsustainable -- an unsustainable set up for a long time. we have it on a global scale. we have it in europe as well. we have four countries with huge surpluses and countries with huge deficits. germany has to contribute.

it is interesting that even germany now, some people say there might be maybe a little bit more inflation, may be tighter salaries will help, and this tremendous push for productivity is probably putting others into a situation where they simply cannot cope. what is true on the global scale is also true for europe. and we have to help them. therefore, we have to see that the export and import improves for the benefit of the deficit countries. that is absolutely key. that is something we need more direct foreign investments to achieve that, and we need more assistance in these countries to

create growth and employment. to the tsunami -- well, china is negative on their own future, i must say. officially they are at 6.5%. unofficially, they are expecting somewhat more. the same is true for many emerging markets. a do hope europe continues to do -- i do hope europe continues to do relatively well. europe is in a recession, but it is not a collapsed yet. -- it is not a collapse yet the bank i do not think that we see a tsunami in the global economy, but it is true that global growth is here. it will be somewhat lower. it will stay on a relatively

good level, i would said. -- i would say. the last three or four years, i've got 90% of the time, questions about the euro or the debt crisis to bank it is somewhat sustainable -- debt crisis. it is somewhat sustainable. i have always said, if you are short, you lose a lot of money. i think many have said over and over that we are wrong and you were right. i should say that. but i know there is a tremendous impatience about the european response, and as you rightly said, is germany willing to do more than the $211 billion? which they have said is the

absolute cap? 10% of the federal budget. if it comes to the question of do we have to do a bit more, or substantially more, or see the collapse, which will have a negative impact on our society, i think the answer is really obvious. will the countries on the periphery do what the austerity programs expected them to do? >> i must reject i met -- i must say that greece has done a lot. so far, we have seen that things are improving. italy, the program mario monti put in place is a dramatic 1. -- dramatic one.

spain has done a lot of the last two years. is it sufficient? ireland, the financial ministry, i think they are quite of the view that things are moving in the right direction. some other measures have to follow. labor market reform. spain is doing this in quite a dramatic way. i would say even these countries under strong political leadership and of necessity, because no one -- we have seen much more positive developments then at many of us will have anticipated. there is a strong political or

ideological movement -- people see the average person, if you ask them if they want to stay in the eurozone, the vast majority still supports it. not everyone sees the benefits yet. that is true. that is something we need to explain better. but there is no resistance in a big political way against these measures. only do we need a little bit more time in order to achieve that? and the question is, are we patient enough to give us the time? that is a critical question. if the greek election had not shaken this new analysis again, i think we would not have this time -- this kind of debate right now. >> last question. >> hello, i'm from the news agency from serbia.

my question is about austerity measures and serbia. from the results of the parliamentary and presidential elections, we see these same players from the former government. already, we have differences on how to deal with the economic crisis. as we know, serbia is a country with high unemployment rate and lower gdp. what would be your suggestion for serbia? would be better to go with austerity measures? or should we go without imf at this moment? >> i'm sorry. whenever i see one of our ambassadorial members intervened from the baltics, let's take this. >> thank you. i have a question for you. my government in latvia, we're probably the only country in europe still having a priority of joining the euro.

i am not surprised by the reaction. >> you could get a very positive exchange rate. >> and just from the ecb perspective, is it politically desirable? is it the right time? >> i should never give advice to a government. as a swiss, we stay out of the euro. [laughter] i mean, right now, it is a very difficult. i think the euro is a fantastic achievement. it has helped us create a lot of wealth for many years and reduced transaction costs. but it is not a very stable situation. it is probably not easy to convince people that joining is the right thing to do right now.

but it is your government's decision. there may be other considerations. the serbian growth and austerity -- look, austerity is a big word, but i would always go for a disciplined approach. because imbalance is the worst. there is the imbalance and the real-estate sector, which will always last much longer than people think. may be in the u.s. as well. but certainly in japan, it took almost 15 or 20 years. and because this is not a homogeneous good. you cannot just move houses from one place to another. so, this is a very difficult market to regain. the other one is high indebtedness. high indebtedness is terrible, because you have to deliver your balance sheets -- delever your

balance sheets. the leveraging means also that you have to have some sort of contraction, and debt to gdp is not improving as fast as you would like to see. that is why i think a disciplined approach in terms of a conservative budget discipline and relative, reasonable, affordable debt to gdp ratio is certainly below 100%. some people say it is 90%. i would rather have it be below 60%. then i think growth comes without all these obstacles from the not very stable economic environment. these are not objectives that

contradict each other. you need discipline to create growth, but you need growth. that would be my answer. >> let me give you a last chance to comment on our mission, because our mission is renewing the atlantic community for global challenges. in this case, how would you assess the trans-atlantic cooperation, and most specifically, as the u.s. recognized its strategic stake in you're getting this right and given the kind of assistance that might help? we talked about your own financial crisis. so far, i have mainly heard about advice that one should have done more. we had the big bazooka of the tarp program in 2008, with the fed providing an astonishing $13 trillion of support.

how would you assess the trans- atlantic element of this? >> the u.s. is on all levels putting a lot of pressure on policy makers. the u.s. or china in that context -- are they willing to invest in sovereign risk in europe? that is not really the case. of course, the chinese would say, if you do not trust your own rates, why should we do it for you? i have some sympathy for that argument. in the end, if you could give strength to the imf and give the imf and the funds to help in a worst-case scenario to assist in bailing out certain

countries, it would not be a bad thing to do. i think the fact that there is impatience on the u.s. side is probably helpful, because it leads to a speeding up of the process on your. the only thing which people have to understand is, we are somewhat in a different ball game. the tarp program was primarily strengthening the bank's because of the real estate exposure or the toxic assets exposure. in europe, banks so far have not had a major exposure to toxic assets any more. they were marked down or liquidated. nor in most countries is it real estate, because we did not have the real estate bubble, with one or two exceptions. the problem is the exposure to the sovereign risk and the

correlation between sovereign risk and bank balance sheets. you can now recapitalized banks, but if you have a sovereign risk restructuring, as i said before, the capital is melting away. it is more important that we stabilize the sovereign risk issue and not so much give banks more capital, because this is not only a banking problem, but people always underestimate -- banks are not the main source of sovereign risk. even central banks. i think we have to be mindful of the risk. since we have given up sovereign risk as a risk free asset class, we are in a completely new world.

