discussion that is becoming nothing more than irresponsible grandstanding. the government must stop racing to the lowest cost regardless of risk or mission importance. member the story of the three little pigs. each little bit chooses to build a house of the different materials with different consequences. we tell the story to our kids to make a point that it is important to do things right the first time and be aware of the consequences of taking shortcuts. today's race that makes sense on the surface. why pay more than the seemingly have to? in many instances, it is like building our national security house out of straw. by defining value as the lowest up-front cost without adequate regard for other factors we've risk of building on the wrong foundation comment bearing an

unnecessary risk and incurring a much higher cost through budget overruns in the worst cases of failure. i am not suggesting that the government should not speak to get the best price. it accounts for all the cost of a time as low as the objectives of the mission. think what you do as an individual. it is one thing to buy a drug to treat a colder headache. when it comes to open-heart surgery on your heart you act differently. we need to understand what is at stake before we buy or cut. that leads me to my second point. there is a growing tendency to think of only using the private sector to provide staff

augmentation or government resources and are insufficient. this is a mistake. the private sector is more than the supply of timber of labor for two reasons. first: these systems reside across the government and the private sector. we're all in it together. second, innovation and the application of new technology comes from the private sector. treating the private sector is nothing more than a low-cost provider of staff augmentation that shut out american experience and innovation. the government should articulate what it needs to accomplish what it is prepared to pay for and let the private sector figure out to deliver. do you buy a car based on the cost of the steering wheel and the engine and the wages of the assembly line workers?

of course not. you buy a car that performs to your criteria at a price you consider affordable and fair. the government acquisition process should move away from the current profession, the cost of component inputs, and shift the focus to desired output such as performance and affordability. by doing so, taking this approach will allow us to get much more from less. it is increasingly recognized that both circles allow good engineering. it is the architect you get before you buy house. you get what he need, when you

need it at a budget you can afford. we have built too few many houses without architects. considered the development of an airplane as report in the washington report. engineering is associated with the construction of a new program. in today's age of fiscal austerity, it can help us with the construction, making the right trade-off to scale back on existing programs but without sacrificing committee readiness and sustainability. as a country, we face major challenges. challenges for which solutions

to come in conflict with each other and test our willingness assistance and a democracy. pulling it together on not ignoring our national security responsibilities requires knowledge and courage. it is it time to embrace the changes we know we need to make a put aside our self-serving parochial interests. we must rethink how we engage the private sector in order to unleash the innovation and brainpower that have defined our country for more than 23 years. >> good morning. i think the first test of knowledge this has been a

nation at war for going on 11 years. there is no precedent for that. as you look at the activities that are going on around the world, there are still huge populations where people cannot afford their housing for their food, are well educated and really do not have much to lose but to go by what they need to survive. that is not going away. the likelihood that as a nation or a blow that conflict is on the wane is not realistic. what is our role? how do we expect to be a participant as the go forward? the first question that comes

from us is what is it that we want to be? what are we? is there a different? if you are and afghanistan, you get in an armored vehicle. you go. you come back. it is an occupation force. is that what we want? it is the question that we ought to answer in a debate. there's more than one discussion that should be held. this second issue is where is the leveraged? where is the leverage for competitive advantage? i will use dates analogy of your car. when i care what, the first thing i wanted to know was how much horsepower, what transmission, how fast could it go, and what color was it?

a small company doesn't work on cars in arizona. they're not a car company. they build a few in a crowd source building. today when you buy a car it is well my phone connected to it that doesn't know i -- does it know i am there? the car and the platform still has a significant role. the fact that we bring centers and systems into it, that we put them into where we go, there recognized and functional. those are the things that are important to us. we're starting to move away from platform-centric to the leverage gained by i.t. systems.

