thinking about it in that way because i think there is more of an argument that congress can regulate commerce. i actually think the distinction probably maps on more closely to the direct-indirect tax framework that the commerce power. if there is one person who has embraced this distinction in the commerce clause opinion, it was the chief justice. to embrace that distinction but then to turn around and basically say as he did that a tax on not havingt insurance is no different from a tax on gasoline i think makes a very important jump. you've just said all those other cases were distinguishable

because congress was regulating action. i know a lot of taxes on gas and all sorts of things. i am not that familiar with being taxed for not doing something. it is still a weakness in the taxing analysis that emerges as the majority opinion. >> we are going to take one last question from manny. go ahead, manny. >> thank you. plf recently filed a motion which is still pending about the impropriety of using the tax code because the bill in this case did not really originated in the house so it violates the origination clause. >> i have not studied that issue so i really do not want to

comment on it. obviously, the constitution has a number of structural provisions that are designed to protect the taxing power which the chief justice recognized from the get go, that the power to tax is the power to destroy. one of them is the origination clause that says taxing legislation has to originate in the house of representatives. there is certainly that limit on the taxing power. >> if npr had asked the question, would you respond? >> you still need a limiting principal. [laughter] >> the bill originates in the house and then it would go over to the senate. the senate strips everything from the belt accept the age.

>> the issue here is the bill originated in the supreme court. [laughter] that is what we call your congress at work. we're going to go get a drink which is probably what we need. let's have a good round of applause. [applause] please join us for our reception. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> today, our coverage continues with remarks from president obama at a campaign rally in milwaukee. it is one month before early voting begins in wisconsin. see that rally live today at 6:40 p.m. eastern here on c- span. right after that, first lady

michelle obama delivers remarks at the congressional black caucus foundation awards dinner here in washington. 7:30 p.m. eastern also on c- span. >> i think there are a lot of anti-obama books out there and a fair amount of books defending the president. i wanted to write a book to describe an answer of the most important question. as a look at barack obama character. here is a guy who has very little executive experience. his entire life is at the committee table in the illinois state house or u.s. senate or in various meetings, but he is never the guy in the front of the room deciding or making the hard calls. said in may, he is in the most

-- suddenly, he is president of the united states, leader of the free world. how does he do it? how does he make decisions? how does he govern? >> and investigative journalist credit president obama's advisers for many white house policy victories. on c-span2. >> former defense secretary robert gates and former 26 of staff chairman admiral mike mullen predicted dire consequences if automatic cuts are applied to the budget. both talked about the national debt, the need to compromise, and the current condition of service members and their families. this is an hour and 20 minutes. >> thanks, john, for your

outstanding leadership and for hosting these forums. i also want to thank my co- chair at the coalition and a full partner here who helped to plan these forums, and the co- chair and presenter. pete, it is going to be a great pleasure to have you as a witness today. i have never been able to ask you hard questions. >> myuestions are all going to be answered by doctor alex rubin. >> last week, jim baker and alex rubin made it clear that the fiscal trajectory and debt are very dangerous to our nation and a u.s. debt crisis is a real possibility. in a few minutes, we will hear

from former secretary bob gates and admiral mike mullen on their view of the implications of our current this call outlook. we look forward to that testimony. in our second panel, we will hear from former u.s. senator alan simpson, bowles, former chairman pete deminici, and former budget director. they will present their findings and recommendations of their bipartisan panels which were separate undertakings but came to broadly similar conclusions about the steps that must be taken in response to our fiscal challenges. i am confident that both are panels will address the subject of sequestration. which by law will occur at the

beginning of next year. i hope our discussions will not just include this legitimate concern but will also engage in the much broader and long term but the central structural problems and challenges that must be addressed and solved. most analysts believe that all lawmakers will find a way before january 1 to delay the worst effects of sequestration. even if this is a corrected guess, the threat is creating a climate of uncertainty that is harmful to the defense industry and anning. harmful to confidence in america's leadership abroad. even if we avoid a crisis, escalating debt will increasingly dominate the budget and interest rates will inevitably increase putting more pressure on all other parts of the budget and certainly on national security and the

defense budget. tradeoffs will become necessary. this problem is exacerbated by the dynamics within the defense budget been doing the same broad trends affecting the u.s. economy are affecting the pentagon's budget. other countries including our allies and our adversaries pay close attention to america's the scope problems. the debt problems make diplomacy, development, and preventative defense less feasible. preventing war becomes much more difficult. according to the congressional budget office, at defense spending will be under 20% of the entire federal budget this year. this accounts for roughly one half of what is called discretionary spending.