this has huge implications. these countries will have to pay huge premiums going forward, because they're not risk free any more in the perception of investors. and also in the availability. this is a great thing at the end, because people will be less inclined to give so much money to countries which actually have no strength to service that debt. but that is different, because everybody felt this was a risk free assets. no one actually ask, why is this risk free? a was a perception of being risk free forever. some people would say, this is not going to happen. we have put a lot physically on these countries, and that is a very good thing. if we had not had the financial markets signaling that something is not good, we probably would

have gone on for some more years. why would we have $70 billion? the credit spreads would still be low. the state would still be comparable with the german and french terms. and i think financial markets have been given that signal. we have completely changed the discipline of this country's going forward. >> of the financial markets in that sense of done europe of favored? >> if you were to see through it and not just talk about speculators, absolutely, yes. absolutely, yes. they forced europe to do what they had to do. from an historic perspective, it is premature to talk about this and ask for recognition, but what has happened over the last five years, it is tremendous in terms of political integration,

and in terms of financial and structural reforms. that was triggered by the financial markets and no one else. there is no politician who showed up and said "we have to change it." they felt this was all speculators, and then they started to say now we have to regain the priority and dominate financial markets, and this is, unfortunately, for a segmented european country, not realistic. the thinking that we have to be disciplined and that we speak with one voice is a good thing. imagine -- you would have a ceo of a company saying one thing and the cfo to dobe hours later sing some completely different? -- two hours later saying

something completely different? people are talking about eurobonds. two hours later, there is a press conference and they are saying, come with us. this is how we were told. we have to have one voice walking through that process and say "this is what we want to achieve." i think we give more clarity and assurance to the world. back to your first question is, i think we need a road map of what you want to do in europe. if people stay in the next five years, these are the different steps -- like a company in a restructuring mode -- we have to invest in this and so on and so on, i think shareholders would start believing it began. if it is credible. i think european politicians have to do the same. together with the european central bank. and probably supported in some ways by the ims.

>> i think that is a terrific, terrific closing statement. thank you for shedding light on the confusion on this historic plea-important moment. @ think what you said i european self-determination, i think we should pick that up. is also about the capability of being coherent -- is also about the capability of being coherent trans-atlantically. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> there will be another chance to see this discussion at the atlantic council tonight at 10 minutes after 10:00 on c-span2 and any time at c-span.org. president obama it is attending three campaign fund-raisers tonight in new york. we will be broadcasting his fund-raiser where he will be appearing with bill clinton. the house is back for legislative work tomorrow afternoon at 2:00 eastern.

on the agenda, final votes on 2013 spending for the energy department and federal water projects. also possible, more spending bills related to the homeland security dept.. the house is live on c-span. and the senate gabble then at 2:00 eastern -- gaveled in at 2:00 eastern to talk about discrimination in the work with. >> he is the congressional quarterly senate watcher. the senate majority leader harry reid is scheduled for a vote on gender-based pay discrimination. what should we expect to be the outcome as lawmakers go to vote? >> the bill would provide new

tools for women who believe they have been victims of gender- based pay discrimination. one of the specific components of the measure, which could affect a lot of people, is that it would prohibit employers generally from penalizing employees to disclose information about their salaries or perhaps inquire about the salaries of their co-workers. as for the boat itself, it is not expected to prevail. it is a procedural vote on taking up the bill. is seen some both sides that is not going to get to the 60 votes better needed on tuesday. >> if we expect the bill to fail, why is senator reid pushing forward with it? >> the portion that has been put on from the white house and from the -- the push that has been put on from the white house and the senate leadership, it looks

that this is largely an election year item. we have seen governor romney, the presumptive republican nominee, called to take astand . >> who is supporting this bill? >> senate democrats led by theara mikulski, who hais longest-serving person -- woman in the senate. one of the first items of legislation that became law under president obama only narrowly address a question of the statute of limitations for gender-based pay discrimination

and broader measures are needed to bring the rate of pay up to where men are. >> who is opposed to the measure approved, one of the issues the business community has is there are several issues that say it goes far beyond where you would think you need to go to get it so men and women spend the same amount of money. there are concerns about possible litigation costs that could arise as a result of this as well. >> senate republicans say they have their own bill. how does this differ? >> we have not seen that many did details -- that many details on what the public and counterproposal would be, because we do not expect -- this is a procedural vote on tuesday, which did not expect they will actually be able to bring a

counterproposal to the floor. >> what impact might this issue have as a campaign season gets into full swing? >> we have been seen democrats for the last couple of months from amending a narrative about a war on women trying to ensure that the female vote, which traditionally vote democratic, continues to and boxing romney in on that. this is another step in that process, i would not be surprised to see more as the year progresses. >> the ftc has brought a good many cases in the consumer privacy area. >> i think self-regulation is a tool that can be much more

responsive to changes in the marketplace. >> tonight a look at the federal trade commission's enforcement role in dealing with privacy on the internet. "the communicators" in o'clock p.m. eastern on c-span2. >> the fact of the matter what the american people know is they understand we did not get into this crisis overnight and we will not get out of it over not. >> the question is what in ohio, florida, virginia -- what they think, what they think about their lives, is it getting better, and getting worse, who

is responsible. that is not quantifiable by saying the unemployment rate is down -- >> watch the discussions online at the seized and the library. >> jay carney told reporters that he believes the u.s. economy would be in a different situation if congress would pass the president's jobs planned. last week unemployment went up to 8.2% 69,000 jobs added. other topics include political unrest in syria. >> good afternoon. welcome to the white house for your daily briefing on june 4, to a dozen 12. i have no announcements to make. -- 2012. i have no announcements to make.

