they do the inspections of the poultry farms, etc., those people are lower level employees, and they leave at a faster rate than the higher level employees. obviously, in part because of the pay where a lot of the work of done at the bottom of the hierarchy is where you have a higher level of separation. one way to deal with this particular sequestration crisis is to not hire people who are leaving most. of the people who leave government are at the bottom. they are the people who deliver the services. that's for you get the problem. i recommend that we take those baby boom jobs at the top and we looked at each one as the baby boomers leave and we ask for certification that the job actually is needed before we fill it.

what the republicans are asking for is an across-the-board cut. it's easy to do. it would reduce government's ability to do its job. those are the park rangers, for example. but tsa employees screening bags and passengers at the airport as well. those are the people who have a high turnover rate. it is a we are not point to hire people for the next six months, those are the people you louis, the ones we really need. the higher levels, those people tend to stay quite a bit longer. host: paul light, public service oppressor and new york university, thanks for your time this morning. guest: my pleasure. host: and thank you for watching this morning. we will be back tomorrow morning at 7:00 a.m. eastern. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> there's news out of the white house that president obama will choose sylvia burwell. served as chief of staff to rubber aruban. before taking over the philanthropic wing of walmart, she served as president of the gates foundation global development program. resident obama has scheduled an announcement for 10:15 eastern this morning and we will have live coverage when it gets under way here on c-span. on capitol hill, both chambers are back today. house lawmakers working on a bill dealing with medical disaster response programs.

speaker john boehner over the weekend said he expects the house will begin work on a stopgap spending bill to keep the federal government funded for the remainder of fiscal year. and funding runs out on march 27. the senate returns at 2:00 p.m. eastern of. the agenda, votes on a pair of new york district court nominations at 5:30 p.m. eastern. also, coming up as early as tomorrow, a senate intelligence committee vote on the nomination of john brennan to be the next dia director if. as always, watch live coverage of the house here on c-span. why senate coverage on c-span2. [video clip] >> i was fascinated by her feminist views. "remember the ladies, or you are going to be in trouble." she warned her husband you cannot rule without including what women want and what women have to contribute. this is the 1700's when she

sent. >> abigail adams, tonight on c- history series. she was called mrs. president by her detractors. if she was outspoken on her views on slavery and women's rights. she provides a unique window into colonial america and her life with john adams. join in the conversation on abigail adams live tonight it's 8:0 -- 9:00 eastern. [video clip] >> do you find that washington and silicon valley are [indiscernible]/ >> that's probably fair to say. ties probably getting closer. there's more interaction these days than there was before. folks in silicon valley for a long time did not care what was going on in washington. likewise the folks in washington have

spent been tone deaf to what's going on in silicon valley and the technology industry. >> the san jose mercury news technology columnist is touring the consumer electronics show, tonight at 8:00 eastern on c- span2. >> year standing by for president obama's announcement of sylvia burwell to be his next budget director. he is also expected to announce his georchoice of ernest duenezr the energy department. and gina mccarthy to take the top spot of the environmental protection agency. that is scheduled to take place in about 10 minutes from the east room of the white house if. until then, a discussion of the automatic budget cuts that took place on friday. host: we want to talk this

morning about the logistics of sequestration. what is happening in washington? guest: right now there's still a lot of confusion. agencies are trying to figure out how they're going to present their plans to employees. we have only heard from a couple to federal agencies. the defense department of about how they would work cladistics, couple weeks back. the internal revenue service last week. the informant to protect an agency talked about it a little. i was struck talking to people inside agencies over the weekend by how many people still don't really know what is going to happen. they don't know how the cuts will affect them as employees and how they will affect the programs they work on. host: have they been told how they will be notified of any furloughs for anything like that? guest: it most likely will be by e-mail although it's possible some employees will be notified

face-to-face. so far, pretty much all the contact we are hearing about it for sequestration possibilities or that agency heads are acknowledging sequestration, and it's pretty much all been by e- mail, just because these eight currencies are organizations where it's not practical to try to communicate the information face-to-face. host: do we know how the federal government is going to determine furloughs? guest: each agency will do that itself, because each agency will decide what of its mission is critical and what people have to stay on to keep the government functioning and which people would be able to be out of work for a time. that's the big difference between the way employers are approaching it this time around and the way they approached shutdowns. because shutdown means you come into our morning and give us your blackberry and stuff and don't expect to be here for a

