at the attorney general's request. reuters and then jake. >> thanks, jay. on the resignation of the commerce secretary, does the president plan to nominate somebody else and try and get them confirmed? >> well, first, i would refer you to the president's statement thanking john bryson for his service, noting mr. bryson's many decades of service both in the private sector and the public sector. and i would refer you to secretary bryson's letter explaining his resignation. dr. blank, becky blank, will serve as acting commerce secretary. if we have a personnel announcement to make beyond that we'll let you know. but the president has a lot of confidence in dr. blank -- she has served in this position already and did it quite well -- and has a great deal of

confidence in her ability to carry on the important work that the commerce department does. >> so that's a no, there's no plan to nominate someone else? >> no, i said that if we had a personnel announcement to make we would provide it, and we will, if and when we do. >> okay. let's try on another thing. there's a story in the times today about the cia helping allies make sure that weapons don't get into the wrong hands in the syrian opposition. i don't know that i can get you to talk about intelligence matters, but i wonder if you could talk about how much you know about the opposition and how much confidence anyone can have that weapons that go to the syrian opposition stay out of the hands of potential foes? >> i appreciate what you noted because i'm not going to discuss intelligence matters. i can say that as a general matter -- and this is something i've noted before -- that part of this period of helping the opposition consolidate itself has been one where we have evaluated who makes up the opposition.

and we've certainly noted that there are some elements of the opposition that are not necessarily friendly to the united states. they do not make up the bulk of the opposition, and the opposition is not entirely unified, as you know. but again, that would be a separate matter from the issue that you raised at the top of the question. >> so how much confidence do you have that you know enough about the opposition that you can actually direct the flow of weapons in the right direction? >> well, again, i'm not commenting on an article so i can't -- i can only say to you that our position on providing lethal assistance has not changed. what i can tell you is that we provide humanitarian aid to the syrian people. we provide non-lethal assistance to the opposition, and we continue to work with the opposition, in concert with our international partners, to help them organize themselves, to help them develop greater capacities, all as part of the process of preparing for a political transition that the syrian people absolutely desire and deserve and that will take

place. >> and that stops short of giving the opposition weapons? >> again, we do not, as a matter of policy, provide lethal aid to the opposition. jake. >> the documents being blocked through executive privilege, are any of them to or from individuals in the white house? or are they all internal doj documents? >> i don't have a way to characterize the documents in question here. i can tell you that long ago, the administration provided documentation about specific questions regarding officials at the white house and the national security staff. that was a long time ago, which speaks to -- it was last fall -- speaks to how prolonged this political investigation has been ongoing.

the point i made earlier is that this is an assertion based on the absolute need for this president, as the steward of the executive branch -- not just for his administration but for every administration going forward -- to retain the separation of powers, to protect the capacity of the executive branch to deliberate on these matters, and to work independently and appropriately in response to these kinds of inquiries. the issue here has been the operation known as fast and furious, and that operation is being thoroughly investigated by the inspector general, who has access to all these documents, including the ones that you're asking about. and when it comes to the operation itself, everything has been provided to congressional investigators. and that is really the issue,

isn't it? it is, how did this operation come about? and it originated in a field office during the previous administration. it was ended under this administration, by this attorney general. >> the operation began in fall 2009. the operation fast and furious began -- >> the tactic began in the previous administration. >> okay, but the operation -- you keep saying -- >> okay. the tactic began in the previous administration, and it was ended under this one when this attorney general discovered it and believed it was a flawed tactic. he then referred it to the inspector general. >> the documents that the president is asserting executive privilege and not disclosing -- you don't know or you're not going to say whether any of them are to or from anybody in the white house? >> again, i'm not going to characterize documents related to this except to say that, on the specific matter of white house -- anybody in the white house -- and this refers, i think -- and you know if you cover this, and i know some folks here have -- you know because these documents were provided and are out there and were provided back in the fall -- they relate to anybody in the

white house knowing about the so-called fast and furious operation. any document related to the white house, anybody at the white house knowing about the fast and furious operation was provided -- at the time was provided back in the fall. >> in early 2011, the justice department wrote a letter to congress in which they said something that was not true. >> right. >> right? they said that atf had nothing to do with guns going over into mexico. that wasn't true, and it took them until december 2011 to take that back. is there not a legitimate investigative and oversight responsibility to find out what the department of justice knew when they were giving false information to congress? >> first of all, i think that matter has been thoroughly discussed in congressional testimony, including nine appearances by the attorney general, including the 7,600 -- >> -- after the false statement? >> -- documents that have been provided. the issue -- i would refer you to a leading member of congress in the republican party who, himself, called this politics.

i think most people in this room understand that this is about politics. it is not about an effort to divine the truth in a serious matter -- which is why the tactic used in this operation was used, how it originated, and the consequences of using it. this administration takes very seriously, the attorney general, as demonstrated by the actions he took, takes it very seriously. and he has demonstrated his willingness to try to reach a resolution to this matter with congressional investigators. to this point, the interest of house republicans has been to use this politically, as they previewed for the world in the beginning of this year when they made clear that that was one of their chief goals of the year. >> jay, just one last question. the family of brian terry, the slain border patrol agent at whose murder scene at least two of these guns were found, they disagree with your characterization about these investigations. they say that the attorney

general's refusal to fully disclose the documents associated with fast and furious and president obama's assertion of executive privilege serves to compound this tragedy. it denies the terry family and the american people the truth. that's a statement from the terry family lawyer. >> look, we absolutely agree with the need to find out the truth about why fast and furious happened, why the tactic that, again, was employed in the previous administration in different operations and was stopped by this attorney general -- why it came about. and that's why the attorney general referred it to the inspector general. that is why we have provided congress every document that pertains to the operation itself that is at issue here when you talk about the family that you referred to. and -- >> the terry family. >> the terry family.

and that is separate from an attempt by members of congress, republican members of congress, to try to score political points -- as senator grassley referred to his desire for a "political scalp" -- that is separate from trying to find out the truth about what happened in this operation, which this administration has been pursuing since the attorney general discovered it. let me move around a little bit. steve, and then norah. yes. >> can you say categorically that there is no -- there's been no cover-up? >> absolutely. >> there's nothing being covered up by the justice department, by the white house, as far as your involvement in -- >> again, the attorney general -- >> -- not in the initial thing, but in the -- >> the attorney general referred this matter to the inspector general. the inspector general has full access to all documents we are discussing right now -- full access. and he is investigating this matter. congress has been provided an enormous number of documents -- 7,600 pages.

it has been provided access to the attorney general on eight occasions, as well as other justice department officials and relevant officials to this matter. and this has gone on for months and months and months. the assertion of privilege has to do with the absolute necessity of retaining the executive branch's independence enshrined in the constitution in the separation of powers, to allow it to appropriately and independently respond to -- deliberate and respond to these kinds of inquiries. that is an assertion that has been made by administrations of both parties dating back 30 years. and that is the matter -- that is what the issue is here. again, the attorney general of this administration ended this practice. he referred it to the inspector general. the inspector general has been investigating since that time, and has access to all these documents.

yes, norah. >> on syria, is the united states, along with allies, willing to give president bashar al-assad safe passage out of the country? >> it is not for us to decide that. it is up to the syrian people to decide the fate of mr. assad. and it is -- i know the report you're referring to, and i would simply state that it is our position to work with the international community, to work with our partners to try to bring about the political transition that the syrian people desperately deserve. and it is our firm belief that that political transition cannot take place without bashar al-assad stepping down, removing himself from power. >> so what are you suggesting

happens to assad when he removes himself from power? >> well, this is not a matter for the united states to decide, certainly not alone. the fact of the matter is we need to -- >> so when assad steps down he can stay in syria? >> president assad has not made any indication -- i think he's made every indication to the contrary -- that he is going to participate in this political transition that his people are demanding. instead he has launched a brutal assault against his own people, an assault that continues to this day. >> but the u.s. policy position is to call for a peaceful political transition. is there no answer with what to do with assad once he steps down? >> again, that is not something that the united states decides. that was an issue, i think you'll recall, that was raised during the libya situation. the united states does not make a decision about the disposition of leaders who remove themselves from power. that's obviously up to the

syrian people. >> but perhaps yemen is a better comparison. is the u.s. encouraging kofi annan to host sort of a conference-type, where there would be a transition of power like they did in yemen and president saleh got immunity? is that a potential option? >> i'm not going to negotiate from here an outcome in syria except to say that our clear position is that assad has no place in syria's future. he has long since relinquished any claim he had to a spot in syria's future as its leader by the horrific actions he's taken in an effort to thwart the will of the syrian people and to retain his own hold on power. >> and then final question on syria. after the bilat between president obama and president

putin, there seemed to be some indication afterwards from u.s. officials and others that putin expressed that he was not wedded to assad. is that correct? >> i'm not going to speak for president putin. i can only tell you that, as the president said and others said, that syria was certainly a topic of discussion during their lengthy bilateral meeting and the two leaders share the desire for an end to the violence in syria. and i would refer you to the statements that each leader made. but i can't speak for president putin from here. ed. >> since we were talking about transparency on fast and furious, a quick one on bryson, secretary bryson stepping down.

he's now -- you've added an event with the president and secretary bryson. why is that not open to the entire media and to television cameras? we haven't seen him since the hit-and-run incidents. maybe people want to ask a question. maybe we want to see how healthy he is. why is it not open to cameras? >> secretary bryson submitted his resignation letter, the president accepted it. it is a matter -- in terms of his medical condition, i would simply refer you to his letter of resignation and refer you then to him and to the commerce department for further questions about that. this is a situation where -- >> well, we'd like to -- >> -- the president is meeting with secretary bryson to thank him for his service, to thank him for the months he spent as commerce secretary and to commend him for his lifetime of service in the public and private sector. >> you repeatedly, on fast and furious, kept saying that the attorney general deserved credit for ending the gunrunning operation, but you seem to be leaving out the fact that agent terry was killed, and not -- >> not at all, ed.

that's an insult. >> no, but you're not mentioning -- does he not deserve -- the attorney general -- you're giving him credit for ending the operation. does he not deserve some blame for the fact that this gunrunning operation resulted in a federal agent being killed on his watch? >> well, the attorney general made clear and has made clear on numerous occasions, including the eight times he has testified on capitol hill with regard to this matter, that when he learned about it, took this matter exceptionally seriously. that is why he ended it, and that is why he referred it to the inspector general for investigation. this is a tactic that was employed in operations in the prior administration -- during the prior administration. it was a field-driven tactic. it was not something that was generated out of washington. when it was discovered by the attorney general he put an end to it, and he launched -- or requested an investigation into it. i think that demonstrates the seriousness with which he regards it. >> you've also given the attorney general credit here in this briefing for turning over -- i think you at one point said every page to congress -- 7,600 pages. but my understanding is the

inspector general at the justice department has gotten tens of thousands of pages. i think the number is something 70,000 -- 80,000 pages. so how can you say every page has been turned over if congress has gotten about 10 percent of it? >> well, i think you're engaging in a little selective listening. >> well, you said every page -- >> what i did say is every page related to the fast and furious operation. and that is what is at issue here -- how did this operation come about, how did this tactic begin to be used -- a flawed tactic, which everyone recognizes -- including the attorney general, the president of the united states, congressional leaders of both parties was a flawed tactic and a mistake. and that's why this attorney general referred this matter to the ig for investigation. what is being -- the documents over which privilege is being asserted are internal executive branch documents that have to do with response to congressional inquiries, response to media inquiries. those kinds of deliberations have been protected under privilege as a matter of the

separation of powers enshrined in the constitution by administrations of both parties dating back 30 years. >> how many pages is the -- >> i don't have a page count for you, ed. >> well, why not? >> i just don't. >> i mean, you have given us no information about what is covered by what the president is claiming executive privilege on beyond the broad protecting advisors advice -- >> as you, i think perhaps more than others, given the interest in this at your network, knows the administration, principally the department of justice, has cooperated extensively with congressional investigators, provided extensive documentation. the administration has even provided documents related to an interest in whether or not people in the white house knew of this operation at the time -- >> but why is there not a piece of paper -- >> -- and provided that -- >> how many pages -- >> -- let me finish, please, ed