the portion of the budget not on automatic pilot that is determined through the appropriation process. the united states spent more on defense in 2011. we do far more including trying to complete two wars while fighting another one on terrorism every day while maintaining a global presence around th. it is clear that any credible approach to deficit reduction must include defense as well as other parts of the federal budget. we must not bang away with a mindless sledgehammer. we must cut overtime spending both federal revenues and expenditures are shaped by our national economy. they are shaped by the public need.

we cannot divorce the debate over national security. since 1960, our national spending on medical care has gone from 5.7% of our gross domestic product to over 17% and is rapidly heading toward 20%. we cannot ignore the reality that our population is steadily aging. we live far beyond the age of 65. life expectancy is now in the mid 80's which makes it a big difference. social programs were created with the expectation that people were going to live to the age of 65. now we are living much, much beyond that ending the funding of those programs has not been redressed to address that reality. these trends affect our economy

and well-being and our nation's security and the broader context. since we here at csis are holding three of our four forums here and the sense it is one of the world's most premier policy institutes and since one of its founders -- since tony holds the chair, let me give a quotation from his latest report. i am summarizing. number one. the united states still dominates world military spending but we must recognize that maintaining the u.s. economy is a vital national security interest. number two. security spending already places at a long burden on the u.s. economy during the peaceful periods of the cold war.

number three, , the department of defense need to make a major new effort to deal with its own self-inflicted threats, lack of cost control, and a realistic planning future budget. number four. the real pressures on federal spending are driven by entitlements which are driven by the fact that most americans do not save for retirement and massive prizes in the burden of all medical care costs, government and private, and the pressures they put on the economy. i commend the report for all those interested in national security and economic security and who would like some relief from the current campaign's

flawed addition and subtraction. i thank the members who are here with us today. bill and jane have joined us today. we're very delighted to have them. and a former united states congressman from indiana who was with us in our first forum. i would like to thank the organizations that have made this forum possible. pete, let me turn to you and then we will hear from other committee members. >> thank you very much, sam, mr. chairman. what a pleasure it is to serve with you.

if we have a shortage of time, just let me know and i need not make these opening remarks. i will try to be very brief. first of all, it is an honor to have these two participants with us today. the nation owes them a very, very large debt of gratitude. admiral mullen, we have used some of your quotes extensively the past few days. secretary gates, you will come to us from where you are in texas and many of the reforms you have advocated have guided the work of the bipartisan policy center debt reduction task force which i have cochaired. permitted and' justified us making some substantial reductions in

defense but nothing like the bludgeon that will occur under the sequestration order under law. you have also guided the work of our analysts and the impact of the sequestration on our national security and economy. we face these cuts because policy makers have failed in their responsibilities to develop this goal paths that give the nation both long-term debt reduction and short-term boost to economic growth. the failures of the past several years and 18 months have led the nation to the edge of this cliff. i cannot imagine a worse way to reform defense spending and procurement then using the instrument we called sequestration. our chairman has said this is almost a suicide pact.

if you do not do fiscal changed the way we want, both say we're going to shoot ourselves by using the sequestration. i do not know where we will shoot ourselves but it will be lethal for sure. it will be refreshing to hear from both of you today about your recommendations and the thoughts. to let us know the relationship between fiscal policy and security. it is my pleasure to be able to participate. today i get to share with the committee a proposal that we put together as an alternative to the one put together by the president's commission. we will look at the overall picture and all the other things to see how we can get out of the mess tha twe're in. how many meetings have i attended where we have addressed this issue? how long has it been front and

center? for many months if not a few years, we know we must fix this. somehow it does not get across. those who say it to the people of our country who some way or another do not feel or believe it. we do not want to wait until it happens. our u.s. dollar is no longer the value of the world and we are in a mess as a nation. we do not want that to happen. we want to fix it first. >> thank you. john was at our first forum. we are glad to have you again. jane, we will give you a few minutes for whatever comments you would like to make.

