in the good times nor do they have to cut quite as much in the bad times. as we go forward trying to find solutions on gradually lowering the size of our government relative to the economy, are those metrix good ones to work off of? >> i think you're definitely headed in the right direction. i think it's important we allow the automatic stabilizers to work. i mentioned them as the major cause. i agree the quantitatively they are a large part of the deficit. so that's important. i do believe there are two other things that are worth considering. one is that for good purposes or other, we often wind up doing things that are like spending but don't count as spending. we regulate. when the government says put

this on your car and therefore, the auto companies do it and charge people higher prices for their car, that may have a good benefit cost ratio but it doesn't show up as spending the money. so regulations is a substitute and tax expenditures are a substitute for spending. so you would need to have some complementary legislation or safety valve to prevent that you could tighten if all of a sudden the spending cap started to bind and edging into regulation and tax expenditures. the other is when you look at spending, there is this fundamental fact of arithmetic we can't get around that present discount of taxes has to equal future spending plus the national debt. the government has to pay its

bills now or later. a dollar of borrowing now means the interest tomorrow has to be raised to pay off the interest. so with that in mind, it's very, very important that the spending caps be reasonable and bind and there is some mechanism by which we don't, even with reasonable spending caps, start continuing to accumulate more debt as well. so there is an issue whether you need something on the deficit and debt side simultaneously with spending, spending minus taxes. you need to control two to control three. but you're at the fundamental core, the first thing we need to get under control is spending. we can argue. i think we would agree that should be done gradually but in the long run these projections,

even if you shave them for optimist assumptions are really tremendously harmful. to take the path of spending as the o.m.b. projects for the president's policies with reasonable assumptions which includes the future projected growth of medicare and social security. means we're going to have a wide swath of the population paying tax rates at 70% paying for it with higher income taxes, not just the well off. it's hard to imagine in a generation from now we can have a successful economy with a large fraction of americans being a minority partner in their own labor. so you are right that spending is the fundamental thing. the other something you might want to give thought to the long run about whether have you a recalibration exercise or think about how demographics interact with it. but you are in the right place. >> thank you both.

i did see a few common threads in your testimony and i want to start with the elephant in the room and go through questions quickly. on tuesday ben bernanke testified before the senate banking committee and he said the congress and the administration should consider replacing the sharp mode spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the short term. the head wind facing the recovery while addressing the imbalances in the federal budget. >> do you agree with his statement? >> yes. >> if you could keep your statement short. i notice you talked about a fazed in reduction. do you think there is a better way to do this than the sequestration? >> i think there is a better

way. but i want to make sure this year the total affect on outlays is going to be between $5 and $45 billion. that is one quarter of g.d.p. it's hard to believe this year the sequester would be a major event. next year it starts adding up. so it would be better to have it shaped like this, there is no doubt. but it's difficult to do that when we're living in a world where every two months we have a new set of negotiations. >> i agree. many of us would have liked to do a bigger thing at the end of the year but we will proceed now and have the opportunities in the next few months. i know in the senate and the house want to get this done. i want to follow up on one thing i thought was interesting and that is the number of businesses that have accumulated

money right now that we would like them to invest in our country. part of it is the problem with the uncertainty with changes all the time. you rightly noted this is not just our country that has this problem. what i wanted to get at is how you think we can unleash this money and get it invested? >> in my view, the reason it's accumulating in the u.s. and other countries fear about the world economy is has a recovery taken hold. for all of the discussion of our growth rate being modest. the.5%, that's about fastest of all the advances committees in the world which is a sad state of affairs. it's been a tough period. so i think uncertainty about overall world economic growth and second fear over whether there will be another major

financial crisis led by problems coming out of the european banging sector. -- banking sector. i think those two things hang over the investment decisions of big firms. and really we can only address that part through macroeconomic management and trying to persuade the europeans to confront their problems. i think on the micropolicy side, investment tax incentives i think have some impact in an environment like this on the decision if you're going to invest, where do you want to invest. i think putting a focus on in some of the sectors getting skilled workers and trained workers that are in our language complementary to the capital is quite important. because you've seen in high- tech manufacturing and others, they haven't been able to do

that. and the third i think there is a confidence element that as growth gets going, you will see more pressure like what you've seen with apple and others that investors go to the firms and say either use the money for investment or pay out the money and we will use it for investment, but do not just sit on the money. >> i want to follow up on one of the things you made. i was picturing myself telling the small business owners in minnesota that you need workers that are complementary to your capital. i think it is right on in terms of trying to encourage our school, from the high school level on, to train workers. i think manufacturing is one of our spots right now. we do not have enough people going into welding. we need more women doing it. we need more people doing it. there is a big effort in

minnesota to recruit more women to the manufacturing floor because of job openings. if you could briefly talk about your views on this and maybe in the second round i will ask about your ideas on consolidation. >> i agree with those statements that manufacturing has been one of the bright spots. it has been pretty clear. in the data, the u.s. has got to shift a more export-oriented growth model. the biggest export market for the u.s. is in the manufacturing sector. most of what we export our -- are manufactured goods. in those cases,, especially in minnesota, those issues of finding structural mismatch and fixing it are important. it behooves us now, at a time

when i think cyclical unemployment is the dominant factor nationwide. very soon, as the unemployment rate comes down, structural unemployment will be what remains. we have already seen the weakest parts of the job market being the drop out of the labor force and a group of people who have been unemployed for a very long period, these skills will be a forefront issue. >> thank you very much. >> thank you. >> you touched on long-term, structural unemployment. we have created the vast

majority of jobs that have been service jobs. a very small percentage were signs, technology, engineering, and math. we know we have disparities' growing and every job is not the same. we could have zero unemployment and people could be struggling paying their bills. what do you think is the severity, in a global sense, that we are increasingly moving away from those things we need to invest to increase our global competitiveness in terms of innovation, tradable goods, and that type of thing? how big of a factor do you think the unemployment rate we are seeing right now is a function of us not being as competitive and as skilled as we

need to be as a people? >> i think it is a substantial part of our problem, both short-term and long-term. people are not getting jobs now. 3.5 million job vacancies. they are not all computer programmers. welders, etc. that is partly a problem of our education system and the opportunities, private and governmental, to retrain yourself. need to modernize these jobs programs. i think we can get a lot better out of it for less money and help people a lot more than we do now. spending should not be the

metric, it ought to be, how people get jobs again. in the long term, it is a larger problem. if the unemployment comes down in the next two or three years, what remains will be primarily structural. >> i think there is a tendency, when firms are hit with really rapid, sharp adjustments, they make deeper cuts, including stuff that is accumulated. they tend to shed a lot of labor than they might have in previous downturns. they pushed their remaining workers and become more productive. all of that is interactive. there is something major to it. >> i did think it is a major issue. i think it is not appreciated

that the u.s.'s competitiveness problem has not principally been on the productivity side. we remain the most productive work force in the world. we only got more productive during the recession. the long run competitiveness of the u.s. economy is pretty strong. we have gone through a heavy, cyclical unemployment time. it is something we ought to think about. there are a lot of different sectors and jobs that have never faced foreign competition that have become tradable good. that leaves a lot of tough adjustments. we should make quality investments. i think that professor's point

is well taken. let's do those things that will get people jobs and sustain them in their jobs. the advance of technology, let's not overly dreadful is it. if they had said in 1920, how many phone lines would exist today, they would have said that is impossible because every man, woman, and child in america would have to be a telephone operator. the fact that they do not need to be did not put everyone out of a job gradually as we trained for other things, we got more skilled. there is no reason we could not shift again. >> thank you. >> thank you. it is good to see both of you here today. in your testimony today, you suggested congress could help

the housing market recovery by facilitating finance, refinancing for people on able uunabl-- unable to take advantaf low rates because by facilitating to people to convert vacant homes into rental properties, it was interesting what you said about housing. housing sometimes is put on the back burner. for my constituents, it is a big deal. they have lost a lot of wealth with the recession. could you explain the actual benefits to the economy of allowing borrowers to refinance their mortgages down to the historic low interest rates? >> yes. in the city of chicago where i live, the impact of the housing downturn has been devastating. a lot of cities in the united states, as well as a lot of suburban areas, this has weighed in quite a substantial

way. the benefit of refinancing is simple. as the professor discussed in the case of taxes, the most effective tax cuts are those that are long lived and have permanent changes to people's income. if you are under your mortgage, you cannot go refinance at the bank. you are paying an interest rate well above what the market rates are. this has been noted by chairman ben bernanke. if people could simply refinance at the market rate, as they are now, it would be literally, for the average homeowner, thousands of dollars a lower payment per year that would go straight into their pockets. it would be the equivalent of a 30-year tax cut for them of thousand dollars a year. that is substantial.

it is not just pure stimulus. the incidents in the short run of spending the money for people who are massively liquidity restraint and hurting, trying to figure out how to pay their bills each month, that tends to be higher than for the banks currently sitting on reserves and for the mortgage owners. that could have a positive impact. >> you said a lot that was very interesting. you talk about the sequestration possibly cutting 1% of the growth rate. it was suggested it would be a certain amount, 2% and above.

talk about that. we had a policy hearing the other day where the professor, a top economist, talked about the various subjects. he believes even a month of sequestration would be like creating a crater in our economy. i want to have your comments. >> the professor and i disagree a little bit on what the multiplier would be of the spending on the economy. if you take forecasters like mackerel advisers, they -- macro

advisors, they anticipate the direct impact of spending is maybe 25 basis points, two tenths of a point. the question is what other refects does it have. i think that leaves it up to be higher. i do not think this is as big as what the fiscal cliff would have been, which would have driven us into a recession. in my view, this will cut the growth rate and by a enough that we drop below 2% so there is a decent chance the unemployment rate starts going back up again instead of coming down. that is where i would characterize it. >> i think it was said it would take quite a stretch to make this into a major macroeconomic event.

it is literally about a quarter of a percentage point direct spending. economists are not sure in an expansion with a high debt ratio where that spending will be off spent, whether the multiplier is slightly negative, 0.6, 1.3, the incoming obama administration used 1.7 in the midst of a deep recession. if you to that, which i believe is wholesome, there is a range. it is a range of disagreement among economists. that would get us up to maybe 2.4%. even the most of what has been used in washington recently, it is a minor macroeconomic event. it is not trivial with respect to some things. it is disproportionate to the military. some people will get disrupted. overall in the economy, my best judgment would be it would be a

quarter of a percent or slightly left. -- less. >> this is an important hearing because i believe our economy has a long way to go to reach its full potential. you had mentioned the current recovery is about 10 million jobs short. i agree with you overall. we need a strong, credible commitment to consolidation to turn things around. i am discouraged the recent announcement that unemployment is expected to remain 1.5% all -- 7.5% all the way through 2014. it is the longest in 70 years. my worry is this is being accepted as the new normal. it is being accepted by congress and elected officials. and employers back in my district, that understand this is what will happen now. i am worried about that. this needs to be addressed.

i want you to look backs and seeing the bubble in the 1980's, and the bubble in the 1990's, and the bubble of 2000. some would argue we are in a federal spending bubble now. our current trajectory is spinning right now. at one point do you expect investors will lose confidence in the ability of the united states government to back up our debt? >> you are onto something extremely important. last week, there was a major paper presented by a former federal reserve governor. they concluded when the debt gdp ratio gets to 80%, and our net debt bank, leaving out social security's were a little below that, our growth status of well over it, you run an increasing risk of a sudden loss

of confidence and a dramatic rise of interest rates that you run into these long growth episodes. -- depressed growth episodes. there is a serious risk. we cannot be sure. if you are heading toward an iceberg you ought to change course. it seems to me we need to start getting the spending down and we need to start getting the debt gdp ratio stabilized and heading back down to a safety zone, 50% of gdp over the long term. >> you just mentioned interest rates and the growing cost of interest rates to the federal government as part of our government. at some point, they will normalize. how much will these payments

increase? what are the trade-offs as a larger share have to go to paying off interest. >> cbo projects the interest costs over the next decade will almost triple. -- quadruple. that does not include the one of these abrupt losses. the interest payments will crowding out other activity. the higher interest rates will eventually crowd out investment. we need that investment to generate jobs and increases in wages. it is a serious problem. we have had an unusual period where the fed, for good reason

or not, i can give them an incomplete. i have not been a fan lately. they replaced the credit markets with themselves, deciding to keep interest rates closest to zero. that has enabled the budget to look better than it was. that is not why they did it. it was to make the budget look better than it was. if we normalize the budget for that, looking at what it would look like, tax revenues would be well above their historic average of gdp. spending would come down kilobit. -- a little bit. if we look at that, interest will become a big issue. it is a sizable fraction. held abroad by foreign central banks. it is a big problem.

it is an extra reason we need to get the debt down. the effect on interest rates will primarily reflect what the budget position is, a surplus, a primary surplus. if we get to a primary balance, that should take a lot of pressure off. >> thank you. >> thank you, mr. chairman. i want to thank you for your opening comments. for someone who is new to congress, overly constructive and bipartisan. i appreciate that very much. thank you for allowing me on the committee. i thought the last point you made was a good point. a point often overlooked when we talk about our deficit

situation is the fact that we do not borrow from ourselves. other countries like japan that have been able to maintain high debt are from themselves. it is important to deal with this now while interest rates are low. we can deal in a smarter way than what will ultimately happen. i agree with the comment. i want to shift my question to tie into some of the comments mr. hanna made. competitiveness is one of the central issues this country faces. it started years ago when we entered a global and technology enabled world. it changed the face of employment in this country. we talk a lot about tax policy and the size of government. i worry we do not talk about

what the future competitive situation of this country is because, even though we have seen cyclical employment trends, the trends around the standard of living and around the average american have been very down. you are competitive, you create jobs. if you are not competitive, you continue to create jobs that have a deteriorating standard of living. it seems to me reforming immigration, 7 billion people in the world, 6 billion wake up and largely want to come here. it is a huge advantage we have as a country. the lack of a national energy policy, which we do not seem to have, not doing the things and education, there has never been a strong correlation than now between having a better education and a better job. and not creating enough avenues for the significant amount of capital to invest in our

economy. i worry about these things. my question to you two is how do we think about the role of government in light of what i think it's a changing economic landscape for the country, a landscape defined by globalization and technology. how do we think about the role of government to address these things, to make us more competitive and so we can actually reverse the unemployment trend? >> my grandmother lived in texas. she used to say to me whenever i would complain, 80% of the world really does not care about your problems. the other 20% are glad.

if you were thinking how long will we need to wait before the government solves our private sector competitiveness problem, the answer is forever. if you were waiting for the government to fix it or anyone else, you would do best to remember the vast majority of what happens to the competitiveness of u.s. enterprises has nothing to do with the government. policy is only setting the framework that is operating in. in my view, the government has, for many decades, played an important function through direct and indirect support of research and development innovation in ways that have been quite fundamental. the economic infrastructure of the country is quite important.

you can disagree about individual job training programs, but there is no question in my mind that overall federal support through financial aid and training have been crucial in keeping the work force the most productive in the world. we also need to have things like a national energy policy, the potential drop of energy cost could be a great boon to u.s. manufacturing. it would behoove us to figure out a way to do that that is safe. those type of broad based things the government can play a more important role, rather than directly making companies more competitive. >> i generically agree this is primarily something the private sector does.

a government plays an important role in doing things we would not expect the private sector to do well. basic physics, individual firms cannot operate the benefits so they will not do it. that needs to stop short of subsidizing specific firms, which means you are getting a competitive disadvantage for the competitors. education is important. the key difference is i would draw the line a little shorter. he would have a larger government. i would be concerned that the larger it got, the less effective it got. the government is playing this role, the larger it gets, it crowds out the private sector. combined federal, state, and local government, 50% of gdp.

they have to pay taxes. >> thank you. i do not mean to interrupt. with votes pending, i want to make sure we get as many people as possible. >> i asked my staff each day to prioritize my memos. despite tuesday -- [laughter] >> thank you for bringing that up. we appreciate that. >> i never thought would be from a football powerhouse, either. [laughter]

>> i have suffered greatly. let me get my questions. i was interested in your comment here. i would like to go into more detail. you said economically balanced. it is not 50-50 between spending and taxes. simpson-bowles came in with a commission report with the ratio spending over taxes. yet the administration continues to insist that any kind of long-term deal will ultimately put us on the right track if it is 50-50. what will that ratio be? you said it should not be 50-50. >> the successful ones have been $5 of actual spending

cuts, actual cuts that have occurred for every dollar of tax increases. it does not mean it has to be exactly that. could be smaller or larger. the u.s. may have slightly different circumstances. it suggests it is primarily on the spending side. the evidence also suggests tax hikes are worse than spending cuts. there is a steady by one of austan's colleagues suggesting tax increases can be very dangerous in the short term. the mix, for economic reasons, there are many other considerations. people care about the size of government. they care about the distribution of income and so

on. the macroeconomic issue should be overwhelmingly on the economic side. -- spending side. >> two things. the evidence the professor is siding is based on a circumstance fundamentally different than what we are facing now. our fiscal challenge is nothing more and nothing less than the population is aging and the health care costs are rising. if you just advance for the baby boom to their retirement, with the existing policy, that we have known about for 40 years, it would imply the government side will get bigger than it ever was before. either you have got to cut those promises or raise revenues higher than they have ever been before to cover them, were some balance. those are fundamentally different.

what simpson-bowles said was 3- 1. it is really a 2-1 ratio. it is best to also remember we had one round. if you add all of these things together, we are at the 2-3-1 ratio in simpson-bowles. we ought to balance these things against that. at the end of the day, if we do the $4.50 trillion of cuts simpson-bowles recommended, the total would be 2-1 or 3-1 spending cuts to tax revenue is totally inappropriate. -- totally appropriate.

>> i think it is important to appreciate two things. the projected cost increase of social security and medicare are primarily because of rising real benefits. we are making them more and more generous as they go along relative to the cost of living. some people might say we ought to have those things proportionate to the size of the economy, but the original mission was to supply a measure of security against poverty and old age. if i were to collect social security at the right time, -- we cannot keep projecting. i do not view 70 years from now as a promise. it is a big increase. i think we have to get these programs under control. with respect to simpson-bowles, they did not deal with health

care costs. that is a big issue. that is a large driver of future debt. >> thank you. >> thank you, mr. chairman appeared i would like to compliment you on your new position i would also like to welcome a new member on the democratic side from the great state of maryland, who has been a very successful businessman and will bring a tremendously important perspective to this committee. a welcome to our two panelists and thank you for your government service for our country. tomorrow, the real question before our government is sequestration, which kicks in with an $85 billion cut. it is estimated this will result in a loss of over 700,000 jobs. ben bernanke testified yesterday in the house of representatives.

although we have been gaining jobs over 35 months, roughly 6.1 million in the private sector, but the government lost 0.6 million jobs. he testified this sequestration was a problem, besides having an adverse affect on jobs and income, he said a slower recovery, which is sequestration will cause and our fragile economy will lead to less actual deficit reduction. the whole purpose of sequestration is deficit reduction. he is testifying it will slow that because of the impact on jobs and incomes. there has been testimony today the impact on gdp would be roughly a quarter of a percentage point.

it is estimated it will contribute about 0.6% to a fiscal drag on the economic growth this year. i would like to hear your comments in relation to what chairman ben bernanke was saying about the idea of phasing it in overtime, having targeted reductions, the democratic minority keeps putting forward closing loopholes. let's not fire all these people that are paying their taxes, a part of an economy dredging our money back into the economy instead of having them on welfare and not being able to produce a part of the economy. this is turned down by the republicans. there was an article this week in one of the papers where speaker boehner was quoted in saying, in terms of the tax debate, because we all support tax restructuring, that he

would take closing loopholes if given a lower rate for taxes. it seems to me closing some of these tax loopholes, why we are giving tax breaks to companies that move overseas and take our jobs over there is beside me. if you are going to give a tax break, give it to someone providing a job in america. the tax subsidies, the 40% in some of the examples, really successful companies, that are making a lot of money, why are we subsidizing the company making a lot of money? it seems to be closing the loopholes and lowering the deficit would be a better approach than closing loopholes and giving a lower tax rate. -- break. i would like the response to those two questions.

and yours. >> on the first, i am more in the camp as i outlined as the congressional budget office that the impact of sequestration would be half of a point off the growth rate. i think that would be enough to set the labor market back. and it might start to deteriorate. on the tax loophole point, what professor boskin said, that there is a whole lot of spending in the tax code, is correct. if you cut the loopholes, it is not accurate to think of that as tax increases. by that very logic, we should be dealing cutting of tax loopholes as spending cuts. i do not see any problem with changing the form of the spending cuts to be in a more rational direction. i hope we would get it off of the next 12 months into the

spirit of the economy recovering more quickly. >> i will be on the 5 minute limit for questions. i would like that order. >> i will ask one question. i will ask each of you. we cannot do too many things at once. give me your number one thing you would think we should do to boost job creation and economic growth. and one thing you would say we should avoid. >> i would avoid any major tax increase. the first thing i would do was try to have a commitment to changing indexing formulas,

altering structural features of programs, not just cutting a few billion off of one program. growth of spending heading down. >> i would say putting investment in the workforce is the most important thing in the short run. i would say the thing to avoid would be anything that is going to have a significant negative impact on incomes and well- being of the broad middle class of the country over the next 12 months. >> both of those are broad. >> federal r&d spending, we should not just not cut it, but increase it.

investments in economically important structure is important. >> the thing you said we should avoid? >> tax increases on the middle class would be one. things that are the pressing the wages of the middle class. the biggest example would be things that would increase the taxes on the middle class. the stuff we are doing on the housing front can be thought of in that way. >> thank you. i yield back. >> thank you. >> i am concerned about the unemployment rate of our youth. those who are 16 and 19 years

old have an unemployment rate of 23.5%. those are 1 to 24 years old have 14%, much higher than the national average. i would ask you both with quick answers, are you concerned about it and what impact does that rate have on the life skills the kids learn at this very important age? >> you are exactly right. it is major and limited to a subset of that group, it is a major problem. it is very important we have a more robust economy. we agree on some things. i do not know how to create that in a short run. we need to dramatically improve our education system. competition is one thing that can be done to improve it so they wind up at the beginning

of their careers with skills that are better matched. we reform the programs we spend a lot of money on so they provide jobs. >> thank you. >> i have published on this subject. the evidence suggests the- dynamic you are describing is damaging. if you come out of school in a period in which it is hard to get a job or you are forced to take a lower-level job than you should based on your background, that sticks with you, partly because of less skill development, partly because you get trapped in a negative way. it is critically important. the most important way to do that is to get the overall

growth rate of the economy up. i think the youth unemployment is one of the weakest and scariest parts of the labor market. >> are they the higher or lower earners in our economy? >> the lower earners. >> it depends on where you are in the skill distribution. from 16 to 19, you see people who could not get jobs and they stay in school longer. >> on average, younger individuals make less money? >> yes. >> if we want to improve the opportunity for our youth in the country to make sure they learn skills in central, can we grow more opportunity for them, create more jobs for them, if we would raise the minimum wage? >> i think the minimum wage has offsetting effects.

it is not very carefully targeted in this regard. teenage children, of rich people who are working at minimum wage jobs, will get more. it is a big concern. i think raising the minimum wage is not the most effective way to deal with this problem. >> will the growth of jobs, will that help grow jobs? >> the most important word just said is the trade-off. the minimum wage has trade-offs. there are some people it would raise their wage and make it harder to get a job. others, it would raise their income. the question is really how much you think that affect the overall income. >> will it grow jobs? >> it could, it depends.

if you believe the total income is going to rise for low and middle income people, that could grow jobs. >> if we increase minimum wage, that means more of our small businesses, the places a lot of these people work in, they will have more opportunities and jobs for the youth? >> my position is the minimum wage does several things, not just one thing. just looking at the one thing is the incorrect way to look at it. >> i am looking at the one thing, job growth. >> there are two factors. what is the direct factor of the wages on people who cannot get a job, the people who are still unemployed, their income goes up, and what is the overall macro impact. that may outweigh the direct impact. >> to invest in our work force, a good policy would be to increase minimum wage.