-- and provided that last fall. and there wasn't a lot of interest in it because it disappointed those who were trying to make politics out of this. and here is the central fact of this matter, this many months into it, this many months where house republican leaders have been focused on this rather than helping the economy grow or helping it create jobs, is that there is no evidence of anything beyond what the attorney general has said about this matter. and our level of cooperation has been extensive. >> but when you say, "go back to last fall," the president's executive privilege claim only came in yesterday. so why are we getting no information -- >> because we made every -- >> -- and how broad is the scope? i mean, what does it cover? >> ed, i can attempt to get more details for you, in terms of what it covers. i don't have page numbers for you. what i can tell you is that the assertion of privilege came at the time when it became clear that there was no intention to resolve this matter, at least to that point, in a good-faith effort by house republican leaders, that they were committed to their previously

publicly announced intention to hold a contempt vote -- a highly political gesture, a completely partisan vote, and when efforts to resolve this matter otherwise were exhausted, in order to provide the absolutely necessary stewardship to the executive branch that this president must provide on behalf of his administration and every future administration, this action was taken. >> jay, on this question of how far the privilege goes, traditionally, privileges involve either the interactions with the white house and the white house staff, or national security. in this case, it seems to go beyond that.

is it a general thought in the white house that executive privilege -- is it applied to all the executive branch, even in the -- >> well, steve, i'm not the counsel, but i think that you need to do a little research. the truth is our assertion is consistent with the positions taken by prior administrations in disputes with congress that date back to the washington administration in 1792. the legal analysis is blessed by the career doj staff, who have advised both democratic and republican administrations on congressional executive relations. and as both historical practice and judicial decisions confirm, the fact that documents reside within an agency rather than in the white house is irrelevant to whether they are privileged. there are at least five examples we can provide to you from recent history where that is demonstrated. chris and then dan. >> jay, in 2007 president obama criticized former president bush for asserting executive privilege, for not handing over documents related to the firings of the nine u.s. attorneys. does he not run the risk of looking hypocritical by criticizing the former president and now essentially evoking the same action? >> no, because this president, again, is -- after making, through his department of

justice, an extraordinary effort to cooperate with congress on this matter of providing thousands of pages of documents, having the attorney general testify eight times -- asserting a privilege that retains the capacity of the executive branch now and in the future to operate independently, as enshrined in the constitution. i would note that this is the first time president obama has asserted the privilege. but as you know, previous presidents of both parties have done so repeatedly. according to crs, executive privilege has been asserted 24 times since 1981. president george w. bush asserted it six times. president clinton, 14 times. president george h. w. bush asserted it once. and president reagan, three times. in fact, president obama has gone longer without asserting the privilege than any president in the last three decades, which is consistent with the statement that you quoted.

bottom line is, after a level of cooperation that i think demonstrates this administration's absolute interest in finding out the truth about the fast and furious operation, and why that flawed tactic was used, its origins and its implementation, its efforts to work with congress to provide it the information that was required under legitimate oversight needs, an assertion was made -- because this has become a political fishing expedition. and it is absolute evidence -- and i would refer you to the statements by congressional house -- rather, republican congressional leaders from the beginning of the year, where they made clear that one of their chief priorities for this year was to use their investigative power in the house to score political points in this election year.

i think knowing that tells you everything about the motivations here. >> you make the point that you've turned over thousands of documents, and yet not all of the documents that congress would like to see. so what's the difference? why not -- >> well, i think i made clear in answers several times to the questions that every document that relates to the fast and furious operation has been provided. and others have been provided, as i mentioned last fall, that relate to any knowledge anybody in the white house had contemporaneously about the fast and furious operation -- again, as part of an effort to cooperate, as part of an effort to resolve this matter in a professional way, not in a partisan way.

roads this weekend on american history tv, harvard history professor on the civil war and the labor movement. >> when of the aspects of abolitionism, there were still a tiny minority. what transformed abolitionists into respective prescient critics of american seemed is fort sumter. >> more on key political figures who ran for president but lost but cherished political history. a look at the five time socialist candidate for president. this weekend on c-span at three.

>> mitt romney said that president obama was taking the hispanic vote for president. his remarks are 30 minutes. president obama will speak at the same convention tomorrow. >> thank you for that generous introduction. i appreciate the chance to be with you today. i am delighted to be invited to your annual conference. it is an honor to be among some many dedicated, elected officials. i come to you as a candidate for the president of the united states of america, and i will govern from the principle that while this is an extraordinary land of diversity, there is much more that unites us than there is that divides us. [applause] each of us wants a different path in life, but we are united

by one great overwhelming passion. we love the united states of america. we believe in america. we are one nation under god. today we are united not only by our faith in america, we are also united by our concern for america. the country we love is in peril. that is why i am running for president. almost four years ago, the american people did something that was very much the sort of thing americans like to do. we gave someone a chance to leave, someone who we had not known very long, who did not have much of a record, but promised to lead us to a better place. at the time, we did not know what kind of a president he would be. it was a moment of crisis for our economy, and when barack obama came into office, america wished him well and hope for the best. three and a half years later, over 23 million americans are out of work, unemployed,

underemployed or simply quit looking for a job. at a time when we should be gaining momentum in the economy, we are actually losing it right now. job growth slowed and this week we learned that the number of job openings has slowed again. and as you know, hispanics have been hit disproportionately hard. while the national unemployment is still above 8% and has been for 40 straight months, hispanic unemployment is at 11%. the middle class under president obama has been crushed. more americans are living in poverty today than at any point in american history. over two million more hispanics are living in poverty today than the day when president obama took office. home values have plunged. our national debt is at record

levels and families are buried under higher prices for things like food and gasoline. and yet the president has said the private sector is doing fine. this is more than a policy failure. it is a moral failure. i know the president will say that he inherited the economic crisis, and that is true. but we should not allow the challenges he faced four years ago to divert our attention from another important fact. the president pursued policies that have made this the slowest recovery since the great depression. and he broke promises many people were counting on to build a brighter future. it did not have to be this way. just compare this president's record with the first term of ronald reagan. president reagan also faced an economic crisis.

in fact, in 1982, the unemployment rate peaked nearly 11%. but in the two years that followed, just two years, he delivered a true recovery. economic growth and job creation or three times higher than in the obama economy. if president obama had delivered a real recovery, a reagan recovery, we would have 5 million more jobs today. 5 million more. the unemployment rate would be about 6%, and our economy would be at least one trillion dollars larger. not tomorrow, president obama will speak here. of course, that is the first time he has spoken years since his last campaign. he may admit that he has not

kept every promise. he may say that even though you are not better off today than you were four years ago, things could be worse. he will imply that he did not really have an alternative. i believe he is taking your vote for granted. i come here today with a simple message. you do have an alternative. your voice is more important now than ever before and your vote should be respected. this november, we are going to make a choice. we can continue along the path we're on, or we can choose a better way. instead of continuing with the policies of the last three and a half years, we can revitalize our economy. we can lead the world, as we have, in what we invent and create. let me make this clear. this is the only way we can sustain the middle class and create sustained prosperity. raising taxes to grow government does not grow the middle class. today, i'm asking you to join me because while we might not agree on everything, we share the same goal, the same vision, and the same belief in american

greatness that draws so many people to our shores. liberty's torch can burn just as brightly for future generations of immigrants as it has burned in the past. we now our businesses cannot succeed, grow, and hire more workers without a competitive tax system. that is why i am going to lower our corporate tax rate and reduce individual tax rates by 20% across the board. we also know that our families need more reliable energy. expanding our resources will create jobs and generate revenues. it will also bring manufacturing back to our shores. you will see a manufacturing resurgence if we get the policy right.

we now our economy cannot grow of we're mortgaging our future to pay for the big government programs of today. we cannot keep borrowing massively more than we taken without putting the country in peril. as president, i will rein in spending and i will get the budget balanced. i will repeal obamacare. we cannot afford another $2 trillion entitlement. everybody likes free stuff, but there is no free stuff when the government has to pay and tax the american people or borrow from future administrations. in obamacare, -- in one study, 73% of business owners said that obamacare has made it harder for them to hire people. think about that. if jobs are your priority, you have to get rid of obamacare and put in place real reform that works. repealing obamacare will give

businesses what they need to grow. we can also jump-start the economy by expanding trade. as you know, the president has not created a single new trade agreement with a latin american nation. he has also failed to crack down on china. as president, i will give the parents of every low income and special needs students the chance to choose where their child goes to school. [applause] when it comes to education, a choice for every parent means a chance for every child. an effective immigration system can also strengthen the economy as it has since the nation's founding.

unfortunately, despite his promises, president obama has failed to address immigration reform. for two years, this president had huge majorities in the house and senate. he was free to pursue any policy he pleased, but he did nothing to advance a permanent fix for our broken immigration system. nothing. instead he failed to act until facing a tough re-election and trying to secure your vote. last week the president finally issued a temporary measure. he called it a "stop-gap" measure. he seems to think it will be just enough to get him through the election. after 3 and a half years of putting every issue from loan guarantees to his donors, to cash for clunkers, putting all those things before immigration, he has been seized

by an overwhelming need to do what he could have done on day 1, but didn't. i think you deserve better. some people have asked if i will let stand the president's executive order. the answer is, i will put in place my own long-term solution which will replace and supersede the president's temporary measure. as president, i won't settle for stop-gap measures. i'll work with republicans and democrats to build a long-term solution and i'll prioritize measures that strengthen legal immigration and make it more transparent and easier, and i will address the problem of illegal immigration in a civil and resolute manner. we may not always agree, but when i make a promise to you, i will keep it. let me speak about some of the guidelines i will use in putting together that policy. as you've heard me say many

times, it is critical that we redouble our efforts to secure the borders that means preventing illegal border crossings and making it harder to illegally overstay a visa. we should field enough border patrol agents, complete a high- tech fence and implement an improved exit verification system. our immigration system should help promote strong families as well, and not keep them apart. our nation benefits when moms and dads are kids are all together under the same roof. but today to many families are caught in a broken system, costing time and money and entangles the in excessive red tape. for those seeking to come to america the right way, that kind of bureaucratic nightmare has to end, and we can do this with just a few common sense reforms. as president, i'd reallocate green cards to those seeking to keep their families under one roof, and will exempt from caps the spouses and minor children

of legal permanent residents, and will eliminate other forms of bureaucratic red tape that keep families from coming together. immigration reform is not just a moral imperative. it's also an economic necessity. immigrants with advanced degrees start companies, and they drive innovation at a very high rate. immigrants founded or co- founded nearly half of our top 50 venture-backed companies in the u.s. they are nearly 30% more likely to start a business and that kind of risk-taking is something we need more than ever because new business start-ups in america are at a 30-year low. i'll work with states and employers to update our temporary worker program so that it meets economic needs, and if you get an advanced degree here, we want you to stay here so, i'd staple a green card to the diploma of someone who gets an advanced degree in america.