bill gray, we are delighted to have you join us today. jane? >> thank you. sitting here with former colleagues and dear friends, i cannot help but observe that security is also a woman's issue. i served in congress for nine terms from the heart of california's aerospace industry and was on all of the major security committees. i left last year to secede lee hamilton at the wilson center. today is the jewish new year. i prayed for peace and prosperity both at home and abroad. my sunday school teachers taught me you do not pray to be given something but the will to do something. i decided to come here this afternoon to do something about

our budget and national secure the. the white house released a report detailing the effects of sequestration on every aspect of military procurement and operations. given last week's attacks abroad, diplomatic programs and security it would lose $1.2 billion. i know and many of us know with political will we can avoid this because we have done it before. i was in congress in the 1990's when we worked together to balance the budget and it did this in 19975 years of prosperity following. then came 9/11. the world changed and our budget discipline collapsed. now that vote from 1997 seems far away. on wednesday, the wilson center

will roll out the election edition of a serious game that enables people to see the hard choices necessary to regain fiscal sanity and bank 1.2 million people have played the game already. i have devoted decades to protecting our national security and still serve with some others here and mike mullen. i know that we can not maintain our national security without economic security. i also know that we will not restore economic security without making the hard choices. when i was elected to congress in 1992, we were expecting a dividend. a dividend is still not here. i fear it never will be unless we correct our economic force and do something.

bring us peace, prosperity, bipartisanship and fiscal health. >> thank you very much. thank you for your service in congress and your leadership. we value our many working relationships on different projects. bill, would you like to say a few words? >> i would like to reserve my time so i can ask questions. you do not need a speech from a former member of the house a baptist preacher. we don't have enough time. [laughter] i am just honored to be here and then honored to be sitting here next to my friend. we have had many discussions back in the 1980's when he was chairman of the senate budget committee and i was chairman of the house. i think we cut the deficit in

half during that four-year period. everything pete has said i would agree with. >> thank you very much. and the other members of the panel would like to make comments at this point customer admiral mullen, we are delighted to have you today. [applause] we are honored to have admiral mike mullen, the 17th chairman of the joint chiefs of staff. he spent 43 years in the u.s. military. an incredible lack of leadership to our country. many of you know -- since 2010, he has said a number of times he believes the national debt is the single biggest threat to our national

security. he is not trying to shape a political debate. he is simply giving his best advice to a country he has served for four decades. i know he believes that the military needs to stay above the political fray particularly in this environment and i am certain he will do that today. he has agreed to join us for his continued love and service to our nation. he knows our national leaders need to addressed the debt or it is going to undermine everything hour or fighters need to succeed in everything they are willing to fight and die for. i am deeply grateful for you being here today. secretary date will be coming in by satellite. you will go first. is that the preference?

>> your understanding is always correct. [laughter] >> we will introduce robert gates in just a few minutes. i am not sure if bob is on yet. is he on? do we know? >> [inaudible] >> ok.d >> senators and other distinguished panelists, i appreciate you putting this group together on this critical issue. when you are serving in uniform as i did and you go to some many different hearings, you are always looking forward to the last 1. i guess this proves there may never be a last one even after you leave. i really do appreciate the opportunity to be here with you today along with my good friend and colleague bob gates to say a few words about the critical

issues of our country's national security and economic health. more than two years ago while serving in the position of chairman of the joint chiefs, i was asked a routine question by a reporter. what is the most significant threat to our national security? my response was simple. i said our debt. i have been asked time and time again about that threat. a nation with our current unsustainable levels of debt cannot hope to sustain for very long its superiority from a military perspective or it influence in world affairs. that was not intended as a partisan statement and has no partisan meaning now. to broaden someone that two-word answer, i was using our unsustainable debt as shorthand for the abundant disorder in our fiscal house, brought upon us by

ourselves by our own doing. while much has been said since then, little has changed. i would argue that the mere passage of time combined with a lack of solutions has compounded the problem as our debt increases stem mainly on exponentially and solutions that require compromise seemed but a figment of the imagination than that in approaching this issue from a national security perspective, it is the combination of the passage of time and no solution in sight that intensifies the crisis and the threat. the present has reduced the defense budget by half a trillion dollars, a reduction which i supported when i was chairman. under the current contract, dod will sustain another half a trillion dollar cut not shaped