while. the furloughs integration will be a little different because it will not be happening for at least 30 days, because that's the amount of time the federal employees have to be notified that they are eligible for furloughs. and so, that is casting a little bit of a different feel about this. host: here's the baltimore sun this morning, front-page story -- guest: yes, that's a good example of how the agencies are going to determine on a one by one basis how they are going to do this. to counter what the social security administration is looking at, you heard the defense department saying they made it sound pretty much like a lock, that as soon as it was possible for them, there were going to furlough employees. one day employees that's a 20% pay cut for

civilian employees at the defense department. so each agency will have autonomy in how to implement the cuts and each agency is going to release their plan on a individual basis. host: what about benefits? guest: this will not impact benefits like health insurance or retirement contributions or anything to the extent that it does not impact pay. for employees who receive matches in district savings plan accounts, that's the federal equivalent of 401k plan spa, if you're not committing as much pay because you are furloughed, you will not be contributing as much to your retirement plan and you will not receive as much of a match from your agency. so that will have an effect. that's a much more long-term effects. things like health insurance and so on will not be touched by this. host: what is the difference between federal workers span contractors for the federal government when it comes to sequestration? guest: the main difference is that contractors don't have --

contract employees don't have the 30 day protection necessarily that federal employees have. if a contractor decides because of sequestration they expect to see their business, down and they decide today they want to perform layoffs, they are free to do that. another difference is the dollar value of sequestration will not necessarily impact contractors for some period of time because any money that the federal government is already obligated -- that is any money they have already signed deals for which companies will be honored. that money is essentially already spent. and so, that is not affected by sequestration. one side effect that i am hearing from some people in the business, the contracting business community in washington, is that they may look at sequestration as an opportunity to do cuts, layoffs, furloughs, or whatever and that they were going to do any way or that they wanted to do, be able to call them sequestration cuts,

and treat their businesses anyway, because they are looking at not just sequestration cuts but the prospect of smaller government budgets for the foreseeable future, and they're thinking this is the time we need to start thinking about reshaping our businesses. host: we heard a call earlier ask about the image behind me, the capitol dome, saying the sun is out in washington, does not look like sequestration had much impact. if people are looking for visual, what and when might stacy one? guest: the way to look at that would be however it impacts a particular citizen. you mentioned social security administration. that's one of the most customer- facing agencies in government. another one is the internal revenue service. look at those agencies and ncsl when you try to do business with that agency, are their hours cut back, are there fewer employees?

some national park service is a very high-profile one. there's the old line about washington monument cuts. whenever the park service was in danger budget cuts, they would say maybe we will have to close some of the national parks and it's a very high-profile way for citizens to see the impact of budget cuts. look for things like that. and when you start to see longer lines of the airports because there are fewer transportation security administration screeners, those are the kind of ways we expect it to manifest itself to the average person. host: francis rose, thank you. jackie simon is public policy director for the american federation of government employees, representing the federal workers. welcome. your reaction to what you just heard from rose. guest: pretty much agreed with almost everything he said, but one thing in particular that the widely held misconceptions.

i don't mean to criticize him, because contractors have tried very hard to disseminate this misconception. it is not true that money once obligated cannot be deobligated. it's not true that the government is required to continue with every contract that it signs. the government only encourage liability for the contract once the word has been performed. we have a memo that we are sharing with agencies and lawmakers, a very distinguished law professor and government contracts law expert who was on the wartime contract commission on iraq and afghanistan wrote a memo describing all the ways in which the federal government can legally cut spending. and service contracts. it's very important especially in the context of the department of defense. in the last 10 years, spending

on service contracts in the department of defense have more than doubled. from 72 billion per year to over to a hundred billion per year, just in the last 10 years. during that same time, in-house personnel costs have been effectively flat. he estimates that government- wide, 70%, to 90% of all sequestration spending cuts could easily come from service contracts. not exercising options, terminating for convenience, negotiating with the contractors not to continue with every option in their contracts. so it's not true that once a contract -- once money has been obligated to a contract that it is required to be spent. it's only when the work has already been done. host: i assume that the argument you are making to the administration. he would like to see them renegotiate contracts before the furlough of federal workers. guest: absolute appear there's no rationale for having furloughs of federal employees as a first response to

sequestration. it should be an absolute last resort or not happen at all. as mr. rose was saying, there are a number of agencies that have a lease made tentative announcements that they will absorb the cuts without resorting to furloughs. social security administration is a sort of special case which i would like to talk about, but we have the smithsonian, office of personnel management, small business administration, nuclear regulatory commission, national institutes of health,, they have all come out and said not definitively but that they are basically planning to make the cuts without resorting to furloughs for their federal employees. host: the size of the civilian federal work force in 2011, according to the bureau of labor statistics, 1.9 million. could we go through the numbers, to give our viewers context? but the pentagon, 766,000.