[unintelligible] with that i will go to your questions. the answer is no. let me ask you about the economy. i am wondering how the president continues to make the argument the voters that the economy is headed in the right direction when john numbers -- job numbers -- [unintelligible] >> i appreciate the question, and while freddie's job numbers are below expectations and far from good enough, they do represent the 27th straight month of private-sector job

creation since the policies began taking a fact. he has argued that we need to do more, and we can do more right now, not wait until november or next january, to further encourage the economy and have a treat more jobs. the president made clear last fall that the recovery was not robust enough when he introduced his american jobs act, and outside economists, not white house economists, outside economists judge that plan, if implemented, to be one that will trade over a million jobs. republicans in congress and the up supporting some of the elements of the act, others refused to support because they made the choice it was more

important to protect subsidies for oil and gas companies or tax loopholes for the wealthiest americans. that is a choice president disagrees with, but those items remain on the table and they remained that things that would boost job creation right now if congress were willing to take them up. is all true on the president's to-do list for congress, which is compiled of measures that should have bipartisan support, that in the past have had bipartisan support, and which would contribute to further economic growth and job creation. this president will continue to do everything he can, using his administrative authority, executive authority, and through working with congress to make sure we continue to move this economy forward. i cannot help but make the point

that the alternative here is to go back to the policies that created the 8 million lost jobs. i do not think the american people think that that is the right way to go if you look at that choice. is it continuing in the direction that led to 4.3 we ion jobs created as thre recovered from the depression, or is it going back to the policies that created the worst recession since the great depression? >> on the proposal you [unintelligible] is there anything else the white house would seek to do this year through congress?

>> the elements of the american jobs act and the to do to list combined with help the economy grow and creates a different numbers of jobs. there's no question about that. had congress and the right thing and passed at last fall, we would be in a difference to ration with a different employment picture. you can be sure this president is constantly asking his economic advisers and talking to folks about other policy ideas and proposals to continue this economy -- continue adding this economy grow and create jobs. that is work that is never done before anybody who has been sent to washington by the american people. the number one task that you have here, if elected to congress or sent to the white house, is to do the things necessary to help the economy grow and to help the economy

create jobs. clinton question, the presidents have had differences in politics and tactics lately. a comment was made in an interview late, romney had a sterling business career and that helps boost him across the to threshold. are these two former presidents seeing the same way right now? >> i would prefer you to some of the other things that clinton has said and make the point that the issue is not whether someone succeeded in the private equity world, where the purpose is maximizing prop sets -- profits, it is whether that vision is the right vision for creating jobs. maximizing profits as a primary

goal is to find an appropriate in that world, but it has nothing as a primary goal to do with job creation, because the way this world works, if you can sexy -- succeed in a situation where the result is many layoffs, you can still make a lot of money, or perhaps the result is jobs are created. the issue is not jobs. it is profits. that is fine if your goal is to succeed in that financial world. that is not a president's responsibility. his responsibility is to maximize the economy for all americans, to maximize growth so that more jobs are available for middle-class books run the country. the king at that, president -- looking at that, president clinton has completely supported the president's burch and as thoroughly endorsed president

obama as someone who has the right vision economically. it is important to note that president clinton, after he left office, he handed an economy and a budget that included surpluses for as far as the eye can see, hundreds of billions of dollars of surpluses. after eight years, pursuing policies every republican leader in congress supported and every republican who ran for president has endorsed, president obama came into office, which had a $1.40 trillion deficit, the largest at that time in history, and an economic situation that was the worst in the of us had ever seen. i think that choice is clear. >> does president obama agree with president clinton that romney had a sterling business

record? >> i am sure the campaign will be happy to help you more on the specifics of the debate at the political level. what the choice is about in the fall, as well as right now, is which is the right economic prescription for this country. is it one that includes investments in the near term and education and innovation, investments in clean energy, for example, as well as taking the necessary steps to bring our deficit under control and our debt under control for the long term, through a balanced approach, or is it one that doubles down on the policies of the previous eight years, that takes those policies and puts them on steroids and says let's have a tax cut that benefits the wealthiest americans, and every

economist says it would add tremendously to the deficit, and then let the middle class and seniors and for themselves. -- fend for themselves. again, the choice as i described it is clear. >> this report comes in the context a direction of the global economy, primarily the crisis in europe. i am wondering, given all these threats to the economy, is it time to go back to the drawing board, and is the report correct saying the president plans to deliver a speech on the economy later this month? >> i do not have any scheduling announcements to make. the president speaks about the economy frequently. i am sure you will hear him speak about it frequently in the

coming weeks and months. the fact of the matter is there is no mystery about what we need to do or what we can do to help the economy grow. one of the overlooked facts about the recovery that we have had thus far since the great recession is there has been substantial private sector job creation even as the economy at the state and local level has shed jobs. the president thinks that is a problem, that substantial layoffs of teachers around the country is bad not just for those teachers who have lost their jobs, but for the children in classrooms with fewer teachers. that is bad for our long-term economic prospects, bad for the kids, teachers, and bad for the economy. he proposed in the act that

congress should take action, together we should take action to help return teachers to the classroom. republicans in congress refused to do that. we have job losses as a result of that refusal. they chose unfortunately to protect special interest polls for oil and gas industry, for wealthy americans, and that was a bad choice, as the president sees it. there are things we can do now to invest in the economy, to help it grow, to help it create jobs, including the to do list, unpassed elements of the american jobs at. he will only continue to work with his economic advisers to make sure he is doing everything possible, both with congress and threw it is a authority, to take further measures.

again, that is the business that everybody in washington should be about, because he does not expect congress will suddenly change their mind because he is asking them to. he expects congress, those who opposed some of these proposals in the past, will change their minds because their constituents are demanding action now. we need to be focused on the american economic situation and jobs for the american people, not on jobs that will be won or lost in november. we need to act now. >> in reading the news and looking at the jobs report, do you think it is good enough to say for me to tell congress to pass my jobs at? but economists think it is the right thing to do. don't you think that people need

to see him come up with more creative approaches prove >> he will be working with his team and others to examine proposals for economic growth and job creation in addition to the ones he has put forward. he has been i think supporting a number of ideas and they have been designed to garner bipartisan support, the american jobs act and the congressional to you-do list. [unintelligible] you should ask why. it is not ok to root for failure and hope it pays off politically. there is a potential for a political price to be paid if you come to washington and you do nothing in the hope of doing nothing will enhance your power in the future. that is a bad approach to your responsibility as an elected representative of the american