i will never forget standing down in georgia by secretary gates. we were ready to deploy. they had new systems. they had ipads and droids. the secretary said what do you think of all this? he said he would sooner be put up his rifle -- leave without his rifle and leave without those things. the capabilities are changing. the competitive advantage on the battlefield is now founts of platforms anymore. it means that the competitive advantage today is driven by devices. it is about a 30 day cycle to

try to stay up with that fight. spending 20 years and develop for a platform and building it and find out what fight is going to be in and modify it, it seems somewhat irrelevant to the battle that we are on. is staying in one place for a long time what we want? these are the things we lipper as a move toward the future. the last point i really feel is under appreciated, this military that we have built is an all volunteer force. this is the first time we have gone through a fiscal downturn

with an all volunteer force. their service is substantially different. they expect to have equipment that works. expect to do training that is relevant to what they think is going to happen next. the question becomes what are the dangers of hollowing be forced out? what of the changes of not preparing for the downturn? 480 billion plus syria we're taking out a defense -- would come down in the neighborhood of 25%. are we halfway there? what next for retaking now? those are important questions that we have to understand. what is it you want to be? where is the competitive

advantage as you go to the future, and how do you retain of course you have and the quality have as you go into a fiscal downturn? thank you. >> good morning, everybody. i don't want to be the only one up here who does not come up with the current analogy. coming from michigan, i cannot quite figure out what that analogy is. maybe i will ask a question that will trigger the right answer here. [laughter] the questions that have been asked so far are the right questions. how do we change our management and make it more effective? how bizarre acquisition system need to change? we have done a number of reforms but in terms of what we need to do, general car rights questions are clearly the right ones. but the answer to these

questions is not the current budget process that we are in the middle of. whatever the right answers are to those questions, and they clearly are the right questions, sequestration, which is what is looming before us is not the answer to these questions. i think probably my colleagues would agree with that but they will speak for themselves on that issue. these cuts we are facing our automatic cut. in the defense budget there are 3000 accounts which would be automatically cut. the president has a little flexibility, but that is about it. what we are facing now that is looming before us, what will happen in january in addition to the other parts of the train wreck will beat sequestration, automatic reductions, perhaps 10%. this is a kind of mindless

budgeting which i think needs to be avoided if we are going to have a chance to answer general car rides questions, and i hope we do. we have begun to struggle with these questions for a long time. one of the questions with the general left us with, the previous wars, reductions afterwards were 15% or so. the problem is we are in the middle of a conflict, however you want to describe it, that is not going to end when our troops come out of afghanistan. most of our combat troops come out of afghanistan in 2014. what kind of capabilities do we need for the new threat and the new challenges? it is not as though suddenly there will be a new peace agreement signed in 2014 that

will end the terrorism that we face around the world. i worry very much about sequestration. i want to talk about how we can avoid it. most of my colleagues in both parties seek sequestration it as a-kind of threat to a sensible budgeting process, a threat not just to security priorities but to a lot of other priorities within our nation, including education, health care, transportation, environment, and many other critically important challenges. -- challenges we must meet and we must face. there has already been a 15% reduction from 2010-2012, a 15% reduction, and that is unacceptable as well as the mindless cuts in the defense budget. i would get out of the mess that we face.

we have a lot of hard choices and the only choice that really is an acceptable one, the correct one, one that is politically feasible is to have a balanced solution that includes additional spending cuts, but prioritized, prudent, no area would be exempt. general cartwright has spoken on one area in the defense budget that is ripe for cuts and that is the nuclear stockpile. we cannot exclude entitlements from the solution. i want to focus for my remaining few minutes on the question of additional revenue. that is the real challenge. that is where republicans who say they want to avoid sequestration and say they want

to avoid cuts in defense, and i believe that most of them do, perhaps not the tea party types who are temporarily dominating the republican party. i am not sure they care about sequestration as much as most republicans and i think all democrats. so there is an agreement we have to avoid these across the board salami type cuts in all our programs. we start with the facts. historically, revenue has been about 20% of our gross domestic product. today, it is closer to 15%. yet we have republican leadership drawing an absolute line in the sand against additional revenue. every president that has