that gives our viewers the size of the civilian federal work force. what do those numbers mean to you when it comes to sequestration? guest: i jotted down a few figures before i came in today so i would remember. just announced furloughs by state, you got 90,000 in the state of virginia. 13,000 in washington, d.c. 46,000 in maryland. at the washington metro area. virginia has a lot of department of defense employees throughout the state, not necessarily in the washington area. 26,600 and alabama. 29,000 in washington state. 24,000 in oklahoma. it is not just inside the

beltway. or the beltway and its environs being affected. of the people have a misconception that all the federal employees working for the government are concentrated here in this area as paper pushers. but we are talking about depots, arsenals, military installations across the country, military hospitals, schools. we have transportation security officers, meat and poultry inspectors, people who are very modestly paid working across the country. it's going to be devastating to the workforce. host: we just showed a breakdown by agency of the civilian federal work force. how many of them are union members represented by you or other groups? guest: we are by far the largest federal employee union. there are other unions that represent federal employees particularly one in the treasury

department and irs. we represent just over 650,000 federal and d.c. workers. the concentrations in the productive offense, veterans affairs, homeland security, a department of justice, bureau of prisons,, hud, cpa, we are all over. -- epa, we are all over. host: what's your role in sequestration and who are you talking to in the administration and what are you trying to accomplish? guest: trying to accomplish a lot. we would like to see sequestration end. we would like to repeal of the budget control act. it was a terrible law. are all circumstances -- horrible circumstances. it was a gun pointed to the president's head, the debt ceiling. for reasons we will never quite appreciate the, he agreed to this turbulent law that really had the supercommittee, with a

deal, it probably would've been a bad deal also. the alternative was also bad -- sequestration. and it will be with us another decade unless its repeal. that would be our priority. short of that, you've got the possibility for what the administration called the balance deal, to include new tax revenue that would offset some of the spending cuts and spending cuts suspect would not necessarily been this across- the-board approach. what the contents of some of these deals, even some of the proposals the administration has made, will also be very bad for our members. anything involving cutting social security benefits for medicare benefits, but we oppose just as vigorously as we oppose for los. -- oppose furloughsa. we're talking to the

administration. we are talking to management at every level in the agencies where be represent workers. we're talking to lawmakers. aiday's news was really disspiriting, the notion that maybe there's nothing to be done and we will just let it go. i comfort myself -- you were talking to people earlier about optimism versus pessimism. i remember at one point a lot of people grew up their hands with health care reform and nancy pelosi and harry reid said we're not going to go up our hands, we are going to come up with a deal. i like to think about that when i want to feel optimistic that something good could be done. we are talking to agencies about alternatives to furlough. we have labor agreements, collective bargaining agreements that give us the right and opportunity to sit down and talk about the furloughs and exactly if they happen, how they will be implemented.

host: what do you negotiate? guest: we negotiated the scheduling of the furloughs. again, if we fail to stop them and they do occur, we have bargaining rights over what we called the impact and implementation. although it is management's right to know decide to do the furloughs - host: >> you cannot stop that. guest: but we can talk about how they will be implemented. this is the agency's responsibility. we cannot criticize the agency for saying they want to put mission first. their responsibility and their position is that they want to minimize the impact on the public. and so, in that case probably want staggered furloughs, certain employees would not come on mondays and others not on tuesdays, wednesdays, and so on. at least on most days, 80% of