people, from your district or your state. again, there is a lot that can be done right now, working with congress. the president will continue to look at ideas and proposed ideas. he will continue to do what he can administratively through executive power, where appropriate. he will continue to push congress to take action. let's not forget, when republicans in congress relented and extended the payroll tax cut and unemployment insurance, when they agree to pass the assistance to veterans in the american jobs at, and have taken the other actions they have taken, it has been in part because they have heard from the people, their constituents, that they need to do this. the present been pressed president has been putting pressure on congress, making

clear we have business to do right now for the american people that has resulted in some of this action, and he will continue to do that. >> why did the president quit talking about those elements, the infrastructure projects and pain for teachers and first responders? once he did not talk about them at all, and in the to do list can out and none of those things were on it. was it a mistake to quit talking about that, given the jobs -- >> we always continue to talk about the undone proposall from the american jobs act. the president has continued to generate new ideas that congress could take up and pass, small, medium, and large. he will continue to do that. i think when you look at the

jobs numbers that we got on friday and you look at all the jobs reports from previous months, you notice this defect here, which is greater private- sector job growth and slippage in public sector jobs, principally in education and in public safety, cops and firefighters, teachers. this is very significant because the impact is not just on the teachers who were laid off and their immediate families, it is on the kids who do not have this teachers in classrooms, classroom sizes are bigger. we think that is a bad thing. and the impact that has on our education system and our overall economic growth, which the president believes is tied to the quality of the education our kids received. the compound in effect here of

those layoffs is profound, and that is why congress should take action to put this teachers back to work. it is why congress should have put construction workers back on the job. there is no question that had congress acted then we would be looking at a different picture now in terms of overall job creation in the period since. >> was it because of the sense that the economy was -- >> continued to push additional new and economic proposals, but it never became a question of whether or not congress should simply not act on the ones they had not yet acted on. that was always part of what the president believed congress should do, and he continues to believe that. >> who specifically is rooting for failure? >> i think that when you have a situation where action is not

being taken on capitol hill, where it is obvious what actions congress could take to help create jobs, that there is a least a failure to act. i cannot tell you specifically whether or not that is just passivity, but the fact is americans send their elected representatives to washington to act, not to do nothing, and there is an opportunity and has been now for quite some time to help the economy grow faster and help create more jobs, to protect the jobs that teachers and firefighters and police men and women, and congress has built act on it, and congress has failed to act on the congressional to-do list. >> they have been passing

legislation, but -- >> the same economists who get the goldenseal of approval in terms of the independents, said those proposals, that includes small business tax cuts, the definition of small businesses that give breaks to hedge fund managers, would not have an immediate impact. it may have some impact on the future, and some of them have neither short-term newark medium- or long-term impact. the president's proposals was designed -- were designed to have an impact. they're focused on what we can do now to help this economy grow and create jobs. >> is it fair to say there is nothing new the president will introduce, given not only a bad

jobs report, but a revision from the previous two months, that the president will keep pressing forward with his to do list, nothing new? >> know, that is not fair to say. the president will continue to work with his team of economic advisers as well as outside advisers to examine other proposals and other ideas as he has all along that could help the economy grow. those could be proposals that require congressional approval or ones that he could act on using his executive authority. they can be proposals also that encourage private sector action along the lines of the things that the first lady has done with the president and vice president and dr. biden to get the private sector to hire returning veterans from the wars in iraq and afghanistan. there are a variety of things

and areas where action can be taken, and obviously the president is continuing to work with his team on potential new ideas. the point i am trying to make is there is not a lot of mystery in june of 2012 after all of the economic debates that we have had these past several years about what the menu looks like in terms of the things we can do, but to help the economy grow in the near term, help it create jobs in the near term, take actions that address our deficit and debt in the medium- and long term. one of the positive outcomes of these debates and negotiations and swapping of proposals has been there is a lot of work on the shelf that can be taken off the shelf and acted on if there

is a willingness to take a balanced approach that the american public supports, the president supports, the bipartisan commission's support when we talk about proposals that include short-term action and medium and long-term deficit reduction. >> the last few days, democrats have expressed concern about not only the economy, but what it says about the president's prospects for reelection, and with him, the house and the senate's and who will control them. is the president hearing from these democrats? what is the concern -- does the present share a concern that somehow there has been a sticking point reached that the economy is now headed in the wrong direction, not that there is a blip, but the last two months were revised downward, and the president will not be able to make the argument that the economy, as recently as march, that the economy is accelerating and that his

prospects for reelection are weaker? is he concerned about this? >> jake, the president is focused far less on his job than on the jobs of the american people. that is what he works on every day. that is what drives all the economic proposals he has put forward. that is what has driven him from the time he decided to run for the senate and one for the presidency. the fact of the matter is, having covered him for some time as you know, he takes a long of view on all these things. he did not buy in to the same but the tree and -- punditry that said since we had better than expected job creation that everything would be smooth sailing for the election cycle. he takes a determined viewed

today about the work he needs to do as president, the direction this economy needs to move, and the bait -- the debate he will have in the coming months over the direction the country should go. these issues are far too significant, and they matter in tangible ways to far too many people across the country to be reduced to an electoral question -- is it good or bad for any candidate's prospects in november? that is not why he got into this. going to europe last question, he will argue strongly -- going to your last question, the actions he took as president, working with congress as well as around congress as he had to, took an economy that was in free fall and reversed that direction, took an economy that

was shedding 750,000 jobs in the month of january, 2009, on the way to some 8 million job losses to one that has grown by3 million jobs since his policies have taken effect. the numbers are very far from where the president wants them to be. another month of private-sector job creation compared favorably to losing 750,000 jobs in one month. that is what face this country when he took office. that is the way he looks at all of these issues. >> friday at multiple fund raisers the president was saying that the disappointing jobs numbers in may are largely due to the turmoil in europe.