>> it could or it might not. it depends on what the values are. >> we can continue this discussion. thank you. let me vote in the house. i want to thank dr. austan goolsbee and dr. michael boskin. thank you very much. >> thank you. we had great attendance. i think you for your leadership. >> thank you for joining us today. >> i wanted to talk to you about tax reform. there seems to be a broad bipartisan consensus that we need some kind of tax reform, especially a tax code

simplification. it was in this committee a few months ago we had a gentleman with a ph.d. and we asked if he did his own taxes, and he said he does not we asked why. he said there is no way i could know whether i was correct. i think that is indicative of how many americans feel. a simplified approach to the tax code would be better. we need tax reform. there is not broad bipartisan consensus on what that ought to look like, at least in the sense that some are less inclined than others to say we need a tax reform package that would yield more revenue when static prescored. -- statically scored. i think most would agree, as long as we are in the world of saying, to static the score --

statically scoring something, if we can assume we are going to be neutral, maybe we would be better to reform the tax code and leave it neutral. at that point, some would suggest that would stimulate economic growth, leaving us free to see whether and to what extent it did lead to more revenue. would you tend to agree that would be a good idea? >> it is an excellent idea as long it is primarily at broadening the base. a tax reform that raised tax rates would be a bad tax reform. we have not talked much about corporate tax reform or small business here. so many successful small businesses, 3% of businesses, some of it passes through. broader rates would be good for

their incentive. we have the highest corporate rates in the world nominally, about 39%. the effective rate is lower. in the high 20's. it is not far out of line. the moving in this direction could be good for the economy in the short run and the long run. i do believe if it were accurately reform -- >> would that tend to have the impact? we have peaks and valleys within that period in 2011, we were in a valley of 14.5%. at times we have gone to a

little over 20%. could lowering the rates and broadening the base produce a more stable code? >> it would because the steep progression, some say the rates are too high, we have relative to the other countries, we see the most progressive tax system. they collect more, but we have a more progressive tax system. becomes more volatile. in my own state of california, we have a very progressive tax. we get into an awkward situation with our balanced budget requirements, because we wind up having revenue go in, they send that, they project more, the crisis hits, we rely heavily on capital gains and stock options from silicon valley, the revenue collapses, it is hard to cut spending, so we try to make the tax code more progressive, so we cannot even

find the basic benefits for people really hurting in california. >> that is a tough cycle. that is why i ultimately tend to come to the conclusion that where there is not consensus on everything, we have to look at where there is consensus. we need tax reform in the form of simplification. maybe we can start off with something revenue neutral and static the score and see where it takes us. that would leave subsequent congress is free to plus up or minus down where they go from there. in your testimony, you mentioned the need for permanent structural changes, not just the specific dollar cuts while discussing a credible commitment to deficit reduction.

can you speak to us briefly on the importance on credibility in deficit reduction taxing and why markets will not be satisfied in this regard with cuts and tell us why cuts will not cut it anymore? >> it turns out if you look at the history of budget negotiations, i have been involved with several, sometimes because evaporate later. if you cut tax rates, a much bigger battle than small changes in spending at the next appropriations hearing. what people want to see about what the environment will be for investments that are paying off five, seven, 10 years, infrastructure, a lot of that should be going on in the private sector of big investments.

he mentioned energy. we could export natural gas. that will require firms investing $10 billion. to do that, they have to have a notion of what the taxes they will pay on that are. credible means the rules have changed and they are harder to reverse than a singletax rules, indexing formula, retirement savings over time, and so forth. >> these are the kinds of permanent structural reforms you refer to? >> yes. you say we will cut $10 billion. it may happen once or it may not. the following year, it is up for debate. >> thank you.

>> thank you. i have one last question as we grapple with immigration reform in congress. if you could talk a little bit about how you view this from an economic viewpoint for the country. there are many aspects. one of the parts i have been working on, and i have a bill along with senator rubio, it makes it easier for students from other countries when they study at our universities, they are more easily accessed to green cards. we are also doing more with the cap on the visas. there is another bill called, start up 3.0. if you talk a little bit about how this fits in with the

overall economy. we have been focusing on jobs training, a major part of this. a part will go directly to stem education to help train our students in these top areas we have openings right now. we will start with you, dr. boskin. >> i am a strong advocate of sensible immigration reform. three key components would be the green card provision you are talking about, it is silly we have great students that come from abroad and then we send them home. we make it hard for them to stay. they should be working here and helping us grow our economy. the visas, again, we tend to focus on what on the problems of people on the lower income scale, we should, but we should not ignore the technologies.

we need a sensible worker program. there are other aspects about making sure we have a border enforced. it is very emotional, but it is the case we have been refreshed numerous times by waves of immigration in this country. we are diverse. it seems to me if we are smart and we have an immigration policy that strengthens the opportunity for higher skilled people to stay here and improve the opportunities so people with lower skills, it could do so again. also, i would say the problems of social security and medicare and the slowing growth of the labor force, which the chairman mentioned about potential gdp, out there unless our birth rates change, we will probably need to have more immigration. >> i appreciate those comments.

one of my favorite statistics, 30% of the nobel laureates were born in other countries. >> thank you for your support and leadership in this issue. we should keep talking about it now. the president has endorsed that. i champion several of the ideas you mentioned. start up visas. you do not have to look very far, either in the research literature or just talking to business people, to recognize that immigrants have made not just an important contribution to the legacy of who we are as a nation, but to the economy. my friend said 50% of the

companies funded were born out of the united states. they are big job creators. by doing some of these things, we could have a positive impact. on visas, they do have the complications that you are tied to one employer. >> we have made some changes. >> making changes on that is a good idea. >> very good. i wanted to thank both of you for your knowledge and wisdom and everything you shared with us. secondly, the stability you said here. i had several members say, this is so unique. i hope we see more of that going for. we have to come together to solve these challenges. the american people are demanding it. i thank you for setting a good beginning for this committee.

you have seen it all, probably in many outfits and hair styles over the many years. we are very excited. we will do a number of hearings on these topics and move toward. thank you very much for being here. this hearing is adjourned. >> you're welcome. national captioning institute] national cable satellite corp. 2013] >> in about 25 minutes here on c-span we'll take you live to the pentagon. defend will be speaking. we might here from defense

secretary hagel. meanwhile the irs announcing that any furloughs will be delayed until summer after the tax filing season ends. the acting commissioner said in a memo to employees he wants to minimize the impact although furloughs could be implemented. there was a meeting between president obama, vice president biden and congressional leadership. they went their separate ways. after that meeting house speaker boehner spoke. mcconnell released a statement i want to make sure northeast solutions that will be done with regular order with input from both sides of the aisle in public debate. i will not be part of any book room deal and i will not agree

to increase taxes. here is what speaker boehner had to say. >> the american people know that washington has a spending problem. while there are smarter ways to cut spending than the process we're about to engage on. the house shouldn't have to pass a third bill. the house has laid out a plan to avoid the sequester. i would hope that the senate would act. but let's make it clear that the president got his tax hikes on january 1. this discussion about revenue in my view is over. it's about taking on the spending problem here in washington. i did lay out that the house is going to move a continuing resolution next week to fund

the government past march 27. and i'm hopeful that we won't have to deal with the threat of a government shutdown while we're dealing with the sequester at the same time. the house will act next week and i hope the senate will follow suit. thanks. >> you heard speaker boehner say the house will have a plan to deal with automatic spending cuts when they return next week. eric can't or the talked about that plan on the house floor

before members went home for the weekend. we'll show you as much as we can before the pentagon briefing at 3:30. starting tomorrow as a resf the so-called sequester. i did not see any legislation on the floor for next week which would obviate the happening of that event, of the sequester, although i do see that there is some desire, apparently, to make sure that the defense department and the department of veterans affairs has the ability to manage those cuts in a way that will be least detrimental. i would ask the gentleman, there

are of course 12 other -- excuse me, 10 other appropriation bills , there are 10 other major agencies and multiple departments and offices that will have a problem similar to that of the department of defense and the veterans administration. is the gentleman aware of any efforts that will be made to accommodate the domestic side of the budget? mr. cantor: thank you, mr. speaker. i thank the gentleman for yielding. and i would say, mr. speaker, as the gentleman knows, the house has acted twice to offer alternatives to what we agree with is a very wrong way to go about cuts. which is the sequestration measure. but unfortunately both times the senate rejected or refused to take up the alternatives. i'm aware the other body is anticipating at least --

anticipating to at least attempt to vote on an alternative, both of which are protected to fail in the state in -- predicted to fail in the senate. so i'd say to the gentleman, mr. speaker, that he's right in saying that our intent is to try and provide the flexibility for the defense department in terms of its appropriations, as well as the milcon bill. and we do so because there's bipartisan agreement around those two bills. and i would say to the gentleman, if bipartisan agreement somehow is reached in other bills, i would say to the gentleman, we certainly would like to be able to take a look at that. but i believe, mr. speaker, it's prudent for us to try and do the things that we can do right now so that we don't have to bear the burden of the wrongheaded way of controlling spending which is that sequestration. i yield back. mr. hoyer: i thank the gentleman for his comments. let me only observe that the

bills which the gentleman has now discussed for three weeks running, that we've had colloquies, are no longer available to either the senate or the house. he knows that. they were in the last congress and they died in the last congress. there has been no legislation in the 59 days that we've been here, put on this floor, and only the majority leader can put legislation on the floor. no legislation which would have an alternative to the sequester. and in fact, notwithstanding some of the representations, mr. leader, that have been made, mr. speaker, there was a bill on this floor on july 19, 2011, which was called cut, cap and balance. 229 republicans voted for that bill. that bill had as its fallback, if the objectives of the bill were not reached, sequester. that was substantially before, many days before the president and through the person of jack

lu talk about the making that a part of a piece of legislation that we needed so that we did not default on the national debt. and for the first time not only since i've been serving the congress, some 32 years, but the first time in history as a result of that action of coming so close to defaulting on the national debt this country was downgraded by a single point. the gentleman talked about the stem bill that was passed and i voted for, he voted for, the overwhelming majority of democrats and republicans voted for it, to help our economy. that event substantially hurt our economy. mr. speaker, the inability to get to agreement on this sequester is hurting the economy. and i will tell my friend that we've offered three times to have a bill considered as an alternative to sequester which cuts spending, raises some additional revenues. i know the gentleman is going to give me a lecture about raising taxes.

i understand that. but i would urge the gentleman, let a vote happen on this floor. let the house as you said in 2010 work its will. that's what the speaker said he wanted to do. let us vote on an alternative. not just blindly go down this road of sequester, not blindly go down this road that the gentleman has just agreed with me and we agreed together, i think most of us agree, the sequester is irrational. it should not happen. in fact, it was put in the bill on the theory that surely we wouldn't let it happen. but in 59 days we've had no bill on this floor. all the gentleman says is a bill that's gone and dead and bury, that we can't consider, that won't make a difference, that will not get rid of the sequester. i regret that, mr. leader, because i think we can. frankly we can next week put alternatives on the froor. if you have an alternative, put

-- on the floor. if you have an alternative, put it on the floor. but that's what the american people expect. they expect us to solve problems, and they sent us to vote on policy. mr. van hollen, who's the ranking democrat on the budget committee, has asked three times, mr. leader, to bring a bill to this floor, an amendment to this floor to provide an alternative to sequester. it seems strange that when both of us agree that sequester is wrong, irrational, will have adverse effects, ben bernanke said it would substantially hurt the economy, that we don't provide alternatives, and all we talk about is something we did yesterday -- actually more than three month, four months ago, that is dead and gone. we need to do something now, and we need to come together in a bipartisan basis. i might say to the leader, we've had four major bills

signed into law in this congress by the president. every one of those bills were passed in a bipartisan basis with an average of 168 democrats voting for it and an average of 124 republicans voting for it. we saw a perfect example, mr. speaker -- mr. leader, on the floor today of making very good policy. how did we do it? we did it in a bipartisan vote. and i suggest to my friend, the majority leader, that we could do that as it relates to the sequester if we would bring something to the floor, have a vote on it and in my view in a bipartisan fashion we could in fact set aside this irrational, negative sequester and move on to a rational, fiscal policy. i'd be glad to yield to my friend if he wants to make a comment on it. mr. cantor: mr. speaker, i thank the gentleman. first of all, there would not

be a bipartisan vote on the democratic suggestion as to how to deal with the sequester. as the gentleman rightfully suggests, that measure will include tax increases. we heard a lot of talk about balance, that we need to approach the situation in a balanced way. well, the president has enacted $149.7 billion worth of tax increases for this fiscal year. sequestration results in $85.3 billion worth of spending reductions. as you can see, mr. speaker, the balance is clearly in favor of tax increases. taking people's money and then allowing washington to decide how to spend it when most people realize that government is never the one best to spend and allocate someone else's dollars, which is why we insist on having a limited government providing the necessary support and roles as it should and not

continuing to take other people's money and deciding how we spend it. now, i'd say to the gentleman, he knows as well as i do that the senate refuses to take up whatever we send them. they refused again and again. so we've got a real problem, that somehow one house does its work. twice this house has passed bills with alternative measures to address sequestration, and a significant portion of both of those bills, one of which i sponsored, were provisions taken out of the president's, himself, budget. not spending increases but reductions that the president says are ok but yet still the senate failed to take them up. so there's a meeting tomorrow at the white house, mr. speaker, and i know the gentleman shares the desire to

perhaps have that men -- meeting make the senate act. the house can produce a plan and has twice to replace this sequester. now, i'd say to the gentleman, he's concerned about the economy and so are we very concerned about the economy. we're concerned about the rating agencies outlook -- agencies' outlook on our situation. but i remind the gentleman, mr. speaker, that the warnings from these rating agencies are not warnings that are wholly addressed by just coming to some deal. those warnings from the rating agencies are directed at our doing something about the underlying fiscal problem this federal government has which are the mountains of debt caused by the growth and the

unfunded liblets in our entitlement programs -- liabilities in our entitlement programs. and the gentleman knows we failed to come to agreement in 2011 as to how to deal with those unfunded liabilities which is why the sequestration is in place. we got to have that deal on the unfunded liabilities, because that's what those warnings are about, that's what we should be concerned about, not raising more taxes. those warnings are not about raising more taxes. it's about getting rid of the out-of-control liabilities that are racked up because of the spending which is out of control. i yield back. mr. hoyer: i thank the gentleman for his comments. it doesn't get at -- we've been here 59 days in this congress. not a single bill has been brought to this floor which will deal with the sequester. not one. as a matter of fact, we've only met 17 of the 59 days this year

. so when my friend laments the fact that the sequester is going into effect and he talks about bills he doesn't deny they're dead and gone. senate can't take them up. so many folks want us to read the constitution of the united states. i'm for doing that. it's article 1 that gives to the house, as the leader i'm sure know, the responsibility to raise revenues and to pass appropriation bills. it's the house that needs to initiate legislation, and we guard that pretty jealously. we guard it as -- we just passed vawa. there was a lot of discussion about vawa having -- in the last congress that passed overwhelmingly was delayed because very frankly they had some money effect in that bill. we said it was subject, therefore, to objections on our side. we haven't met very often and when we do meet the only real bills that are passed are passed in a bipartisan fashion

which happened today. and when we talk about balance -- and i get very frustrated and take somebody else's money. do you want to take it out of your pocket? was the constitution of a united states which formed a more perfect union designed to take the chinese money or european money and fund our education, our health care research, our highways, our national security? of course not. it is our money. each one of us individually works hard and we apportion a part of our earnings to the common good, to the common defense, to the common investment in our future, in education, in innovation, in infrastructure. yes, we do that. and i will tell my friend, and he well knows this, i get somewhat frustrated when i hear this. when i served in this congress

from 2001 to 2008 when the economic policy that was in effect was all your party's economic policy, and you cut revenues substantially and you increased spending substantially and we went from surplus to deep deficit. we need to solve that. i agree with the gentleman. we need to solve it, but we need to do it in a bipartisan basis. that's why i point out the only bills that have of substance that have been signed by the president that weren't suspension bills on which we all agree were bipartisan bills which averaged 124 republicans voting for them and average 168 democrats voting for them. both parties joined together to solve problems. that's what needs to happen. and i will tell the gentleman he can talk about confidence all he wants, talk about why the rating agencies downgrade us. there were a number of reasons. but the greatest reason was, and they articulate it, standard & poor's articulated, they weren't confident that we could work together to solve problems.

and we're not doing that. the gentleman continues to not want a balanced program. every group, every group that i've seen or read about or talked to people about has said you cannot get from where we are in the deep debt that was created in the last decade to where we need to be, a balanced fiscal and sustainable plan for america for the years to come without addressing both the spending side and the revenue side. the example i use is we are selling a product, mr. leader, that many of us voted for it and you want to accommodate on the defense side, which cost $23 -- costs $23, and we are pricing it at $15. no business in america or in the world could survive with that imbalance. we need to bring that in balance, and you're not going to get to the 15% of revenues that we're collecting or now

maybe 16% or 17% simply by savaging either defense or nondefense spending or entitlements. so i would certainly hope, mr. leader, that we would come together. you and i have talked about this a lot. people go home and talk about how bipartisan we are going to be. we are prepared and we understand there are going to be things we have to do that we won't like. on your side there will be things to do that you won't like. that will be a compromise. that's the definition of a compromise. our country needs it. americans want it. i would hope that we could in the coming days, not only address the sequester, but address the need over the next 10 years to get this country back to balance where we were in 2000 where we had a balanced budget, the debt was coming down and in fact people were concerned that it was coming down too fast.

unless the gentleman has further remarks, i'll yield back. mr. cantor: i appreciate the gentleman yielding. mr. hoyer: i yield to my friend. mr. cantor: the gentleman loves to go back and talk about that period from 2001 to 2008 and the fact that there was too many tax cuts in place and without the control in spending. mr. hoyer: reclaiming my time, because my point, i tell the leader, is that we didn't pay for what we bought. we kept buying but we didn't pay. i yield to my friend. mr. cantor: mr. speaker, i was saying that. too many tax cuts in place, and i agree with the gentleman, mr. speaker, not only on the fact that there were tax reductions and cuts in place but the fact there wasn't a control in spending. that is a problem here, mr. speaker. but ironically, the gentleman has consistently been in support of and just voted to extend 98% of those tax cuts. and so what we're saying right now is we got to do something about the spending.

you just got $650 billion in tax increases, mr. speaker, over the course of the next 10 years through the fiscal cliff deal. i just prior spoke about the imbalance. this year, f.y. 2013, of the amount of new revenues versus the actual spending that is being projected to be reduced in the sequester. i agree, let's get back to balance. let's go ahead and increase the spending reductions. washington does have that spending problem. the gentleman agrees. so, you know, again, i think it's unfair to say that there's just, you know, no agreement on the fact that we ought to go and reduce tax rates and taxes because the gentleman supports doing that. so let's talk about balance. you know, and we got the highest level of revenues, it's

been reported that we have the highest level of revenues coming into the federal government this year ever. and the gentleman does know as well the spending is out of proportion in terms of history, in terms of the percentage of g.d.p. so why can't we focus on that? we got to get this economy growing. and the gentleman is correct in saying the government needs to be adequately funded, but we got to take a look at what we're funding. that's what we're talking about in replacing the sequester is prioritizing. what are the functions of government? and the sequester, it does cut spending, but we'd rather cut it in smarter ways. you know, again, i hear the gentleman talk about he'd like to be here on the floor passing bills. we would, too. get the senate to act. we have a bicameral process here, and the senate has not

acted. the white house, the president hasn't even sent up his budget, mr. speaker. the president has that obligation in law. has not presented his budget to the house. the senate refuses to do anything. and what's the white house doing right now? the president's been going around the country campaigning for the past two months scarring people, creating havoc. that's supposed to be leadership? the president says to americans that their food is going to go uninspected and the borders will be less patrolled and unsafe. his cabinet secretaries are holding press conference and conducting tv interviewses, making false claims about teacher layoffs. i just feel that people ought to take a look and say, hey, these sequester spending levels, not the sequester, but the spending levels, and say, in 2009, was

food not inspected? because that's what the claim is, mr. speaker. that somehow if we were ever to reduce spending at all we couldn't have food inspectors. did we have a border patrol -- any border patrol agents in 2009? of course we did. of course we did. they will be funded at the same levels under the sequester. and that's our point. replacing the sequester with smart cuts. but the other side, mr. speaker, and the gentleman and his caucus won't join us in doing that. because all we hear again and again is raise taxes. and i have said, as the gentleman knows, we can't in this town be raising taxes every three months. that's just not the way we can get this economy back on track. did the f.a.a. shut down in 2009? that's the claim. that's the claim that the president's saying.