achieved significant deficit reduction has made revenue part of the equation. president reagan, president bush, president clinton -- the first president bush, president clinton, all have somewhere between 40% and 50% of deficit reduction represented by traditional revenue. we got plenty of opportunities for additional revenue. the code is full of loopholes, full of giving in to offshore tax havens that we were able to close down and restore much needed revenue. one example is facebook, very familiar to both of us. a tax deduction following the sale of that stock for $16 billion. corporations paid $16 billion, even though it showed itself as being profitable on the books, when it comes to falling its

income tax, because of this loophole, they get a tax refund of the taxes they have actually paid. so they are profitable to the outside world. that is why people are buying their shares for $40 a share, maybe now 30 or whatever. but when it comes to their books, hundreds of millions given to their executives were worth about 20 cents a share. it is a loophole. we can close it. a huge amount of money in just one loophole. this is not probably the place to go into more detail unless you are dying to know, but not only do we choose to restore that upper bracket of tax rates at about 39%, and what it was before the bush tax cuts, which will go more than halfway in the deficit reduction that we need, but we also should close the loopholes. i believe eventually the

republicans are going to have to choose, are they going to continue to defend tax breaks, tax loopholes, that mainly benefit our upper income folks. the only group in this country whose net worth has gone up has been the wealthiest 10%. the rest of this country, median income has gone down in terms of net worth. so there is a necessity that we have additional revenue. there is overwhelming precedent, with every president who has tried deficit reduction that there be a significant component of additional revenue. so i think we are going to find a way out and avoid sequestration, in my judgment, because the overwhelming number of congressmen and women,

senators and members of the house, want to avoid sequestration. the big problem beside weather is when. i consider that to be frankly the greatest problem we face, because i am confident that we will avoid sequestration whether it comes in a lame duck or after p.a.t. come -- it could come too late to avoid a severe weakening of the economy which result from the prospect of sequestration. business folks have got to plan. families have got to plan. you cannot plan if you don't know whether or not there will be contracts coming in january or not. that uncertainty which is created by the threat, the prospect, the specter of sequestration, i believe is a real threat to this economy.

so not only must we avoid sequestration, in my judgment, we will, but we must do it in time to avoid a severe weakening of this economy. that is the greater challenge that we face. see if we cannot possibly reach the kind of compromise which we know will be there at the end, to do it in time to avoid this kind of mindless and very dangerous weakening of the economy. thank you. >> thank you, senator. we will open it up to questions and answers from the press first. please identify yourself and your organization with your question. we like to get started. >> i want to ask, mitt romney on the campaign trail talked about cuts that are already on the table. i wanted to know if you think is realistic [unintelligible]

it that will change in the near- term or start going up in that romney won house. >> center, would you like to start? >> your asking me not a hypothetical but something that is difficult for me to hypothesize about. if he wants to add money to defense spending, he will have to do two things that he refuses to do. have a press conference and identify where he would get the funds. that is number one. what cuts would he make if he wants to talk about cuts? would additional cuts would he make in the so-called discretionary domestic programs. he ought to finally address the loophole question.

did he take an oath? is he still bound by the pledge that even though his offshore tax havens are soaking up tens of billions of dollars a year, money that belongs in the treasury, and that money -- is he going to continue to spend it to defend a bunch of other tax loopholes cut critics such as stock options? the carried interest loophole that allows hedge fund managers to treat as capital gains income which everybody else has to treat as ordinary income. he needs to address the questions of revenue, loopholes, and he also -- if he doesn't offer revenue, where is he going to cut? he should not be allowed to get away with some answer like he will go with efficiency and cutting waste.