we want the best and brightest to enrich the nation with the jobs and technology they are going to create. now, we also have a strong tradition in this country of honoring immigrants who join our military and put their lives on the line to keep the country safe. since september 11, 2001, the u.s. has naturalized almost 75,000 members of the armed forces. too many of those patriots died on distant battlefields for our freedom before receiving full

citizenship here in the country they called home. as president i will stand for a path to legal status for anyone who is willing to stand up and defend this great nation through military service. those who have risked their lives in the defense of america have earned their right to make their life in america. but improving access to legal immigration is only one part of the equation. we must also make legal immigration more attractive than illegal immigration so that people are rewarded for waiting patiently in line. that's why my administration will establish a strong, employment verification system so that every business can know with confidence that the people it hires are legally eligible for employment. we can find common ground here, and we have got to. we owe it to ourselves as americans to ensure that our

country remains a land of opportunity, both for those that are born here and for those that share our values, respect our laws, and want to come to our shores. throughout my campaign i have often had the chance to speak about my dad and how proud i am of him. he was born to american parents living in mexico. when he was 5, they left everything behind and started over in the united states. his dad, my grandfather, was a builder and he went bust more than once. my grandfather did not make much money. there were times in my dad's life when he lived in poverty. but my grandfather had big hopes for my dad and tried to help him as best he could. my dad did not finish college, but he believed in the country

where the circumstances of one's birth or not a barrier to achievement, and he was not afraid of hard work. he held odd jobs, putting a plasterboard, selling paint. he was lucky enough to live in america where hard work can turn aspirations into realities. after he became a man of the business world, he got the opportunity to lead a great car company, and ultimately, he became the governor of the great state, the state of michigan. this is my father's story, but it could be the story of any american. most of you here today are leaders in your community. you are here because you have benefited from the land of opportunity and you want to give back to this country, to fight for its people so they have the same chance to succeed. we are truly one america. everyone here as made this exceptional nation what it is today. this is not an election about

two people. this is not an election about being a republican nor a democrat or independent. this is an election about the future of america. i would ask each of you to honestly look at the last three and a half years and ask whether we can do better. is the america of 11% hispanic unemployment the america of our dreams? we can do better. we can prosper again. with the powerful recovery we have all been waiting for, the good jobs that some many people need, and above all, the opportunities we owe to our children and our grandchildren. i will do that. i will make that happen with your help and your support. thank you so much and god bless this great land. thank you. [applause]

♪ ♪ [playing "born free" by kidd rock]

[playing "born free" by kid rock]

[playing "born free" by kid rock] >> president obama will also address the national association of a lot of latinos in florida. we will have his remarks live at 1:15 p.m. eastern here on c- span. for more information on our road to the white house coverage, go

to c-span.org/campaign2012. >> president obama is calling on congress to lower interest rates on current rates. on julyrs booster double 1. they agree that the rate should be extended but not on how to pay for it. the remarks are 10 minutes. >> thank you. [applause.] thank you, everybody.

thank you. everybody have a seat. [applause.] well, it is good to see all of you. >> we love you! >> i love you guys back. [laughter.] i have to say, the -- i don't know about the choice of music coming in here, though. [laughter.] i love my marine band, but this is kind of a young demographic for the piano cocktail hour. [laughter.] so some of the most fun i've had as president is when i get a chance to talk with you, college students, about the importance of earning a higher education in today's economy.

and i'll admit that the east room isn't as rowdy as carmichael arena at unc, or -- we got any unc folks here in the house? there we go. coors center at cu boulder -- any -- no? okay. [laughter.] i have to say that most of you are much more dressed up than usually when i see you in your own natural habitats. [laughter.] but our message today is serious. right now, the unemployment rate for americans with a college degree or more is about half the national average. they earn twice as much as those who don't have a high school diploma. so whether it's at a four-year college, or a community college, or a technical program, some form of higher education, something beyond high school has never been more important. it's the surest path to finding a good job, earning a good salary, making it into the

middle class. and at the same time, over the last two decades, the cost of college has doubled -- it's actually more than doubled. and that means -- and i don't have to tell you, because you're probably tallying it up right now -- the cost for you to take out loans has increased, and you are more likely to rack up more debt. the average student who borrows to pay for college now graduates with about $26,000 of debt from their student loans. americans as a whole now owe more on student loans than they do on their credit cards. and that is wrong, because we cannot afford to price the middle class and folks who aspire to go into the middle class, we can't price them out of the college education market. we can't stand by when millions of young people are already saddled with debt just as you're starting off. your parents, your grandparents, oftentimes they were in a position where when they got that first job, the first thing they're thinking about is, how

do i save to buy a home and start a family. and if you're already dealing with a big bunch of debt before you even get started, that's a problem. and it's mind-boggling that we've had this stalemate in washington that threatens to make the situation even worse. so the reason you're all here, the reason all these fine- looking young people behind me are here is that in just over a week the interest rates on federal student loans are scheduled to double. i've been talking about this now for what -- a month and a half, two months, three months, five months -- i've lost track. [laughter.] we've been talking about it for a long time. if congress does not get this done in a week, the average student with federal student loans will rack up an additional $1,000 in debt over the coming year. if congress fails to act, more than 7 million students will suddenly be hit with the equivalent of a $1,000 tax hike. and that's not something that you can afford right now.

now, as i said, if this warning sounds familiar, we've been talking about this for months. congress has had the time to fix this for months. it's part of the reason why everybody here looks impatient. [laughter.] this issue didn't come out of nowhere; it's been looming for months. but we've been stuck watching congress play chicken with another deadline. so we're nine days away from thousands of american workers having to walk off their job because congress hasn't passed a transportation bill.

we're 10 days away from nearly 7.5 million students seeing their loan rates double because congress hasn't acted. this should be a no-brainer. it should not be difficult. it should've gotten done weeks ago. now, the good news is there are folks in congress trying to do the right thing. last month, democrats in the senate put forward a plan that would have kept these rates in place without adding a dime to the deficit. unfortunately, senate republicans got together and blocked it. over in the house, the republicans said they'd keep these rates down only if we agreed to cut things like preventive health care for women, which obviously wouldn't fix the problem, but would create a new problem. this is -- even as they were voting in lockstep for an economic plan that would cut financial aid for nine million college students by an average of $1,000 and give a $150,000 tax cut to wealthy americans. so i recognize that there's been some effort to change the subject from this rate hike. one congressman warned that this collegeutin students "free college education" -- which doesn't make much sense, because the

definition of a loan is it's not free -- [laughter] -- you have to pay it back. others have said we're just talking about student loans to distract from the economy. that doesn't make much sense because this is the economy. this is all about the economy. this is all about whether or not we are going to have the best- trained, best-educated workforce in the world. that improves our economy. and higher education cannot be a luxury reserved just for a privileged few. it's an economic necessity for every family, and every family should be able to afford it. so you guys, during this period when you've been in college have been some of the toughest economic times since the 1930s, and there are still a lot of challenges ahead globally. and we can't control every economic headwind that we face, but this is something we can control. this is something we can do something about. stopping student rates from doubling at the end of the month is something we can do right now to make a difference in the lives of all the american people. there's still 10 days for congress to do the right thing.

i understand that members of both parties say they want to get this done, and there are conversations taking place, but they haven't done it yet. and we've got to keep the pressure on. that's where all of you come in. over the past few months, there are so many students and parents who have been working hard to shine a light on this issue. you've rallied on campuses, in your communities. you've called, you've emailed, you've tweeted your representatives in washington. so you've played your part in making sure your voice is heard and your democracy is responsive. my main message is, as you guys embark on this day of action, i

want to make sure you keep this going. don't stop until it's actually done. there is nothing more powerful than millions of voices that are calling for change, and all of your voices can make a difference. so keep telling congress to do what's right, to get this done. tell them now is not the time to double interest rates on your student loans. tell them to double down on an investment in a strong and secure middle class -- and that means your education. tell them now is the time to double down on an america where everybody who works hard has a fair shot at success. and for those who are not here and are watching, if you tweet, use the hashtag #dontdoublemyrate -- [laughter] -- #dontdoublemyrate. but i tell you, when i look out at this group right here, you give me confidence in america.

you make me optimistic, not only because you're getting a great education, but also because all of you are participating and making sure that this democracy works the way it's supposed to. we need outstanding engineers, and we need outstanding nonprofit leaders, and we need outstanding entrepreneurs, but we also need outstanding citizens. and that's what you guys are displaying by your presence and your activities. so, keep it up. let's get this done. thanks, everybody. [applause.]

to address parliament. then securities and exchange commission chairman mary schapiro testifies about changing money market fund regulations. >> tomorrow morning, a npr editor discusses with u.s. financial markets are headed. univ. of baltimore law school professor examines the executive privilege claims concerning attorney general holder in the fast and furious case.

the talk about hispanics in the u.s. and how they fare in education and income. live at 7:00 a.m. eastern on c- span. >> have you approached book and your views differently? >> i think of them as gathering history. i think that interviewing when i am working for the news side as gathering contemporary information. >> how difficult is it to remain impartial that's correct i'm going to try as best as i can get people as people an understanding of what is happening in this campaign. it is not that difficult to put your biases to the side. like how social media change your line of work?

>> twitter is that primary new source for anybody who covers politics are paid attention to politics. it did not exist four years ago for all practical purposes. >> they interviewed the washington post on the newspaper business. >>suu kyi won the nobel peace prize while under house arrest. last week she expected the nobel peace prize in person at a special ceremony in norway. her remarks some parliaments westminster hall in london are 40 minutes.

this hall has hosted many events over the past 900 years. in recent times only a few international figures - charles de gaulle, nelson mandela, pope benedict xvi and barack obama - have spoken here. today daw aung san suu kyi will become the first figure other than a head of state, the first woman from abroad and the first citizen of asia to do so. this is not a break from precedent without a purpose. the courage of our guest is legendary.

she has withstood the unimaginable suffering of separation from her family and her people with a dignity, fortitude and resolve which most of us can barely conceive. her connections with the united oxford yesterday, are intimate. she has been the symbol of resistance to a regime which even in an imperfect world has been exceptional in its barbarity. as the un has documented, and from three trips to burma's borders i can myself attest, this is a cabal guilty of rape as a weapon of war, extra- judicial killings, compulsory relocation, forced labour, deployment of child soldiers, use of human minesweepers, incarceration of opponents in

unspeakable conditions, destruction of villages, obstruction of aid and excruciating torture. burma has become a beautiful but benighted land where fear runs through society like blood flowing through veins. one woman has now defied a dictatorship of such depravity for two decades. that is why daw aung san suu kyi, a leader and a stateswoman, is here with us this afternoon. however, there is room for cautious optimism. the recent election to parliament of our guest,

accompanied by 42 of her colleagues, and the release of many political prisoners are welcome signs of reform. we earnestly hope that further, and fundamental, reform will ultimately lead to the freedom, democracy and rule of law which we have so long enjoyed and the people of burma have too long been denied. there is an asian saying that a journey of a thousand miles start with a single step. will be taken in this parliament today. parliamentary colleagues, ladies and gentlemen, it is my privilege to welcome the conscience of a country and a heroine for humanity, daw aung

san suu kyi. [applause] lord speaker, mr. speaker, mr. members of the house of commons. thank you for inviting me to speak to you here in this magnificent hall. i am very conscious of the extraordinary nature of this honour. i understand that there was some debate as to whether i would ñ

i welcome that debate and discussion, it is what parliament is all about. i have just come from downing street. it was my first visit there. and yet, for me, it was a familiar scene, not just from television broadcasts, but from my own family history. as some of you may be aware, the best known photograph of my father aung san, taken shortly before his assassination in 1947, was of him standing in downing street with clement atlee and others with whom he had been discussing burma's transition to independence. he was pictured wearing a large british military-issue this had been given to him by jawaharlal nehru en route to unaccustomed cold. and i must say, having not left

my tropical country for 24 years, there have been the odd moments this week when i have thought of that coat myself. my father was a founding member of the burmese independence army, in world war two. he took on this responsibility out of a desire to see democracy established in his homeland. it was his view that democracy was the only political system worthy of an independent nation. it is a view, of course, that i have long shared. general slim, commander of the 14th army, who led the allied burma campaign, wrote about his first encounter with my father in his memoir defeat into victory. the meeting came towards the end of the war, shortly after my father had decided that the

burmese independence army join forces with the allies. general slim said to my father, because we are winning'. to which my father replied 'it wouldn't be much good coming to you if you weren't, would it'. slim saw in my father a practical man with whom he could do business. six decades later, i strive to be as practical as my father was. and so i am here, in part, to ask for practical help, help as a friend and an equal, in support of the reforms which can bring better lives, greater opportunities, to the people of burma who have been for so long deprived of their rights and their place in the world. my country today stands at the start of journey towards, i hope, a better future. so many hills remain to be climbed, chasms to be bridged, obstacles to be breached.