shut down the f.a.a., stop air travel as we know it. or give us higher taxes. that's the false choice that this president and his administration are out there hawking. we can't have that. that's not leadership. let's come together. i agree with the gentleman, but stop the false choice. stop the games and let's get it done. i yield back. mr. hoyer: i thank the gentleman. he said a lot and i could have a lot of comments on that but i will say this, as long as the gentleman believes it's only us saying that we need a balanced program, he will oppose it because we are democrats. if the gentleman listens to independent advice all over this country, from all sorts of sources, republicans and >> >> you can watch all this in our c-span library.

ashton carter talking about the impact of sequestration cuts. live on c-span. >> i wanted to take a few minutes to talk a little bit about sequestration, which was announced today. many of you saw the president a few hours ago. i will make a statement and then the deputy secretary and i will entertain questions. thank you for coming. i just spent an hour between -- between an hour and an hour-and- a-half with the joint chiefs to talk about this issue and to talk about the consequences and how we will continue to adjust to the reality that faces our

country and faces this institution. in particular, i would like to address the uncertainty that sequestration is causing and will continue to cause this department. at the outset of my remarks, let me make it clear that this uncertainty puts at risk our ability to effectively fulfil all of our missions. leadership at the pentagon, all of us, have two serious concerns. first, the abrupt and arbitrary cuts imposed by sequester. second, the lack of budget management flexibility that we

now face under the current continuing resolution for the past 8 months, d.o.d. has begun to see the effects and consequences of that -- passed two months, d.o.d. has begun to see -- past 2 months, d.o.d. has begun to see the effects and consequences of those actions. the actions we are taking as a result of these budget restraints. the navy will stand down gradually at least four wings. air force flying hours will be cut back. this will have a major impact on training and readiness. the army will curtail training for all units except those deployed to afghanistan, adversely impact the nearly 80% of army and operational units.

later this month, we intend to issue hesitations to thousands of civilian employees who will be furloughed. these steps come on top of those the department began in january to slow spending in view of this uncertainty. those include the deployment of naval assets, hiring freezes, beginning to lay off temporary employees, sharply cutting back facility maintenance and beginning views to delay contracts. -- refused to delay contracts. if the continuing resolution is extended in its current form, other damaging effects will become apparent. our number one concern is our people, military and civilian. the millions of men and women at

his department to work hard every day to ensure a merkel's security. i know that these budget cuts will cause -- to insure america 's security. i know that these budget cuts will cause pain to military families. we are all concerned about the impact on readiness and these cuts will have a cross our force. for these reasons, the department's senior leadership will continue to work with the administration and congress to help resolve this uncertainty, specifically, we need a balanced deficit-reduction plan that leads to an end to sequestration. and we need congress to pass appropriations bills for d.o.d. and all federal agencies. we will need to make hard choices. i will do everything within my power to see that america of hold its commitment to our allies and our partners. and most importantly, to our service members and their

families. today, america has the best fighting force in the world. , capable of responding to any challenge. this on necessary budget crisis makes that job much harder. -- and necessary -- unnecessry budget crisis makes that job much harder. i will take a couple of questions and then i will ask ash for his response. >> the language you use is not as dramatic as that that has been used in recent months talking about catastrophic results if sequestration happens. do you think this is not a situation where the u.s. will be reduced to a second great military power? may ask a question on syria? what is your opinion on whether

the u.s. should be doing more militarily to help the rebels? >> america, as i concluded my remarks, has the best fighting force, the most capable, most powerful fighting force in the world. the management of this institution, starting with the joint chiefs, are not going to allow this capacity to erode. we will manage these issues. these are adjustments. we anticipated these kinds of realities. we will do what we need to do to ensure the capabilities of our forces. on syria, i think it is clear what our policy is. non-legal assistance. secretary of state john kerry has recently -- non-lethal

assistance. secretary of state john kerry has commented on his trip around the world. >> sequestration has been described as a slope and not a cliff. in your opinion, how long can sequestration go on before there is real damage to the defense of the united states? >> we are adjusting for reality, not just for what happened today. as i noted in my remarks, we have a continuing resolution that expires on march 27, an additional complication. i have confidence in the president and the congress that decisions and consensus will be reached at some point to avert tremendous damage to this

institution. this is the security of the united states of america we are talking about. that is the highest order of any government, in the leader. we will do what is necessary, what it takes to assure that that security to assure that security -- to assure that security. >> others in your department has -- have expressed concerns that the budget sequestration will prevent the department from implementing the defense strategy that the obama administration announced last year. do you share that opinion? and when do you begin to start modifying that strategy? >> adjustments are being made and we have anticipated required adjustments to our budgets to ensure the

capabilities and readiness of our forces. as to the issue of the president's strategic guidance, that is the policy. in my opinion, it is the correct policy. we have been implementing that conceded that is over the last year and we will continue -- that strategic guidance of the last year and we will continue. >> given your role inside nato, what is going to happen to nato? will you be in contact with the allies and the secretary-general to explain the situation? >> we have been in touch with our nato allies. as you know, we are in constant communication with our nato allies. they are not unmindful and not unaware of this issue that we are currently engaged in.

our nato allies have difficulties as well. with their economic issues. the fact is that nato represents probably the most successful collective security relationship in the history of man. that relationship remains strong, will continue to remain strong, must remain strong. >> just to clarify something you said earlier, that adjustments will be made to avert serious damage. to you think there will be a decision on sequestration? >> i hope we will see a consensus. this is a partnership. this is every public and it is the executive and the congressional branch is working together to find a way out.

listening to our leaders, all are saying the same thing, we need to find a way to resolve the issue. that is the only way out. i will leave this gentleman, whom some of you may know, ash carter, who is our deputy secretary and plays a significant leadership role on this particular issue as well as others. i ask him to come and i appreciate very much his leadership and his focus on what has been going on here and his years of service to this institution. it is a benefit to our country and it is a benefit to this institution, especially in a difficult time like this. i would not say anything more.

>> a couple questions. can you flesh out what practical impact the pentagon and its forces will see during sequestration versus three or four must from now. over the next 8 weeks, what will we see? >> let me start with the army. you will see the army beginning to curtail training at the national training center. if we go to the air force, you will see the air force beginning to curb flying hours. that means the nuclear capable air force, that part of the air force participating in operations in afghanistan -- we will protect them. that means the cuts costs by sequestration and the continuing resolution will fall more heavily on other parts of the combat air force.

they will need to cease training, which mean they -- means they will not be ready for other conflicts, which is a serious impact. you have already seen the navy began to make adjustments in terms of how many ships are at sea. you will see each of our program managers -- sequester a facts 2500 individual investment programs. we are working with our individual partners. we will see them beginning to make adjustments, for example, in the number of weapons systems in a given category that are being purchased. a different kind of arrangement. you were weapon systems in a contract than we anticipated were being put in a contract. as the secretary and the president indicated earlier today, this progressively bills

-- builds over coming months and constitutes a serious problem in readiness accounts. >> delaware the services have flexibility in their own accounts -- don't the services have flexibility in their own accounts where the bank will training? >> they have flexibility and they are using that flexibility to protect operations in afghanistan. we are not curbing or withholding training from units that are going to afghanistan. what that means is that the burden falls more heavily upon the rest of the air force. a lot of people ask why does so much happened so fast. you begin to see some of the reason for that. you have become addition of sequester and the continuing

resolution. you have the facts that we are trying to protect the war in afghanistan. . only half of the fiscal year is left. even those accounts after we moved everything around -- what secretary hagel just said, we are doing everything we possibly can to protect national security and minimize damage. even after you have done all of that, even in the onm accounts, you still do not have enough money left to do the training that underlies readiness. that is why the readiness crisis is real and builds as the year goes along. >> you talked about the programs you are concerned about. which people are you most concerned about today now that the sequester is official. is there any immediate impact

on personnel and their families? >> the impacts are in it in all three of the populations we depend on for national defense. the president has exempted the pay for military personnel from sequester. however, our military personnel will still feels things immediately. for example, if you plan to fly or to train in the next few months, that is their duty, that is their profession, that is their responsibility during national security. they will not be able to do that. they will feel that immediately. second, our civilian work force. as you know, our civilian workforce is about 800,000 strong. those people are dedicated to the defense mentioned -- mission. they live all over the country. 86% of them live completely

outside the washington area. 44% of them are veterans. they are dedicated to the mission, too. as the year goes on, many of them will be subject to furlough. third and finally, the contractor work force depends on us. we depend on them. we do not make a thing at the pentagon. we depend on the industrial base to make our weapons systems, second only to our people, which make us the greatest military in the world. many of them will be affected directly by this. we will be cutting back on cuts -- on contractor spending. we have to find $36 billion between now and the ends of the

year. the civilian military work force will only provide a low savings even if we do drastic things, a few billion dollars. all three of those populations upon whom we depend will have effects that will be serious and immediate. >> in your view, how many of these initial cuts will have lasting effects that will trickle on and be felt in the years ahead? readiness, if it is not immediate, how soon until the cuts will impact readiness for years to come? >> good question. we are doing everything we can to minimize lasting damage. you cannot eliminate it. i will give you two examples right away. when you cannot afford to begin overhaul or maintenance of a ship and you do for that

maintenance, what that means -- our shipyards have their planned maintenance plan out through many years. once you have created a gap this year, that gap propagates into the future. another example. i explained that the air force was not going to be able to afford to have any of the pilots in combat air force trained in the latter part of the year. if you stop training for a while and york -- you are a combat pilot, you lose your rating and eventually cannot fly at all. we cannot allow you to fly if you cannot fly safely. if you cannot fly safely, you cannot fly proficiently. you have to go back to the long building that process of getting

your readiness back. this is not something that, even if it is temporary -- and the secretary explained that everybody hopes that, in some way, the sequester and the problem associated with the continuing resolution will be resolved through legislation and a large budget deal of some kind -- even with that to occur some months from now, there would be lasting damage from this. it is serious. >> of all of the cuts you see potentially coming down the pipeline, which gives the pentagon the greatest applause. what are the specific threats to the pentagon that we could be seen immediately right at midnight tonight? >> right at midnight tonight,

and building to the days and weeks and months into the future, we will begin curbing training for units. let me take that example and play that out. what does that mean for national security. as the year goes on, apart from afghanistan, apart from nuclear deterrence through two missions we are strictly protecting, the readiness of the other units to respond to other contingencies will gradually decline. that is not -- reduced readiness is a serious matter. the secretary has emphasized that. >> to you have any concerns that the lack of any clear impact on

national security, short of something of this intangible, will make people think the pentagon can simply of zombies custom of a lot of these are down the road -- a absorb the cuts. a lot of these are down the road. they may not be tangible enough to sound the alarm is. >> we have been trying for 16 months to sound the alarm about sequestration. we are describing to you in all of the detail that we can help each and every part of this enterprise will be affected adversely. the people, the weapons programs, readiness. we are not going to take actions that are unnecessary just to do something obvious. all this is going to be abundantly obvious starting tomorrow and building to be here.

those who do not appreciate how serious this is, as the year goes on, it will be unmistakable. this is not subtle. this is an abrupt, serious curbing of activity in each and everyone of our key categories of activity in the department of defense. it is not subtle. >> thank you very much. there is a country and narrative out there. i am sure you have heard it. i am eager to hear your response. we are winding down in afghanistan. the war in iraq is over. we are not in a nuclear standoff with russia. china is a competitor and not an enemy. even if the sequester is a closing tool, why can and why shouldn't this department be forced to operate on less after 10 years of so much money come your way?

>> first of all, beginning a year ago, the department embarked on $487 billion in defense cuts in exactly accordance with what you just said. $300 billion secretary gates had begun in the efficiency initiatives. as the wars in iraq and afghanistan winds down, overall budget authority will go down. that will make a contribution to deficit reduction. but sequestration is a different matter. it is arbitrary. it is abrupt. on top of sequestration, we have the continuing resolution in force, which creates its own set of problems that i would not go into. in some categories, they are

just of serious. the nub of this is something that is abrupt, and deleterious, and detrimental to defense. we should only get the money that we deserve and that the nation needs. we understand that. that is the principle upon which we built the new strategy last year. the secretary alluded to that. this country is turning a strategic corner. that is the broader point that you are making. we are coming out of an era of iraq and afghanistan. we are trying to address the national security problems that are going to define this country's future and it's our future. we are prepared to do that. -- this country's future.

this is a different matter. this is something that is not managerial from a national security point of view. >> you mentioned before how the civilian work force has a mission with the department also. they feel they have a mission. what do you say to a gs-5 or somebody contemplating a civilian career with the military? to you still think it is a good idea given the uncertainty this causes? -- we are realistic. our civilians make important contributions to defense, otherwise they would not be part of the department of defense establishment. they do real things that are really important to us. they have had their pay frozen. now they are subject to

furlough. as i talked -- you say, why would anybody join our ranks other -- under those why would anybody join our ranks, they join with us, and i hope they stick with us because of mission, because they are committed to what we do, which is contrary to defend the country and help make a better world. that is why. >> mr. secretary? >> thank you all. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> and deputy defense secretary carter talking about the potential impact of the $85 billion in automatic spending cuts set to take effect today. earlier today, at the white house, president obama met with the congressional leaders harry reid, mitch mcconnell of the senate, speaker john boehner, and nancy pelosi.

he said after that that he hopes the economic pain being caused by the economic spending cuts in the coming weeks will force congressional republicans to accept the deficit-reduction plan, which includes new revenue. they met this morning in the white house with congressional leaders. we will show that to you next and follow it up with your reaction and phone calls. >> good morning. >> all right, guys. all right. the morning, everybody. as you know, i just met with the leaders of both parties to look at it with ford in light of the severe budget cuts that start to take effect today. i told them these cuts will hurt our economy, will cost us jobs, and to set it right, both sides need to be willing to economize. now, the good news is the american people are strong, and they are resilient. they fought hard to recover from

the worst economic crisis since the great depression, and we will get through this, as well. even though these cuts are in place, all across the country, folks will work hard to make sure that we keep the recovery going. but washington sure is not making it easy. at a time when our businesses are finally beginning to get some traction, hiring new workers, bringing jobs back to america, which should not be making a series of dumb, arbitrary cuts to things that businesses depend on and that workers depend on, like education and research and infrastructure and defense. it is unnecessary, and it is not one where too many americans are still looking for work -- it is inexcusable. what is important to understand is that not everyone will feel the pain from these cuts right away. the pain, though, will be real. beginning this week, many middle-class families will have their lives disrupted in

significant ways. businesses that work with military, like the virginia shipbuilder that i visited on tuesday, may have to lay folks off. military bases will take a serious blow. hundreds of thousands of americans who served their country, border patrol agents, fbi agents, civilians who work at the pentagon, all will suffer significant pay cut and furloughs. all of this will cause a ripple effect throughout our economy. pay cuts means people have less money in their pockets, and that means they have less money to spend at local businesses, and that means lower profits and fewer hires. among these cuts are in place, the greater the damage to our economy. it will intensify every day. so economists are estimating that as a consequence of the sequester, growth cut by over one half of 1%, it will cost

about 750,000 jobs at a time when we should be growing jobs more quickly. so every time that we get a piece of economic news over the next month, the next two months, the next six months, as long as the sequester is in place, we will know that that economic news could have been better had congress acted. we must be clear. none of this is necessary. it is happening because of a choice republicans in congress have made. they have allowed these cuts to happen because they refuse to budge on closing the single wasteful loophole to help reduce the deficit. as recently as yesterday, they decided to protect special- interest tax breaks for those well-connected, and they think that that is apparently more important than protecting our military or middle-class families from the pain of these

cuts. i do believe that we can and must replace these cuts with a more balanced approach that asks for something from everybody. smart spending cuts, in tug hulett reform, tax reform that makes the tax code more fair for families and businesses, without raising tax rates. also we can significantly reduce the debt is without laying off workers or cutting financial aid for college students. i do not think that is too much to ask, and i do not think that is partisan. it is what i ran on last year. a majority of the united american people agree with me. by the way, a majority of republicans. we just need republicans in congress to catch up with the people in their party in congress on this, and if we did so, we would make a lot of progress. i do know that there are republicans in congress who,

outwardly, at least, say they would do this rather than let the tax cuts go through. there are democrats who would rather have smart tax reform rather than let these cuts go through. there is a sense on capitol hill, except it is a sign that group, and we want to make sure that their voices start getting heard, and in the coming days and weeks, we will keep on reaching out to them both individually and as crews of senators and in the house and say, "let's fix this." this is for years to come. the greatest nation on earth does not conduct its business in month to month increments or by going from crisis to crisis. america has got a lot more work to do. in the meantime, we cannot let political gridlock stand in the way of other areas where we can make progress.

i was pleased to see that the house passed the violence against women act yesterday. that is a big win for not just women but for families and for the american people, and it is a law that is point to save lives. it is something that we have been pushing on for a long time. i was glad to see that done, and it is an example of how we can still get some important, bipartisan legislation through, even though there are these fiscal situation sticking place, and i think there are other areas we can make progress, even with the sequester. i will continue to push for these initiatives. i will continue to push for things that every family once, pushing to make sure we raise the minimum wage so we can make sure there are one that families can live on, and for improvements in our transportation sector, and i will keep pushing for sensible gun reforms because i still

think they deserve a vote. this is the agenda that the american people voted for. these are america's priorities. they are too important, and i will keep pushing to make sure that we see them through, so with that, i am going to take some questions, and i will start with you. >> , much responsibility do you feel you bear for the cuts taking effect? and is there any way to offset this, or do you see any alternatives? >> look. we have already cut $2.50 trillion. everybody says we need to cut $4 trillion. which means we have to come up with another $1.50 trillion. the vast majority of economists agree that the problem when it comes to deficits is not discretionary spending, it is not that we are spending too much money on education, it is not that we are spending too much money on job training or

the we are spending too much money rebuilding roads and bridges. we are not. the problem we have is a long- term problem in terms of our health care costs, and programs like medicare, and what i said, very specifically, in great detail, is that i am prepared to take on the problem where it exists, on entitlements, and do some things that my own party really does not like, if it is part of a broader package of sensible deficit-reduction, and so, the deal that i have put forward over the last two years and the deal that i put forward as recently as december is still on the table. i am prepared to do hard things and pushed my democratic friends to do hard things, but what i cannot do is ask middle-class families, ask seniors , ask

students to bear the entire deficit-reduction when we know we have things benefiting the well-off and the well-connected, who are not contributing to our economy. it is not fair. it is not right. and the american people do not think it is fair or right, so, you know, i recognize that speaker boehner has got challenges. i recognize that it is very hard for the party leaders to be perceived as making concessions to me. you know, sometimes i reflect, is there something else i can do to make these guys -- i am not talking about the leaders now but maybe some of the house republican caucus members, not to paint horns on my head, and i

genuinely believe there is an opportunity for us to cooperate, but what does not make sense, and another thing we have seen from a public and so far in terms of proposals, to replace this set of arbitrary cuts with even worse arbitrary cuts. that is not going to help the economy. that is not going to help growth, and it is not going to create jobs. as far as a number of economists have noted, it does not even reduce our deficit in the smartest way possible or in the fastest way possible, so in terms of going forward, my hope is after some reflection, as members of congress start hearing from constituents who are being negatively impacted, as we start seeing the impact

that the sequester is having, that they step back and say, "all right, is there a way for us to move forward on a package, on entitlement reforms, tax reform, not raising tax rates, identifying programs that do not work, coming up with a plan that is comprehensive and that makes sense?" and it may take a couple of weeks, and it may take a couple of months. but i am going to keep on pushing on it, in my view is that, ultimately, common sense prevails, but what is true right now is that republicans have made a choice that maintaining an iron-clad rule that we do not accept more does not make it

easier for us to get a large, comprehensive deal, and that is a choice to make. it is more important to preserve these tax loopholes than it is to prevent these arbitrary cuts. and what is interesting is speaker boehner just a couple of months ago identified that. these tax loopholes and tax breaks. and said, "we should close them and raise revenue." it is not that it is not possible. they, themselves have suggested that it is possible. and if they believe that, in fact, these tax revenues and these tax breaks for the well off and well-connected are contributing to growth, -- are not good for our economy, are not particularly fair, and cannot do more, why do we do that? it may be because of the

politics in the republican party that they cannot do it right now. i understand that. my hope is they can do it later, and i just want to repeat, julie, i think is very important to understand. it is not as if democrats are not being asked to do anything either to compromise. there are members of my party that violently disagree on the notion that we should do anything on medicare. and i am willing to say to them, "i disagree with you," because i want to preserve medicare for the long run, and we are going to have some tough politics in my party to get this done. this is not a situation where i am only asking from -- for concessions from republicans and asking nothing from democrats. i am saying everyone will have to do something, and the one key to this whole thing is trying to make sure to keep in mind who we are here for.