the workforce would be there. host: what do you negotiate specifically on behalf of the federal worker? hostguest: impact and implementation. it's monday is considered the most desirable furlough day not to come to work, having access to monday as your furlough day might be decided on the basis of seniority. that's something we would negotiate. host: are you negotiating for one federal employee or for all the federal employees, union and nonunion at that agency? guest: it's not one on one at all. we have a bargaining unit. at some point, employees in a bargaining unit voted to have union representation. so everybody in that bargaining units is covered by our collective bargaining agreement and they would be subject to the terms that we negotiate for implementation. if you are outside our bargaining units, a supervisor or manager gets to decide

unilaterally when your furlough days are, how many you get, and how you will take them. host: jackie simon is public policy director for the american federation of government employees. we have a fourth line for federal employees -- we want to hear from you as well in this conversation. on twitter -- guest: well, i think the federal workforce and almost every agency is extremely lean. what people might not realize is that most of the increase in the number of workers performing the government's work are private contract workers. one of the things we're very concerned about in the context of sequestration is that agencies not break the law and don't really replace furloughed employees with either military

or private contractors. recall that direct conversion of work to the private sector and that is always more costly for the government. so it is an ironic effect if agencies do decide to break the law and do that. we will be watching that and being very vigilant about wanting to make sure agencies don't take advantage of this contract or work out. host: you said that would break the law. guest: the law requires -- the law prohibits direct conversion, generally. absent another law, before you would contract out work currently performed by federal employees, you have to perform a cost comparison to make sure -- to try to make sure that the decision to contract out is in the interest of taxpayers. that process right now is under consideration because it is such a flawed process. basically, agencies are

prohibited right now from converting work performed by federal employees to privatize government employees work. host: eddie is in massachusetts, republican. caller: good morning. i was pessimistic when i heard the l.a. times say they were happy. we're lowering the deficit spending. big deal. going down to 1.3 trillion. you touched on furloughs. europe goes on a four-day workweek. that's fine. but address the pensions. one guy in california, a manager retiring gave himself a raise. $850,000 per year. he has had 30 years' service at 3 percent per year, that gives him 90% of that, giving him $800,000 pension per year. would you please address it?

>> we take you live to the white house where president obama is announcing sylvia burwell pipa be his next budget chief as well as his choice to head the epa and the energy department. live coverage on c-span. sylvia burwell to be his next budget chief.

>> ladies and gentlemen, the president of the united states accompanied by sylvia burwell, ernest monus, and gina mccarthy. >> this is a serious group. [laughter] everybody have a seat. good morning, everybody. this afternoon i will hold my first cabinet meeting of my second term. there will be some new faces and

there will be some familiar faces in new jobs. but there will also be some seats waiting to be filled on a permanent basis. today i'm announcing my plan to nominate three outstanding individuals to help us tackle some of our most important challenges. one of those challenges is building on the work we have done to control our own energy future while reducing pollution that contributes to climate change. few people of played more for role in addressing these issues than current secretary of energy. he has helped speed the transition to more sustainable sources of energy. he has given more of our brightest young scientists the opportunity to pursue the idea that will shape our future. i cannot be more grateful to steve for the incredible contributions he has made to this country. now that he has decided to leave washington for sunny california,

i'm proud to nominate another billion scientists to take its place, mr. ernest moniz. there is ernie. [applause] the good news is he already knows his way around the department of energy. he is a physicist by training, and also served as undersecretary of energy under president clinton. since then, he has directed mit's energy initiative, which brings together prominent thinkers and energy companies developed technologies that can lead us to more energy independence and also some new jobs. most importantly, he knows that we can produce more energy and grow our economy while still taking care of our air, water, and climate.

i could not be more pleased to have him join us. he will be joined in that effort by my nominee to lead the environmental protection agency. over the last four years, lisa jackson and her team at the epa have helped us reduce emissions of the dangerous carbon pollution that causes climate change, put in place the toughest new pollution standards in two decades. lisa is not ready for well- deserved break. thank bob,ery much spank who's been a great deputy administrator and who has been acting as the administrator. please everybody give bob a big round of applause. [applause] as we move forward, i think there's nobody who can do a

better job in filling lisa's shoes prominently than my nominee was standing behind me here today, gina mccarthy. -- who is standing beside me. [applause] you would not know from talking to her, but she is from boston. [laughter] one of for proudest moments was yelling "play ball" at fenway before redbox came. she has plenty more to be proud of. as the top and fermenta official in massachusetts and connecticut, she helped design programs to expand energy efficiency and promotes renewable energy. as assistant epa minister added, she is focused on practical, cost-effective ways to keep our air clean and our economy growing. she has turned a reputation as a straight shooter.