our own determination can get us so far, the support of the people of britain, and of peoples around the world, can get us so much further. in a speech about change and reform, it is very appropriate because at the heart of this process must be the establishment of a strong parliamentary institution in my own country. the british parliament is perhaps the preeminent symbol to oppressed peoples across the world of freedom of speech. i would imagine that some people here, to some extent, take this freedom for granted. for us in burma, what you take for granted, we have had to struggle for, long and hard. so many people in burma gave up

burma's ongoing struggle for democracy. and we are only now just beginning to see the fruits of our struggle. westminster has long set a shining example of realising the people's desire to be part of their own legislative process. in burma, our parliament is in its infancy, having been established only in march 2011. goes against the cultural grain of forty-nine years of direct military rule, it will take time to find its feet, and time to find its voice. while undoubtedly an improvement on what went before, are not as transparent as they might be. i would like to see us learn

from established examples of parliamentary democracies elsewhere, so that we might standards over time. perhaps the most critical moment in establishing the credibility of the parliamentary process happens before parliament even opens, namely, the people's inclusive electoral process. earlier this year, i myself participated in my first ever election as a candidate. to this day i have not yet had the chance to vote freely in any election. in 1990, i was allowed to cast an advance vote while under house arrest, but i was prevented from contesting as a candidate for my party, the national league for democracy.

grounds that i had received help from foreign quarters. this amounted to bbc broadcasts that the authorities considered to be biased in my favour. what struck me most ahead of this year's by-elections was how quickly people in the constituencies across burma grasped the importance of participating in the political process. they understood first hand that the right to vote was not something given to all. they understood that they must take advantage when the opportunity arose, because they understood what it meant to have that opportunity taken away from them. during the years that i lived in the uk, i never had the right to vote myself. but i can remember, even during my university days, that i was always trying to encourage my friends to exercise their right to vote. it was never clear to me whether they followed those instructions. but it was clear to me even

then that if we do not guard the rights we have, we run the risk of seeing those rights erode away. to those who feel themselves to be somehow above politics, i want to say that politics should be seen neither as something that exists above us, nor as something that happens beneath us, but as something integral to our everyday existence. after my marriage i constantly preached my gospel of political participation to my late husband, michael. the occasion when a canvasser knocked on the door of our oxford home, during an election campaign. michael opened the door and when he saw the gentleman, poised to deliver his campaigning pitch, he said "it's no use trying to win me over, it's my wife who decides how i should vote. she's out now, why don't you come back later?"

later, mainly i think to see what a wife who decided how her husband should vote looked like. it has been less than 100 days since i, together with my fellow national league for democracy candidates, was out on the campaign trail across burma. our by-elections were held on april the first- and i am conscious that there was a certain scepticism that this would be another elaborate april fools joke. in fact it turned out to be an april of new hope. the voting process was largely free and fair, and i would like to pay tribute to president thein sein for this, and for his committment and sincerity in the reform process. as i have long said, it is through dialogue and through cooperation that political differences can best be resolved, and my own committment to this path remains as strong as ever.

elections in burma are very different to those in many more established democracies such as yours. apathy, especially amongst the young, is certainly not an issue. for me the most encouraging and rewarding aspect of our own elections was the participation, in such vast numbers and with such enthusiasm, of our young people. was university students, school children, and flag-waving toddlers, who greeted us on the campaign, blocking the roads through the length of towns. the day before the elections, on my way to my constituency, i passed a hillock which had been "occupied" by a group of children, the oldest about ten or eleven, their leader standing at the summit holding the nld flag.

the passion of the electorate was a passion born of hunger for something long denied. following burma's independence in 1948, our parliamentary system was of course based on that of the uk. the era became known, in burmese, as the parliamentary era- a name which by the mere necessity of its application speaks of the unfortunate changes which followed. our parliamentary era, which lasted- more or less- until 1962, could not be said to have been perfect. but it was certainly the most progressive and promising period until now in the short history of independent burma. it was at this time that burma was considered the nation most asia. things did not, however, go entirely to plan. they often don't, in burma, and

indeed in the rest of the world. now, once again, we have an opportunity to reestablish true democracy in burma. it is an opportunity for which we have waited many decades. if we do not use this opportunity, if we do not get things right this time round, it may be several decades more before a similar opportunity arises again. and so it is for that reason that i would ask britain, as one of the oldest parliamentary democracies, to consider what it can do to help build the sound institutions needed to support our nascent parliamentary democracy. the reforms taking place, led by president thein sein, are to be welcomed. but this cannot be a personality-based process. without strong institutions this process will not be sustainable. our legislature has much to learn about the democratisation process, and i hope that britain and other democracies can help by sharing your own experiences with us.

thus far, i have only spent a matter of minutes inside the burmese parliament, when i took my oath as a new mp last month. i must say that i found the atmosphere rather formal. men are required to wear formal headgear. there is certainly no heckling. i would wish that over time perhaps we will reflect the liveliness and relative informality of westminster. i am not unaware of the saying that more tears have been shed over wishes granted than over wishes denied. nevertheless, it is when burma has its own satisfactory

equivalent of prime minister's questions that we will be able to say that parliamentary democracy has truly come of age. i would also like to emphasise the importance of establishing requisite parliamentary control over the budget. in all this, what is most important is to empower the people, the essential ingredient of democracy. britain is living proof that a constitution does not need to be written down in order to be effective. it is more important that a constitution should be accepted by the people, that people should feel it belongs to them, that it is not an external document imposed upon them. one of the clearly stated aims of the nld is constitutional reform. burma's original constitution was drawn up following the

meeting between my father, aung san, and clement atlee, here in london in 1947. this constitution may not have been perfect, but at its core was a profound understanding of and respect for the aspirations of the people. the current constitution, drawn up by the military government in 2008, must be amended to incorporate the basic rights and aspirations of burma's ethnic nationalities. in over sixty years of independence, burma has not yet known a time when we could say that there was peace throughout the land. at this very moment, hostilities continue between kachin forces and the state armed forces in the north. in the west, communal strife has led to the loss of innocent

lives and the displacements of tens of thousands of hapless citizens. we need to address the problems that lie at the root of conflict. we need to develop a culture of political settlement through negotiation, and to promote the rule of law, that all who live in burma may enjoy the benefits of both freedom and security. in the immediate term, we also need humanitarian support for the many many people, in the north and in the west, largely women and children, who have been forced to flee their homes. as the long history of the united kingdom shows clearly, people never lose their need to preserve their national or ethnic identity. this is something which goes economic development. and that is why i hope that in working for burma's national reconciliation, the

international community will recognise that it is political dialogue and political settlement which must be given precedence over short-term economic development. if differences remain unresolved, if basic aspirations remain unfulfilled, there cannot be an adequate foundation for sustainable development of any kind- economic, social or political. britain has for so long under successive governments, including the present conservative-liberal democrat coalition, and the previous labour government, been a staunch and unshakeable supporter of aid efforts in burma. i hope you can continue to help

our country through targeted and coordinated development assistance. britain has been until now the largest bilateral donor to burma. it is in education in particular that i hope the british can play a major role. we need short-term results so that our people may see that democratisation has a tangible positive impact on their own lives. vocational training and creation of employment opportunities to help address burma's chronic youth unemployment are particularly important. longer-term, burma's education system is desperately weak, reform is needed, not just of schools and curriculum, and the training of teachers, but also of our attitude to education, which at present is too narrow and rigid. i hope also that british businesses can also play a role in supporting the democratic

reform process, through what i have termed democracy-friendly investment. by this, i mean investment that prioritises transparency, accountability, workers' rights, and environmental sustainability. investment, particularly in labour-intensive sectors, when carried out responsibly and with positive intent, can offer real benefits to our people. one test will be whether new players will benefit from the investment coming in. britain has played an important role in facilitating the forthcoming visit, next month, of the extractive industries transparency initiative secretariat. i hope this will be the start of many similar initiatives in the months ahead.

conclusion it was through learning about two great british leaders, gladstone and disraeli, while at oxford, that i first developed my understanding of parliamentary democracy. i learnt the basics, that one accepts the decision of the voters, that the governing power is gained and relinquished in accordance with the desires of the electorate, that it is the system which goes on, and that ultimately everyone gets another chance. these are things taken for granted here in britain. but in 1990 in burma, the winner of the elections, the nld, was never allowed even to convene parliament. i hope that we can leave such days behind us, and that as we look forward to the future, it will be the will of the people

that is reflected faithfully in burma's changing political landscape. this journey out of burma has not been a sentimental pilgrimage to the past, but an exploration of the new opportunities at hand for the people of burma. i have been struck, throughout my trip, by how extraordinarily warmhearted and open the world has been to us. to experience this first hand, after so long physically separated from this world, has been very moving. countries that geographically are distant, have shown that they are close to burma in what really matters, they are close to the aspirations of the burmese people. we are brought into proximity through our shared values- and no geographical distance, no

human-made barriers, can stand in our way. during the years of my house arrest it was not just the bbc and other broadcasting stations that kept me in touch with the world outside. it was the music of mozart and ravi shankar, and the biographies of men and women of different races and religions, that convinced me i would never be alone in my struggle. the prizes and honours i received were not so much a personal tribute, as a recognition of the basic humanity that unites one isolated person to the rest of the world. during our dark days in the 1990s, a friend sent me a poem by arthur hugh clough. it begins "say not the struggle nought availeth." i understand that winston churchill, one of the greatest parliamentarians the world has known, used the poem himself as

a plea for the usa to step in against nazi germany. today, i want to make a rather different point, that we can work together, combining political wisdom from east and west, to bring the light of democratic values to all peoples, in burma and beyond. i will just read the final verse, "and not by eastern windows only, when daylight comes, comes in the light, in front the sun climbs slow, how slowly, but westward, look, the land is bright. i would like to emphasise in conclusion that this is the most important time for burma, that this is the moment of our greatest need- and so i would ask that our friends, both here in britain and beyond,

participate and support burma's efforts towards the establishment of a truly democratic and just society. thank you for giving me this opportunity to address the members of one of the oldest democratic institutions in the world. thank you for letting me into your midst. my country has not yet entered the ranks of truly democratic societies, but i'm confident we will get there before too long, with your help. [applause]