if the jobs futures continues as is, is this administration prepared to make the case that europe is slowing the economy? >> the president made clear on friday and has in the past that the situation in europe unquestionably creates a head when for the global economy and therefore for the american economy. the point that he made on friday and has in the past is because that headwind and others that effect economic growth and the global economy, we need to take every step that we can to insulate our economy from the negative effect of the eurozone crisis or whenever headwind

arises. that is what we need to do in the united states of america. we cannot completely control vents around the world economically. we need to take all of the action we can to insulate the american people from the effects of those kinds of events. >> why not come out and say the station is going to race slow- growth period and this is the reality we are living in? >> the president has been very clear that the job figures on friday and the overall growth figures we have seen are not nearly good enough. that is a fact. we are not remotely satisfied with 4.3 million jobs created.

this president will not be satisfied until every american looking for a job has a job. it is true that eurozone crises or earthquakes back cause tsunamis in japan, spike in oil crisis o mopthere events that affect the global economy have a negative effect on the u.s. economy. >> we asked about the story. and whether this was an authorized leak. this was unusual because i think the white house should answer questions. my questions, was this

authorized it? >>no. the author has made clear that his reporting on this initiative elsewhere. our interest is always in protecting sensitive information and classified information because it is important for our national security. some people are frustrated by the approach that we take. it is vital to the ability of our men and women in uniform and the intelligence community to protect the united states. the reason why people pointed you to the author is because he knows best where he got the information. >> why does the president travel there? >> the president endorsed tom

right after he won the primary. the president's stance by him. if you talk to the campaign, they can give you more details about how about support is manifest that. the election is a result of a recall petition. the president absolutely stands by tom barrett and hopes that he prevails. i think that there are a lot of factors in that contest that make it unique. the money being spent. the president has made clear all along his opposition to those who would take a wayworker's rights.

he has made clear his support for tom barrett. >> they gave us a big speech and denied that the syrian government was involved in the massacre. is he against the world? >> yes. >> what is the next step for the administration? >> along with our international partners, we are preparing for a political transition in syria. as evidenced by the various massacres that the assad regime participated in and is now denying. as soon as that political transition takes place, the better for the people of syria. the better the chance is that a bloody sectarian war will be

avoided. assad's behavior is so heinous -- the chance that there will be a bloody sectarian war is diminished in ifassad removes himself from power or is the longer in power. the lager that this continues, as long as he continues to wage war on his own people and brutally executed his own people, the greater the chance that situation will dissolve into sectarian civil war and spill over its borders and cause instability in the region. that is why it is so essential that the world community come together and unify to pressure and isolate assad. we have been clear about the

responsibility that the nations of the world have in this matter and the need for international unity when it comes to the appalling behavior of the assad regime. we have made clear and it is obvious that history will judgeassad as a brutal dictator that -- that murdered his own people. history will judge those who support assad accordingly. it is important to support a plan that will bring about political transition. >> you gave the impassioned case about private equity and how it does not prepare you for the presidency. why is the president raising money at a hedge fund manager

at's home in new york? >> i was not aware that any of them were running for president. i did not say that and you know it. you can succeed very well in that field by maximizing profit. that is the goal. the point is that job creation is not the goal. job creation is incidental. whether it is massive layoffs or job creation, either way, what matters is maximization of profit. the point simply is that that is not the approach that would best informed decisions that the president would make when trying to maximize job creation in this country and maximize economic growth. you make a great point in that folks that are supporting the

president including folks that know that supporting the president and his success would know that they would have to pay a little bit more as part of a balanced approach to get the deficit and debt under control. another approach would be to support a candidate financially or support a supertax -- super pak enormously knowing that you are essentially buying tax relief. the victory in that case would result in a windfall. that is a different approach. it is not the one that is being taken by the supporters of the president. >> people are talking about a fiscal clef. it could make this a job situation worse. and also taxes going up. why is the president not calling republican leaders to talk about both the job situation and the

rest of that agenda. it seams like it is being kicked to after the election. why is he not dealing with this now? >> he had lunch with bows -- both republicans and democrats. they discussed that issue as well as the need to take action right away to help the economy growth and create jobs. that is the president's position. the question that you referred to was agreed upon by both republicans and democrats us summer during the debt ceiling negotiations. the whole point was to make it so onerous that nobody would want to allow it to become law. therefore, congress would be forced to make some tough choices.

before us to accept some things that they normally would not want to accept. on the democratic side, you saw this demonstrated during the debt ceiling negotiations. there was a willingness to address the need for entitlements. there was not a willingness on the republican side. it has not bent at a willingness on the republican side to make the tough choices. i did note that one leading republican senator talking about the fact of the sequester on defense spending said that he believes that revenue should be on the table. the point of that is not a cheer, but simply to view that as the essential kind of decision that congress needs to make. members of both parties needs to make that. dealing with fiscal challenges. it includes hard choices by

republicans and democrats. you can achieve a result that would reduce our deficit by 10 years by over $4 trillion. it would allow for substantial, but not damaging cuts in our non-defense discretionary spending. the kinds of cuts that are manageable. the kinds that the president supports. this administration does not support cuts that would be brought about if that were to take effect. congress needs to come together to make some tough tauruses. >> the president is not calling republican leaders over here. >> i know remember it -- you

remember, at the beginning of my answer, the president just met not just too long ago with the leaders of both parties of congress. i am sure he will continue to do that in the future. the fact of the matter is that the forces that are available to leaders of both parties are apparent to everyone. that is the result of all the work that has been done. it is not that complicated. it just takes political will. >> talking to some ideas that could help promote job growth. are they securing a new stimulus bill? >> i appreciate the question. i would simply say that there are a number of things that

congress could do right now to put teachers back to work, put construction workers on the job, put police and firefighters to work. efforts that would help homeowners refinance their homes, it would help veterans get jobs. it would protect 37,000 jobs with the extension of the tax credit. at least 10 different things that congress could do that are already on the table that represent traditionally bipartisan legislation that would help the economy grow and create jobs. the president will continue to discuss with his economic team different options that can be pursued. perhaps congress could take these up to help the economy grow and create jobs. he will look for every opportunity to act

administratively with his executive authority to further economic growth and job creation. >> will the president revisit this idea given the jobs report? >> as you know, and i will take a little time to revisit the history, the company in question has submitted a new proposal, not that long ago, for a new pipeline. the reason they submitted this proposal is because the previous proposal was rejected because of broad bipartisan opposition to this including opposition from the republican governor in the state that would be affected. the process must not be politicized. purely ideological votes that