she welcomes different points of view. i'm confident that she is going to do an outstanding job leading the epa. these two over here, they are going to be making sure we are investing in american energy, that we are doing everything we can to combat the threat of climate change, that we're going to be able to create jobs and economic opportunity in the first place. they're going to be a great team. these are some of my top priorities going forward. as president, one of the things you learn quickly is it's not enough just to talk a big game but the real test is whether your priorities are reflected in the budget. that's where the rubber hits the road. dancewear my third nominee comes in. my thirdwhethere nominee comes in. just science has been the

director for management of the office of management and budget. he's made our government more efficient. -- jeff zients. he has stepped in as acting director not once but twice. so there's no question that his skill and versatility has served the american people very well. i expect it will continue to serve us well in the future. in the meantime, i am confident that my nominee for omb director sylvia matthews per well, is the right person to continue his great work. [applause] -- sylvia matthews burwell. 19the 1990's, when she was -- [laughter] sylvia's served under jack lew

as deputy director of omb for the team that presided over three budget surpluses in a row. later she served the gate foundation and help it grow into a global force for good. and she helped the walmart foundation expand its terrible work. sylvia knows her way around a budget. -- she helped the walmart foundation expand its charitable work. she knows our goal is to reignite the true engine of economic growth in this country and that is a strong and growing middle class. and to offer ladders of opportunity. her mom is here. sylvia loves to talk about her parents, growing up in west virginia and the values they instilled in her as educators. i think that reflects everything but sylvia now does. i am confident that she will do

a great job at omb. those values are especially important to remember now as we continue to try to find a way forward in light of the budget cuts that are starting to cost us jobs already and hurting our economy. as i said, the american people are resilience and i know that jeff and sylvia will do everything in their power to block the impact of these cuts on businesses and middle-class families, but eventually a lot of people will feel some pain. that's why we've got to keep working to reduce our deficit in a balanced way. an approach that is supported by the majority of american people, including a majority of republicans. i am confident that we can get there to its people of good will come together. i want to thank steve and lisa and jeff wants more for their outstanding service, for all the great work they've done in this administration over the last several years. i want to thank ernie, gin,

and sylvia and her family's for agreeing to take on these big roles. -- gina. i hope the senate will confirm them as soon as possible, because we have a lot of work to do and we cannot afford delay. as soon as the senate gives them the go-ahead, they will hit the ground running and they will help make america strong and more prosperous country. thank you very much, everybody. [applause] ha >> president obama making his choices to head the energy department and epa and also selecting walmart foundation's sylvia burwell to be his next

budget chief. she previously served as deputy budget director in the clinton administration and as chief of staff to former treasury secretary robert rubin. before taking over the philanthropic wing at al marj, served as president of the gates foundation global development program. on capitol hill, both chambers are back today. house lawmakers working on a bill dealing with medical disaster response programs. speaker john boehner over the weekend said he expects the house this we will begin work on a stopgap spending bill to keep the federal government funded for the remainder of the fiscal year. current funding runs out on march 27. the senate returns at 2:00 eastern. on the agenda, votes on a pair of new york district court nominations. that will take place around 5:30 eastern. as always, watch live coverage of the house here on c-span. live senate coverage on c-span2. [video clip] >> i was fascinated by her feminist views.

"remember the ladies or you are going to be in trouble? i am paraphrasing. she warned her husband you cannot rule without including what women want and what women have to contribute. this is the 1700's. that's when she was saying that. >> abigail adams, tonight on c- span's new history series first ladies influence and image. she was outspoken about her views on slavery and women's rights. as one of the most prolific riders of any first lady, provides a unique window into colonial america and her life with john adams. join in conversation on abigail adams live tonight at 9:00 eastern on c-span, c-span radio, and c-span.org. >[video clip] >> do you find that washington and silicon valley are on two different planets? >> i think that's probably fair to say.