we are not here for ourselves. we are not here for our parties. we are not here to advance are a lot coral process. -- our electoral process. some are just learning to see the economy improved. businesses are just learning to see some confidence coming back. -- starting to see some confidence coming back. this is not a win for anybody. this is a loss for the american people. again, if we step back and just remind ourselves what it is we are supposed to be doing, hopefully common sense will allow them. >> any thing you are willing to bear responsibility for? >> judicata give me a sense of what i should do. what i am suggesting is i put forward a plan that calls for

serious spending cuts, serious in time and reforms, goes right at the problem, the long-term deficit problem, and i have offered to negotiations around that so-called balanced approach, and this is because of what seat -- what speaker boehner and republicans and said, that we cannot do any revenue. we cannot do one dime's worth of revenue, so what can i do different? i just want to clarify. if you have a suggestion, i am happy. this is a roomful of smartphones. all right. -- a roomful of smart folks. >> at the end of the month, that expires at the end of the month, would you sign the cr that continues the sequester, and

have you really truly reached the limits of your persuasive power with republicans that this is not the way to go? >> i would like to think i have still got some persuasive power left. let me check. [laughter] the issue is not my persuasive power. the american people agree with my approach. they agree that we should have a balanced approach to deficit reduction. the question is can the american people helped persuade their members of congress to do the right thing, and i have a lot of confidence that over time, the american people will this -- express their displeasure about how things are not working, there will be a response, eventually, congress catching up.

keeping the government open, trying to make sure our viewing audience does not think we are talking in washington terms. what is called a continuing resolution, which is essentially the extension of last year's budget into this year's budget to make sure that basic government functions continue. i think it is the right thing to do to make sure we do not have a government shut down, -- shutdown, and we agreed to a certain amount of money that would be spent each year and certain funding levels for military, our education system, and so forth. if we stick to that deal, then i will be supportive of us sticking to that deal. it is a deal that i made. the sequester are additional cuts on top of that, and until

we take the sequester a way, we have to abide by those additional cuts, but there is no way why we should have another crisis by shutting the government down in addition to these arbitrary spending cuts. >> finding the budget even at the lower levels of sequester, even if you do not agree -- funding the budget? >> i think it is fair to say that i made a deal for a certain budget, certain numbers. there is no reason why that deal needs to be reopened. it was a deal that speaker boehner it made as well and all of the leadership. the bill that is on my desk is reflective of the commitments that we previously made, and, obviously, i would sign it because i want to make sure we will keep on doing what we need

to do for the american people. jessica? >> mr. president, to your question of what you could do, could you just refuse to let them leave the room until you have a deal? >> i mean, jessica, i am not a dictator. i am the president. altman z, mitch mcconnell or john boehner would say, "we need to vote or catch a plane" -- ultimately. i understand. i know that this has been some of the conventional wisdom that has been floating around washington, and somehow, even though most people agree that i am being reasonable, even though that most people would agree that i am presenting a fair deal, the fact that they do not take it means that we should somehow do a jedi mind meld and

convince them to do what is right. well, they are elected. we have the constitutional system of government. the speaker of the house and the leader of the senate and all of those folks have responsibilities. what i can do is i can make the best possible case. i can speak to the american people about the consequences of the decision that congress is making or the lack of decision making by congress. ultimately, it is a choice they make. this idea that somehow there is a secret formula or secret sauce to get speaker bather or mitch mcconnell to say, "you know what, mr. president? you are right. we should close some tax loopholes for the well-off and

well-connected in exchange for some serious entitlement reform ." i think if there was a secret way to do that, i would have tried it. i would have done it. what i can do is make the best possible argument, and i can offer concessions, and i can offer compromise. i can negotiate. i can make sure that my party is willing to compromise and is not getting ideological or talking about these just in terms of political terms, and i think i have done that, and i will continue to do that. what i cannot do is force congress to do the right thing. the american people may have the capacity to do that, and this

will allow the speaker of the house and others to put middle- class families, whatever political imperatives that he has right now, we are going to have these cuts in place, but, again, i am hopeful about human nature. i overtime, they will do the right thing, and i will keep on reaching out and see if there are other ways to do this so we have a better result. >> what about people like mayor bloomberg, who is no critic of yours, e and doris duke, what he talks about posturing -- he endorsed you, what he talks about posturing. >> jessica, look. let me give you an example. the department of defense right now has to figure out how the children of military families are going to continue with

their schooling over the next several months because teachers at these bases are typically civilians. they aren't there and subject to furlough, which means that they may not be able to teach one day a week. now, i expect that we will be able to manage around it, but if i am a man or woman in uniform in afghanistan right now, the notion that my spouse back home is having to worry about whether or not our kids are getting the best education possible, the notion that my school or that my children at an army base might be disrupted because congress does not act, that is an impact. mayor bloomberg and others may not feel that impact. i suspect that they will not, but that family will. the border patrol agents, they

are in the hot sun. they are doing what congress said they are supposed to be doing. finding a suddenly they are getting a 10% pay cut, and having to go home and explain that to their families, i do not feel like they feel this is exaggerated. so i guess it depends on where you sit. now, what is absolutely true is that not everybody is going to feel the effect or feel it all at once. what is true is that an accumulation of those stories all across, folks who suddenly, working all of their lives to get an education just so they can get that job and get off of welfare, they have got their kid in head start, and now they're head starts lott is gone, and there are trying to figure out, how am i going to keep my job, because i cannot afford child care anymore.

some of the shipbuilder is down in virginia, you have got some small businesses, and this is all they do, and they may shut them down, and those employees will be laid off. the accumulation of all of those stories of impact is going to make our economy weaker. it is going to mean less growth. it is going to mean hundreds of thousands of job losses. that is it. we are not making that up. that is not a scare tactic, that is a fact. starting tomorrow, everybody here, all of the folks who are cleaning the floors at the capitol -- now that congress has left, somebody is going to be vacuuming and cleaning those floors and throwing out the garbage. they are going to have less pay. the janitors, the security guards. they just got a pay cut. and they have to figure out how to manage that. that is real. so i want to be very clear here.

it is absolutely true that this is not going to precipitate the kind of crisis we talked about about america defaulting and some of the problems around the debt ceiling. i do not anticipate a huge financial crisis, but people are going to be heard. the economy will not grow as quickly as it would have. and in climate will not go down as quickly as it would have. and there are whys behind that. that is the problem. >> mr. president? >> mr. president yakko -- mr. president? >> hey. >> mr. president, months ago, it looked like you would be averse. i want to know if you can talk to buy your deliberations in your thinking on that, the

conversations that were important to you. >> as everybody here knows, last year, upon a long period of reflection, i concluded that we could not discriminate against same-sex couples when it comes to marriage. that the basic principle that america is founded on, the idea that we are all created equal, applies to everybody. regardless of sexual orientation, as well as race or gender. or religion. or ethnicity. and, you know, i think the same

evolution that i went through is the evolution that the country as a whole has gone through, and that is a family-positive, so that when the supreme court was taking this case about california topos law -- california's law, i thought it was important for us to articulate what i believe and what this administration stands for, and although i do think that we are seeing on a state- by-state basis progress being made, more states recognizing same-sex couples and giving them the opportunity to marry and maintain all of the benefits of marriage that heterosexual couples do, when the supreme court asks, you would think that

the california law, which does not provide any rationale for discriminating against same-sex couples other than just the notion that, well, they are same-sex couples -- the supreme court asked me or my attorney general or solicitor general, do we think that meets constitutional muster, i felt it was important for us to answer that question honestly, and the answer was no. >> given the fact that you do hold that position about a gay marriage, i wonder if you have given a thought about once he made a decision to weigh in, that the marriages are right, that they should be available to all people? >> well, that is an argument i made personally. the solicitor general, in his institutional role of going before the supreme court is obliged to answer the specific question, and the specific question presented before the court right now is about prop 8

and the california law, whether it is unconstitutional. we put it forward what applies to all equal-protection cases. whenever a group is being discriminated against, we ask the question, what is the rationale, and if you do not have a good reason, we strike it down. same-sex couples are a group, a class that deserves heightened scrutiny, in the supreme court needs to ask why the state is doing it, and if they do not have a good reason, it should be struck down. that is the core principle. the court may decide that if it does not apply in this case, it may not apply in any case. if i were on the court, that will probably be the view that i

prefer, but i am not a judge at present. ,et's treat everybody fairly and i think the brief that has been submitted accurately reflects our views. >> you said a few minutes ago, and you have said repeatedly that the country has to stop living from crisis to crisis, and with a few crises behind us and a few crises ahead of us, how as the leader of this country do you plan to stop the country from careening from crisis to crisis? >> a couple of things. one is to make sure that we keep making progress wherever we can on things that are important to middle-class americans. if you set aside the budget crisis, we have been able now

to get the violence against women act, and there are the things about immigration reform moving forward, we have seen great interest in a bipartisan fashion about how we can continue to improve our system, including around early childhood education. there have been constructive discussions about how to reduce gun violence, and i am going to keep on trying to make sure that we push on those things that are important to families, and we will not get everything done all at once, but we can get a lot done, so that is point number one. what i have done is to make a case to the american people that we have to make sure that we have a balanced deficit- reduction but that the deficit

reduction alone is not an economic policy. part of the challenge that we have had here is not only congress but washington, generally, spends all of its time talking about deficits and does not spend a lot of time talking about how to create jobs, so i want to make sure we are talking about both. i think, for example, we could put a lot of people back to worked, rebuilding our roads and bridges. we know we are going to have to do it. howch mcconnell's state -- do we do it? how do we create jobs that will be good for businesses and

improve commuter safety? that has to be part of the conversation, not just about cutting and spending. what i want to do is make sure we are constantly focused, that are true north is looking at how to make american families succeed. deficit-reduction is part of that agenda, but it is not the only part, and i do not want us to be paralyzed because we disagree on this one thing. as i already said to jessica, over time, perhaps after republicans to back -- step back, and maybe they say, we were tough on sequester, and this makes us feel good, maybe

then we can have a more serious discussion about what the more serious problems or. the good thing about america is that sometimes we get to these bottlenecks and gets stuck. we have these sharp partisan fights. but people have common sense and are practical, and eventually, that common sense and practicality wins out. in the meantime, just to make a final point about this question, we will get through this. this is not going to be an apocalypse, i think as some have said. it is just dumb. and it will hurt people in this country and the economy overall. but if congress comes to its senses, we can now one month

from now, three months from now, then there is a lot of open running room for us to advance the agenda of the american people dramatically. and this is a temporary stop with an outstanding prospect for american growth. all right? thank you very much. >> mr. president, if the supreme court goes against it? >> has he signed the order? >> jay, has he signed the order? >> some time before midnight tonight, president obama will sign the executive order to

begin the $85 billion in spending cuts, the sequester, which was mandated. on this sequestered day, we are opening the phone lines again. using the hashtag sequester is how to do it. democrats, 202-585-385. republicans, 202-585-3886, and independents and others, -- but first, let us go to the phone calls. this is joan on the republican line. hi, you are on the air. >> i am a republican, but i am quite upset with the republican

party. this is unconscionable. i am just going to change my party. for the rich and not for the american people. >> the democrats' line, this is linda. >> i'd bug that was a wonderful remark. president obama has until 11:59 to sign the sequester, and if congress has left town, what if the president leaves town and does not sign it? >> that is a good question. we will go to our federal employees line. mike is in glen burnie, maryland. >> i am actually in government

training. >> for what particular department? go ahead, and make sure that you knew your television. go ahead. >> for me, the biggest concern i have is that there seems to be a lot of sense in a lot of these programs, radio station and listen to, talking heads, and there are people that were so anxious. even though it will have catastrophic effects. they are not concerned about the outcome, it would appear. >> tell us about this. >> we have heard through the situation -- we do not know if

you are handed a pink slip, "do not come back." that is very concerning. >> earlier today, we had the defense secretary carter. he is talking about the impact of the defense cuts on dod. you can see it here and in our video library at c-span.org. some said they would delay furloughs until after the filing season, which will go into summer. let us go to jacksonville, florida. tina. hi, there. >> yes. i just got the news recently about the sequester, and i could

get a 20% pay cut. we are taking a significant brunt of the $85 billion. defense spending has been reduced dramatically. i really think that both the president and congress -- i think more thought has to be made to try to come up with a resolution. people need to make decisions. >> tina, when did you get the news, and when does it take effect for you? >> it could be a furlough of up to 16 hours of furlough. it is basically a 20% pay cut. >> so that is sometime in april? >> correct. >> thanks for your calling in this afternoon. more of your calls coming up. after the meeting this morning,

john boehner made a statement to reporters. here is a look. >> the american people know that washington has a spending problem, and while there are better ways than the process we are about to engage in, the house should not have to pass a third bill before the senate does anything. the plan laid out to avoid the sequester. i would hope that the senate would act, but let's make it clear that the president got his tax breaks on january 1. the discussion about revenue, in my view, is over. it is about taking on the spending problem in washington. the house is going to move a

continuing resolution last week to fund the government passed march 27, and i am hopeful that we will not have to deal with a threat of a government shutdown while we are dealing with the sequester at the same time. the house will act next week, and i hope the senate will follow suit. thanks. >> how was the mood in the room? >> getting your reaction to the sequestration, the automatic spending cuts, we are following the house tend region sequester -- the hashtag "sequester." there was this comment. one more. dennis is a democrat.

he is in trenton, missouri. go ahead. >> yes, i am just curious as to whether or not members of congress are going to be taking a cut in pay while they are at doing nothing, or is it just want to be the american public who has to take the cuts. >> peter is on our other lines from new bedford, massachusetts. >> he ought to select one of the biggest tax loopholes that simpson bowles and others of identified, make them known, stadium of money that could be saved, asked why he wants to approve it, name the names of the tea party people who are obstructing him, and let's give names on the table. this is for real so people can really see and understand what the issue is and why they cannot come across. he is holding back, i do not

know what he is holding back for. he needs to really start calling other republicans for what they are doing. obstruction, obstruction, obstruction. >> john boehner talked briefly in his statement about what the house will do next week about the funding, the remaining 2013 fiscal spending. here is about 2014, the budget that is coming. the president's budget is coming in march, says the headline. president obama's delayed budget is not expected to be delivered on march 25. they are expecting the blueprint on that day. by law, the budget was due february 4, and releasing it on march 25 would make it seven weeks late. john is on our public the mine. he is in atlanta, georgia. john, hi, there. >> i am sitting here watching your program and wondering why our elected officials continued

to be paid when generating things like this. why are salaries not frozen? who is being held accountable for what they are doing and what they are not doing? i was part of a class that went to congress and met with some education folks, and they watch these bills to the floor. they put anything they want on them, and half of them, all i am sure, do not even read what they are doing, and then they spend the rest of the time trying to fix what they voted on. the system is broken. we need help. something needs to change. >> that is john from atlanta, georgia. mitch mcconnell did not make a statement for the cameras, but he did release a statement from his office that says, it says in part, want to make clear that any solutions will be done

through the regular order with input from both sides of the aisle with public debate. i will not be party to any backroom deal, and i absolutely will not support an increase in taxes. this was after the meeting with the present. lois is on our democrats . lois, hello. >> yes. i am calling to remind people that the first four years of obama being president, we did not get a raise in our social security for two years. only 1.7%. that is money that we put in for our retirement. we put money into it. companies put money into it. that money is our money for retirement, as my dad told me when i was complaining about them taking that money out of my paycheck, and i am getting tired of people saying we are not entitled to it.

i am entitled to it just as much as anybody else. i have worked hard all of my life. i hate people saying about the entitlement. i am entitled to that money. i put the money in there. and i am entitled to get it. i do not have to take any cuts so the rich can get it. i am tired of it. >> elizabeth is on the republicans line. hi. >> how are you doing today? >> thine. >> thank you for taking my call. the last speaker. however, it is not really a cut. it is just a reduction. instead of what we were normally anticipating. reduction, how much the government -- >> i think we are breaking up a little bit. i have got your message. we have a little interference on your phone call. one more call to our fellow employees phone line.

john, what do you do for the federal government? >> i work for the u.s. courts. >> ok, go ahead with your comments. >> it is not just the military that keeps things safe. while i am sitting on my couch being furloughed, a lot of people will be walking around, not being watched. that is something to keep in mind, that community safety is paramount, and i do not think that takes into factor -- that people realize that. these furloughs. >> well, we were seeing stories today that the justice department issued some of those furloughs today. is that when you got your notice? >> i have not got one yet, but they say it is coming down the road. i am just waiting. while i am sitting on the couch,

there will be a convicted felon walking around. >> thanks for all of the calls. the conversation is continuing on line. tag "e falling back hash sequester." one more. that says -- newmont that is the treat. again, the hashtag is " sequester." up next, the comments of nancy pelosi. >> i was here before. >> good afternoon. just barely. as you know, this morning, the

president held a meeting at the white house with the vice president and the leaders of the house and senate in a bipartisan way. it was an important meeting. it pointed out the clarity between the democrats and republicans in congress. we believe we should build our economy from the middle class out. the republicans believe in trickle-down. that is the essence of our differences. we gather today because today begins the cuts, the mindless cuts, the result of sequestration across-the-board cuts that do not reflect priorities. it just reflects a way to make cuts, which even the chairman of the fed has said that cuts of this size, made this quickly can

lose jobs, slow the growth of our economy, and this is exactly the word on the deficit. keeping deficit larger than otherwise growth is essential to that. such a large amount in such a short period of time. they do not reduce the deficit. and so, the president challenged us all to look at all of the expenditures that government makes and whether it is about entitlements, whether it is about taxes, whether it is about discretionary spending, and to see if we could come to some agreement on how to go forward. to govern is to choose. to govern is to choose, and when we want to subject our expenditures to the scrutiny that we should do so that we know that the taxpayer is

getting his or her money's worth out of this and that the initiative is doing the job it sets out to do, we have to make judgments. is it a particular initiative that is still a priority for us? is it duplicative proof is an obsolete? is there any wasteful spending? certainly, we need to subject things to that scrutiny, but we have to be careful about how we do it, and an across-the-board cut is not the way to do it. for example, education, probably the best investment we can make in our future and our families. education brings a better future. nothing brings more money to the treasury than the education of the american people. the education that the president is advocating, k through 12, it brings more money to the treasury than others. it does not reduce the deficit when you cut to education.

it begins in the classroom. cuts in education deter the growth of innovation, and cuts in science do the same thing, so are we going to say across the board, we are cutting science? america will continue to be number one, and we must continue to be number one. we do not do that by making cuts in science. the president mentioned infrastructure. cuts to infrastructure. ridiculous. we have so much deferred maintenance now, and we do know is that no maintenance is the most expensive minutes. and in events -- this build the infrastructure of our country, which is essential to our economic growth. products, to and from market, people, to and from work. high speed. why would we cut those kinds of things?

so across-the-board cuts that do that are mindless. the president mentioned tax reform. very important. we all agree on a number of things, that we must reduce the deficit, that we must have tax reform, and that we must look at, again, i talked about expenditures that are investments, we have to prioritize to choose. some may be good, but they might -- might not be best, and they may not make the cut even though there are worthy, but we have to prioritize. across-the-board cuts do not do that. the next thing is to look at entitlements. we need to look at how we can prolong and sustain in a fiscally responsible way medicare and social security, pillars of economic security for many american families and certainly for our economy, so let's go to the table and make judgments about how to sustain it. if it is how to prolong and

sustained for a long period of time in a fiscally strong way, medicare and social security, i think that is what the american people want us to do. a free society. we want to privatize it. medicare. we want to add a voucher, we are not in for that. but, again, objectively, agnostic lee, -- agnostically we need to do that. another area as tax expenditures. tax expenditures. they are probably $1 trillion in tax expenditures that occur each year. we have a $3.50 trillion budget, and over $1.50 trillion of is in tax expenditures.

some of them support the middle class. for example, the mortgage interest deduction, but some are wasteful and are just gifts to special interests, and some of them are excessive for the middle-class, and that is when we have to go to the table and say these tax expenditures are spending. the costthey cost the taxpayer. what are we getting for them? the speaker has said there are hundreds of billions of dollars of tax expenditures to look at. mr. mcconnell has said that. when they look at them, they say the only way is to lower rates. call that reducing the deficit by removing wasteful tax loopholes that are there for the special interest. some of them are just excessive for the wealthiest individuals in our country. we cannot ask seniors and children and family to make all

of the sacrifice and say that this is going to be in effect. -- sacrosanct. we have a proposal that would have been better. one that cuts spending, which has a revenue piece, and which is not deter growth and does reduce the deficit. we have not been able to bring it up. we tried three times. republicans -- i do not know what they are afraid of. this is a marketplace of ideas. are they afraid that some of their members might vote for its? to go forward, it has to be with a commitment to the american people, to the middle class, as the president said. and not for us to be not opening our eyes to the fact that if this is going to happen, it has to be shared sacrifice, that we have to look at domestic discretionary spending, entitlement spending and tax expenditures. that is where the big money is. that is what has remained untouched in all of the

discussion. that is a place we can find some area of agreement. any questions? >> the president suggested you to do more than pr, that the house -- [inaudible] >> i have not seen it. have you seen their cr? i cannot tell you that i've not seen it. but i will say this, we came to an agreement on the budget control act, which said that there would be a certain level that our approach creation -- when i see that, i can tell you what it is. the republicans can produce the votes to pass it at that level.