have nothing to do with the legislation at hand that would force the president to approve a pipeline for which there was not even a proposal. that was the case. now that the proposal has been submitted, it will go through the entire opera reprocessed that has been in place for success of administration for years and years. in the meantime, this administration has taken action, as it has in numerous areas on domestic production, specifically with the domestic portion of the keystone pipeline. the proposed pipeline crosses an international border with canada. that is why the state department would use it. as you know, the president's -- and the administration has not only approved various permits that need to be approved at the

federal level, but the president urged that that process be expedited. >> the process has to move forward and a recommendation has to move forward from that process. you cannot do what republicans seem to want to do. you can approve anything, no matter what emerges. the president is interested in a thorough process that makes a judgment based on the merit. he has pursued very aggressively and all of the above approach to our energy needs which includes domestic oil production, increasing domestic natural gas production as well as clean air technology is. this has resulted in a situation where we have had greater oil production that we have had in a number of years and lesser reliance on the imports of foreign oil.

congress could take action today on one of the president's proposals from the american jobs act. we could put people back to work today. then they would be employed by that portion of the keystone pipeline to which you are referring. the proposal was only recently submitted to the state department. >> can we get your reaction to the mubarak trial? gave a green light to future -- does the president think that the outcome of this trial -- how concerned are you? >> specifically with regards to the trial i would say that this is a decision made by the egyptian judiciary according to the egyptian legal price and -- process. i would refer you to the government of egypt for more

information. we continue to support the application through the egyptian legal system. alexis and then laura. >> there is a report out that kofi annan will be in washington on friday. is this a signal to at thetowel is being thrown in. >> by will letanna speak for himself with his proposals. the fact of the matter is, going back to what i said earlier, the international committee needs to

come together and unify around the idea that political transition must happen sooner rather than later in syria so that we can avert the kind of sectarian civil war but that situation could dissolve into. i do not have that kind of update from the president. if i have one, i will let you know. >> last week, some commentators are saying that the american people are fuzzy about the details about what the president would do it as far as the economic agenda, not in the election year, but the second to term. it does the president believed that the people are fuzzy, that the choice is murkier than he thinks that it is? >> i am not sure who you are siding. the president will continue to make clear the steps that he took to reverse the situation

where we were in cataclysmic economic decline. we were suffering massive job losses on the order of 750,000 jobs per month. to a point where once these policies were implemented, we began to see the economy grow and create jobs. we are only part way down that road. we need to continue to take necessary actions to invest in the middle class. to sit -- provide the security that the middle class need so that they can be the foundation of the economic engine in the 21st century. part of what you will hear and the american people were here that awaits us is this elucidation of his vision for moving the country forward economically. i am not going to preview every

speech he will be giving in the coming weeks and the proposals put forward. you can be sure that it will be a very clear choice. i think the outlines of the different directions being proposed will be extremely clear to the american people. proposals that have led to the creation of 4.3 million jobs over 27 months that have brought us back from the worst recession since the great depression coming back from the policies that delivered us to the worst recession since the great depression. the last quarter of 2008 the economy was shrinking at almost 9%. the kind of economic catastrophe we have not seen since the 1930's. that choice will be clear. yes?

>> we had a rebel sports -- spokesman quoted saying that they're tending their commitment to a plan. how clear is this getting to the president's meeting with putin? secretary clinton said that his departure does not have to be precondition to a resolution. it should be an outcome. >> a plan that brings about the political transition sooner rather than later is one that is desired by the international community. secretary clinton addressed the issue of russia and the need for russia to play a constructive

role in this crisis. we have disagreed with russia in the past on syria. we are in direct communications on why there process that leads to a transition in syria is so important. i made the point about how history will view assad and view those who sustains him. we are working with not just the russians, but a variety of nations on this issue. we will continue to do so.

i remembered you sneezed. i just did not know if there was a question. >> you said that the president put forward jobs ideas. the congress has failed to act on them. that is the situation we have been in for many months. even bankamerica and people buy that, what would you say to those who say that i do not want four more years of this? if i like barack obama and the republicans maintain control of congress, we are going to have more and more of a stalemate. how is that going to help anybody get a job? >> we have elections for a reason. they provide direction to washington from the american people. if the president is reelected,

he will pursue the policies that he will have talked about extensively with the american people during the campaign. that message will be delivered to members of congress of both parties. our economic challenges are two significant not to act on. despite the record of intransigence that you cited, there have been times in this congress with their backs against the wall, leaders in the congress have come together with the president to work on economic issues. some of that has occurred. not nearly enough of that has occurred. it should not wait for the election. members of the house worse than

here for a two-year term. they were sent here to do the job for two years. the president wants to work with congress. he has made it clear in the proposals that he put forward that by their very designed they should be enticing to those who are willing to work in a bipartisan way to make the economy grow. that is the message he will carry. i think most americans see that when they are presented the choice of the ideas that the president has put forward as opposed to some of the proposals put forth by the republicans. they want to see some of the bipartisan compromise. >> do you anticipate in the wake of an obama victory that you think the republicans would come

around? do you think that the president needs to do anything differently in a second term as far as he would approach how to get these back? >> what i want to focus on and he wants to focus on what he can and is doing right now for the american economy. there is an opportunity for congress to actually help the economic picture right now rather than wait and see until january to see who's won and loss and whether they can push traditional proposals. there are things that usually garner bipartisan support. >> the president dispatched somebody to europe last week. spain, france, germany.

did she come back with any fresh recommendations for the president? >> the president has regularly spoke on the situation in the eurozone. i do not have anything specific for you. i would >> is there any sense that perhaps you're a pessimist its best chance to stem this debt crisis? >> he believes europeans have the capacity to take action to resolve this. they have already taken significant actions, but serious risk remain that the measures taken thus far are sufficient to secure the recovery in europe and remove the risk that the

crisis will do -- deepen. in our regular consultations, involve discussions of the lessons we have learned to take difficult steps to have our banks go through strick stress test and require them to raise capital to strengthen their balance sheets and to bail out institutions for the benefit of the overall economy. he has discussed those efforts. he wants to restart job creation and secure growth. it is conversations that officials have had with their counterparts. they have discussed how some of those lessons may be applied in europe. mark, you are the last.