i think that the thais are probably getting closer. there's a lot more interaction was before. in many ways and for a long time soaks in silicon valley did not really care or want to know what was going on in washington. and likewise the folks in washington have sometimes been tone deaf to what's going on in silicon valley with the technology industry. >> a technology columnist at the san jose mercury news' is touring this year's international consumer electronics show, tonight at 8:00 eastern on c-span2. >> this morning on the washington journal, we looked at rising gas prices, tax credits or oil companies, and the keystone pipeline. this is 40 minutes. host: joining us on the phone this morning is a staff writer for reuters. she was in new orleans last week at the beginning of the trial for british petroleum, looking at the issue of the gulf

oil spill. kristen, let's begin. who are the players in the case? u.s.: on one side it's the government, the justice department. the u.s. gulf states that were affected by the oil spill, and most importantly, louisiana and alabama, which had the most effects of all the gulf states, and a number of plaintiffs that did not participate in the settlement that bp stock last year, estimated to be $8.5 billion. on the other side it is a number of companies, but mainly bp, which owns the oil well that burst hands leaked. trans ocean, that the red burned and sank. and halliburton, which made the cement to put in oil well that was supposed to help stabilize it. host: what is to be decided in

this case? guest: it's a big trial in three phases. each will be about three months or four months. the main thing to be decided in the first phase, the focus is allocation of blame, which presented a blame goes to each company. and the severity of the negligence. whether it was simple negligence or gross negligence. to reduce the level of gross negligence, that means of willful misconduct or reckless behavior, that they knew bad things are happening and did not do anything to stop them or they did not take measures to stop them ahead of time of when they knew it was coming. that would be the level of that. the second phase is focused on the flow rate. that's how many barrels of oil actually came out of the oil well. the third phase, which would stretch into next year, if they get that far, would be the amount of damages. what's really at stake is the level of negligence. if the judge determines any of

the companies are grossly negligent, not only would they face certain fines under the clean water act and the oil pollution act, it would also face potentially tens of billions of dollars more in punitive damages. if it's just simple negligence, if the amount of money they would end up having to pay would be determined by the ranges of those federal laws. host: why did the two sides not come to a settlement in this case? guest: great question. i cannot really answer that. there have been settlement talks going on for months off and on. bp's history, if you look at at the texas city refinery explosion litigation, all those cases were settled. it was always just a matter of when. but in this case somebody did not come up with the right number and they decided to go forward. host: how much money are we talking?

what's the range of outcomes when it comes to fines? guest: some of that is determined and some is not. it could be, depending on what they determined the flow rate was, it could be $4 billion to over $17 billion. it would be more under natural resource damages assessments, under the oil pollution act. that is not really in that finite a number. as i said, if they get adequate -- if they reached the punitive damages level, and you are talking about something that could be quite a bit bigger than the $5 billion punitive damage award if that was put up against exxon for the exxon valdez oil spill, which exxon fought over number of years and ended up being cut to half a billion dollars. host: the trial kickoff last week and continues this week, monday through thursday is when they will hear testimony. how did it go the first week? is there any talk of possibly

coming to some sort of agreement? guest: like i said, that's really hard to say. once a trial starts, a case can settle at any moment, before or after a trial starts, especially a civil case. so you have to assume that settlement sarks are continuing as the golan. but once they actually get started and they do their opening statements and start moving into testimony, at least the people that are in the courtroom, that is their focus. whoever the negotiators are, they may be elsewhere in washington and not in new orleans, they may be elsewhere doing what they are doing. but the people that are in the trial, they're focused on the trial, the task and hand. host: thank you very much for the update on the trial. guest: thank you. host: now return to john felmy, the chief economist for the american petroleum institute,

here to talk about energy policy and rising gas prices. i want to begin with the bp trial. what's going on in this trial? guest: i really don't know. i'm not an attorney, so i'm not qualified to comment on this. and they are members of api, after a pass on that discussion. host: since you are chief economist, do you think it could have any -- if ever they decide, what is the impact on environmental law going forward? and is this a precedent-setting a trial that could impact the company's bottom line? guest: is no question it could impact the company's bottom line. as far as president-setting, i cannot comment. i'm not enough of an attorney and the minister knows his limitations. host: all want to let our viewers know that the washington post editorial today, one of them is --

so let's turn to gas prices. we were talking earlier about the economy and whether or not people are optimistic or pessimistic. one article noted that the middle-class and lower class people are paying out more for gas. guest: its three factors. what we have seen is the cost of crude oil has gone up sharply. the cost of ethanol, which is blended about 10% in all gallons of gasoline, and demand is up. if you've had 50 cents per gallon increases since december. host: there's one story in the paper that says they blame refineries. it says the refineries went offline unexpectedly and that sent prices up. guest: what you've seen this production is down a couple percent. what you've seen is gasoline