>> on behalf of the house of lords, and everyone here today, may i express our collective and heartfelt thanks for your inspiring words. we all espouse freedom and democracy but few of us are called upon to pay for and uphold these principles by spending 15 years in detention.

your presence here today is a testament to your courageous approach of steadfast non- violence and reason in the face of an oppressive, powerful and determined regime. your struggle has reverberated around the world. it has forcibly reminded us that free and fair elections, a free press, an independent judiciary, and the institutions of civil society are the cornerstones of democracy and individual freedom. we take these freedoms for granted at our peril. democracy is never won once and forever it is a process requiring constant vigilance. today you have reminded us of the struggle that must continue in burma and elsewhere. in post-war europe we have seen that it is possible for countries to make the transition from totalitarianism

to democracy, and i trust that this will give you hope and encouragement for the journey ahead. your stand against repression has been at the heart of the national league for democracy's struggle. i am sure that at times during your long campaign you must have felt unbearably lonely, though as you yourself have said, the nobel peace prize allowed you to feel part of the international community. and indeed, through you, your people and your country were always in our minds. now, together, we must use this occasion of your address to fellow parliamentarians to renew our own determination to be part of the struggle for liberty whenever and wherever it arises. thank you. [applause]

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>> tomorrow, a panel discussion on the greek elections and the financial stability of the ozone. we will hear from the u.s. ambassador to the u. live coverage starts at 11:00 a.m. eastern here on c-span. on c-span 2, a forum on veterans' housing issues. live coverage from the national housing conference gets under way at 9:00 a.m. eastern. now, the head of the securities and exchange commission testifies about money market regulations and risk. mary shapiro took questions from

members of the senate banking committee, chaired by senator tim johnson of south dakota. this hearing is one hour and 20 minutes. >> i called this hearing to order. today we will examine the health and stability of money market mutual funds. the impact of two reforms and the potential negative consequences additional proposed reforms from the perspective of the industry itself and products.

i look forward to hearing testimony and recommendations as the committee can tinges its oversight of the financial markets. we are anticipating a series of 11 votes, we will forgo opening statements from the committe and members in order to begin questioning of our witnesses. i remind my colleagues at the record will be open for the next seven days and any other materials you would like to senate. i would also ask everyone to take five minutes for your questions. the first panel, we have the chairman of the securities and exchange commission, chairman mary schapiro. please begin your testimony.

>> i appreciate the opportunity to testify about money market mutual funds. as we all know, during the financial crisis and a single money market fund broke the box and triggered bonds across the market. within a matter of days, investors have withdrawn $3 billion from prime market bonds or 40% of those bond assets. it is one of the destabilizing events during the crisis. money market funds began selling portfolio securities into markets that were already under stress. if for the depressed the value of the securities and created a vicious cycle. other funds held in the same securities were struggling to meet the demands of their customers and found themselves at risk of breaking the box. the shock waves were widespread. money market funds began hoarding cash.

this dramatically reduce the cash and liquidity available for entities. in the final two weeks of september 2008, money market funds reduce their holdings of commercial paper alone by more than $200 billion. the money market funds ended only after the treasury department to the unprecedented step of using the exchange stabilization fund to guarantee more than three trillion dollars in market fund shares. it improve the market, but it put u.s. taxpayers directly at risk from any losses. in the wake of the financial crisis, many asked, where were the regulators? why did they not do more? having viewed this issue closed and methodically since my arrival in 2009, i have come to understand that money market funds produces a risk. others agree. regulators and both political parties have raised flax about

the risk posed by money market funds and the need for reform. two years ago, we passed a series of measures to increase their resiliency of money market funds by instituting a liquidity standards and reducing maturities and approving credit. these steps have been widely hailed. i have said then and still believe that more needs to be done. this core part of our financial system is operating without a net. there are several features of the market finds that needs to stabilize. first, the one buyers share price was sponsors support has fostered an and expectation of

safety. sponsors of stepped in with their own capital at least 300 times to absorb losses our protector funds from falling below $1. when sponsors cannot support a bond, investors lose confidence and rush to redeem. an early reading shareholder can get their full $1. investors have an incentive to redeem at the first sign of problems in a fund. large institutional investors are most likely to be monitoring that and to remove large sums of money quickly. the slow-moving retail investors and small businesses will bear the full loss. there are too many investors redeeming at the same time. the fund could be forced to sell securities at higher prices. it would depress the barter short-term market. this spreads the contagion to other funds. it is for these reasons that i

asked the staff to explore a number of the structural reforms, including two particular that may be promising. they need to set their share prices based on the market the idea of the fund's underlying assets. understanding the dollar is important to investors to use this project, a second option would be to allow money market funds to maintain a stable dollar value as they do today and require the funds to maintain a capital offer to support the funds stable and the values and restrictions on redemptions. if a large -- occurred, the money market fund would incur a loss. it a supplement the capital and dramatically reduce the contagion to other funds and the system. these ideas and others are the

subject of continued analysis and discussion. if the commission were to propose a reform, there were a be an opportunity for comment. investors, taxpayers, and the financial system at large. it is essential to address this risk now instead of waiting for the next crisis. thank you. i would be pleased to answer your questions. >> thank you, chairman schapiro. please put five minutes on the clock for each of the questions. what did the sec know about money market funds that you did

not know before the crisis? how is this new information inform their views of the risk of money market funds? >> senator, the transparency initiative that the sec undertook had been extremely useful to us in the monitoring the rest of the money market funds are taking. i would also say that every morning when i pick up the newspaper and read about an earthquake in japan or problems in european financial institutions, the first question i asked the staff is, what is money market fund exposure to these incidences are institutions? what the data has done is given us a window into these exposures in a bigger way. it also helps us understand the risk that exist within fund portfolios. we have hired a former money market fund portfolio manager to help us work through this data.

we have noticed interesting things that some fund managers are taking on the ticket to get a greater risk than others while the share prices are still priced at a dollar. we learned that most funds significantly reduce their exposures to european banks in light of all the problems in the eurozone. they were able to capture higher yields. that is enticing to investors. this shows the $1 share price can be enticing. >> which one are two revisions in the 2010 reforms do you believe have been most beneficial? what analysis has the sec conducted on the full impact and effectiveness of the 2010 reforms? has it informed your view on what worked well?

>> sure. we studied the 2010 reforms very carefully. from my perspective, the most value has been the liquidity requirement. the requirement for 10% daily liquidity. it was exceeded on average. that has been the most helpful in meeting redemptions, particularly hot numbers of redemption that we saw this past summer. we have analyzed the 2010 reforms carefully. we believe they have served their purpose quite well. they do not solve the problem we are most concerned with right now, which is the potential for a money-market fund suffered a severe loss as a result of the credit event and not be able to absorb the loss and the

propensity if there are grounds of the market funds. we think the 2010 reforms were extremely positive. if we put out a release recommending for their reforms, we will include in that a careful analysis of the 2010 reforms and why we believe we need to go further. >> there are pros and cons within the policy proposal. what would be the impact of additional reforms such as asset value or redemption restriction on those who use our rely on money market funds, including minister polities and companies in the retail if implemented? do you agree with some who have suggested that additional reform because investors to move

assets out of the money market funds? >> senator, that is a question i could answer over a long period of time. additional reforms will have costs associated with them. we would intend in our release to fully analyze not is operational and administrative costs which could come from other kinds of changes, but also costs competitive issues and opportunity costs and the full range of costs-benefits. the costs would be far, far outweighed by the benefits of forestalling another potentially devastating run we saw in 2008. investors not having access to their accounts during back to

period, the costs of the short- term market freezing up, and other companies not able to have access to commercial paper, the costs of small businesses and individuals not been able to access their cash management accounts and make payrolls are tuition payments. the implications for our economy are very broad and very deep. those are costs we need to take into account, as well as the costs of course of any proposed changes. >> senator shelby. >> thank you. in your written testimony, it talked about the financial

system as a justification for additional money market fund regulation. has the financial stability oversight council designated any money market funds or activities systemically important? >> senator, as you know in their annual report of the financial stability oversight council, money market funds were discussed at length as a weakness and the potential systemic risk for the u.s. financial systems. they have not designated to any institution at this point as systemically important financial institution. >> yesterday "the wall street journal" reported that a new sec study has found that money market mutual funds receive

financial support from their sponsors more than 300 times since the 1970's and about 100 more times than previously reported. did the commission review or approve a study? if so, could you provide a copy of this study to the committee? and how many times has money market funds required sponsors since the 2010 reforms? is that too much? that is a lot. >> it tests my ability to remember, but please remind me if i forget anything. a is not really study, it's tabulation. it does not include all kinds of sponsors support. i believe the number may be conservative. it is a tabulation in many instances where people came to us in order to get authority to do sponsors support. what you wanted to do was an

affiliate transaction, which would be a violation of sec rules. i would be more than happy to provide the information to the committee. it is likely conservative number. it is those instances i came to the attention of the staff or were notified about the support that was given. i know that moody reported a number summer in 200. i do not know what they look at. our staff we did everything back to the 1970's. they might have a different base line at moody's. they reported that 62 money market funds required support from the sponsors, but they looked only at the 100 largest bonds as an example. our staff look at everything back to the inception of money market funds in the 1970's.

>> the sec work with the fed reserve in developing the 2010 money market fund reform? if so, can you please explain? >> senator, i am not sure to what extent the staff consulted with our talk with the fed reserve board's staff with respect to the 2010 reforms. they may well have, but i do t know the extent. >> are the currently working with the fed reserve in developing further reforms? >> yes. our staff has had lots of conversations about the potential reforms. >> ok. chairman schapiro, there were some speeches about shadow thinking. our money market funds shadow

banks? >> i am not a big fan of the term shadow banks. money market funds are hugely important in our economy. they are important to millions

.