>> taking it in a slightly different direction, the reality is, one thing we have been perfect that is a nation is we have never guessed when and where we will be in the next conflict. the question that worries you hear is, is that conflict coming before we can get through some adjustment to the economy and start to rebuild ourselves? then i think the statement and comments of the senator are appropriate, and if we are going to enter into another conflict here in the near future, will we, and how will we in fact sustain ourselves in that conflict? how will we find the revenues in order to actually conduct that conflict? we made another choice. it may not be a political decision. may be forced upon us, which is often times the case. >> [unintelligible] >> i don't really have any

detailed answer on that. most of the space program is not even in our budget so i don't have a comment. >> of the air force is moving operational in response of space under their rapid acquisition programs. it is not just the movement in where they are managing -- my personal opinion on that is is the right thing to do. began to integrate space into the rest of the activities that you are responsible for. don't hold that separate.

make it unique so that only the people in space or who work in space know how to use it. space on the military side is but another venue in which we conduct operations and that ought to be integrated with all our operations so we know how to use it and what is going to contribute. and is that contribution worth the expense? today, space is extremely expensive. counterparts like airborne surveillance systems and other things like that have value. what is the right balance? if you separate these things, you know how to find the balance. >> the cuts in the satellite program will nonetheless have a negative effect on the defense department's so i am concerned about the reduction in the satellite program and agency that controls many of those satellite. >> your perspective on our nation's future in space?

>> i think the discussion makes the point, which as general car right talks about the need for a competitive advantage in the future, we have to look at all the different aspects and understand how it changes the set of mission capabilities we need and what the mission looks like. whether it is air or land are undersea, it is an integrated approach we have to be thinking about, which is why it is important to apply the judgments at the national level, notwithstanding the fact that we budget at the program level. i think the senator's point about sequestration and cutting out programs equally is absolutely the wrong approach. it ignores mission and what general car right touches on is the integration of space with air and other capabilities. that is the future, which is why we have to apply our

thinking and a tradeoff that the level of the mission and necessary mission capability for tomorrow's wars. >> next question. >> what signals to the public be watching for in the next couple of months if sequestration can be avoided? what should we be looking for? >> thank you for asking a question. the big issue is whether or not an uncompromising position is going to be maintained. i hope you will get answers from candidates as to whether or not they are going to stay with the haley barbour type pledge or whether you will see more and more, as you have already done, suggesting they will not be

bound by that pledge. the first zero is to the constitution and the security of the country, not to haley barbour. you will see people on the republican side to sign those pledges gradually recognizing that there is no real deficit reduction and cannot push back defense another critically important priorities of this country from sequestration without additional revenue. cannot do it. has been proven over and over again.

that is the one tip of would look for. maybe the presidential candidate on the republican side will answer the question about the barbour pledge. remember, he was asked that question in the debate, all the candidates were asked whether or not, if they could trade $1 in initial revenues for $10 in spending cuts, would they accept that trade? raise your hand, the moderator asked all the candidates. i think none of them raised their hand. that is an extreme position. no president who is serious about deficit reduction, including ronald reagan -- that is what i look for, that specific question. >> what realistically is your thought of what the defense cuts would look like? >> i could see at the most -- i will answer this question but i have to tell you do not agree with what my colleagues here said, first that you have to acquire things in a very different way. you have to decide what is the strategy you are going -- what

is the president going to face? when i give you a number, is with that in mind. my best guess would be about $10 billion more, which would be about $100 billion over 10 years. for total planning purposes when we look at how to come up plans to avoid sequestration, $100 billion over 10 years is the no. i look at. i think defense has to contribute. we have to be very careful about the draconian approach on the fence or other important programs like education, health care, and so forth. >> i am from south korea. [unintelligible]

the u.s. needs to adjust spending in korea. [unintelligible] >> we have to reduce some of the plans for housing. we cannot afford to be spending a figure like $10,000 a month for family housing that was planned in order to have families come over and be with our troops in korea. we cannot afford that. i would say that in terms of the number of troops, the first thing we ought to do is turn over responsibility for wartime control operations to the koreans. it is long overdue. we keep saying we are going to do it and we do not do it. the question is who would be in operational control. should have been decided that