stocks are up. so there's plenty of product out there. the question is how much does it cost to make? host:? what's the: guest: you either need to produce more oil demand less. what we've seen worldwide, record demand for crude oil. there's three big factors. china, china, china. we're at a record level of demand. 90 million barrels per day. with limited supply. opec production cuts prevent why we have a tighter market. host: what do you expect for the spring-summer driving season? guest: after chris ault increase in the terms of the cost of crude oil, declined prevents a good sign. we've seen gas prices start turning down. the question is what will happen in terms of all the factors that affect crude oil prices worldwide? it could be worldwide supply- demand factors, tension in the middle east, production cuts. it's cloudy crystal ball. host: the president will make a couple announcement that deal with energy policy this morning.

gina mccarthy to lead the epa, ernest moniz of mit to take over at energy. your comments on those two? guest: those folks have been aroundmo for awhile beenniz has been in the administration before-- moniz has been in the administration before. gina mccarthy has been at the epa. we will see what happens. i cannot make any comments. host: do you think the senate should confirm those two people? guest: it's not for me to say. it will have a vetting process. host: we have had a lot of talk about sequestration and the two sides not being able to come to a deal. the president has said that we could have avoided sequestration had the other side agreed to eliminating tax credits and loopholes. one of the areas he is focused on its oil and gas companies. why not do that? guest: it is the

mischaracterization to call them loopholes. in the oil and gas industry we get to deduct costs. it's just political spin to say that we are getting subsidies. that's nonsense. what we need to do is reform the tax structure across the board, to broaden the base, and move forward. host: explain to our viewers about these credits and how they work. guest: there are several possible candidates. don't pay taxes on cost. section 199 is a manufacturing credit. all industries get that. the oil and gas industry now gets less, in fact. things like being able to deduct your costs for exploration costs. it is just political spin to call it subsidies. host: " about leasing fees that oil and gas companies pay, how much are you paying for that? do you consider that the contribution to the u.s. treasury? guest: there's no question we

pay a lot of money to lease properties from the federal government. that's really beneficial in terms of the amount of oil and gas that we developed and then we get royalties from those, so it is a significant opportunity and we could do a lot more. host: we want to get your thoughts on energy policy and rising gas prices. yesterday on c-span a senator from oregon joined us. years when he had to say about gas prices. on gas prices going up, and you have any plans to hold a hearing on that? >> yes, i spoke with senator schakowsky on that and we plan to hold a hearing on gas prices. >> any details on what that hearing would consist of? >> i think we ask the question is what is making prices go up so dramatically now? the custom has always been in

america that prices go up in the spring. we are still in winter. i believe we are trying to look at the history on this. this is the biggest increase in the last month that people seen in quite some time and maybe the biggest increase ever. susan, if they could see your expression, there are lots of gas price increases, but there's no reasonable explanation to this right now. the iranians are not rattling around this week in the straits of hormuz. we have not seen any kind of unusual developments. that's why i want to look at a whole host of issues. and one that has not been on the table has been the question of refineries. host: your reaction? that's the new chairman of the energy and natural resources committee. guest: the cost of crude oil has gone up. you have to understand there's 42 gallons in a barrel. to calculate, price increases in terms of since per gallon.

that was about 29 cents. ethanol went up 3 cents. demand increased. it is simple math. in terms of production, production is down a little, but inventories of gasoline are up. so there's plenty out there. it's just a question of how much more in costs to make. host: mark is in ohio, a democrat. caller: good morning. you just keep saying the cost of crude oil has gone up. i watch national business report every night on public tv and they cover the price of oil every night. 10 days ago, the price of a barrel of oil was almost $100 a barrel. friday, it was $91 and something. it has gone up almost 10% in 10 days.

if it happens in reverse, oil go sky high, in terms of price as soon as the price of oil goes up. why do you keep saying the price of oil has gone up? why has not gone down to reflect this price of a barrel on the world market? host: stay on the line. guest: it has gone down. i was talking about why does the price increase? it went up by 29 cents a gallon and that an oil went up also. now you've seen " no prices have dropped 16 cents a gallon and gas is down 4. you are seeing the normal relationship of gasoline prices lagging crude prices. host: a follow-up? caller: what he just said is not true. i'm in toledo, ohio, all the time. i was in fort wayne, indiana, over the weekend. it is $3.79 or $3.89 a gallon. how can you say it's gone down?