>> anyway, let me just spell this out. i want to cover a little bit of congressional and what's going to happen at the end of this year. i'll just throw it open for either one of you to jump out and just say, is the presidential race fundamentally any different from where it was the day, april 11, the day romney sort of nailed down the nomination? >> well, let me start, if i may, charlie, tom and i have been doing these kind of

programs for the last year, and we have both been in agreement for a year now that this was going to be a very, very close race. other people at some point were saying, oh, obama was going to win by a big margin, republicans have problems. as a democrat, i still think obama has a reasonable chance of winning. i never thought this thing was going to be other than close. i've always thought this was going to be very comparable to what happened in 2004 when you had an incumbent president who barely won re-election. charlie, i've looked at all the material you've done on this, and charlie generates more stuff than anybody else. it's very interesting. >> charlie has people who generate more stuff. >> charlie did a summary of the state, dated may 31, you probably have updated it, but it showed the electoral vote almost exactly even among the states where you had solid d or

lean d and republicans and solid republicans and solid and likely republicans. it's interesting. it looks to me -- it looks like if everything breaks the way it looks right now, that is, if wisconsin and michigan and pennsylvania stay democratic, and that's still yet to be resolved, but assuming it breaks that way, the election is going to come down to three states, and for romney to win -- and he could win -- he will have to carry ohio, virginia, and florida. and i don't know that he can carry all three of those states. but if he does, he could be the next president. i think that's where you're going to see an awful lot of action. i think what obama did on the dream act was very important and i think helps him a lot. he already was way ahead among

hispanics, and hispanics are important at least in florida and important in some of the states out in the west. this is going to be a very close race. i think it's going to go right down to the wire. >> well, how has it changed since romney -- the unemployment has gone up. unemployment kept dropping, at least in terms of the unemployment rate. but last month, job creation was well under estimates. corrections showed it wasn't beauty, and all the sudden obama turned on his head. i don't know where the next four months are going, but i can tell thaw those metrics are going to determine who the next president is, because they create what i would call the atmosphere for this election in terms of the public mood. >> what martin just described in terms of the states at risk is basically the old bush and kerry coalition. it's almost a rerun of 2004. a few states on the bubble, but

there were close states in 2000 and only 2004, only three states switched between 2000 and 2004. obama broke new ground last time with indiana, virginia, and north carolina. this is kind of a throwback. if you look at where the administration's going in terms of their campaign, it's becoming more a mobilization election than going after independents. there's a risk in doing that in terms of how you attract independents. i think they have a very difficult time replicating their turnout model this time around. bush wasn't on the ballot, but he was polling in the 20's, and that certainly hurt mccain. an economic fallout in september on a republican watch and a 2-1 spending advantage. this time around he's had to govern for four years, and governing is a tough business. no president has been re-elected with unemployment higher than 7.2% since roosevelt. it's at 8.2% last month. that's not a hard and fast rule, but the metrics of this

race make it much more difficult for the president than anybody envisioned three or four months ago. >> there's an interesting piece today. i think it was in "the post," talking about how the electorate has changed in the last 20 years. it was the percentage of the white vote continues to decline, and the percentage of the minority vote continues to increase. and that the republicans are in real trouble because of that. now, they might scrape by this time, but if the hispanic vote locks into the democratic column and the republicans have done nothing to really attract hispanics, this is the -- the underlying dynamics are the election are not on the republican side. now, they may win because of the economy. tom could be right about that, and we have to watch very closely by what happens the next four months. but obviously the turnout model from 2008 can't be replicated. obama is not going to win by that kind of margin.

he's not going to carry indiana. he's probably not going to carry north carolina. there are states he carried last time that are going to be off the table. but they don't have to replicate the exact model where they won by a big margin. what they have to do is win by just enough to be re-elected, and again, that is certainly possible given where the two parties are. i write for politico from time to time. >> anyway -- >> yeah, anyway. i was just saying -- >> i had referred to them earlier. i wrote an article, and we'll see. we won't elaborate. about a month ago, i pointed out a real problem as i see for the obama campaign is seniors. particularly seniors, and the democratic share among white seniors has been declining, and it's very interesting, because

while interest rates have stayed low, that's good for a lot of people. that's not good for seniors. i remember when seniors would show up, and they would say, isn't it wonderful interest rates are down now snow you can buy a house and car, and they would say, congressman, you don't understand, low interest rates are not good for anybody because they had their money in c.d.'s and savings accounts. obama has to figure out how to speak to seniors, because they're trending in the wrong direction, just as hispanics are trending in the wrong direction for the republicans. there's no question, little question that republicans or some elements of the republican party have done everything humanly possible to alienate the latino vote, but i get a sense that while there's an anger towards the republican party among many latinos, on the other hand, there's a disappointment in the president

and democrats that, yeah, you were on our side, but did you fight for us? did you break a sweat for the dream act? did you shed any blood for the dream act? and so they're angry at one side, disappointed in another, and that's one reason why, when you look at numbers and whether it's the gallup vote, how likely are you, eight, nine, or 10 to vote, that latino voters are very, very, very low. even though they're matching, but in the gallup poll, he's actually matching what he did against mccain last time in terms of support if they show up. >> it's a good observation. what i said initially goes to -- they're turning into a mobilization election, because i think they're recognizing at this point they're having a hard time expanding their electoral base. they have a difficult time replicating what they did

before, because it's easy to put a coalition together when you run against something. but when you haven't managed expectations, a different set of issues. let's go through the president's coalition last night, african-americans. i think he's going to come close to repeating what he did before. he's not making history. winning the playoffs the second time, it's not quite the impetus, but i think they're going to drive that turnout, the african-american community is heavily invested in this presidency. let's get to students, young people in college towns. these are huge gains for obama last night. harrisburg hadn't voted for a democrat since 1948, swept to a muslim democrat, just a straight-ticket vote. that is not there for him this time. where are the young people? they're looking for jobs. they're back in school, having to re-register other places. the enthusiasm gap is way down, turnout models way back. and in iowa and colorado,

republicans are outregistered democrats and young voters under 21. so that is out the window. they're trying to do the student loan thing and stir things these up. it's not a strategy geared towards swing voters, it's a strategy geared towards hispanics, gay voters, young people, and the like. and then finally, let's get to hispanics, which you can't lump together. puerto ricans, they don't have the same interest. they're citizens. my district was chock full of salvadorans, but there is an enthusiasm gap here. it's a tough group to get out anyway. and charlie, i think you are right. i don't think they're going to be able to replicate that. it's going to be how romney handles this, who he picks as his running mate. long term, it's a huge problem for republicans, not just hispanics, but asian voters,

but in this election, with the economy at the front, it kind of masks the traditional ethnic and cultural coalitions, and i think it hurts the president. >> but charlie, it's interesting, because the hispanics, you look at what's going on, and i had a large, they give the hispanic community the back of their hand every time there is an opportunity. when you have the presidential debate -- >> actually, a good day is the back of the hand. look at the presidential debate. governor perry, my governor, who had lots of problems, but was for the dream act, was for a reasonable position on immigration, and romney moved to his right, and perry had other problems too, but certainly his more progressive views on immigration hurt him inside the republican party. now some of the republicans are threatening to sue the president about his decision on

the dream act. my attitude is bring it on, let them sue, i think it's wonderful. it drives the point home that the republicans are on the wrong side on an issue that is widely popular inside the hispanic community. the democratic house did pass the dream act. it was filibustered by republicans in the senate. but i think all the body language that the republicans send to the hispanic community, all that has been wrong, and they have thrown the opportunities, because hispanic voters are culturally conservative. i represent a lot of hispanics, but the republicans have not given them anything to hold on to, so i think this is going to be a real problem going into the campaign. no one expects the turnout model to be the same as it was in 2008. that was a historic election. he just has to turn out enough. >> earlier, you explicitly said and tom implied references to the george w. bush 2004.

i mean, there's never a perfect analogy, but i think a similar situation in the sense that you had two presidents that are facing pretty ugly, undecided, ugly i happened penalties, and there's a choice of how much effort do you make chasing after swing voters who, at the end of the day, probably aren't going your way, in the case of bush organically growing his base or in the case of president obama, how do you get as close as you can to that extraordinary turnout thing, knowing you can't completely replicate it? let me just toss out something. and get reaction from. nbc and the "wall street journal" combined five months of their -- their first five months of this year, their polling. and so it was a poll in each

month, and then they throw out the -- threw out the nonregistered voters. we've been talking about the 3,800 registered voters. and then they pulled out for comparison purposes and locked at just the undecided, the 7% of the 3,800 that were undecided, which works out to 260. and so, among all registered voters on right direction, wrong track, 32 right direction, 59 wrong track. that's all registered voters, 3,259. among just the undecided, 15 right direction, 71 wrong traction. on the president yeas approval rating, overall, all registered voters over the five months, 48 approve, 46 disapprove. among just the undecided, 24 approve, 59 approve. on job economy, overall

registered voters, 44 approve, 52 disapprove. among undecided, 22 approve, 68 disapprove. and on the generic ballot, you know, who are these people, among all voters, democrats were ahead by two points, 45, 43. but among the undecideds, republicans were ahead by 10, 36-26. looking at this group, they're older, they're hard independents. they're a little bit more republican than they are democrat, but they're mostly really independents, and they're older. looking at that group and saying, wow, you're not getting the half of this group, you're probably not getting a third, you know, it probably sounded realistic, but if this is the case, doesn't that force you back to a turnout? >> well, of course it does. and bush won the race by an

enormous turnout effort in the state of ohio. that was the ballgame as it turned out. you have to ask where these voters are too geographically. charlie, i don't know if they gave you any indication on that. but of course these undecided voters in certain parts of the country are going to, particularly in the south, in certain areas, are going to break strongly against the democrats. you have to look at what's going on, and you have the auto bailout, the fact that obama acted forcefully to keep general motors in business, to keep chrysler in business and all their complires and all the small businesses that rely on people who have jobs in the automobile industry. i think you're going to hear a lot about that in those key states, and i think that will have an impact, and particularly since romney was opposed to the auto bailout. you've got to go into this

state by state and say, what makes the difference to undecided voters in those particular swing states? now, that's not an argument that's going to help in virginia, but the turnout model, and tom can talk about that more than i can, but the turnout model of maximizing his support from last time could make a difference in virginia. florida is very hard for me to call, very hard to predict. i'm not sure any of those factors will be in play on obama's side in florida. but i think in virginia, he has one thing going for him. in ohio he has another thing going for him. you got to look at it state by state, and this is going to come down to just a handful of states. >> i think undecided voters are going to decide this. they're undecided. they've had three years-plus to look at president obama, and they're not there. traditionally, i knew in my elections what i got the first ballot -- they knew me.

they'd been familiar with me. i've been to their picnics and parades and kissed their babies. if they didn't like me, you know, at the beginning it was going to be a hard sell to get them unless i can really damage my opponent. i think the president is in a similar situation. but room heat has to make the sale. reagan didn't come up until the very end. he had to make the sale. but they're looking around, and that's a dangerous place for the president to be. the more he caters to his base, the more alienated these groups r. it's hard to have a mobilization election and going after i understand penalties at the same time. but let me just agree with martin on this. it's state by state. every state has a different kind of components to put together, to muster a majority. the obama team is very savvy at doing this. it's looking at this very carefully. they're not going to make it easy. this is not a cakewalk. you look at registrations, both parties have lost market share. people are going to the --

people are going to independents. there's a huge dissatisfaction with the ruling political class. when you look at it, two failed classes, stagnant wages. people are looking around, and the president has fallen short of the promises in the hopes that people had in him, so they're looking around. but look, a long way to go. a small group in the population they're going to be catering to, so it kind of forces the incumbent to get the base together. last time they only got 52.9%. >> which is pretty good for a democrat. >> they're going to need the independents. >> let me play devil's advocate on state by state. 95% that whoever wins the popular vote wins the electoral college. you know, 2000 was a pretty flukey situation. if the popular vote goes one

way, electoral college goes the other, my assumption has always been, well, a democrat might be more likely to win the popular vote, lose the electoral college than the other way around, just because democrats waste so many votes by winning california and new york by huge margins. once you win by one vote, you wasted all those other votes, and republican votes are more efficiently allocated around the country, so it's more likely to go one way or the other. despite 95% chance it's going the same direction, but that looking at it state by state in the new world order, it means paying a lot of attention to some polls that, i'm going to use the technical political science term, crack. we won't same these specific pollsters, but this is like at best dime store stuff, if not

total garbage. you know, i've sort of decided, i'm watching the time instead, because the obama campaign is spending millions of dollars in research. if this is one of the top five or six states they're spending in, my guess -- and they're both in there -- you know what? it's probably pretty damn close. if only one side is in, the other is not, and if they're not spending as much it's not. i'm just not getting torqued up over whatever is the latest rasmussen or quinnipiac poll. you know, the day of the largest newspaper in the state and the leading tv station in each market getting together and commissioning a fabulous

statewide survey, that's pretty rare now. >> one thing i would note is, right now the polls tell you one thing. it's a competitive race. this race really doesn't engage until after the conventions. i would wait a week after the democratic convention before i would put much behind any of these polls in terms of the direction. at that point, a lot of these undecided voters start focusing, the candidates start focusing their message. you get into debates. this is within four or five points going into that. it's anybody's race. you know, international, national events can determine the outcome at that point. but i do think the metrics on the economy are going to set the voter mood and are probably the most important indicator of where this is going. >> charlie, going to your point, tom and i live in the washington, d.c., area now, and we see local television here, and i've noticed that the obama campaign has a very clean and i

believe effective ad on right now in this market, which i believe they're focusing on virginia. they're advertising because of virginia being a swing state. they show obama at the beginning, where he says, i've authorized this ad. i think that's kind of a counter message that i'm not hiding anything, here you hog all these shady groups, you're attacking me. i'm right up front at the beginning of the ad, and then he focuses on romney's record in massachusetts as governor of massachusetts. how the state was 47th in job creation. that is a very clean, elective ad. it's obviously rubbing because virginia is up for grabs. i'd be curious as to wreals they're running that ad. >> let's make a segue and talk about congress for a couple of minutes. actually, i'm not going to say anything. martin's got -- democrats need