but we do not want to have a shutdown of government. i think some people thought sequester meant shutdown. it means more like hold hostage all the things you care about so we can have across the board cuts. i just got this morning -- let me describe it to you this way. this memorandum notifies you that the department of justice opposes to furlough you know earlier than 30 days from receipt of this notice. we recognize the difficult personal applications of any furlough, the matter how limited. that is what this furlough is about. so furloughs are arty going in. they will have an impact on people's lives. that is really important. many of you were there yesterday and saw the effect sequestration have on women taking a big hit from this, in addition to other cuts that have already happened. but it also has a tremendous

impact on our economy. losing jobs, deterring growth, and not reducing the deficit. >> -- be part of a bigger deal to replace sequestration, helpful should people who are facing furloughs be that a deal can be reached to stop these furloughs? >> my own hope springs from the american people. i think the more they know about what the choices are that have to be made here, to our republican colleagues, that we cannot have a situation where no absolute statement, no revenue, it is all going to be cut. we have $1.6 trillion already in cuts. one point to any budget control

act. -- 1.2 in the budget control act. my hope springs from the fact that we should be able to focus on a tax expenditures. big money there. big money there. we cannot have a situation where one party is saying we are going to protect these wasteful tax giveaways to special interests, but we are going to stop help for seniors. i do not think the american people will tolerate that. yes, yes i think so. as i say, categories are domestic discretionary spending, they're going to cut a lot of money from that. over $1 trillion. they have already done that. we are ready to find more if we can. that is not in need growth --

impede growth. but to see if there is any wasteful spending, which is not a priority in light of the reality that we have in our budget. there may be some spending cuts that you find there. we are always ready to strengthen medicare, medicaid and social security, as i mentioned. let's go to the table to do that if our goal is to strengthen them. not have our goal is to destroy them. again, the more the american people are aware of what the choice is, the more hopeful we can be. but in terms of actual dollars, the tax expenditures, listen to that, tax expedition. they are spending. there is a recognition by the terms that they are spending. they are spending money. the taxpayer dollars -- they are spending money to give tax

subsidies to big oil in order to drill. $30 billion for them to drill. at a time when they will make $1 trillion in profit. what incentive do they need to drill more than $1 trillion in profit? the list goes on. i do think there is a recognition to be had there. that is a place where we can try to bring into focus and into balance what we are trying to do. >> the president said today to prepare for tough politics. our house democrats prepared to work with him for deeper cuts and raising eligibility age? >> our caucus sent a representative to the table, whether it was biden, whatever

it happened to be, when they went to the table, they went with the confidence of our caucus that they shared values and that we trusted their judgment and their knowledge about what could be accomplished. everybody knows that we don't have one government role. there would have to be optimized. -- compromises. my guidance to them was to be agnostic. put it on the table, and do the job,. does it reduce the deficit? that is how they went to the table -- open. a wall of close with no revenue, that is the point. you cannot do it without revenue. i think you can persuade our caucus for a balance, big, bold approach that has revenue, that has reform, a tax code as well as making judgments about entitlements if we go forward.

but you cannot do it in isolation. you cannot say to seniors and others, you pay the whole price and these others are getting off scott free. there has to be balance in it. the house democratic caucus will not the and opt to go -- an obstacle to reaching a balance agreement. again, we supported the president in the initiative in the summer of 2011. our caucus stood with him. we did not like some of the particulars of it, but in light -- you weigh the equity against what do you get for it. you get growth in our economy. if you can do a one-sided, where it drags one side down, exalts the wealthy and the special interests, and say, see how open we are. i am optimistic that something

can be done, but the judgment is are the democrats ready to go to the table to recognize we need more spending cuts, we need to prolong and sustain in a fiscally sound way medicare and social security, we want to see some movement on the other side in terms of their sacred cows, which are tax breaks for special interests, tax giveaways for special interests. excessive reductions for the wealthy people in our country. that is why we say you can take direction, but you cannot take them to a point where they have a wealthy person paying a lower rate than the people who work in an office. >> have you been informed about the mechanics of the sequester? how will it work, how will it play out, how will people be notified? >> this is one manifestation of it. i get the saddest part of it --

when i signed on to the budget control act, which i did not like, but it with something we had to do. we do not have it with us. but i made sure there were certain things existed from sequester. -- thinkgs that were exempted from sequester. medicaid -- it is in my purse, actually. because i brought it. you don't have to do that anymore. somebody else can get my purse. what was the question? the mechanics. we tried to protect as much as we possibly could because the cuts are brutal. defense, they are mindless. nobody ever thought, nobody ever thought that they would happen. they are so brutal that we thought everybody would cooperate in order to make this happen.

but it trickles down. protect special interest, the high and individuals -- high- end and visuals to avoid these mindless cuts. we made some protections in the bill just in case. but the saddest thing that i heard, because it means so much to all of us, was that some psychiatric nurses who are meeting the needs of our returning vets with ptsd may have to be for load. -- for load -- furloughed. that is not what the american people thinks is the right priority for us. some of the things that we try to protect and medicaid from the image among social security, -- some of the things that we try to mitigate from the sequester, social security, --

when the president talked about teaching our children, all refundable income tax credits, this will be for low-income, child tax credits, which are important to america's working families. medicare, chip, children's health insurance program, black lung, ssi, child nutrition programs, l grants -- pell grants, and some other initiatives. but those are a few of the ones that we tried to protect. but even with that, the impact on america's working families is something that could have been avoided.

it impedes economic growth, it is not reduce the deficit as it would otherwise be reduced. it should have been avoided. the fact it has not been is unfortunate, but i think it highlights the fact that we must work together to get this done. in terms of the particulars and the mechanics of all of this, people will be getting their furlough notices. you will see that unfold. it will be different for different agencies. one of the things that we have to do in terms of defense is that we have to work together to enable our defense, national security sector, to be able to reprogram so the harm that can be done to our national security can be medicated. -- mitigated. that is more related to what is its cost, having prioritize that. this is not the way to cut the

defense budget, to have across the board cuts that harms our national security. thank you very much. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> at 8:00, remarks from obama, boehner, and nancy pelosi on this automatic spending cuts going into effect today. on c-span3, highlight from february's session in the australian parliament. bernard this week, the supreme court heard an oral argument on

a provision in the landmark voting rights act of 1965. the court will decide if part of the act has outlived its purpose and imposes an undue burden on states. you can hear that argument tonight at 9:00 p.m. eastern on c-span, also online @ c-span.org .dot boar the house returns monday for legislative work. one bill to be considered next week is a continuing resolution funds the government for the remaining six months of fiscal year to doesn't 13. current funding rule runs out march 27. earlier today, arne duncan and castling sibelius warned of the impacts of the spending cuts on early chocolate education, child

care services, and public services. >> this school represents so much of what we want the country to be like, and i get to visit great schools, struggling schools, but this school is a high poverty rate, 35 different anchorages spoken, but children are doing well. we ask them, do they like coming to school, and they say yes. challenges of poverty, assimilating children, and they come to an environment where they can be successful. board members, superintendents, teachers, staff, it is fun to be here. the key for the hard work. this is a topic that we love to talk about, and government at all levels, federal, state, and local, investing in the education of our nation's

teachers, our children. this is one of the best investments we can make collectively. we are thrilled at about the president's landmark plan to create new partnerships with states to provide universal access to high-quality preschool for all four-year-olds. it will provide the biggest expansion of educational opportunities in america in the 21st century. parents who hooker for affordable learning programs, worked tirelessly to provide opportunities, and business leaders all want children to have access to high-quality preschool. the biggest beneficiary will be our children. particularly, disadvantaged children, english language learners, and children with disabilities. expansion is a win-win proposition. it will make america more productive, and of the long haul

will save millions in taxpayer dollars. it is past time to get our public schools and out of what we call the educational catch-up business. america cannot win the race for the future by cheating children at the starting line. i hope everyone here today appreciates this is an extraordinary moment. it is not too often you find government departments with overlapping responsibilities, working together. i am grateful to my partner kathleen sibylla this for her vision. she always puts children first. we worked on issues like the h1n1 virus. the president's plan will allow states to provide high-quality preschool, up to two under% of the poverty line, and will

provide incentives for all families who want to send their children to preschool. it would be an investment space that jump starts accessed the preschool and take leading states to the next level. states would use funds from our department to create high- quality state-run preschool programs, administered with local providers. the urgent need for greater access to preschool for low and moderate income students is not in dispute. ask any parent or teacher about the gaps in development when children come to kindergarten. we note that on average children from low-income families start and come into kindergarten up to 14 months behind their peers in reading and language skills. it does not have to be that way. we no fewer than 30% of four-

year-olds are enrolled in high- quality preschool programs. our theory of expanding high- quality preschool will be the same as it was during our first term. the federal role in education is support in partner mistake to incentivize innovation to strengthen educational opportunities. that means we should be clear on goals, but loose on the ways to get there. our department what must set a high bar. we should leave it to local leaders to figure out the best way to achieve that high bar. under the plan, states will be required to have benchmarks for outcomes. like having a high-quality state-level standards for early learning, well-compensated teachers, and a plan to implement comprehensive assessment. the president has pledged to offset the cost of the early

burning plant so it will not add a dime to the deficit. skeptics question we should make a major investment in preschool in a tough time. in the end, i believe it is a false choice. in fact i would suggest all of you that we cannot afford not to make these investments in the future of our babies, toddlers, and four-year-olds. as the present has pointed out, if you are looking for a good bang for your buck, high-quality preschool is a good place to look. if you want to invest wisely, save taxpayer money, this is the best place, the best investment we can make. i wish some of our friends on the hill today are -- could have been with s and visited the school and would talk to governors across the country who are expanding high-quality preschool programs in their states. they understand it is a great investment.

i wish they could be with me as we watch children been engaged and having fun and excitement, have a chance to explore their skills. if we move forward, with the topic of the day, sequestration, it is a real challenge and a lot of different levels. honestly, to many members of congress are out of touch with the concerns of parents and teachers and students. they are out of touch with the real-world consequences of their actions. it is important everyone remembered that school districts in montgomery county, they spent 80% of their budget on personnel. sequestration will have a big impact on school staff. sequestration will cut title 1 money, by 7 had a $25 million. that blanket cut could defect -- affects one. to descanted million -- 1.2

million disadvantaged students. if the budget cut was translated into furloughs, another way districts may have to make these cuts, it would be the equivalent of furloughing 541,000 teachers and staff for five days. other cuts include $600 million for children with special needs. that will require distance to cover the costs of approximately seven hut thousand 200 teachers and support staff. the furlough equivalent there will be foreign 33,000 teachers and staff missing a week of school cleared secretary sibelius' will talk about the impact of education on headstart. cutting programs for children is economically foolish and morally indefensible. in his state of the union, obama

called for smarter government. sequestration is an example of dumb government. it is mind-boggling that washington is manufacturing a crisis when educators and parents are facing challenges and doing so well every single day. these across-the-board budget cuts were not caused by some hurricane or by natural disaster. they are man made. they can be fixed now, by men and women who have the courage, commitment, and willingness to come together to cover current -- compromise. they can be fixed by lawmakers to do the right thing for children and keep growing america's middle-class. this is not rocket science, not intellectually difficult, and must be done. that you so much. now it is my honor to turn it over to secretary sibelius.

please give her a round of applause. >> good morning, i want to join secretary duncan in thanking the superintendents, school leader ships, principals, pre teachers, and the amazing kids who we have seen so far at this school. is a truly great example of kids learning every day and learning lots of things that are going to make them world leaders. i talked to a young man here who is -- who has his eye on maryland state house, so i have to warn governor o'malley. he has some competition. i have to tell you this effort is near and dear to my heart because i am a new grandmother and have had a six-month-old grandson. early childhood education,

always important to me, has taken on a brand new meaning because i am seeing the world to the eyes of georgia. the secretary has mentioned we have had some great partners and champions in the united states congress from here in maryland, but i want to particularly single out congressman bonior, who has not only been a long time great leader, the judy center here at the school is named after his late wife, and it shows the kind of energy and commitment he has had all along. i cannot tell you what a great treat it has been during my tenure as secretary to work with a partner like arne duncan. there cannot be a better champion for children and families in this cannot be than arne, and he is leading this effort and an historic moment, and i'm glad to be tarnished --

partners in the initiatives. the kids at rolling terrace and across the country who benefit from the early learning programs are not just getting an academic foundation. they are gaining in social skills, learning how to interact with others, benefiting from services. i just saw the new health clinic that will help the whole family. as any parent knows, and the side shows, the first few years of a child's like are the most critical. that is when the most important brand of what takes place. we have evidence that when we invest in education during those early years, the benefits last a lifetime. kids who attend high-quality early learning and preschool programs are more likely to well -- to do well in school, more likely to maintain successful careers. that is what makes this investment so beneficial.

these programs benefit all of us. we all gain when our country has a stronger, more productive work force. we gained what we have lower crime rates and less need for public assistance. that is why the president has announced historic investments in programs that help put more children on that path to opportunity. in our department, we have worked to strengthen critical programs like head start with more accountability and training programs to help spread best practices. as you have heard from the secretary, the president announced a new plan for the second term that would build on those efforts by making high- quality preschool available to every child in america. these children needs began earlier than preschool. that is why we are launching a new head start child care partnership. it will expand the availability of high-quality early learning

and opportunities for infants and toddlers. while we are expounding -- expanding programs with resources needed to help thriv ing on it. we have a moral and economic imperative to ensure no child has fallen behind by the first day of kindergarten. that is what the last thing we can afford right now is the self-inflicted wound that you have heard secretary duncan describe. it occurs with blunt arbitrary cuts that congress is allowed to go into the fact. three sequestration. in addition, to the cuts you have heard described, through k- 12 education, we have a situation in our department where we look at the possibility of 70,000 and children losing their access to it had start an early headstart, which teachers being laid out the cuffs off. with those services eliminated,

it makes it more difficult for those parents to go to war, so it has a ripple effect, damaging the fact, throughout the community. we know about 30,000 note-income children and their parents would lose their child-care slots, which has a huge economic impact on working parents. that is up to 100,000 american children, some of the most economically deprived children, whose futures are put in jeopardy, and their parents' ability to work every day is put in jeopardy. if we want to ensure the long- term prosperity of our country, which should not be cutting back on programs like we just the laws it. we should be expanding them, as the president has suggested. that is what this administration is committed to doing. i joined arne on the notion that sequestration can be fixed quickly by contrast coming

together with a balanced approach to continuing to make smart cuts, smart reductions in programs that do not work very well and smart investments in programs that have a huge payoff down the future. barney called at the new government. to me is stupid government. we have a smart way to do things and a stupid way to do things, and what is unveiling today is suited government. thank you again to our host this morning, good luck with rolling terrace elementary, and the secretary and i will be pleased to answer questions. >> secretary duncan, this week on a couple occasions there are teachers being laid off because of the sequester. are you prepared to say that that was an exaggeration on your part? >> that need be clear. what i said is teachers are getting notices and in the district we talked about, 110

teachers were getting notices. that is not what i said. let's not lose the -- they are getting such an notices now. that is where some of that misunderstanding. the fact of the matter is whether it is what is already happening or what is coming across the country of the next two months, which i also said tens of thousands of teachers potentially are going to be getting these notices. the impact here is very significant. >> both you and the secretary said this was done government. didn't this dumb idea come from the white house? >> actually, the idea was designed in such a way and really inserted in the bill by congress because they thought it was such a bad way to run government that it would never happen. two years ago, congress agreed to give themselves this option

which should never occur in order to force themselves to actually come up with a deal. if you remember, it was the failure of the supercommittee to reach a budget agreement that produced this methodology, there have been two years that have expired, and here we are on march 1, a day that no one ever wanted to see come, and everyone agrees is a bad idea. it can be fixed. the president is meeting this morning with congressional leaders. he has put forward a proposal. one thing i think we need to make clear, government is being cut year in and year out. we at health and human services are operating on less resources than last year. $2.50 trillion has already been cut out a program spending during the president's administration. it is not like we are spending huge pots of money we did not have. but making sport strategic

reductions and making smart investments in things we don't work is the way we need to go forward. >> one more question. >> how did you come up with the figures of how the impact will be felt at local schools? >> it is important for the media to understand how school budgeting works. 80% of -- 81% -- we did not plan that. on average, 80% of school budgets are people. most of the rest of them are paying the heat, school lunches, buses. when schools have to make commitments and cuts, and between title one and well more than $1 billion, they're not too many places to cut the sides people. with people, you do two things -- you lay them off, so you are talking about potential layoffs,

or you do furlough days. there's not a better option. people said if you have control, what would you do. the majority of our funding from the department of education, the federal level, co-star nation's most vulnerable children, to english-language learners, migrant children. the biggest part of the pop art children with special needs and title one for poor children. those pumps are $25 billion. if your are asking folks to choose, do you hurt more special needs kids -- there's no choice but no right answer. when districts are forced to cut, because our funding goes down, they have very few places to go. one of the only places they can go, the vast majority of their budget, our people. what that means is potentially a lot less children, tens of thousands of children, having access to head start, lots of

children with special needs and poor children losing access to services. what we have not talked about yet is as many as 70,000 young people try to go to college will lose access to work study and to grants as well. at every level, babies, k-12, higher-end, at every level we will be taking a step back education. it makes no sense. the economy is starting to bounce back. graduation rates are going up. the final thing i will say, as a nation we're trying to keep good jobs. good jobs, employers what an educated population. i promise you our competitors for those good jobs, singapore and south korea and india and china, they are not going through sequestration now. that is not their approach to education. they are doing more. for us to go backwards is mindboggling. >> thank you.

>> one more question. are those 70,000 new slots or slots that have to be cut? these are slots of have to be cut, and again, first of all, sequestration does not give us discretion. we have to take $15.5 billion out of the hhs budget out every agency, every department, every program, in seven months of the remainder of the year. it is a very arbitrary cut. those are slots, child care slots, 30,000, and head start slots, about 70,000, that exist right now. we do not have a need budget. congress has not passed a 2013 budget. we're talking about existing slots. we have to cut services that go to public health departments that have chris help backs and the kids said they can come to school. we know thousands of children will not have the vaccines that

they need. that is a cut in the program. we know mental health services to the parents and children, which actually help to support their behavior of health, issues, to me to become and what the funding that is to states. this has health and wellness revocations as well as teachers, as well as having a huge impact on parents' ability to go to work. if you think about the youngest kids, if there's lots are gone for their children to be in a safe and secure learning environment, the parents actually then have a much more difficult time going to work every day. thank you, all. >> [indiscernible] >> i want to thank you today because we are with you on pre- kate. we can see all the differences that pre-k makes. kieffer highlighting that, and i

want to say all of us are teachers, are very proud to be teachers in montgomery county public schools. we know now, no.-one right in the nation. i wanted to segway a little bit because all this new stuff about education is turning into all sorts of good ideas. what i want ask you is about teacher evaluations are a big deal now everywhere. with our administration and the teachers and representatives, we have developed in mcps a good teacher evaluation system, very qualitative, more than a checklist, and we have worked with the administrators, and we feel we have a good evaluation system that states are asking

for how each -- how they would put forth their a valuation statement, and maryland has 50% of the evaluations that would include still and performance. so we want to know in your opinion is there room for the states to have wiggle room. we are helping, and ,star asked for a moratorium for testing for three years some of which speaks to this idea, so is there wiggle room for states to go less than 50-50? >> i do not know the details, but absolutely. look at what has happened across the country. i have tremendous confidence and the board here, in the state. the have folks here at

compromise, and those are complex questions, but we have never said 50%. never said that once. >> between the president and mcconnell and boehner, is this too little too late on both sides? >> i do not think it is ever too late. you have to keep working things through. i want to come back to the urgency to get this done. this is why i worry congress does not understand the real world. you have really good boards here, i fantastic superintendent. what are they doing now and march? they are planning for the fall, try to put their budgets together for all. they need stability, predictability. in chicago, we never had enough money. i wanted to know what i had so i could plan. these guys are doing the fiscally prudent thing, planning not have this money. they're forced the plan that way. you cannot plan for money that

is up in the air. they have to plant on not having that money, putting in a budget cuts, and we sell in the district in west virginia where they sent out 110 notices. we see notice is coming out across the country in the coming weeks. this has to do with the notification of the unions. four districts that to go through this trauma, why put them through that? let's fix it, fix and now, let's do it right away, today, over the weekend, and i do not think they realize the real-world impact and stressed this is putting on working families, on teachers, on principles, on superintendents. it does not make sense. [indiscernible] >> i would like to say that i am really proud of the -- my son attends this school, and i just made it to get him into the pre-k program, and i see

results and a fantastic for him. are there plans to help those middle-income people that live in high-income or high-cost of living areas to get into the program? >> part of what we want to do is make sure we have access for children who are living in poverty. we want to have incentives for states to make sure that middle- class folks that chance. the majority of children who need access to the, the majority do not have that. we are playing catch-up. we have to get out of that business. if we can get babies up to a good start, encompass not matter. it is a game ginger for the country. on three- and four-year-olds, they did not bode, they cannot have lobbyists. this is 8, 10, 20 years down the

track. we hope the country can come together in a bipartisan way. i am hopeful for all this current disfunction. we're seeing governors across the country, republican and democrat, invest more and early childhood education. this is starting to be a bipartisan commission, which is very encouraging. take you very much, guys. they can for your hard work. -- thank you for your hard work. >> looking at our schedule, at 8:00 p.m., remarks from the president, boehner, and nancy pelosi on those automatic spending cuts going into the effect today. on c-span2, ashley judd on women's reproductive health services. on c-span3, highlights from february's session of question time in the australian

parliament, all these programs tonight starting at 8:00 on the c-span that much. earlier this week, the supreme court heard an argument in the landmark voting rights act of 1965. the court will decide if part of the act has outlived its purpose. you can hear that argument tonight at 9:00 p.m. eastern on c-span. it is online at c-span.org or, and that court is expected to have a decision by late june. back to the issue of the day, the sequester. up next, how might impact defense spending. republican members of the house armed services committee spoke to reporters this morning. good morning. i'm from the 25th district in

california, chairman of the house armed services committee. these are members of the committee. most of -- chairman of the subcommittees, each of us will have a few words to say. we have the responsibility to protect our nation's defense, and make sure it those who we sent out to or have things they need to carry out their missions and return home safely. i have never in my lifetime seen such a lack of leadership and truth-telling emanating from the white house and from our commander in chief. senator reid and the democratic leadership for three years have not pass a budget, and we have given them a pass. you have given them a pass. i was watching a general this morning who said he has been chief of the department for a year and half, and never had a budget. that same thing goes for the commander -- the chairman of the joint chiefs and all of the

chiefs. these men who have dedicated their life to protecting our nation, we put them in these responsible jobs and give them no financial support, no direction. sequestration was the president's idea. when we tried to fix it he said no, if you do everything, i will veto it. during the campaign he said it will not happen. the last couple of weeks he has come out and said it is armageddon, the world is going to end, and the last couple of days, he said -- he has played all kinds of roles in this position. when woodward, a respected journalist, try to lay out the truth, he was crucified, and i do not what extent this white house will go to, but it has got to end. we are done cutting our defense.