in any way by national security strategies. civilian agencies will undergo the same treatment unable to care spending reductions in such a way as to strengthen, not weaken, our country and its future. of this will take place in a world of great and growing uncertainty. one only need to look at the events of last week. the fiscal crisis is peaking at a time when our military and their families are stretched and stressed as we begin our 12th consecutive year at war. it would also be who of us to remember that almost 70,000 troops are still in harm's way in a war in afghanistan. we also have a couple hundred thousand more are deployed and

stationed around the world doing our nation's bidding in faraway places as they have done for decades. our military missions must and will continue as our ability to resolve our own differences remain paralyzed. i am also mindful that today is the 220 that day of the signing of our constitution. one of the most important documents in political history whose very framing signaled the compromise necessary to found this country. our tendency after war has always been to come home and isolate. this response could be accelerated by dramatically and recklessly reducing budgets falling no principle accept the need to hit a number. our isolation would make a dangerous world more so. these times are different from the 1940's, the 1970's, and the

1990's. huge productions will badly undermined our interests. i recognize that we face historic economic challenges at this time and that everything must be on the table including defense spending which i have said before dod must pay its fair share but if we zeroed the defense budget we would hardly make a dent in our debt. it is possible that our responsibility could cause huge and poorly targeted budget deductions in defense. this virtually guarantees that we would end up with a hollowf orce unable to conduct it training or maintain its equipment and a force unable to fight. a force on able to readily recover from the ravages of over

a decade of war. my intent today is not to appoint a figure because i do not have enough thinkers. getting to a higher ground sooner rather than later together. resolving this crisis will be a process that needs to start now. engaging with determination will ensure the prosperity of our children and grandchildren. giving nothing will compromise it. since i retired almost one year ago, i have visited many parts of our great country. i have not met one american citizen who is not worried and does not want this problem of growing debt solved in a mature way. i worry that the time to do so

is shorter than we realize. we are steadily being drained of our strength while our national security strength is being set as well. lastly, i worry that my generation from the vietnam era will for the first time in american history leave our country to those who follow us in worse shape than when we received a. this is a legacy that we should all hang our heads. we are bigger and better than this. we are americans and nothing is impossible. let me pick up on one point that was mentioned in opening comments with respect to quotes. that is the cost per soldier / sailor/ airman / marine of our force. this has been something that we

have all participated in and strongly endorsed since the mid- 1990's. in doing that we invested in our people. it is less than 1%. it is a different 1%. less than 1% who have borne the burden of these last two wars and in too many cases have had to pay the all comprise, over 7000 or so, and tens of thousands wounded visibly and invisibly and hundreds of thousands who bear other wounds of these wars to the tune of over 2 million who have served in iraq and afghanistan and over 2 million making us proud. as we take of this debate in terms of our future and in particular with respect to defense, i have said many times

the thing we need to get right to ensure our military is in good shape for the future is to make sure we get it right for our people and their families. that is not just a cost or a budget item. that is the strength of who we are as a military. as a military, having fought two wars, we have a pretty healthy discussion about what that means coming out of these wars even as we had 70,000 still exposed today in afghanistan. what that means to us as a country and in military as we look forward to the security requirements which seem to always be there that will challenge us both here at home as well as globally around the world. thank you again for the opportunity to speak to these critical issues.

they touched the core of our future as a nation which must be sustained. i also begrudgingly look forward to your questions. [laughter] >> thank you very much, admiral mullen. [applause] thank you for your powerful testimony and your continued service to our nation. i am not informed as to whether secretary gates is available on satellite. can somebody in for me of that? not yet? ok. we can start asking you questions. >> [inaudible] [laughter] >> i would just start with a question that is very simple. you have been through wars and a career where we have had the

defense budget going up and down as you have already observed. is there anything particularly unique about where we are right now compared to previous times in history on the fiscal side? >> before i was chairman, i spend a lot of time in the navy in the money world familiar with the programming and the budget side of that. right after the -- i returned to the pentagon to be the navy's budget and program officer. part of what then head o the navy was counseling on was the historic ups and downs of the defense budget. if you go back and plot it as early as 1935, it goes up and