25 seats to get a majority in the house. i'm kind of skeptical. but martin, if you want to make the case or if someone who was going to make the case, what would they say? >> charlie, i'm trying to give as independent a view as i can, it is early in the morning. i think that it's not impossible for democrats to take back the house, but it's a pretty heavy lift. i mean, it's not just 25 seats. there are some other seats where democrats are retiring in the south that are going to be hard to hold on to. it's not impossible. if there really is an anti-incumbent mood out there, and i have felt for some time that there is more of an anti-incumbent mood this election than we've seen in previous elections, and there

are more republicans in the house than democrats, i think the democrats can make significant gains. the important thing for the democrats is that there are a lot of new republicans who haven't established themselves in their districts. they haven't been in long enough, they haven't done what tom did to go around to all the little league games and go to all the p.t.a. meetings. they've only been in for a year now, or a year and a half. and it takes a while to really become a figure in your district. so there are a lot of new republicans who are vulnerable, some of whom were swept in by the tide last time. when you have a landslide election, just as you did in 1994, i was chairman in 1996, we knew who the accidental congressmen were. we knew who the people who were that got swept in. we knew the guy who beat rostenkowski wasn't going to make it more than one term, and that turned out to be the case. redistricting has been kind of a wash.

i think that it's not impossible for democrats because of the unrest out in the country to take the house back, and most likely outcome is republicans will lose some seats, and it will be much closer, and if this turns out to be an unusual election, it's not inconceivable the democrats could take the house back. >> i'm not going to allow this to happen. >> i wouldn't take it. >> steak dinner is ok. we both win on that. >> the republican problem is they overperformed in the last midterm, where you had the highest midterm turnover since 1938 that they some seats that are at risk, but they used the redistricting process where they controlled more seattle at the redistricting table to

strengthen a lot of those seats a. top of that, as martin noted, there are at least a half dozen democratic seats that are gone because of retirements that republicans pick up on top of that. historically, when you look at presidential he reelects, there aren't coat tasmse you look at eisenhower, republicans lost seats. nixon swept 49 states. there are virtually no coat tails. reagan, virtually no coat tails. >> clinton in 1992. >> well, the he re-election. 1992 is not a re-elect. >> we gained seats. >> not enough to take back the house like you thought you would. but will he elects traditionally -- because of republican overperformance, but if you re-elect the president, people aren't that upset, and they continued to reelect congresses along with it. just look at the history of this. it's very difficult for people to oust obama or be close and

have coat tails, and you have a decided congress. it takes the whole argument away from the president when you have a democratic senate this time. it's not impossible, but much more difficult narrative. look, republicans are likely to lose a handful of seats just because they so overperformed last time, but i think 25 seats is a wave that i just think is unlikely to occur within the context of the presidential race. >> charlie, could we talk about the senate for a minute? >> let me finish one thing in the house and then get to the senate. i think the statistic that makes tom's point is that in a post-war era, the party in the white house only gained more than 15 seats once, and that was in 1964 with the l.b.j. landslide. other than that, it's been under 15 or lost a few. and so, that's why it's not that 25 is an enormous number, but in the context of a

presidential re-election for that party, 25 is -- that is a very heavy lift. >> i don't disagree with that. i'm saying this is such an extraordinary year, strange things can happen. you want to talk about the senate? >> i thought some thoughts about the senate, because not charlie, but some other people in the press haven't quite figured out what's going on in the senate. because while democrats have a three-vote majority, the hill for the republicans is actually significantly more than that. they need to pick up more than a net of three seats. they're going to lose. there will be an independent elected in maine, that's four. if obama is re-elected, then the vice president, biden, presides over the senate, that's five that they have to pick up to gain control of the senate. if we win either nevada or massachusetts, two states currently held by republicans, and we could win one of those,

then that's six. and so the republicans probably have to pick up at least six seats in the senate to gain control, and i don't think they can do that. i think there are a lot of very closely contested senate races, and some of those will break democratic, some of those will break republican. there are a couple of wild cards floating around out there. but i think when this is said and done, democrats have a reasonable shot of retaining control of the senate, maybe by one vote, one vote, maybe by two. >> let me make this observation. elections have become very parliamentary over the last few cycles. they have a handful of red senators in blue states. that is the exception to the rule. you see red senators in blue states. if you look at the lineup this time, you have 23 democrats up for re-election, 10 republicans, and 11 of these

10, by their own volition, not running again, so basically 11 open senate seats t. can go either way. i think sometimes there's an exuberance on the part of my party to think we're going to take it because of the lineup. nothing is automatic. you have some democrats that won in 2006, which was a huge democratic wager they have to protect themselves this time, folks like tester, mccaskill. they're tough holds for the democrats. but you have a number of these other seats that could go either way. i feel very good about republican prospects in wisconsin, montana, north dakota, nebraska, missouri. that gets us over the hump right there. >> that doesn't get you six. >> well, five right off the bat, and then you can look around. virginia is a possibility. indiana i don't think is clear for us at this point. >> that's a republican seat. >> well, i know, but you didn't mention in terms of a vulnerable seat.

the polling on that is still close. i think by the time it straightens out and you get into the parliamentary voting patterns, it's likely to stay republican, but it's not there yet after what i would call the grip from the republican primary there, so i think the senate is very much up for grabs. my gut on this is if romney wins, it will probably portend a republican senate. he doesn't win, it becomes much more difficult because it says other things about the makeup of the electorate. >> it's interesting, i'm from texas, and i represented them. i went to school in missouri, and the missouri senate race is one of the most interesting in the country. clare mccaskill, running for re-election, has a tough campaign. but they have a late primary, three candidates, and it is possible the republicans will nominate the weakest candidate

out of the three, and it's possible clare mccaskill could be reelected in a state that, under normal circumstances, would go republican. so a lot of things are going on here, and some of these other races are very close. >> it's all possible. the race in montana with tester is a very interesting race. he fits that state. it's a republican state, but he fits the personality of the state. >> and don't forget the ultimate wild card in this election that no one, including charlie, thinks has a chance, my friend bob kerrey. >> you're right. >> bob kerrey was chairman of the senate campaign committee the same time i was chairman of the house campaign committee. he is a very interesting candidates. he's an unusual candidate. it's not going to be easy for him to win in nebraska, but not impossible.

they need a flawed republican -- of the three republicans that were running, one of them was, politically speaking, horrifically disfigured. >> yes. >> i won't say who it is, but last time is stenberg. the secretary one had some issues that someone as smart as kerrey might have been able to take. the other thing is sort of more of -- and i'm not saying this in a derogatory way, kind of a placebo, but he was able to win the generic republican vote, which is nebraska, and i think that's probably ok. so i think it was the worst outcome for kerrey, but he's certainly an able guy. the only thing that sort of jumped out of what tom and martin have said is, i'm not rushing to a judgment on what angus king is going to do. first of all, i think this is a guy that desperately wants to stay independent.

it obviously depends on what happens in the other -- i kind of jokingly say, we don't have 33 senate races, we have 32 senate races and one silent auction. but historically, they don't just sight idle. number one, number two, you got to get your committee assignments from someplace, but the thing is sort of depending on what happens in the other 32 states, what happened in the presidential. i think this guy would love -- apparently i think there was a forced power sharing agreement there. i don't know whether the circumstances would allow this or, b, whether or not this would make things happen, and lord knows it would be over

harry reid and mitch mcconnell's dead bodies that, you know, i'm not -- i'm just not sure -- but i think they're really an independent, and if he can figure out a way to do that, and he has said, i will do it as long as i can still be effective for may. in other words, if it means siding with the minority party no matter what -- well, you know, he's want going to do that. i'm kind of watching that very carefully. but to me, on a bad night, republicans pick up two seats. that would take them from 47 to 49, a bad night for them. a good night for them would get up to 52. the days of potentially doing better than that are gone and he fectively ended when olympia snowe retired. i think martin has a good

point, and i don't want to get too specific, because i don't want to get a bunch of nasty phone calls. but there are a number of places this year and two years ago where republicans have not been able to get the optimal people to run. but that is an understatement. but they're not likely to win -- they're preventing from running in virginia. let's say florida, this isn't likely to be an optimal situation for republicans. >> her name is steelman. if she wins the republican nomination, clare's got a very interesting chance. >> we could go through this. he's from alexandria, u.v.a. law school. his aunt, for those of you from

the washington region -- >> between these two guys, they've got an angle on everybody. >> i have a daughter in maine, and i want to talk about maine. >> his aunt is the mayor of alexandria and in the state senate with my wife. if you're angus king and susan collins could be chairman of the government committee, your colleague if the republicans take control, there's an angle to that boy. i don't dismiss that he's automatically democrat, and i think he desperately wants to be independent, and i think he's going represent that group of people that are frustrated with both parties. they ran as an independent, very unpopular in the state of maine. so i'm not sure an independent aligning himself with the republican party makes a lot of sense in the state of maine right now. >> actually, i learned something interesting recently, that angus king's first political involvement was as a

driver for senator bill hathaway. it's like, really? >> the current governor of maryland, you know how he got his start in politics? he was the driver for gary hart in 1984. >> so being a driver is a very interesting thing. >> that was one of my first two jobs, too. >> that elevator operator. >> elevator operator was a good deal. >> they're so old, i don't think otis was around. >> what about the russell building elevators? anyway -- >> that's a job that has its ups and downs. >> have we beaten the senate horse hard enough? >> i think we may have. >> there's some intriguing -- the massachusetts race to me is one of the most intriguing races, because when we talk about people voting

parliamentary, scott brown is gearing his campaign toward independents, of which 52% of massachusetts voters are registered i understand penalties. i think it's only 13% republican. elizabeth warren is not gearing toward a campaign at all. she is running state in the democratic coalition, we used to say gown and town. she's clearly gown. he can pull this thing off in terms of his re-election. the other interesting race from a republican perspective, where you have red on blue is hawaii. the democrats there have a very contentious primary on their side. carried every legislative district in the state in her last re-elect. now, obama, that's one of his home states, and he's going to do very, very well there. but you get a bitter primary, things can add up and funny things can happen. usually when you see a trend like this, there's always one or two that pop out, and these

are two races that i think could distinguish them. >> the massachusetts race is interesting, because obama is going to carry massachusetts by a very wide margin, and the question is, does elizabeth warren get swept in on that wide margin? had a happened once before, although people don't talk about it very much, in 1964 in the state of new york, when l.b.j. won by a very large margin, and bobby kennedy got swept in on his coat tails in the state of new york. these things can happen. i think that elizabeth warren has a little problem, the chair keeper, and we'll see how that plays out in the course of this election, but it is overwhelmingly a democratic state and she could win it. >> in the senate, sometimes the problem is too many chiefs and not enough indians. >> oh, oh! where's the seven-second replay? >> well, clearly massachusetts,