>> back on wisconsin, are you trying to tell us that you do not think the president has decidedly distanced himself from the recall vote in wisconsin? he has not been there since february. >> i just make clear that the president stands by democratic candidate. i made that clear right that after -- right after the primary. for other efforts to support mr. barrett's candid say, i would refer you to the president campaign. thank you. -- can the knicks -- candidates, i would refer you to the presidential campaign. thank you. there will be a presidential campaign with president obama and bill clinton. there will be at the waldorf-

astoria hotel in new york. you are on c-span. >> the ftc is an enforcement agency and has brought many good cases in the consumer privacy area. it has me -- met compart -- privacy promises. >> self regulation is a toll that can be much more -- tool that be responsive to changes in the marketplace and a quicker way than regulation. >> tonight a look at the federal trade commission enforcement role in dealing with privacy on the internet. the communicators at 8:00 p.m. eastern on c-span two. >> summer morning on "washington journal," mark zandi looks at

last week's jobs report. judith lichtmand and sabrina schaeffer discuss women's paid. after that matthew cooper examines recent polls on the health care law. for the malls, phone calls, and tweets. lots of of easton on c-span. a discussion on the differences between president obama and mitt romney's domestic policy agendas. we will hear about women's issues in the possible impacts of the supreme court health-care decision. this is hosted by the national journal and is 40 minutes.

>> good morning. thank you for joining us. we appreciate those of you joining us via the internet. i am victoria lion monroe. i am the senior vice president of the national journal group. we will have a wonderful event. we hope we can take a very long look at how the two presidential nominees to verge on key policy issues such as the economy, and more. it appears that president obama and governor romney will provide the american public with the starkest contrasts since 1984, if not 1964. every week in our magazine, national journal will look at these clashes of ideas on policy. we will take an in-depth look on each candidate's vision for america that will shape and

define this election cycle. we will also have live evens like this one looking at each candid's position -- live events like this one looked at each candidate's position. we invite you to join us if you are down in each city. we were able to gather this morning due to the underwriting support of the society for human resource management. when we had the idea, the leadership saw the value in it. thank you to the entire team for their partnering with us on this important project. robert carr is chief communications manager. he is the former executive director of the national bar association.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> washington is a city of many intersections. both literally and figuratively. to without victoria, we would not have been able to navigate those intersections. give her a big hand. [applause] i am bob carr. i am with the largest organization of human resources. we are in 140 countries, we are pleased to have the opportunity to be part of today's program. we have partner with the national journal before. this is a great opportunity for us to partner again, especially on this series of public policy

panel discussions. today's program is the first of a series of important discussions being titled "pare the candidates -- compare the candidates." this year's contest will be another nail biter. the electorate remains divided. while divided, most agree that the economy is the most important issue to the american people. it will decide the outcome of this year's election. jobs, health care, retirement, skilled gaps are a few of the issues we wrestle with. these are not new for human resources professionals. they are the key challenges most of our members based on a day to day basis.

all of these issues -- of all of the issues, the most immediate concern is the skills gap. it is the barrier that keeps america behind. the washington post did a story yesterday to reflect that fewer than -- what people between the ages of 25 and 54 are not working. we believe in large part it has to do with the skills gap. most of our members are telling us they are having difficulty recruiting the kinds of people with the right skills, talent that they need to remain competitive. in during that -- doing that as a country, we believe that a is a critical part of the economic aspirations of this country. in concluding, we hope that you

enjoy today's discussion. i encourage you to join us later this summer for the two of the sessions of this three part series. we look forward to seeing many of you for the upcoming national companies. thank you very much. [applause] thank you -- >> thank you, bo b. we want to give you information about how the eventful flow. we have three panel discussions. we are grateful to all of our participants for joining us this morning and for their willingness to take questions from you all and our reporters and journalists. we will have staff going to the audience with a microphone. please stand up, state your name and organization, and ask her questions. for those of you who may have them on, please silence your cell phones. are jamesator is fa

tankersley, an award winning journalist. he was part of the team at the toledo blade who were finalists for the pulitzer prize. our second panel will be led by the deputy editor of national journal in the former senior editor at "news we." ek" ." our final panel is the editorial director at national journal. ron write regularly for the "national journal." thank you to all of them to lead the discussion this morning. over to you, jim. >> thank you for joining me.

robert bixby is executive director of the concord coalition. robert shapiro is a former adviser to president clinton. thank you for coming. let's dive right in. jobs. let's start with you, doug. if governor romney wins this election, what could we expect from him right away in terms of an immediate job creation plan? >> deep structural reforms. the governor has placed tax reform at the top of his agenda, and he has taken strong positions on internal reforms. it because not a question of do we understand the policy means, but can you get the job done in

washington? his history of being a governor of having to work with a legislator will be a real asset. >> what is the underlying economic theory he is playing to his -- bringing to his plans on how to create jobs? >> a reliance on private sector incentives. one of the striking fact is that we have had seen any groups -- growth in spousal income. it is having a quality of life improvement. that is a top issue. >> so much of what the president has talked in the last few months has been the middle class and economic fairness. way too high unemployment rate. how will his policies be different in a second term to bring that rate down faster?

>> there is a contrast between present and former governor romney. the proposals or the areas of reform without going into detail that doug mentions are all good for the economy. they are distant from irish will drop creation. the president believes we can target job creation much more specifically. he has done that with reductions in the payroll tax, on the theory of the sound economic theory that if you want business to create more jobs in a period of slow job creation, which we for 10 years, youa

need to reduce the cost of business. not just reduce cost to business but to reduce job-creating cost and that goes to the employees side -- employer side of the payroll tax and articular incentives that the president has, tax credits that the present has proposed for small businesses that make in criminal increases in jobs -- an incremental increases in jobs. job creation depends on strong growth, strong demand, but where there appears to be structural issues that are slowing job creation, he chooses a much more targeted approach than former governor romney. >> i want to talk a little bit about the commission you served on. you all talk about the two-part problems facing our economy. the long-term problem of a