we are fairly intelligent. we know we can cut two sent out of a dollar. while we have cut those two cents, 50 cents has come out of our national defense tricked the president has talked about a balanced approach and will not address the problem. where telling the president and john boehner, when you walk out of that meeting this morning, did not plan on cutting our national defense one more cent. i would like to turn to mike turner. >> thank you. the president has called congressional leaders to the white house has a prop with a backdrop of his game of sequester. a game that campbell's with our national security and hurts our men and women. today the sequester, which the

president said and promised the american public would not happen and will happen with the stroke of his pen. this did not need to happen. from the proposal by the president of 2011 to the failure of the supercommittee, through his reelection command -- campaign, the president has not brought forth one proposal to offset or two and the sequester. the president has simply not turned in his homework. while the president is touring the country, talking about sequester, the department of defense, pentagon, and man and woman and -- in uniform are preparing for furloughs, is to hit people who are protecting our country and protecting our national security. while that is occurring, the only work being done on a sequester in the white house is being done in the press shop. yesterday the senate took up a bill that sets off sequester and replaces it with more spending.

the cbo scores the bill as a $7.2 billion increase in spending the cbo scored the seventh homework as failing. the house has passed two bills and they are both on the house armed services committee website and they both replaced sequester with responsible cuts and both system and our national security and reduce overall spending. the president's team on sequester has said it is irresponsible and reckless and wrong and dangerous. we agree. in my community, wright- patterson air force base, 3000 people are facing furloughs my community is listed as number 3 in the nation that will be impacted by sequestration, men and women who get up and go to work every day to protect our national security. the president has broken his promise today to the american people and begins with sequestration which was his idea that he places for today with his signature and does so on the backs of those to protect us. mr. president, it is time to get to work and send an actual

proposal to congress, thank you. chairman of the sea power forces subcommittee. people at our home in virginia fill there is way too much bravado coming out of the white house may be too much coming out of congress. nobody is sitting there at looking at the concerns that the have right now when they are worried about whether or not school and whether they will have a job next month are not. i want them to know that while the house of representatives has gone home and the senate has gone on, the chairman of the subcommittees have not. we're telling you we are continuing to work because we will come forward with proposals that helped mitigate these consequences for national defense and we think we will see them as soon as next week. the second thing is, we are tired of the definition we have seen of acceptable risk and we will change that. it will no longer be acceptable when the u.s. navy can only meet 51% of all of our requirements. it will not be acceptable risk for airports to have pilots flying planes that are older

than them. it will not be except to lure us to have an army cutting out 80,000 troops and it is no longer acceptable for us to find the lowest possible point we can have for our military and still argue that it is acceptable. we will begin today a new chapter that rebuilds this military and strengthens it so it can defend and protect our security and the generations beckham after us. we are turning the lights back on to the analysis for national defense in this country for both political parties. one of the things is when you have a journalist that starts talking about the actual facts and refined the white house turning on them and attacking them, the story that has not been written the is the gag orders that began with this administration and the pentagon or individuals could not talk about the implications of these cuts that come down. even as late as last week, sought memorandum -- i saw a memorandum where people could not talk and we will change that and write a new chapter to

that. -- today. i like to present the chairman of the readiness subcommittee. >> thank you, want to make sure people understand where we are today and we have been. secretary superdelegate put in place $100 billion of reduction to our defense budget in 2011. of reductions. as we stand before the sequester, nearly half a trillion dollars, the sequester put another half a trillion dollars in place. is by any measure, that catastrophic. we are looking at our readiness, our ability to meet the threat out there and we are at a place of increased risk, our military leaders say it is a readiness crisis. we cannot beat their. -- be there. we have always stood behind our military, stood behind our men and women in uniform that defend this nation to make sure that they have the overwhelming

superiority on the battlefield and the call on them to defend this nation. that is our obligation as a nation. will no longer be able to do that with sequestration. those men and women will be asked to go into a fair fight. in defense of this nation, it is incomprehensible. we owe it to them and the men and women in dod and we owe it to the great contract and commanded that supports our military to provide the ability to defend this nation and make sure they have the overwhelming superiority and make sure they can fight to victory and come home safe. that is our obligation as a nation and then these to be a renewed sense of urgency as members of the house armed services committee and a congress to make sure we do the job that we were sent her to do when we raised our right and to uphold the constitution to provide for the common defense of this nation and maintain and provide for its armies and navies. the job needs to start a new today and that's what we are here. thanks again and i want to

welcome to the podium, the chairman of the military personnel subcommittee, chairman joe wilson. >> thank you very much. as a 31-year veteran of the army national guard, i want to thank block mckeon for his support this is the third round of budget cuts on the defense department. the was a $100 billion reduction followed by a $487 billion reduction in defense spending and today begins possibly $600 billion in cuts. the american people need to know that the budget is 80% of the federal budget by 50% of the cuts are applied against a fence. this truly create a circumstance and i'm grateful for the leadership of secretary leon panetta who pointed out that these cuts could lead to the hauling out of our military, putting military and

military families at risk. i appreciate his leadership. the american people need to know that our defenses are at a low point. we will have the fewest troops since 1939 in the army and marine corps. we will have the fewest ships since 1916. we will have the fewest aircraft since the air force was created in 1947. there has been a survey indicating that the confidence of the american people in our national security is at an all- time low. i am hopeful that we can come together on addressing these issues and i am so hopeful, indeed, that the president will change course. we know the policies of defense that work are peace through strength and i hope he will change its policy and recognize how we must have peace through strength and not have a circumstance of potential attacks due to weakness i'm

honored to be here with the chairwoman of the oversight and investigations subcommittee, martha roby of alabama. >> there is a better way to cut spending. we are harming our military and military families. from the beginning, that is exactly what this is about, the harm that this sequester would do to our military families. i cannot help but think about the mom down in alabama was husband is on his third or fourth deployment and she is sitting there watching this play out on the news and wondering whether she will be able to cook food -- put food on the table for her family while her husband is in harm's way fighting for the freedom and liberty that you and i enjoy. i would just say it is unconscionable what the president is doing.

we cannot tax our way out of the sequestered. we cannot tax our way out of debt. the president received his tax increase in january. it is time he and the senate get serious about mandatory spending reforms that we can re-prioritize what happens first and that is providing for a strong national defense and it is unconscionable for this president to use our military families as pawns in his crusade for higher taxes. >> i'm from the 13th district of texas. let me close with two points -- the federal government has to get its fiscal house in order by cutting spending. and the federal government has to defend the country in a dangerous and increasingly complex world. we do not have the luxury of doing one or the other. we have to do both. there are lots of options to do

both. you have heard the house has passed a bill twice that would cut other spending and prevent the sequestration. the mcken -ayotte bill would reduce federal employment through attrition and use those savings to offset sequestration. i introduced a bill that would delay further implementation of the health-care bill by two years. ministration will not be ready to do it anyway. 25 states have said they will not set up their exchanges if you give them more time to get their act together, you save the taxpayers $130 billion. this will also offset sequestration. president to adopt one. the second point is that we are not giving up. just because it is march 1, it

does not mean we are folding our hands and saying this is the way it has to be. for example next week, on the house floor, we will vote on a defense appropriations bill that will last us for the rest of the fiscal year. that will not on do sequestration but it will add flexibility and it will help update the categories which will reduce some of the damage that comes from having a continuing resolution and a sequestration at the same time. we will keep working for solutions that protect the country, get our fiscal house in order. need the commander in chief to do the same period -- we need the commander-in-chief to do the same. >> thank you again for being here and we can take a few questions. >> on the 27th of this month, you'll look at closing down parts of the government if we don't get a continuing resolution. the idea of passing a defensive preparations bell --bill does

not sound like to get traction in the senate. will you guys push for an omnibus. many of these bills have been negotiated and committees have been working together. on defense and a host of other preparations bills, it looks like you could get deals. would you push for and on the-- omnibus? >> it is a cr that will run for the end of the year. wrapped up and that is the defense appropriations bill but it would fund the government through the end of the fiscal year. you can call up and on the bus or whatever you want but it does and on the bus --omnibus for what ever you want. let's get that passed next week

and let's see what the senate does. we are used to them not doing anything. we are not waiting until march 27 to work on this. we want to get ahead of it. there is no thought of closing down the government. we have enough problems around here without getting into that. yes? >> you have been raising concerns about these cuts since they were created. the are some republicans in the last week that have indicated they would be ok with these cuts for the time being. do you feel there has been a change and your side of the aisle on this? >> i fought sequestration. i fought the $487 billion but that is done. we accept that and the chief said they could live with that.

they had to change the strategy we have had since world war two. there will not be able to fight two wars and protect us in two different places around the world. we look at korea and iran and other hot spots around the world. we pulled back from that. that is already being implemented, those cuts, but they had to change the strategy they had a year to work on those in plan. the sequestration gives them no flexibility. it cuts every department an equal percentage. it is a crazy way to do things. i am hopeful -- we knew that the national security spending needed to be part of the deal. remember what i said it -- 50 cents of every dollar we have saved so far for this effort has come out of our national security. that is too much when they only account for 18% of the spending. >> you said you regret your vote on the budget control act.

>> there is enough blame to go around. many of these members voted against it. i took the leadership's promise that the super committee would do its work. the president promised it would never happen. that has passed and it happens. that vote at that time was to raise the debt ceiling. if we had not done that, we wouldn't have had a serious crisis -- we would have had a serious crisis. i was hoping that given time, we could come up with a better solution and it that has not gotten done. i am saying it has gone for another. this is the end. no more cuts out of national security. >> [indiscernible] was there a meeting of view -- of many of you in the speaker's office? have you informed other members about the sequestered?

what would you have done differently and how would you have argued differently to avoid this? >> let me turn to mr. turner on that. >> part of the problem in this debate is the president's made a promise to the american people that would not happen and constrained and restricted the department of defense of telling the american people what would occur if he broke his promise. we're standing here today with the president having broken his promise and the department of defense scrambling to get the message out to the american could come up with a better public. is not yet understand because the department of defense has not been able to abandon their homework what will happen. we have been working on this since it was first proposed by the president and have a better understanding of the consequences. we agree with the president that it is wrong. >> you have been talking about this since august of 2011. >> there is no question that the amount of articles that could have been written about the

specifics of what this means to educate the american public would have been helpful. we were speaking in committee rooms and press conferences. there is a gap between what everyone knows and what will happen. we believe the president has broken his promise and needs to allow the department of defense to tell people what will occur. >> can you explain how the appropriations bill would mitigate the effect of sequestration? >> we have two serious problems. the planning of the chiefs and how they decide to spend their money are handcuffed right now. we are operating under a cr keeps us on fiscal year 2012. we passed a defense authorization bill that ended

some programs and given the opportunity to start more important programs. that was passed and signed into law last december. unless you fund it, they are hamstrung. if we do a cr for the rest of the year or some kind of funding mechanism that does not give them the preparations and the authority to move funds from one area to another, it severely impacts them. one of the gravest concerns we have is a readiness. i know we have troops that are being trained to go to the war theater and they are not receiving the same training they did one year ago because those funds have been cut. if we do not pass that appropriations bill, they will be cut further. i was told by the secretary of the army that he will have to cut 40% out of his operating maintenance account which is

where the training comes from. this cannot be allowed to happen. >> is it a problem for your efforts that there seems to be a bit of a mixed message within your own party, that many people are saying let the cuts go ahead and call the president's bluff and many are saying we need defense cuts. i have heard many people saying things that are not in line with what you are saying. >> in the congress, there is 435 people. we cannot all be experts and everything. we have had the opportunity to hear from the cheeks, those who from the cheeks, those from the battle was. we have had the opportunity to go to afghanistan, iraq and hot spots around the world and see. we have a greater knowledge of how the impact of these cuts will be on our national security.

most people have forgotten or did not know about the $487 billion in cuts we have made as when the american people think of cuts, they are looking at waste, fraud, and abuse. we're past that. when you add the sequestration on top of that, i saw a poll and we have not reached the majority of people. only 38 percent of americans knew what sequestration was. i can guarantee you that out of the 38%, a very small portion understands exactly what the real impact will be. they have not had a chance to visit the bases were the training is not being done it should be done. they have not seen down in fort rucker or the flying hours will be cut for the helicopter pilots. we know the problem and we're trying to reach out to all of our colleagues to make sure they

understand it, too. that is a process that takes time. >> would you be willing to accept any tax increases as part of a replacement package if that's what the president wants? >> we just passed $600 billion of cuts a tax increase is a few weeks ago. many of us voted for that. we did not want but the president has talked about a balanced approach. his balanced approach is increase taxes, cut our national security, cut defense. at some point, you have -- if he wants a balanced approach, he better start bringing mandatory spending to the table. if we cut all discretionary spending, we would still be running a deficit of half a trillion dollars per year. most people understand what the problem is. it is the mandatory spending.

not bringing that into the discussion makes the rest of this kind of an exercise in futility. >> it sounds like you are talking about next steps from your side to give dod more flexibility to implement sequestration. do you plan anything to delay it again or turn it off? >> can wrap up with the vice chairman of the committee? >> we're not saying this is done. we will keep after it. i gave you three different proposals that would save money and other places other than the sequestration. we will keep looking for options. we will not say this is done. we have opportunities coming up as budget resolutions,, the debt

ceiling in may -- there is a lot of opportunity to go here. the only area of government spending that had an authorization bill signed into law by the president is defense. as we look at appropriation bills to pass for the rest of the year, passing defense which is consistent with the authorization bill that he has already signed into law makes perfect sense. we will do that next week as a step but it is not the end. we will keep after it >> thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> that briefing with republicans happened at about the same time president obama spoke with reporters and he answered a question pushing back on the notion that the sequestration budget cuts will not be painful. >> what i cannot do is force congress to do the right thing.

the american people might have the capacity to do that, and in the absence of a decision on the part of the speaker of the house and others to put middle- class families ahead of whatever political imperatives he might have right now, we are going to have these cuts in place, but i am hopeful about human nature and over time people do the right thing and i will keep reaching out for other formulas or other ways to get a better result. >> what you think of people like mayor bloomberg, who is no critic of you, he endorsed you, who argues that this is posturing, and the affects of the spending cuts are being overstated? >> i will give you an example.

the department of defense right now has to figure out how the children of military families are going to continue with their schooling over the next several months because teachers at these army bases are typically civilians and subject to furlough, which means they might not be able to teach one day a week. now, i expect we will be able to manage around it, but if i am a man or woman in uniform in afghanistan right now, the notion that my spouse back home has to worry about whether or not our kids are getting the best education possible -- the notion that my school or my children on an army base will be disrupted because congress did

not act, that is an impact. i suspect mail -- mayor bloomberg and others will not feel that impact, but that family will. the border patrol agent out there in the hot sun doing what they are supposed to be doing, finding out they are getting a 10% pay cut, and having to explain that to their families -- i do not feel like they think it is an exaggerated impact. it depends on where you sit. not everybody is going to feel it. not everybody is going to feel it all at once. what is true is the accumulation of those stories all across the country -- folks that might have been working around -- all their lives to get the education to get out of welfare and they have their kid in head start

headstart is gone gone and now they have to figure out how to keep their job because they cannot afford child care for their kids -- some of the suppliers for those ship elders -- shipbuilders in virginia are are going to have to shut down because there employees will be laid off, the accumulation of all those stories of impact will mean less growth, hundreds of thousands of jobs lost. that is real. we are not making that up. that is not a scare tactic. that is a fact. starting tomorrow, everybody here, all of the folks that are cleaning the floors at the capital, as now that congress has left somebody will be vacuuming, cleaning the floors and throwing out the garbage. they will have less pay.

the janitors, the security guards, they just got a pay cut and they have to figure out how to manage that. it is real. i want to be very clear. it is absolutely true that this will not precipitate the kind of crisis that we talked about with america defaulting and some of the problems around the debt ceiling. i do not anticipate a huge financial crisis, but people will be hurt. the economy will not grow as quickly as it would have. unemployment will not go down as quickly as it would have, and there are lies behind that, and that israel. it is not nested -- is real. it is not necessary and that is the problem. >> you will see all of the president's briefing, speaker boehner's briefing and nancy pelosi's briefing.

a subcommittee held a hearing on the impact of the automatic cuts and it would affect the federal aviation administration. according to the administrator, there is no way to avoid laying off air traffic controllers. this portion is close to one hour. >> congress reauthorized the federal aviation administration. the predictability reauthorization provided was welcome. it allowed us to have greater certainty, and we are grateful to have this committee on this and we have been working diligently to implement the provisions of reauthorization, the one year later we again faced unpredictability. the sequester is looming. i want to make a clear distinction about how sequestration differs from

previous government shutdowns that have been caused by a failure to pass the budget or a temporary lapse in authorization that took place in 2011. first, almost all of our faa accounts would be affected, and this would affect all employees. we are looking at all options to reduce costs -- the hiring freeze, putting contracts and travel, and other items not related to day-to-day operations. to reach the large figure, we have little choice but to make up the rest through the furloughing of other employees. this is not something we take likely. -- lightly. old -- almost all of our employees will be affected. the vast majority would have to be furloughed. under the sequester, flexibility is limited because we must cut proportionately from all

affected accounts and we cannot move money around and we have limited flexibility in what to cut. a large portion of the department of transportation's budget is exempt from the sequester, which means the faa will take more than 60% of the sequester cuts in the lower agency only makes up 20% of the department's budget. within the faa, the airport grant program is also exempt from the sequester, so, this again, limits the choices we have on where to cut the money. finally, we have a short time to make the bulk of these massive cuts, and that means the cuts would need to be deeper to have the same affect. it is my hope that our leaders can work together to rally around the improvements we need for our transportation system.

we hope we can continue to support the programs we acknowledged were important one year ago. the number one mission of the faa is safety. that will always be our priority. with regard to the boeing 787, we are working to conduct a comprehensive review of the critical systems including the design, the and assembling of the dreamliner. as part of that review we are working on a data driven process to identify the cost of the battery issues and mitigations. i appreciate the expressions of confidence from the committee chairman and the ranking member. we all had a redacted briefing just a couple of weeks ago -- productive meeting just a couple of weeks ago. we met with senior boeing executives to address the battery issues. we will analyze boeing's

proposal to address these issues, but the safety of the flying public is our top priority, and we will not allow the 787 to return to service until we are confident that are a failure risks were addressed. in the last few years, congress has given us guidance on safety and we have accomplished a great deal, overhauling rules to guarantee pilots have the opportunity to get the rest that they need to operate safely, and we are increasing the experience needed. we are also finalizing a rule that will require more rigorous and realistic training so flight crews can handle rare but serious scenarios. while we are enhancing the safety of the system, we are also working to deliver the benefits of new technology. we are working to safely integrate unmanned aircraft

systems into our airspace. earlier this month, we requested proposals to host six test sites to test unmanned aircraft systems. we need to better understand the operational issues to safely implement unmanned aircraft into our airspace. we need to make sure they can avoid other aircraft. if an unmanned aircraft loses the link to its ground-based pilot, we need to make sure that it operates safely. we are addressing comments about how to address privacy concerns with these test sites. each site operator will have to obey all laws protecting an individual's right to privacy. to bring this to fruition, we need to collaborate across the faa in the industry. reauthorization asked us to do this and we have made great strides. we have worked with our labor

unions to lay the foundation for nexgen with the modernization and the collaboration has been exceptional. we are now using this new computer system to guide airplanes at high altitudes and nearly half of our sites across the nation. chairman, as you know, a lot of the research that propels nexgen takes place inwe need atc city. he plays a key role, and we appreciate your support. we are collaborating with industry and as a result of the work we are doing with many partners we are producing procedures much more quickly and we are using these procedures right now to reduce the miles an aircraft must apply to create more direct routes, reduce fuel burn and cut greenhouse gas emissions. right here in metro washington, we have used these procedures to fly into dulles and reagan national, and we estimate they

will save $2.3 million in fuel per year. reauthorization laid out a vision to address the future needs of our nation's aviation system. these needs have not gone away. it is important for us to work together to protect the great contribution civil aviation next to our economy. aviation is our largest export industry. it strengthens our balance of trade and it adds $1.3 trillion to the economy, providing for 10 million jobs. i look forward to working with you and i said really hope we can work together to make sure america continues to operate the largest and safest aviation system in the world. this concludes my prepared remarks. i would be pleased to answer questions.