a landslide for republicans would be 52% or 51%, and so he's got no margin for error. if i had a choice of being him or her, i think i'd rather be him at this point. i want to go to the fiscal clip tend of this year, and this is the sophisticated washington audience, and you guys know all the background, and my best friend will be here, billy moore has written really good stuff on what may happen at the end of the year and what some of the consequences are. let's see. who wants to go first? now the election, lame duck, or sudden death, meaning after the first of january, i vote for sudden death. i think i think nothing is

going to happen. lame ducks are very unpredictive generally. there are going to be a lot of lame ducks in both parties. i think it's going to be very hard to do much in the lame-dumb -- lame-duck session, and i think something happens in january or february. >> in that case, will whatever that happens happens, will it be preceded by a very, very, very significant stock market selloff? >> tom, you want to try that? >> i think really what these folks need is a market tremor of some kind to get them to act and put this thing together, because the coalition -- look, most members today, their race is the primary election, not the general. it's the way people live. >> house races? >> but senate, too, because you have blue and red states, and they're worried about the primaries. ask robert bennett. ask mike. >> or hatch. hatch is not out of the woods yet. >> it doesn't allow them to act

and compromise is not rewarded by primary voters. the other thing i would vote is you get to the lame-duck session, it's done in the context of leadership election. i won two caucus votes, you won a bunch of caucus votes. they are secret ballots. by the way, just a hint. when i call up members and say, will you support me, they invariably say yes, and then you say, can i make you public, and they invariably say no. this is my wisdom coming out of this. the only member you can believe is the member who looks nut eye and says he's voting against you. but this is con in the context of caucus votes, and you have the payroll tax, sequestering, the c.b.o. report showing this could put us over the financial cliff. two years ago, they did reach some accords during the lame-duck session, but all they defendants added about $800 billion to the debt this. time they have to go the other direction. it's much harder, and i think it's going to take a market

tremor or something like that to spark these folks to act. >> to force behavioral change. >> exactly. by the way, you'll have the appropriation bills hanging out there, and i think it would be a big mistake to let those continue to hang out there. they got to get that out of the way, if you're still doing appropriations for the new president and new congress, you're not going to get anything else done. >> is the dynamic of you have to let -- there's an argument made you would have to let the bush tax cuts expire so that republicans can vote for something that's not a tax increase? in other words, the rates have to jack up to the pre-bush tax cut level for them to be able to come up with anything less than that. >> that's interesting. >> i think i don't know -- >> i heard the argument. >> it's a good argument, and i'd probably get off at that point, and i think what they'd

like to do is lower rates, but take care of a lot of these special provisions in between that could be a net revenue income. >> but at least on the personal side, i mean, on the corporate side, that's its own set of issues. but on the personal side, isn't it so much easier said than done? we're talking about paying taxes on your health insurance premium. wow, that goes over big. >> mortgage interest deduction, charitable, i mean, wow, you're talking about going straight to marrow. >> it's like simpson-bowles. it sounds great until you read the fine print. >> but this is tough stuff. if this were easy, they would have resolved this a long time ago. none of these choices are popular. somebody, to get where we need to go, has to be willing to lose. >> one is do you have tax reform that everybody says they're for, which took four years last time, when we did it in 1986, do you have tax reform

that is revenue positive, that is actually raising more money than the current system no matter how you play with the rates and change the deductions, but actually generates some revenue that can be used to pay down the deficit. tax reform should be revenue positive. you may have revenue-neutral tax reform at the end of the day, which will be a long time in coming. and that's very -- as tom indicated, that's very difficult to figure out. but there's a shorter term question, are you going to do something anytime soon about the signs of the deficit? separate and apart from the issue of overall tax reform. i don't think the parties are capable of doing that between now and the first of the year. there may be an external shot, which will force them to do something early on. i don't know. this business of playing games, saying, oh, well, let the bush tax cuts expire, the maximum rate goes to 39.6%, and then

the republicans can vote for something a little bit less than that, and it's really not a tax increase because they're actually going to bring the 39.6% rate down, it's pretty indirect. maybe that argument would work with some folks. i don't think it plays very well with the general public. the bigger issue, or one of the bigger issues, is the sequestration, because that's a 50% cut on defense, a 50% cut on domestic spending. that's going to happen automatically on december 31 and january 1 if there's no action between now and then. i don't think congress is capable of acting between now and the first of the year to avoid sequestration. the question is, how quickly can they act after the first of the year so that they mitigate some of the real problems that that's going to cause? it's going to cause real problems in the defense industry, and it's going to cause real problems on some domestic programs, and i think congress will do something

about that in the january, february, and march time frame separate and apart from whether there's some sort of external economic problem that causes them to really focus on deficit reduction. they have to deal with these automatic cuts that no one thought were going to happen. this was sword of damocles that everybody thought was going to hang there, and congress deadlocked. >> let me give one scenario. i think it's going to be dependent on the makeup of the congress. obvious physical republicans take the presidency, the house and senate on bush tax cuts, they'll wait to do something through reconciliation and do it their way instead of trying to compromise their way through it. but if you have continued divided government, they may get together and try to get some of this stuff off the table and figuring they're going to have to live with each other at least another two years. we'll see. >> i'm very skeptical they can do anything this year. >> we need to turn it -- but let me clarify, do we have two

or do we have three votes for the single most likely outcome, sudden death, meaning post-december 31? >> i'm a sudden-death guy, i'm afraid. >> ok, so we have three votes for going into sid death with the emphasis more on death. >> billy bourne said four. let's open it up. are there roving mics or anything? wave your hand in a nonthreatening way and somebody with a microphone will come. >> mark tom with hewlett packard. on the sequestration front, the issue came up this past week that if they do get ahead with sequestration as you suggested, the requirement is they notify the employees 60 days prior to the impetus of this sequestration. that puts it early november. i think it's three days before the election. how much of an impact will that

have on the outcome of the election? could have some. it's the plant closing legislation that congress passed a number of years ago, requiring a 60-day notice when you're going to close a facility or dramatically decrease the employment. that could have a chilling effect in some places, but i don't think congress or the president or anybody is capable of avoiding that. and we'll see what kind of an effect it has. >> they'll be home campaigning during that time period and stuff, but each side will get their talking points with the other. i'll tell you this, members who voted for the andow prize are on the hook for. members who didn't vote for it are off the hook. >> i think if you have a gas stove, that's called turning up want heat. i mean, cranking it up. >> i don't know how they're capable though of solving this sequestration problem ahead of time. i mean, you had the supercommittee, you had every indication this is what came up with. it is really going to be ugly and crash and burn. i'm just telling you, we know where this is going.

i just don't see anything in an election context where they can find the offset to do something else. you have deficit hawks that will be down their throat and everything else. you've got to find the cut somewhere. we know where a lot of the money is and entitlements. nobody is going to touch that. people don't look at entitlements. i have maps that i use that show the counties in this country that get the highest percent of their population getting medicare and social security, and they are republican counties. these are rural areas that the republicans own. you start messing with those benefits -- >> in the midwest. >> yeah, appear latch i can't. you start messing with these benefits, and you watch voting patterns change pretty quickly. >> i think the only way this happens before the logical, and i've talkeding about the stock market, it has to be the equivalent of attaching electrodes to sensitive body parts and cranking up -- cranking up the electricity. i think that's the only way to change behavior significantly

to do this before the election. if that sounds kind of grizzly and stuff, yeah. >> charlie, let me make one or point, and not in quite such a unpessimistic note. >> don't get out of line here. >> no, i am somewhat optimistic that if the president is re-elected, and it's still an if, if the president is re-elected, that he will show real leadership in the second term in terms of resolving these problems. without presidential leadership, these things don't get solved. ronald reagan had a reasonably successful second term. bill clinton had a reasonably successful second term. you've had some presidents who did ok in the second term in both parties. >> the defense i use, how do you define that? >> i think bill clinton did pretty darn well in his second term.

>> 5.5 on a 10 scale, or six. >> who else we got? >> since both of you are creatures of the house, then let's assume that the election and the house gets closer without picking a number, what is your prediction on leadership of the house, both republican and democrat? >> let me jump in and slightly modify this question. >> you have that right. >> just to give it a little twist. on the republican side, how many seats could republicans lose before john boehner gets in some difficulty? and if you'd like to take the fifth amendment, i'm sure -- >> no, i mean, because i was there. that's how i got elected leadership is after we took, and it wasn't a big loss.

that is enough to -- >> >> well, i beat linder, who was campaign chairman, over that kind of loss. it's managing expectations. and we'll see how boehner can manage expectations with the troops, this idea that we're going to pick up 10 or 15 seats is probably, you know -- >> nonsense. >> well, probably not within the realm of high probability, i'm going to be a little gentler to that. bought i think it would take a 15, something in the range of 15 to 20-seat loss on this to jeopardize that. remember this, they come to town right after the election and elects leaders. they do this on purpose so nobody can organize against them. because nobody out there right now has organized, and then they elect the leaders and then elect the committee chairman in january. so the leaders always take care of themselves first on this issue, and they don't give you time to organize. if the democrats were to lose seats, that's a different issue in terms of what they do

pelosi. >> well, 15 is a good number. >> well, i want to go back to something tom talked about earlier, and that's the secret ballot. when i was elected caucus chair, i won by seven votes in a secret ballot. when tom additional was elected democratic leader of the senate, he won by one vote in a secret ballot. so it's kind of unpredictable. you never know how these things are going to turn out. what happened in 1998 was that gingrich overruled -- it's interesting, even though you ultimately replaced linder, he was on the right side. he did not want to make impeachment an issue in the concluding week of the 1998 election. i was chair on the democratic side. linder and i were on tv two weeks before the election and said we're not going to make a big issue over it. he was overruled by gingrich. the republicans lost five seats. that was the first time in more than 100 years that the

president's party had lost -- had gained seats in the sixth year of an eight-year term. this is when clinton gained five seats. so gingrich was in disgrace at that point. he had a lot of other problems internally inside the republican caucus. i can't predict how the republicans will view john boehner. i don't know what they'll do. if they get it to be pretty close, boehner certainly could be in trouble. >> i think he's going to be fine. >> and what are -- i mean, first of all, are you convinced that pelosi is going to seek election? >> i don't know. i have not talked to her about that. i do not know. if the democrats close this gap substantially, my guess is she does try to stay around. if democrats did not pick up many seats, there probably would be a lot of interest in such a democrat -- inside the democratic caucus. she has turned out to be the

right leader. the republicans made her an issue in the 2010 election. she has been exactly the right person in 2012. she is a great fundraiser, she is enthusiastic. it was the right decision for her to say, the caucus will have to make the decision after the 2012 election. how this thing turns up. -- out. >> i am with at&t. we know each other. i have a question which is the vice presidential sweepstakes. do vp picks matter? the think it will matter in this election? >> let tom start on that.

>> i think it matters. the old rule is first do no harm. it can matter in picking up a stake. for romney, it will be the first window into how he makes decisions. putting his imprint on things. i think most people vote for president. you do not want to do any harm. if you can add a state or two, so be it. dolet's ask each person to something. pick three people that you think would be considered and what percentage chance of each one of getting picked. >> as the outsider, let me start on this. this is a republican issue. i think that romney, a cautious politician, will make a conscious choice.