the koreans would be an operational control years ago but the request of the korean government has been delayed a number of times. there could be some progress in terms of north korea to allow us to reduce our -- #our troops in korea. as far as the kind of missile systems the koreans have, i don't have any strong feelings on that provided they pay for it. i would hope that we do it in a way that would not be viewed as a kind of offensive position or threatening position towards china or towards north korea. if they want to do it in a nonthreatening way, i don't have a problem with that. >> just to pile on there on the forces and the money spent in south korea, what is important

here up front is to do what, and what is it today that the south koreans need from america that is permanently based there and available all the time. it is not what it was 20 years ago. having a rich dialogue about that, but it is time to make an adjustment on the posture. the second issue of the missile is not a technical issue. it is not a programmatic issue, in reality it is one of understanding the environment in which she would introduce that, and the stability change it would cause. it may impact enhance stability, but understanding how all of the neighborhoods view that change, and that they understand it is the key issue here. generally, it just takes time to make sure that the logic and reasoning is well understood by

your neighbors before you deal with something like that. >> [unintelligible] a lot of contractors may be watching this and thinking it is unrealistic. what are the chances that congress will just keep borrowing money and keep defense spending where it should be? >> there is a chance that could happen during a lame-duck session. we could once again kicked the can down the road and modify the law that is now in place that forces some of us to be more deficit conscious. there is a chance that would happen. i don't think it is the right way to go, but to say that

congress -- no chance that congress would kick the can down the road would be kind of inconsistent with a lot of evidence. not only do we kick the can down the road, i think we have special gym shoes. [laughter] >> to make a point your question, the focus of sequestration in january 13, but that is a quarter of the way into the next government fiscal year. so your point about impact on industry, i think there's a growing recognition that the impact on industry is going to begin in all likelihood in october, at the beginning of the fiscal year. if there is uncertainty that continues with regard to sequestration or not, and if not, then what instead, in all likelihood one is going to see the government start to be very careful about how they are

spending money because they don't know what kind of budget that will be under creek with sequestration hitting the year, that change behavior is likely to happen at the beginning of a fiscal year in october. i think industry is facing a very difficult situation here, beginning in what is our calendar for quarter as this all plays out. focusing just on jan. ignores the point that behavior will start to change in october. >> next question. >> [unintelligible] >> there is some evidence is already spurring action, at least in the senate. our colleagues are exploring possibilities to reach agreement in advance and since

some kind of signal in advance, in some way that we are able to act in a way that is rational, in a way that involves compromise on the part of everybody. we have to get over the idea that some in congress recently, particularly that compromise is a dirty word. there is some evidence, a lot of the conversations taking place in the senate, i think the majority of us are involved in the conversation in one way or another. >> a question for you, mr. chairman. you are confident that sequestration will not happen but you think it will be more challenging. given what was said about the fiscal year starting in october, pink slips have to go out in september. is it fair to conclude that we have to do something this summer

on it or else face the kind of economic fallout you talked about? >> i think that is what most members of the senate recognize as the reality, that we should be finding a way to act and send some kind of signal we are able to work together compromise, even if it is not the whole thing, that we are able to do something prior to the beginning of the fiscal year. >> i agree with what you said about the problem specifically beginning october 1. >> i think warnings to employees have already gone out to some major employers. that will drive us hopefully to finding a path, in a different context it is called a

confidence building measure, the congress is at least able to take some steps down the path of avoiding a train wreck. there are a lot of possibilities. one might be to take it did find a way to pay for the extenders being extended. things like r&d tax credits and other things that most people want to see happen. and it could hopefully involve some parts of the tax cuts. everybody agrees we cannot raise taxes on middle income folks. the disagreement is whether we should continue to lower tax bracket for upper-income folks. maybe we can find a way to at least agree that the median income group that has been so

hard hit should not face the prospect of a tax increase in january. at least on that part, leaving the question of whether the upper bracket tax rate will be restored at a higher rate later on. >> what is the long-term risk of waiting on sequestration and how quickly could we recover? if you could elaborate on what 3000 accounts would automatically be cut, or have reductions in spending? >> the second answer is whatever the cut is, it would have to be applied to every account. the different word is every line in our budget. that is not as clear as the word account. it would have to be an equal amounts. there is flexibility on the pay

of our troops. the president can avoid that but any as to make up for it some other way by adding a slight increase to the percentage on every other salary. in terms of the effect of continuing this uncertainty about this fiscal cliff, i think it will have an ongoing weakening effect on the economy. i would guess that weakening process would begin sometime this fall. >> [unintelligible]