>> thank you. this will likely be the first hearing, and what we do not cover today we are likely to cover in future sessions. on sequestration, in your correspondence with the aviation industry, you mentioned a plan to close about 100 towers as a result of the sequestration, but i believe the faa sent out a list that has something like 235 or 240 that would close. can you explain the difference? >> the list that we provided encompasses all towers that have 150,000 annual operations and 10,000 commercial operations. the principle that we were working from was to provide the least impact on the largest number of travelers.

now, that represents the universe of facilities that we feel we need to look at. we are engaging in discussions with labor partners and industry stakeholders to actually understand the specific operating characteristics of each of those operations, but in order to achieve the savings we need to achieve this year, we have to cast a broad net and look at a wide range of towers. in terms of where we ultimately land, a lot of it is determined by the ongoing contract review we have underway and the savings we can achieve this year. our effort is to minimize the impact on travelers, but these are significant cuts and we need to look at our lowest activity towers in order to preserve the maximum benefit for the maximum number of travelers. >> discussing the maximum

benefit for the maximum number of travelers, recognizing that all towers are important, but certainly in some of our major metropolitan areas, where there are critical concerns about how all of this will work and staffing, will such staffing critical facility areas the identified in advance of sequestration and on a continuing basis and what are your plans to try to minimize for these major facilities? >> this is something we have to look at on a facility-by- facility basis, and the characteristics of each are quite different and we need to consider the impact overall. we might have a modest impact through furlough on controller hours at large complex facilities, but how it effects the operation will be very dependent on the specific facts of that facility.

chicago o'hare international airport is one of our largest facilities and it has signed the ticket impacts across the entire system. it is somewhat unique in that it operates with two air traffic control towers, one on the north side of the airfield and one in the center. because it runs at a very tight level of staffing, and if we need to reduce controller hours, one factor we would need to consider is in certain weather conditions we might need to close the north tower. if we need to close the north tower, that effectively removes a runway from operation. we would do everything we could to mitigate some of that if we have fewer hours from a this could impact larger airports. >> i will have additional

questions. mr. larson, the floor is yours. >> if we could continue on towers? >> sure. >> can you tell me how you will prioritize traffic control tower closures? how you came up with 150,000 hours? >> it is 150,000 annual operations and 10,000 commercial operations. in terms of operations and passengers, it represents a relatively small percentage of the total, but it is a large number of facilities and the cost of operating these facilities through contracts, utilities, personnel costs, they are quite significant. what we are focused on is how to maximize the benefit for the

maximum number of travelers, but we do recognize that some of these small facilities might serve unique needs. they might support some sort of military operation. that is a factor we might need to consider. for every facility we are able to preserve we have to find an offsetting cost saving somewhere else. >> so, in that sense, you do have some flexibility, but you have to meet an overall number? >> correct. >> some have suggested the faa could avoid furloughs, in part by saving over half of $1 billion on consultants and $200 million on travel and supplies -- statements that seem to have been refuted by a fact checker article that ran today in "the washington post."

can you provided the faa response for a suggestion that savings could be found through consulting contracts and travel supplies? >> the $500 million figure that is referenced, my guess is this represents the universe of contracts in our operations account and those are not limited to consultants. our estimate is about $21 million of the number is truly designated as consulting services, which represents only 1% of our total contracting obligations for the last fiscal year. what is included are some very large service contract, the largest of which is a program called the federal telecommunications infrastructure program. that is about $228 million, and what that is is the infrastructure that underlies

the whole air traffic control system, which is provided to us by a private contractor, and -- but for budget expectation purposes falls into this larger account. >> travel and supplies? >> travel and supplies has been an area where we have cut 30% over the last year and we have made significant improvements in our travel budget. what we are preserving is essential for our safety mission. and aviation safety investor -- inspector might -- must visit the facility to provide inspections, or a tech office employee needs to visit a facility to provide repairs and maintenance. there is a level of travel necessary for us to do our job and preserve the safety of the system. >> mr. chairman, i see you not have me on the clock, and i

want to be respectful of that, i have a few rapidfire questions and then i will move on to mundane issues like the application of the bill, but i will rescue yes or no type of questions. on the topic of sequestration, the faa could absorb this half of $1 billion the rest of the fiscal year without compromising efficiency, but on the following actions would you agree that efficiency would be compromised if we took actions like cutting one half of $1 billion -- first off, would the efficiency be compromised if we furloughed the vast majority of all faa employees? >> yes. >> eliminated midnight shifts? >> it would certainly have an impact, yes. >> closing over 100 towers? >> yes. >> reducing maintenance and

preventative equipment? >> that introduces a level of risk where we might face delays in restoring services if a piece of equipment breaks. >> thank you. >> mr. shuster. >> thank you, mr. chairman. the controllers are in an organization called the air traffic organization, and that is a line of business? >> correct. >> its operating budget is $7.4 billion a year? >> yes. >> and the five percent cut would be $370 million? does that sound about right? >> for total, that sounds about right, yes. >> could you find $30 million a month savings in a $7.4 billion budget? >> as i mentioned, our focus is

starting first with the hiring freeze and then focusing on contracts, and in discussing the contract it is important to point out that our largest contract is the telecommunications infrastructure, so that is very important for maintaining the operation of the national airspace system. likewise we are focusing on other contractual areas and taking significant reductions in things like training, travel and consulting services. >> it sounds that you are headed down the road to figure and out -- figuring out how to find the $30 million a month but without jeopardizing safety? >> the thing is our third largest contract is contract tower services and these are the lower-level towers that we talked about. in addition, what we are solving for is what is the amount of money that we would need to achieve through furloughs?

we are making every effort to reduce that number is much as we can but i do not see any way to avoid it. >> you do not think you'll find find $30 million a month in savings? >> we have identified a wide variety, but i cannot really eliminate -- >> the history of the faa has been one of financial stumbling and bumbling, before your time, but there needs to be real reform in the financial management of faa and i believe this is an opportunity to go through these contracts, and it sounds like you are doing that, and i know your reputation and experience is excellent, but this is a time that we need you to sharpen the pencil, go back, and i have to believe you are able to find $30 million a month in a 7.4 billion dollar budget without the threat of furloughs or endangering safety. i encourage you to go. this committee stands ready. we have been working around the

clock am a talking to the budget committee -- clock about talking to the widget committee, and we believe you have the flexibility to move money -- around-the- clock, talking to the budget committee, and i believe you have the flexibility. >> we are looking within each of those areas. it does limit flexibility. >> project row gram accounts -- you do have flexibility to move money? >> within specific lines. >> which would be the ato? >> we need to focus on where we can get out of contract, and minimize the impact on the pay and benefits. based on where i am, and where contracts are, i do not see a way to avoid it, but we will continue to work on it. >> thank you.

i yield back. >> thank you, mr. chairman. at the risk of beating. >> a dead horse, i have to return to the closure of control towers and their affect on rural communities. you heard my opening comments and i am sure you know how important these rural airports are to the economies and jobs in rural america. you know how much of a sticking point the central air service was in the last reauthorization we are supposed to be examining today, and i am sure it will continue to be a sticking point in reauthorization's to the essential air service program. the 200-some hit list that you issued as far as towers that might be closed, there were five in my state of west virginia. my question is have you considered alternatives? i heard you respond that you

look at the affect of the traveling public, but have you considered alternatives to the towers that might be closed in rural america? >> obviously, we are trying to work closely with industry to understand the impact in each of these areas and that is a conversation that we began this week working with industry stakeholders. the reality is we are looking at a series of bad choices. our overall principle has been how can we protect the maximum number of travelers? that said, we are looking at each of these facilities to understand their place, and how they operate within the national airspace system. the challenge that we are going to have is that for every one that we identify the need to

preserve some level of operation there, we need to find a budget offset to meet the overall sequester total, and that is going to be the thing that we will need to work with. we have heard from some local sponsors perhaps a willingness to step in with local resources , and that is something we would be able to consider, but those are the discussions we are in the middle of right now. >> i am still not sure i heard alternatives to the closures in rural america, but please keep that in mind. it is vital in so many areas, and i have to add weather, when we have tragic weather events, they are essential as far as air weather service as well. let me sq one further question on what is deemed -- let me one further question on what is deemed essential

employees. when we fail to reauthorize in 2011, it at traffic controllers continue to work as if they were deemed essential employees. why are they not essential under sequestration? >> the provisions of the sequester are different. previous interruptions have generally operated under an assumption that the funding would be restored on the back and and for that reason the government as a whole has drawn a distinction between essential and nonessential appointees. the sequestration is a different framework. it actually is a budget reduction that takes place that we need to manage to across all of the accounts of the faa. we cannot assume that the funds would be restored because we are not seeing anything that would suggest that is the case, so we have no choice but to take the steps to assume that we need to operate at a low of -- lower funding level.

>> thank you, mr. chairman. >> mr. graves? >> thank you, administrator, for coming in. we appreciate it. my question is basic. if it sequestration goes into place, what does it take you back to, funding levels in what year? staff tells me it is 2010. >> etiquette is about 2008 -- 2- >> i think it is about 2008. >> let's go 2008. everything was operating just fine. 2010?

-- 2010? what is so different. i feel like the sky is falling because of sequestration, and we are going back that far. >> the operations account has increased from 2008 through 2012, and in that time personnel costs increase by about $887 million. we have been absorbing reductions in our non-pay spending for the last five years and cost savings have resulted in significant savings across a wide variety of accounts there. i would also like to point out that we have spentfunny 10? a lot of money for things the industry wants to implement things like advanced navigation procedures and developing new and much more efficient approaches and departures from airports, and for a very important reason. the airlines want benefit, they want to save fuel burn and the cost of the operation system. all of that costs us money. it is money to develop and maintain these procedures, so

we have a much more complex aviation system then we had. i think we have been successful in achieving savings through things like strategic sourcing, but at our core we are a people- based organization and people costs have increased in the intervening years. >> more efficient approaches, and early departures, is that an ongoing cost? you said that as one of the major things you spend money on some of the what did you do different? >> it is an ongoing cost a cousin in terms of developing a new procedure at an airport, we have to maintain it, and that carries costs associated with regular maintenance, assuring its safety, all of which represent ongoing cost. >> you are coming up with new approach to seizures --

procedures. what are you maintaining the cost so much money? >> flight checking, or providing for -- >> but you were doing that before. procedures might have changed, but you are doing that before, flight checking, and you weren't -- look, -- >> we are flight checking more of them. >> ok. you are flight checking more of them, and i do not mean to belabor this, but you are not going back that far. the sky is not falling. we will not have more meteors hit because of sequestration. i do not understand why the administration continues to take this approach that the world is falling apart because

of this and i do not see that much changing, to be honest with you. maybe i am completely wrong, but the faa, and i know very well your procedures and what it takes, and i just do not understand what the attitude is. you know, it baffles me. mr. chairman, thank you. >> thank you, mr. graves. esther lipinski question mark -- mr. lipinski? >> i congratulate both of you on your rise into leadership on the subcommittee. i look forward to working with you. i want to also thank you for holding this hearing on implementation of faa reauthorization and reform act, and i'm going to surprise everyone by actually asking the question about that act. while this reform act was not perfect, it provides guidance applicability to the faa has an

agency that perp -- produces next-generation air transportation systems and works to meet day-to-day meaning -- needs. i would like to start with section 221 which relates to nexgen public/private partnerships. we know they cannot happen if planes do not have new enhanced equipment. these updates will not happen by themselves emma so i was happy to include section 221 which authorizes the faa to establish an incentive program for equipping general aviation and commercial aircraft with communication, surveillance and other avionics equipment necessary for nexgen. can you describe what the faa

has done to implement the nexgen public/private partnerships? >> thank you, mr. lapinski. that has been a discussion we have had on a continuous basis with stakeholders in the industry and we wanted to develop an understanding of how we would measure the benefit and what incentives they actually need and look forward to in order to encourage them to participate in the new system. that got us quickly into a conversation about operation incentives and financial incentives. an operation incentive is essentially, "how do i know that if there is an advanced procedure or i can take advantage of new technology that a controller will allow me to use it?" whatthat is related to developg the metrics, and knowing with certainty that they will be able to realize the benefits of fuel burn, reduced miles flown and everything that goes with that. if we can deliver and if we have the tricks for measuring

the delivery of these operational incentives, one of the things that has become clear in those conversations with industry stakeholders, the financial incentives, while important, he come less important, because the operational benefit -- become less important because the operational benefit is there, and we're working closely to put more more precision around those operational benefits. >> are you saying you are not moving ahead with the -- >> no, but the cuban you are related. on the financial benefit -- the two are related. on the financial benefit side, we are continuing to work with stakeholders on what that looks like. >> thank you. i cannot yield back without going to everyone's favorite topic, the sequester. it is amazing to me to hear that the sequester would actually be worse for the flying public

that if we had a government shutdown where we have essential employees at work. it shows the craziness of what is going on right now. i want to asked what my constituents are asking me. midway airport is in my district. i want to be asking about midway. what is the impact about -- with midway question mark i have heard the midway tower would be closed -- midway? i have for the midway tower would be closed, i was wondering if that is true, and what it would mean for air traffic? >> we are considering a midnight closure but we are in conversations with industry to understand what their operations are. again, we are focused on the universe of facilities had fallen into a certain category -- 150 thousand operations, or 10,000 commercial operations or fewer.

as it relates to midnight closures, those that have the smallest number of midnight operations, but this is exactly the nature of the conversation we are having with industry stakeholders to understand the impact and determining if there is a way to mitigate them. if we identify medications, again, we have to find offsetting cost. >> thank you. i will give back to >> thank you. >> -- back. >> thank you. thank you, mr. chairman, and thank you for your work on behalf of the faa. there has been a threat that because of the sequester the faa will have to furlough the majority of their 47,000 in place, putting air traffic at risk, that i find this hard to believe since faa funding has increased 41% since 2002 to spite affected flights are down by 27% and the same timeframe.

in my state of indiana we have streamlined and made more effective date government, going from $700 million -- state government, going from $700 million in debt, to a $200 million surplus, and instead of tax increases, we have given an automatic refund. we have the same number of employees that work for the state that we had in the 1970's and universally it is believed that services from the state government have genetically improved. with fewer employees, our government has worked at her for every -- genetically improved. with fewer employees, our government has worked better. this was done with no furloughs. can i be reminded again of what you're annual budget is? >> about $16 billion. >> what is your share of the sequester cuts the faa will

have? >> $627 million. >> if the sequester were half that size, would that make a difference? >> yes, if it were a smaller number. >> there are some people proposing to increase taxes to cover half of it, and still have some cuts. you would not have to furlough anyone if you had only $300 million in cuts as opposed to $600 million in cuts? >> we are focused on what we can do with contracts and our planning is that the $627 million level. we have not seen an alternative to that. >> the nexgen program -- i guess there are three programs related to implementation and developing this modernization program. do you have any idea of what you cost overruns are customer >> -- are?

>> our program is within its baseline budget. you might be looking at the plan we we authorized a couple of years ago. >> of the three key modernization programs, the cost overruns have a combined total of about $4 billion, so my question is, where does the $4 billion come from if we have as much cost overrun trying to modernize the faa? where does that come from? $4 billion against $600 million in cuts for the faa, where does that money come from? where are you getting that money to continue to have inefficiencies in the way we spend the taxpayer dollar at the faa question mark i just find it hard to believe that -- faa?

i just find it hard to believe that if we could spend $4 billion over what it is supposed to cost that we cannot find $600 million in savings in a $16 billion annual budget 30 >> i am not aware of the programs you are talking about or the time frame you are talking about, but as we have come before congress we have explained where we are in each of those programs in congress has been supportive of them. >> what you are saying is each time we give you more money? >> every year to come before congress with our program plan and congress has been supportive. >> so, we are giving you more money on top of what we would normally appropriate to cover that overrun question mark >> again, -- overrun? but again, i do not know what programs you are speaking about , so i cannot answer directly. >> related to how our state has

helped government, and you know a proximally how many employees faa had in 2008, about four years ago? >> i do not. >> right now there is about 40,000. is that spread through the country? >> 85% of our employees are in the field, outside of our major centers. >> thank you. i yield back. >> esther:? .> -- mr. cohen >> thank you. i want to say thank you for the dedication to the tuskegee airmen at the memphis airport. how much discretion do you have, if any, in where these cuts how-

they have to go across the board, what do you have some discretion as far as which airports, which times -- how you implement them? >> the cuts need to be applied across the board within a program, project, or account as laid out in the faa budget. the only exempt program is the airport improvement program, but aside from that our operations account, facilities account, and research account, they must be applied across the board there. within that, each program, project or account, there is an ability to work within the account, but when you are talking about an organization that is largely driven by people, that flexibility is limited. >> you had estimated in the larger cities -- new york, san francisco -- there could be delays of up to 90 minutes.

if you did not have those delays, with the alternative be risking safety? >> we are always going to air on the side of safety. that could mean that we would have a disproportionate impact on efficiency, but we will always do everything we can to ensure the system is safe. >> so, these cuts, if they come about with sequestration, unless the efficiency is sacrifice, which is what you are going to have to do, would potentially jeopardize the flying public? >> our focus is on maintaining a safe system, and where we see the principal benefit is in less efficiency -- correction, impact -- credible impact. -- printable impact. i think i said something else -- printable impact. i think i said something else.

>> everything i have heard about was on passenger traffic, and that is important, as we fly all over from washington and allover the world, but the commercial impact is important. mostly they do a lot of their work at night. will there be an opportunity to look at how they will have their services affected and will they be able to deliver the next day? >> we had our industry forum where we met with members of industry and both fedex and ups were present. we understand the impact of the cargo industry and its unique interest extended his will be need to consider. >> there is a possibility that since it is night time and they're not as many commercial, the traffic would not be interrupted? >> again, we are looking at two factors that one is total operations as well as commercial operations. these are commercial operations. >> thank you.

>> what happens to fedex, a used to be what happens to general motors, but now it is what happens to fedex happens to america>> thank you, mr. chairm. let me take a moment to congratulate you on your ascension to the seat. i look for to working with you and the administration as well. i as a congressperson who represents philadelphia and the airport outside the city, we look forward to working with you on a number of deficiencies that the faa is part and parcel of, excluding the implementation of nextgen. a look forward to your leadership in helping to push that.

i know in addition, one of our challenges has been looking at options to reduce costs as part of the reform act. there has been direct responsibility is to look for ways to streamline the offices to seek efficiencies. as part of that process, one of the things i know has been undergone is efforts to see consolidation in various places, including consolidations of the air traffic control facilities. are you familiar with the planning? >> yes. >> that is a high priority for us. as has the potential to yield significant long-term efficiencies for the agency across the board. >> are you familiar with an rfi -- a request wit respecth to the air traffic control facilities in the northeastern united states?

>> yes. >> that is good as well. on the rfi, one of the things i was struck by was the idea that you were looking for consolidation -- the request is for an interest in properties that can be sold to the united states. what are we selling? why are we looking to purchase property when there is a great deal of governmental property out there that is underutilized? >> that is something we are also looking at. the basic issue we are looking at is these air traffic facilities we are looking to upgrade and replace, some are over 50 years old. what we need to have is a property interest in them to ensure that we do not have on bering -- we do not have on

going [indiscernible] >> what kind of property interests? there are a lot of properties the government already owns. if we have a place in which there's a viable, already owned federal will -- federal facility, shouldn't that be a preference? >> it is specific to the location factors. clearly we will look at it. >> tell me what the location factors are and how they are relevant to the decision making. >> we are considering impact on employees. what would relocation costs be associated with employees. what about utility costs? how has the facility hard and so it can be secure? access to utility services, access to the facility itself. is it well located?

there are a wide variety of traditional location factors in the business would consider. >> it is saying the facility is asking for a facility located in new york within 150 miles of downtown new york city but located in the state of new york. why must it be located in new york? >> the principal factor we are considering is to minimize the impact on the existing employees currently based in to long island. >> where one of the factors as cost-of-living? >> that is a factor. >> so if there is a region where the cost of living may be cheaper, than living in new york, is that a fact as well? >> we are considering all costs at kemper -- at operating the facility. >> be familiar with the naval

air station? >> i am not. >> can you get yourself familiar with in time to be responsible to this january 31 request. it is in 150 miles on nyc but it is not within new york. i do not understand why it would ask the purchase private property when we owned public property as a government entity already. the naval air station has been reduced, has security and lower cost of living than that which exists in new york for employees anda variety of other and a structure already there, including infrastructure they have been handling flights. i think those factors would be naturally conducive to

retrofiting of this. >> i am not familiar with the site. it is something we can -- >> can i have your commitment as this process goes along that we will not automatically have a preferential consideration for one state and then explain to me by the preference would be there? >> you have my commitment to look at the site. >> you didn't tell me why we would prefer one state over another? why? >> it is to minimize our impact on the employee's base on long island. >> you can go to round two if you choose. >> thank you, mr. chairman. the mentioned in your opening statement to the issue of unmanned aircraft systems. the reauthorization allows for state integration of civil

unmanned systems into our national air space by 2015. for missions like search and rescue, while life and whether research, border patrol and other law enforcement purposes. i am concerned about the challenge of balancing the risks of privacy in treasons with the benefits of protection from physical harm that drone technology can provide. the reauthorization calls for the faa to work in collaboration with other government entities to develop an authorization where licensing -- for licensing for civilian joan operations. he tell us what other entities the faa is working with -- please tell us what other entities the faa is working with. i have seen reports about falling behind schedule and i would like to know what we can do to get things on track. >> unmanned aircraft represent a

significant challenge. it also represents is it the biggest opportunity. it is something we are taking very seriously. a couple weeks ago, we released in the screening of permission request inviting to compete for designation of one of the six unmanned aircraft test sites that are called for within the reauthorization. we are expecting the will receive a lot of proposals. there has been significant interest in this. the purpose of the test site designation is to develop data on how these types of aircraft operate within the national airspace system and how they can be integrated with manned aircraft that also operate with in the national airspace system. as we were developing screening information, one thing we learned -- a lot of concerns were being raised with respect

to protecting individual rights to privacy. it is for that reason we worked closely with other agencies across the administration to develop a firmer where at the same time we are seeking proposals -- a framework or at the same time we're seeking proposals, whoever is selected would be expected to abide by. we have received a lot of comments on that. integration of uas -- worked closely with our colleagues. we have also had a lot of conversations with state and local government entities. you mentioned law enforcement as being one area where there is significant level of interest. we are expecting a lot of the proposals will be in support of that interest. >> thank you, mr. chairman.