down over a pretty steady pace. i certainly as a budget officer over 10 years ago fully expected that we would tip over. what i didn't anticipate that it would be at a time when the country was at such a fiscal crisis. it makes it much more difficult from the defense standpoint to basically plan for the future. you know we typically do this about five years out. it is historically a pretty good plan. sometimes more hopeful in certain areas but it is a long- term plan that looks at capabilities that we need. that has not done so in other portions of our government which speaks to the difficulty that other portions of our government will have if this budget

reduction happens as it appears to be slated to in january. so i think more than anything else it is the intensity of this, the inability to plan for it. budget people love to go to the numbers. from a macro standpoint, we are really focused on doing that without any thought or strategy as soon as january comes around. i am not as hopeful as others that we will not drive off this clef. i am worried sick about it. i certainly hope we don't. already, and this goes to another quotation from andrew, already the comptroller's in our government are pulling back. already there are plans wherever it this ax may fall to not spend money this year as we get to the

end of fiscal 12 and get into 13. probably more than anything else it is the intensity of it. at a time when we have fought in iraq and have come home and are still fighting in afghanistan. from my perspective, it is somewhat unique. >> the secretary of defense is no longer awol. he is ready to come in on satellite. we will come back to the questions for both secretary gates and admiral mullen. let me introduce secretary gates briefly and then we will hear from him. this will be a very brief introduction talking about his record as well as before his record. he retired after serving 4.5 years as secretary of defense under president george w. bush as well as president barack obama. he has served eight presidents as well as under the role of the

cia and national security adviser. he was sworn in as to -- in 2006 at the 22nd secretary of defense. he was the president of texas a&m univ.. prior to assuming the texas a&m presidency, bob served as dean of the george bush school of government and public service at texas a&m. he has been awarded the national security medal, the president said this and metal, and has twice received the national the distinguished intelligence medal. on his last day of office, president obama awarded him the presidential medal of freedom. he is one of the most honorable and effective public servants i

have known. we are deeply indebted to you for being here. i am told you are about to appear on all screens. admiral mullen has made a statement and we will have questions for both of you at the conclusion of yours. well -- >> powerful man. [laughter] >> now we see you, bob. do we have audio?

can you hear me, secretary gates? ok, we are not getting volume. >> senator nunn, i hope you can hear me. a few technical problems out here on the western frontier. i will proceed. >> i think we are hearing you now if you will speak a little

louder or if the volume can be turned up. >> am i ready to go? >> you have the cell phone where you can dial back. they have you on the screen. >> are they waiting for me to speak? thank you for this opportunity to address a topic of immense importance to the future of this country. thanks for the opportunity to be back in harness with my good friend and colleague, mike mullen. i would like to share my personal perspective on how the american political system reach ed the current impasse and to address spending in the context

of the current fiscal troubles. our fiscal predicament could turn into a crisis of credit, confidence and our position in the world if not addressed. financial insolvency at home will turn to strategic insolvency abroad. the longer the united states government delays dealing with the country's long term problems will only make dealing with them later more painful and potentially more risky in terms of national security. we will get a preview of how damaging this scenario will be at the end of december when hundreds of billions of dollars in mind less across the board spending cuts will take that fourth 2013 adding up to $1.20 trillion and reduce discretionary spending over the next decade. half of that coming from defense. the result will be grave damage

to the u.s. military, homeland security, aviation safety, and virtually all other essential government operations. ,ccording to most experts taking so much money out of the u.s. economy so soon without strategy, rationality, or prioritization could send the country back into a recession that is only worse than the government's current fiscal situation. to maintain current institutions of national defence, the united states must get its government finances in order. doing so requires -- requires our country pose a political class demonstrate leadership to strengthen the country for the long haul. so far, there appears to be little evidence that this is taking place. american politics has always

been a shrill and ugly business the way back to the founding fathers. as a result of several polarizing trends, we have lost the ability to execute the most basic functions of government, much less the most difficult and resistance problems facing this country. there are a variety of reasons, some structural, some historical, some outside the control of government. first, the gerrymandered system of drawing congressional districts to create safe districts for republican and democratic incumbents, leaving most representatives being totally beholden to their party's most hard-core ideological base. second, way the elections that sleep one party into power after another each season with ideological zeal, making it difficult to sustain policies