>> i hope there is plenty going on. we have a provision in the defense bill that requires the defense department to feel the impact specifically of sequestration. not just every department, every department -- not just the defense department, every department should be informing the public on the effect of sequestration it would have. i am all in favor of requiring the defense department to do that. maybe an amendment on the pending legislation to try to do that. so, it ought to apply to every department an impact on education and health care and other important programs as well. >> the impact on private industry? >> of sequestration? there has been so much written by many of you about the paralysis that we see on the industry side.

i don't know how many hundreds of billions are trillion dollars of cash on corporate balance sheets, and the reality is that corporations are not going to invest in capital until they get some sense as to the environment they are investing in two. this continued turmoil and uncertainty continues the paralysis. if we are really looking for private sector investment to have a major role in bringing our economy back, we need to create an environment where business can at least understand the environment in which it is expected to do business, and therefore be willing to invest. all of what senator lebanon's talking about is just another color of continued confusion and uncertainty that has had business standing on the sidelines waiting to see what is going to happen. to expect them to act before

they see that certainty is just foolish. it will not happen. >> my sense is that there is a bit of a conundrum here. we want to plan for the future. it is responsible to plan for the future. you also do not want to give away anything. oftentimes the worry is that as to announce a plan, if i were asked to do x, y, or see, this is what i would do, and all the sudden it happens and the discussion is sometimes felt to be lacking as to whether there should of happen or not. somehow not just the department of defense, the departments have to find a way to dick -- to conduct some serious planning about for a cut and do so in an environment where they are safe and they can explore all the options without having somebody take the decision away from them. >> you mentioned are indian maybe the adjustment with the

bush tax cut plan -- new mentionedr and d. what would be the accompanying think you are looking for on saving money? >> the reason i mention it, the republic in the business community needs is some clear indication that we are going to avoid the fiscal cliffs. they need stability and confidence. that is what is lacking now in what they are seeing. my suggestion is that there may be some actions which could be taken now which would give people some confidence that we are able to work together on a bipartisan basis and some things that we can agree upon. the middle income tax cuts continuing, not being lost. i don't know of anybody that doesn't agree with that.

there may be a few. why not get done the things where we can reach a bipartisan agreement? 9% of the congress would not like to see a research and development tax credits lost. there are other things which i hope there would be agreement on. we have a provision that goes to try to reduce the impact of these offshore tax havens. that provision is in the farm bill actually -- excuse me, that transportation bill is now in conference. if that stayed in there, that is something we hope will stay in there because it is my provision. i hope it will stay in there

because it is the right thing to do. i should have put that person. i don't want to limit the list -- i should have put that in first. >> what you are talking about -- [unintelligible] >> et ask me what i have a program to avoid sequestration myself? i would. am i talking to colleagues about it? i am. you mean a total solution? if people could agree, if there were significant bipartisan agreement on a plan to avoid sequestration, even if you could not implement it right away, if it were announced, here is a plan, this is what we are going to do, i think that would be a real confidence-building measure. >> thank you, next question. [unintelligible]

>> when the defense policy bill reaches the floor, that will be the first time many indy -- many in the senate debate it. can you talk about why it didn't fit its bill will be marked and public and did you ever consider marking up the defense bill in open session? >> there are many cases where we have classified information that we talk about in the defense budget. it is too complex to clear the room every time i want to go in and out of a session. it is an impractical solution. the boats are all made public and the outcome is made public. the debate on the floor is obviously public. there are too many instances where we actually talk about things that are classified for it to be a practical way to do things. >> next question in the back.