i yield back. >> thank you. mr. webster. >> thank you, mr. chairman, for hosting this timely discussion. and -- i have a local question. i represent the orlando area. the orlando international airport is one of the largest of final destinations in the world. we get over 40 million visitors every year to our parks. i would imagine everybody on this panel has been there at some point and time in their life. several years ago, they purchased -- the barletta international airport purchased a property next to the airport for $54 million. u.s. code requires airports should be as self sustaining as possible. their idea was to develop that what some commercial ventures so

it would become more self sustaining. since 2007, they have been attempting to work to the environmental process necessary to get approval to use that land. and they began holding hearings in 2008. much of that has been stalemate d. the general counsel for the faa has denied approval based on national environmental policy act. because they need a suiotor that would be developed in a five-year period of time from the time of approval. they have tried to get people to relocate their main as facilities and so forth. however, none of them want to

relocate without certification. it is like we are against a brick wall. we cannot get anybody to come unless we have approval. we cannot get approval unless we have somebody coming. the you have any advice for me -- do you have any advice for me? >> i am going to have to get back to you on that. i am not familiar with that issue but i can consult with my staff and get back to you. >> could somebody work with me on coming to a solution? >> sure. absolutely. >> tonight in prime time, starting at in the clock, remarks from president obama, john boehner and nancy pelosi on those automatic spending cuts going into effect today. hans c-span2, actress and activist ahsley judd on women's reproduction health service. on c-span3, highlights from the australian parliament.

all of that beginning at 8:00 eastern. the supreme court earlier this week heard arguments on the provision of a landmark voting rights act of 1965. the court will decide as part of the act has outlived its purpose and imposes an undue burden on states subject to federal supervision under the law. you can hear that argument tonight at 9:00 eastern on c- span. also online at c-span.org. the court is expected to have a decision by late june. tomorrow on washington journal, nancy cook talks about the economic impact of this automatic spending to cut -- automatic spending cuts. and the proposed marshall -- the proposed marshall of two airlines. the recent popularity of abraham lincoln and what his political legacy means in modern times. plus your e-mails, phone calls and tweets. washington journal, live every

day at 7:00 a.m. eastern. >> what did george see when the door was open and he walked into the drawing room? what kind of woman did he set eyes on? it was a beautiful young woman. >> if you missed our program on martha washington, see it online in the featured video box at c- span.org/firstladies. >> on the issue of sequestration, defense secretary chuck hagel spoke at a pentagon briefing. he also talked about the immediate effects of the reduction in training. we will show that to you in a moment. president obama coming up endicott eastern. -- coming up at 8:00 eastern. >> this idea that there is a

secret formula to get speaker boehner or mitch mcconnell to say mr. president, you are right, we should close some tax loopholes in exchange for some serious and tandem reform -- serious entitlement reform. i think if there was a secret way to do that, i would have tried it. i would have done it. what i can do is make the best possible argument and i can offer concessions and compromises. i can negotiate. i can make sure that my party, who is willing to compromise and is not being ideological thinking about this just in political terms, i think i have done that and i will continue to do that. but what i cannot do is force congress to do the right thing.

the american people may have the capacity to do that. in the absence of a decision on the part of the speaker of the house and others to put middle- class families ahead of whatever political imperatives he might have right now, we are going to have these cut in place. again, i am hopeful about human nature. over time, people do the right thing. i will keep on reaching out and seeing if there are other formulas for ways to jigger this bank so we get a better result -- to jigger this thing so we get a better results. >> at the pentagon today, chuck hagel talked-about the immediate effects of the sequestration, including the reduction of training and readiness operation and preliminary notification of furloughs for defense department

civilian employees. he's joined by deputy defense secretary ashton carter. >> good afternoon. deputy secretary carter and i wanted to take a few minutes to talk about sequestration, which was announced today. many of you saw the president a few hours ago. i will make a statement and then the deputy secretary and i will entertain questions. thank you for coming. i just spent an hour between -- between an hour and an hour- and-a-half with the joint chiefs to talk about this issue and to

talk about the consequences and how we will continue to adjust to the reality that faces our country and faces this institution. in particular, i would like to address the uncertainty that sequestration is causing and will continue to cause this department. at the outset of my remarks, let me make it clear that this uncertainty puts at risk our ability to effectively fulfil all of our missions.

leadership at the pentagon, all of us, have two serious concerns. first, the abrupt and arbitrary cuts imposed by sequester. second, the lack of budget management flexibility that we now face under the current continuing resolution for the past 8 months, d.o.d. has begun to see the effects and consequences of that -- passed two months, d.o.d. has begun to see -- past 2 months, d.o.d. has begun to see the effects and consequences of those actions. the actions we are taking as a result of these budget restraints. the navy will stand down gradually at least four wings. air force flying hours will be cut back.

this will have a major impact on training and readiness. the army will curtail training for all units except those deployed to afghanistan, adversely impact the nearly 80% of army and operational units. later this month, we intend to issue hesitations to thousands of civilian employees who will be furloughed. these steps come on top of those the department began in january to slow spending in view of this uncertainty. those include the deployment of naval assets, hiring freezes, beginning to lay off temporary employees, sharply cutting back facility maintenance and beginning views to delay contracts. -- refused to delay contracts. if the continuing resolution is extended in its current form,

other damaging effects will become apparent. our number one concern is our people, military and civilian. the millions of men and women at his department to work hard every day to ensure a merkel's security. i know that these budget cuts will cause -- to insure america's security. i know that these budget cuts will cause pain to military families. we are all concerned about the impact on readiness and these cuts will have a cross our force. for these reasons, the department's senior leadership will continue to work with the administration and congress to help resolve this uncertainty, specifically, we need a balanced deficit-reduction plan that leads to an end to sequestration. and we need congress to pass

appropriations bills for d.o.d. and all federal agencies. we will need to make hard choices. i will do everything within my power to see that america of hold its commitment to our allies and our partners. and most importantly, to our service members and their families. today, america has the best fighting force in the world, capable of responding to any challenge. this on necessary budget crisis makes that job much harder. -- and necessary -- unnecessry budget crisis makes that job much harder. i will take a couple of questions and then i will ask ash for his response. >> the language you use is not as dramatic as that that has been used in recent months talking about catastrophic results if sequestration happens.

do you think this is not a situation where the u.s. will be reduced to a second great military power? may ask a question on syria? what is your opinion on whether the u.s. should be doing more militarily to help the rebels? >> america, as i concluded my remarks, has the best fighting force, the most capable, most powerful fighting force in the world. the management of this institution, starting with the joint chiefs, are not going to allow this capacity to erode. we will manage these issues. these are adjustments. we anticipated these kinds of realities. we will do what we need to do to ensure the capabilities of our forces.

on syria, i think it is clear what our policy is. non-legal assistance. secretary of state john kerry has recently -- non-lethal assistance. secretary of state john kerry has commented on his trip around the world. >> sequestration has been described as a slope and not a cliff. in your opinion, how long can sequestration go on before there is real damage to the defense of the united states? >> we are adjusting for reality, not just for what happened today. as i noted in my remarks, we have a continuing resolution that expires on march 27, an additional complication. i have confidence in the

president and the congress that decisions and consensus will be reached at some point to avert tremendous damage to this institution. this is the security of the united states of america we are talking about. that is the highest order of any government, in the leader. we will do what is necessary, what it takes to assure that that security to assure that security -- to assure that security. >> others in your department has -- have expressed concerns that the budget sequestration will prevent the department from implementing the defense strategy that the obama administration announced last year. do you share that opinion?

and when do you begin to start modifying that strategy? >> adjustments are being made and we have anticipated required adjustments to our budgets to ensure the capabilities and readiness of our forces. as to the issue of the president's strategic guidance, that is the policy. in my opinion, it is the correct policy. we have been implementing that conceded that is over the last year and we will continue -- that strategic guidance of the last year and we will continue. >> given your role inside nato, what is going to happen to nato? will you be in contact with the allies and the secretary-general to explain the situation?

>> we have been in touch with our nato allies. as you know, we are in constant communication with our nato allies. they are not unmindful and not unaware of this issue that we are currently engaged in. our nato allies have difficulties as well with their economic issues. the fact is that nato represents probably the most successful collective security relationship in the history of man. that relationship remains strong, will continue to remain strong, must remain strong. >> just to clarify something you said earlier, that adjustments will be made to avert serious damage. to you think there will be a decision on sequestration? >> i hope we will see a

consensus. this is a partnership. this is every public and it is the executive and the congressional branch is working together to find a way out. listening to our leaders, all are saying the same thing, we need to find a way to resolve the issue. that is the only way out. i will leave this gentleman, whom some of you may know, ash carter, who is our deputy secretary and plays a significant leadership role on this particular issue as well as others. i ask him to come and i appreciate very much his leadership and his focus on what has been going on here and his years of service to this institution.

it is a benefit to our country and it is a benefit to this institution, especially in a difficult time like this. i would not say anything more. >> a couple questions. can you flesh out what practical impact the pentagon and its forces will see during sequestration versus three or four must from now. over the next 8 weeks, what will we see? >> let me start with the army. you will see the army beginning to curtail training at the national training center. if we go to the air force, you will see the air force beginning to curb flying hours. that means the nuclear capable air force, that part of the air force participating in operations in afghanistan -- we will protect them.

that means the cuts costs by sequestration and the continuing resolution will fall more heavily on other parts of the combat air force. they will need to cease training, which mean they -- means they will not be ready for other conflicts, which is a serious impact. you have already seen the navy began to make adjustments in terms of how many ships are at sea. you will see each of our program managers -- sequester a facts 2500 individual investment programs. we are working with our individual partners. we will see them beginning to make adjustments, for example, in the number of weapons systems in a given category that are being purchased. a different kind of arrangement.

you were weapon systems in a contract than we anticipated were being put in a contract. as the secretary and the president indicated earlier today, this progressively bills -- builds over coming months and constitutes a serious problem in readiness accounts. >> delaware the services have flexibility in their own accounts -- don't the services have flexibility in their own accounts where the bank will training? >> they have flexibility and they are using that flexibility to protect operations in afghanistan. we are not curbing or withholding training from units that are going to afghanistan. what that means is that the burden falls more heavily upon

the rest of the air force. a lot of people ask why does so much happened so fast. you begin to see some of the reason for that. you have become addition of sequester and the continuing resolution. you have the facts that we are trying to protect the war in afghanistan. only half of the fiscal year is left. even those accounts after we moved everything around -- what secretary hagel just said, we are doing everything we possibly can to protect national security and minimize damage. even after you have done all of that, even in the onm accounts, you still do not have enough money left to do the training that underlies readiness. that is why the readiness crisis is real and builds as the year goes along.

>> you talked about the programs you are concerned about. which people are you most concerned about today now that the sequester is official. is there any immediate impact on personnel and their families? >> the impacts are in it in all three of the populations we depend on for national defense. the president has exempted the pay for military personnel from sequester. however, our military personnel will still feels things immediately. for example, if you plan to fly or to train in the next few months, that is their duty, that is their profession, that is their responsibility during national security. they will not be able to do that. they will feel that immediately.

second, our civilian work force. as you know, our civilian workforce is about 800,000 strong. those people are dedicated to the defense mentioned -- mission. they live all over the country. 86% of them live completely outside the washington area. 44% of them are veterans. they are dedicated to the mission, too. as the year goes on, many of them will be subject to furlough. third and finally, the contractor work force depends on us. we depend on them. we do not make a thing at the pentagon. we depend on the industrial base to make our weapons systems, second only to our people, which make us the greatest military in the world. many of them will be affected

directly by this. we will be cutting back on cuts -- on contractor spending. we have to find $36 billion between now and the ends of the year. the civilian military work force will only provide a low savings even if we do drastic things, a few billion dollars. all three of those populations upon whom we depend will have effects that will be serious and immediate. >> in your view, how many of these initial cuts will have lasting effects that will trickle on and be felt in the years ahead? readiness, if it is not immediate, how soon until the cuts will impact readiness for years to come? >> good question.

we are doing everything we can to minimize lasting damage. you cannot eliminate it. i will give you two examples right away. when you cannot afford to begin overhaul or maintenance of a ship and you do for that maintenance, what that means -- our shipyards have their planned maintenance plan out through many years. once you have created a gap this year, that gap propagates into the future. another example. i explained that the air force was not going to be able to afford to have any of the pilots in combat air force trained in the latter part of the year. if you stop training for a while and york -- you are a combat pilot, you lose your rating and eventually cannot fly at all.

we cannot allow you to fly if you cannot fly safely. if you cannot fly safely, you cannot fly proficiently. you have to go back to the long building that process of getting your readiness back. this is not something that, even if it is temporary -- and the secretary explained that everybody hopes that, in some way, the sequester and the problem associated with the continuing resolution will be resolved through legislation and a large budget deal of some kind -- even with that to occur some months from now, there would be lasting damage from this. it is serious. >> of all of the cuts you see potentially coming down the pipeline, which gives the pentagon the greatest applause.

-- the greatest pause? what are the specific threats to the pentagon that we could be seen immediately right at midnight tonight? >> right at midnight tonight, and building to the days and weeks and months into the future, we will begin curbing training for units. let me take that example and play that out. what does that mean for national security. as the year goes on, apart from afghanistan, apart from nuclear deterrence through two missions we are strictly protecting, the readiness of the other units to respond to other contingencies will gradually decline.

that is not -- reduced readiness is a serious matter. the secretary has emphasized that. >> to you have any concerns that the lack of any clear impact on national security, short of something of this intangible, will make people think the pentagon can simply of zombies custom of a lot of these are down the road -- a absorb the cuts. a lot of these are down the road. they may not be tangible enough to sound the alarm is. >> we have been trying for 16 months to sound the alarm about sequestration. we are describing to you in all of the detail that we can help each and every part of this enterprise will be affected adversely. the people, the weapons programs, readiness.

we are not going to take actions that are unnecessary just to do something obvious. all this is going to be abundantly obvious starting tomorrow and building to be here. those who do not appreciate how serious this is, as the year goes on, it will be unmistakable. this is not subtle. this is an abrupt, serious curbing of activity in each and everyone of our key categories of activity in the department of defense. it is not subtle. >> thank you very much. there is a country and narrative out there. -- a contrarian narrative out there. \ i am sure you have heard it. i am eager to hear your response. we are winding down in afghanistan.

the war in iraq is over. we are not in a nuclear standoff with russia. china is a competitor and not an enemy. even if the sequester is a closing tool, why can and why shouldn't this department be forced to operate on less after 10 years of so much money come your way? >> first of all, beginning a year ago, the department embarked on $487 billion in defense cuts in exactly accordance with what you just said. $300 billion secretary gates had begun in the efficiency initiatives. as the wars in iraq and afghanistan winds down, overall budget authority will go down. that will make a contribution to deficit reduction. but sequestration is a different matter.

it is arbitrary. it is abrupt. on top of sequestration, we have the continuing resolution in force, which creates its own set of problems that i would not go into. in some categories, they are just of serious. the nub of this is something that is abrupt, and deleterious, and detrimental to defense. we should only get the money that we deserve and that the nation needs. we understand that. that is the principle upon which we built the new strategy last year. the secretary alluded to that. this country is turning a

strategic corner. that is the broader point that you are making. we are coming out of an era of iraq and afghanistan. we are trying to address the national security problems that are going to define this country's future and it's our future. we are prepared to do that. -- this country's future. this is a different matter. this is something that is not managerial from a national security point of view. >> you mentioned before how the civilian work force has a mission with the department also. they feel they have a mission. what do you say to a gs-5 or somebody contemplating a civilian career with the military?

to you still think it is a good idea given the uncertainty this causes? -- we are realistic. our civilians make important contributions to defense, otherwise they would not be part of the department of defense establishment. they do real things that are really important to us. they have had their pay frozen. now they are subject to furlough. as i talked -- you say, why would anybody join our ranks other -- under those circumstances? the reason is the reason you would want it to be. they join us and i hope they would stick with us because of the mission and because they are committed to what we do, which is to defend the country and help make a better world. thank you very much. >> some time before midnight,

kevin obama will find an executive order, putting into effect -- president obama will sign an executive order, putting into effect sequestration. thoughts, your reactions. the numbers to call -- we also set aside a special line for federal workers. if you are a federal worker affected by the cut immediately and received a furlough notice, we would love to hear from you. that number is -- we will also look at some tweets using the hashtag sequester. we will send you the statement from president obama and the q&a. but it -richard- , good evening. go ahead and carry >> good

evening. -- richard, good evening. go ahead. >> good evening. i am worried, even about my disability. it is not right, it is not fair. i think the rich should have their fair share of paying into it. correct you have any indication he will be affected? -- do you have any indication you will be affected? >> i do not trust what i hear much. i do not know. it is a toss up. >> let's hear from a federal worker, eliot, in florida. go ahead. >> there are a lot of ways the

federal work force can contribute and save money. i see what is online for frequent-flier upgrades and all sorts of trips and trouble for people who could really tele-conference and find ways to do things. >> what type of government do you work for? >> i cannot what to say that - i do not want to say that. if pds -- if every gs15 -- the federal prophecy is over bloated. to scare people without looking at all the different ways the

federal government can save money, in particular with the dod where i have experience, it is outrageous. at these to llok things and do it logically -- we've got to look at these things and do it logically. i just heard them talk about trains will be affected, of flight hours cut. -- be affected and flights cut. >> thank you for sharing your insights with us. president obama coming up et o'clock eastern from earlier today. richard is on our republican line. what are your thoughts about the sequester? >> they are dragging their feet

on both sides. the main thing that concerns me is that cutting the military systems. the rest of it can survive. the military cannot survive and we will not survive if they keep cutting the military. >> did you hear the other caller? it sounds like he did work talking about ways the government could cut. >> the thing about it, we have enough -- they are bringing up stuff on this thing that does not need to be on it. cut it out. >> continue taking your calls and checking out the hashtag sequester on twitter. he tweets -- that is detroit airport.

also this evening -- one more from georgia who says -- from george who says -- back to calls. in bend, oregon. sue is a democrat. >> actually, i am an independent. basically i know of a lot of places they can cut. i cannot think what they are doing is appropriate. - i do not think what they are doing is appropriate. i am concerned. a post office is already threatened be closed. most of the people in our area basically have p.o. boxes.

i am a mailman. getting very good retirement benefits but our believe our government collects 75 years in advance of hiring post office workers. so they have all this money collected. the crisis is being created by laws and they need to be looked at and scrutinized. parts of the military charge different rates because of working with government contracts, etc. [indiscernible] chattanooga,o tennessee. >> i just want to say hi to all

my country friends out here and any red blooded americans that still have a pulse. if we want to start cutting, let's cut the congress, the senate, the president. trust of our money in our hard work. start with them. 70% would be a good place to start. i just got off work. i have had maybe three hours of sleep in the last two days. i am not complaining, i have two jobs. this is just the beginning. we need a lot more. >> his, about cutting the pay of congress -- his comment about cutting the pay of congress, a bill was introduced today that would cut the pay during sequestration. callers earlier asked about it as well.

congress has to pass legislation to do that. obviously they left town without doing that. an informal cnn poll last week revealed most members would be agreeable to putting their own paid during sequestration. video here of john pinera -- here of john boehner. we will show you all that in a bit starting with the president. john is in alabama honor republican line. >> me and my wife, i am a contract worker for the military. my wife is a schoolteacher for the military. we both stand the chance of losing our jobs are being furloughed but everybody needs to take some kind of caught or action to realize the government is overspending and it will come to a head world -- to a head. >> have you gotten a formal

notice? >> no, but my wife has heard she could be furloughed one day a week for the next six months. >> tennessee, next up. on our democrat line. >> i really am disgusted with all of them in washington. congress is passing bills without reading them for bills they know is that bill -- or bills they know are bad. why don't we stop spending so much money overseas? we need the money here. let's stop sending it overseas and take care of home first. >> here is a tweet --

and that is in north carolina. go ahead. >> hi. my husband is a civilian contractor in afghanistan. his pay will be cut. we are thankful he has a job. the first place they always want to cut its education, our elderly and the military. i agree with everybody else. we need to start with the top down. we need to start building people in that have common sense. president obama started this. that is what people forget. he is the one that started this. and they are following him around and like crazy and what people need to remember is we need to create jobs and the sequester may need to happen.

host: john as in florida. what do you think of the sequester? caller: i think there is a responsibility. we have a judicial branch and they should implement impeachment on all these republicans and democrats for creating this mess and continuing it. the gun thiing is to keep us from looking at the real problem. our great grandchildren will have to pay for it and this is a bad thing for america. host: we will take you to the president, hi comments after the meeting --his comments after the meeting. mitch mcconnell did not come on camera but his office issued a statement which said i want to make clear that any solutions will be done through the

regular order. that is from mitch mcconnell. a couple more calls. pittsburgh, john, a republican line. caller: the lady from oregon metacomet at the -- from oregon made a comment about the post office. we should start cutting back in congress also. host: st. matthew's, james, democrats line. st. matthew's is where? caller: south carolina. i am a small contractor. we need to start with the big people up top. the small contractors build this

country. last year i was in north carolina and checked into a motel that should have been $45. there was an army got ahead of me. he had his room reserved for a month. he paid $186 a night and he preservative for the whole month. host: that was a government employee? caller: he reserved for the whole month and he left the next day. this motel is not top notch. i am just a small guy. host: what kind of contract do you do? caller: i am in the steel business host: thank you for

calling in. they write americans are more likely to describe the sequester negatively. let's see if we can get one more quick call to new hampshire. this is gregory. caller: yes -- [indiscernible] in real turmoil. there are a lot of unemployed people. everybody is wondering around, doing whatever they can to survive. it really does not make a lot of sense we are spending money on wars overseas. from the terry in standpoint, we should not even be there in the first place. host: is this a good or bad way to cut government spending?