and programs over time. third, congressional power brokers, particularly committee chairs, who might have been partisan, but also people who could make deals and force agreements on their committees and their caucus. fourth, a 24-7 digital media environment that provides a forum and wide dissemination for the most extreme and it vitriolic opinions lead to a coarsening and dumbing down of the national political dialogue. as a result of these and other polarizing factors, the moderate center, the foundation of our political system, is not holding. moderation is equated with lacking principles. compromise means selling out. just at a time when this country needs bipartisan strategies that can and must be sustained through more than one presidency and more than one congress to deal with our most serious, long-term problems,

most of the trends are pointing in the opposite direction. progress in our history has come from thinkers and ideologues from both the left and the right. but the laws and policies that implemented the best of those ideas have come from the vital political center, using the results of compromise. at a time when our country faces deep economic and other obstacles at home in a world that keeps getting more complex and more dangerous, the inability of so many political leaders to step outside their ideological cocoons or offend their most partisan supporters has become a real threat to america's future. across the spectrum, to many of our politicians seemed more concerned with winning -- too many of our politicians seem more concerned with winning the next election been saving our country. after the political election,

whenever adults that remain will make the compromises necessary to put this country that in order, i hope. doing so will remove the economic paul -- pall that hangs over the country at home and overseas. let me address our country's fiscal challenges. it is important to remember that defense expenditures are a lower share of our gross domestic product and for most of the last 60 years and a much lower percentage than previous major wars. unless anyone forgets, there is still a war going on in afghanistan. consider when president eisenhower warned that the military industrial complex, it is consumed more than half of the federal budget. the portion of the nation's

economic outcome devoted to the military was 9%. by comparison, the defense budget when i left the pentagon was $530 billion, a huge sum to be sure. that represented less than 15% of all federal spending and equal to roughly 3.5% of gdp, a number that climbs a little more than 4% when the war costs of afghanistan are included. see the bleak fiscal outlook ahead during my last years as it is -- defense secretary, i sought to prepare the pentagon for the decline of the defense budget. the first stage beginning in the spring of 2009 dealt with procurement. all told, more than 30 defense modernization programs were cancelled or capped. i was told completion would have cost the taxpayers $330 billion. the last budget request i

submitted in september -- february of 2011 included nearly $80 billion in additional reductions in the five-year defense program. then the budget control act signed later that year required nearly $490 billion more in defense cuts over a decade. by around the time i retired as secretary defense in the summer of 2011, defense had already been cut by nearly $900 billion over the next 10 years. that was before we had to deal with the nearly $600 billion in reduced defense spending authority that would result if sequestration takes place. in short, contrary to konk -- popular conception, the defense budget has been cut and substantially. what remains in our military modernization accounts are much needed capabilities leading --

related to nuclear deterrence, maritime access, safe and cyber warfare, ground forces, intelligence, surveillance, and reconnaissance, capabilities that our nation's civilians and military leadership deemed critical for our nation's future. i believe the threat america faces today and down the road are in many respects more dangerous for their complexity, variety, unpredictability, and likely lead. let me be clear. not every defense dollar is sacrosanct. one need only spend 10 minutes walking around the pentagon or any major military headquarters to see excess and redundancy. that is why i initiated an effort in 2010 to wring $110

million more out of the budget in 10 years. defense budget savings are possible, the kind that might put a dent in the annual federal deficit without making substantial -- and in the case of sequestration -- to stop this cuts in our military to defend the united states and our vital interests around the world. consider the fiscal picture. the defense budget will have to be on the table as a matter of political reality here. but as a matter of simple math, it is not because of the long- term debt -- debt problem. 2/3 of the budget goes to entitlements. there is a changing demographic in the u.s. population. reducing defense spending by 15%-20% would reduce the current annual budget deficit by 10%.

the cuts on that scale would require a dramatic reductions in the size and overall capabilities of the u.s. military. we need to be honest with the president, with the congress, and with the american people and ourselves about what those consequences are. a smaller, less ready, less modernized military will be able to go fewer places and be able to do fewer things. the risks to our men and women in uniform will only increase. if our elected officials and body politic include that they want a diminished role for the united states in the world, we can start ratcheting back the corresponding military investment in the infrastructure. future military reductions should be phased in sy,