>> the agree with the comments that general car right made about the and necessary cuts and spending for the nuclear arsenal? >> i do. [unintelligible] is that something that is going to be a measure of confidence? >> putting in a plea for compromise on sequestration, the answer is open to discussion and argument. this is one area where some of us have particularly felt we are on an unsustainable approach relative to certain

changes in the open now --in okinawa. before we make decisions on major spending, there is a lot of spending involved here, that we have a long-term strategy in place as to where we want to go and what we want to do. that is not the case with the situation in okinawa and guam. we do not have that report which we are waking -- waiting for. we believe very strongly we should get what the picture for crime is in that area. our feeling is we should not be committing large sums of money to improvements in guam or other pieces of that puzzle. >> general cartwright, to what

extent do you feel that our capabilities will offset the need for spending in other areas? also, i was wondering if you think [unintelligible] against iran could actually enhance the u.s. posture? >> on the first, the emergence of cyber capabilities, but the bids of an offensive, part of what we are trying -- what i had at least advocated for was that like missile defense, like the conventional capabilities that this nation had in the kinetic sense of airplanes, ships, etc., that the balance in the utility of those activities and how they are put together an integrated against the problems we actually have, not the ones

we aspire or wish to have, are critical. to ignore the emergence of the capabilities of missile defense, to ignore the emergence of capabilities and defense is associated with its cyber, and to continue to do everything else the same way we did it in the past does not make a lot of sense. what you are trying to understand is where does it fit? in defense parlance, it is called fires. all the things you have in your quiver to be able to use, where is the utility? i can only speak for myself. having defensive systems on alert rather than offensive systems gives senior decision makers time to make decisions, rather than to react and recover from an attack.

that is point number one. point number two, the things that we have against the threats that we have in the future, the capabilities we have need to be more diverse in the transition from nuclear, which is at the very high-end of warfare, to general conventional forces. in other words, if the best we can do is have an airplane that can go drop obama and the next binomb and the next thing the president has for choice is to launch a nuclear weapon, that is not enough choices. we have to have more choices. that is why these areas are important. for the standpoint of offense, i have said this publicly many times, we need to have more offensive capabilities. we don't have to discuss exactly what they are but the elements we have to have for them to be useful is that we are actually building them. number two, that we are, in fact, testing and understanding them, and number three, we are practicing with them. that is what builds credibility, which is the essence of deterrence. if you can do those things, you

don't have to disclose the secret sauce. people have to understand that you are willing and capable to use these things as alternatives. >> would you like to finish our conversation with your thoughts on cyber? >> this growing concern is taking up a lot of time in terms of committees that were involved in this issue. i think your question is -- the answer is it could, but it does not justify a leak. if the administration decide they wanted declassify it, that is a policy decision, which i

hope people would understand and support. obviously that decision was made in one of the instances to the press. in the case of iran, this was not a policy speech. people who either leak that classified information or confirm it need to be appropriately dealt with. >> i would like to thank our guests for joining us at the national press club. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> the story behind "the star spangled banner" this weekend on "american history tv" marked the start of the war on 18 12th. -- war of 1812. live saturday at 11:00 a.m. eastern also, more from our series on key political figures who ran for president and lost but changed history. sunday at 7:30 p.m. this week with three-time democratic candidate william jennings bryan. this weekend on c-span3. >> nancy pelosi began her career in the house in 1987. >> mr. speaker, 8 years ago, the soviet union invaded afghanistan. the occupation of afghanistan

has turned into a bloody war with no victors. a group of human rights lawyers from the u.s., britain, sweden, and motel. the document acts of terror perpetrated against the african people. >> the current house minority leader and former speaker was honored on the house floor by republican and democratic leaders. watch everything online at the c-span video library. >> coming up this alhurra on "washington journal," we talk to dennis kelleher. then, grover norquist discusses the federal debt, the bush share a tax cut set to expire in january, and whether congressional candidates should sign tax pledge shares --