mounting deficit and the national debt that is getting bigger and bigger every day. the short-term problem of needing more growth. you proposed a stimulate now a couple with a credible deficit reduction plan. has either canid embrace that vision? >> that is the real transition. we have two problems. we have a short-term, cyclical deficit, which is substantial because of the depth and length of the recession. we have this longer-term structural deficit which is pre- existing before that. you have to be able to walk and chew gum at the same time on this one. that is a difficult thing to do

politically, to talk about -- artillery from the point of view of a deficit hawk. if you hand that it is ok in a small economy to do certain things that may increase the deficit, so as long as you have a credible that the plan, which is the more important of the two if i were to choose between the two and say, let things go for one and not for the other. it is more important to do things on the long-term structural deficit because that is unsustainable where as the economy will probably take care of itself at some point. i do not suggest that the government do nothing and sent back. it is important. the candidates have focused more on tactical issues in the short term than on a addressing this long-term chartreuse deficit. if we do not control that, you cannot stimulate your way out of that or tax cut your way out of

it or grow your way out of it. some more attention from the candidates on that structural deficit -- we had a bit of fresh stimulus package -- a payroll tax holiday for a full year. it was a substantial stimulus. maybe that is not the right approach. we wanted to emphasize that you could and should be accommodating in the short-term, but so long as you are having a longer-term sustainability. >> doug. go ahead. >> i think this is a big point of contrast, which is a tender early target policy-making approach. it is not one that governor romney supports. we have had an economy growing since june 2009. it is growing too slowly.

you need to enhance the trend rate of growth in the economy. that requires tools of permit reforms for structural problems. that will quote -- help in the near term. >> but this ignores is the miserable job creation of the last administration. if we look at the period for end of the recession to the 200currt period and compare that with the comparable period with the 2001 recession, we have created $4.20 million -- 4.2 million private- sector jobs. $540,000 -- 540,000 jobs were created in 2002 to 2004. >> let's keep focused on the election of.

. >> there are new structure issues with job creation. this is not about the overall efficiency of the economy. to createy's capacity jobs in response to grow has changed. we know that the rate of job creation will attend to growth fell by half. -- relative to growth fell by half. that is not a matter of policy mistakes. it is because the way the economy has the ball. how do we address that? do we reduce regulations in various areas, where do we have to try to figure out why that is happening and address that directly. the president has said this is a separate problem from the

overall of efficiency of the economy. that is why we need targeted measures. that is why we need measures to slow the rate of increase in health-care costs because of those are inhibiting job creation by business as well. it was a major focus of the affordable care act. >> was talk about health care for a second. thank you for providing are for a transition pern. we have two different visions on health care. governor romney has promised to work to repel the affordable health care act. the president wants to keep it in place. let's talk about the supreme court. how will this decision change how i can get it will impact the government? >> it turned out to be pretty

simple. if you get the court sustaining law with no changes, you will see the president stopped talking about it. you will see governor romney continue to argue for a better approach to dealing with our health care problems. if the court overturns the individual mandate or the whole thing, you will see president obama running on the need for president supreme -- better supreme court justices and romney will advocate for an alternative to the affordable care act. >> how important is it that we hear from the candidates how they would constrain health care costs with or without the affordable care at in terms of our long-term deficit problem? >> when you look at spending, you have the big health-care problems.

that is really the long-term cost driver. social security is a-security over the next -- a modest security over the next 20 years ago so. it is important for the candid not to respond until they know what the supreme court has to say. setting out have book -- setting out hypothetical will be confusing. presumably they have been thinking about this behind the scenes. they should be ready to go with different alternatives. it is important there are different visions. although there are certain similarities, is on both sides in agreement that part of the solution should be competition. the private-sector competition is favored -- both approaches in

a way, but with the obama health care plan is also a way of controlling costs that comes from this independent health care board that will make recommendations. there is more government involvement cost control and more direct and indirect. that is a very fundamental debate to have. so in the cost growth. we have not -- slowing because growth. we have not done it yet. even in the cost control mechanisms work, we are still on an unsustainable path. it is important that both candidates still talk about their patrol -- preferred way of controlling health care costs. >> i want to talk about the deficit in general. our baring casa are extraordinary low. we are not facing the -- our

borrowing costs are extraordinary low. we are not facing the crisis of europe. at what point does the president have to put forth a more detailed plan for deficit reduction in the second term? >> the president has been pretty dollar $4 bout his 4 trillio trillion plan. there are cuts to discretionary programs. 500 billion went to aca. he has laid out $1.50 trillion in revenue increases. he has laid out defense cuts. they are the savings from resolving the wars in iraq and afghanistan as he promised in 2008.

we can argue about whether or not that is enough. there will be a very clear debate on this because the governor has proposed $5 trillion in additional tax cuts. a 20% cut in every personal ra te plus the abolition of the estate tax. that creates a different context for the debate over the deficit. the president's detail is much greater than we have seen from other candidates. i would welcome a debate that forces both candidates to go beyond their current positions with more the tell. >> i thought we did not hear enough details at the democratic

primary. the romney is running in part on the idea we need to control this deficit. he is proposing huge tax cuts. can those things be reconciled? >> those are the same cuts the balsams and has -- bowles- simsspson has. you can do the tax reforms that were proposed and so do deficit reduction. that is the plan we need to have. it is imperative to move quickly. we already have debt to gdp ratios are over 100%. we are already paying the price of the enormous debts run up. if you want to get jobs, you

have to do with the debt problem quickly. you mention the borrowing costs. we have all of the characteristics of a country that gets in trouble. lots of the skies liabilities that keep popping up. -- lot of liabilities that keep popping up. >> when will we need to see the details on the tax loopholes to eliminate? everyone is for tax reform until you get down to the hard parts? when do we see those and when do we need to? >> as the campaign progresses, you get more detail. , iting out the tell early gets lost. we don't focus until june, july, or august.

we have no idea what the promise -- and is promising for the second time. the governor is talking about medical reform. he has talked about what he would do in international trade. you would hope to see something. >> i expected this to degenerate. the fact of the matter is governor romney's position is nothing like simpson-bowles. it calls for more revenue increases of over $1.5 trillion. the governor has specified no revenue increases, instead has specified $5 trillion of additional revenue losses on top additional revenue losses on top of