guest: it has. log on to all the web site of and -- of aaa. host: in pennsylvania, a republican caller, mary. caller: thanks for taking my call. i want to know why it is a political. a few years back when george w. bush was president, senator schumer did some grandstanding and with his own outrage about $1.85 a gallon and he was at a gas station and brought his film crew with him, "what are you want to do about it, mr. president?" now it's twice as much, too dollars more per gallon, and i hear nothing from him. please explain. guest: we are disappointed. the basic tax on gas prices are pretty straightforward. in washington, politics is

politics. so we expect any type of attack. what we are committed to is talking about really the reality. for those folks, you up there in warren, which is home to a dam, it is an important thing to consider, because the average household spends 5% or 6% of their expenditures on gasoline. host: independent caller in georgia. caller: i was just wondering how much does this country export? how much oil do we export every month? and how much do we import? and what does that do to the gas prices that we pay here? guest: in terms of crude exports, only about 50,000 barrels a 60,000 barrels a day primarily through canada. we do export quite a bit of refined products like gasoline and diesel and so on. the prospect of about 3 million

barrels a day. we import about 10 million barrels a day of crude and products. if we can reduce that significantly if we are allowed to produce more in this country. host: speaking of canada, the keystone pipeline. here's the opinion section of the wall street journal this morning -- guest: i think that's absolutely right. what we need to move forward right now in developing the pipeline. opponents of the pipeline the by stopping the pipeline they will stop oil sands development. that's not going to aspen. oil sands are worked sometimes

canada's gdp, so they are going to be developed. if you are an environmentalist, you'll bring that oil to the u.s. because it has lower emissions. the science shows are no adverse impacts, so let's move ford. host: this is the sierra club's reaction -- guest: nonsense. the oil is going to be developed

in the oil sands are worth $14 trillion. the 10 time canada's ttp peter will be developed. the question is where will it go? if they go anywhere but the u.s., it will be higher emissions, higher for production and consumption,. all the things have said that keystone xl pipeline should be developed, so let's move forward right now. host: jeff in, no beach, florida, a democrat. -- pompano beach pick. caller: how much of the oil from the keystone pipeline would stay in the u.s. and how much would be exported? and why is the u.s. government subsidize the oil companies when they are making billions of dollars? guest: we don't get subsidies, what we get its tax deductions on costs. second, in terms of exports, there are no facilities to be

able to do that. most of the oil or virtually all of it will be used to replace declining production from places like venezuela and mexico. these arguments against it simply are fabricated. the key thing is if we bring the oil into the u.s., it means a significant amount in terms of jobs and improved trade, so let's move for. host: michael in stamford, connecticut, independence. caller: if i got this right, the price of gas has gone up and really nobody knows why. i am thinking that it's because of all the fracking they are trying to do. and if gas is not $4 a gallon, they cannot afford to do what they are doing. to take that gas and pumping down through the united states out of the gulf to ship it to china just so you can make the money? $17 billion worth so of oil is there, but how are you

justifying the? price at the? the price is so high for. no good for it's not nonsense. i've heard you say nonsense too many times to believe anything you say. tell me that's testified that the price is high just so you can be able to pump it out from the fracking? host: all right. guest: i have no idea what you're talking about in terms of crackifracking. natural gas and pennsylvania. the keeping its oil development is what we're talking about if we're able to develop the keystone pipeline, it will mean trade benefits and all these positive things and so on. in terms of why prices have gone

up, it is the cost of producing the product and demand. nothing more or nothing less. caller: my question is what i would like to know is why can't they spy -- stop the pipeline there, build the refinery and ship the oil and gas up into the upper parts of the united states because new england and across the country in the north always have higher prices. so they could still profit from oil but it would come directly to us at a lower price. i would like to know why they cannot do that. guest: the basic reason is the refinery business is not a great business. you would still have to build pipeline capacity to be able to get it to doing wind. one of the main reasons why they have higher prices is because of higher prices and more expensive

gasoline because of federal requirements. with the refinery margins being so low, it is not a good proposition business for many folks. if you look at the refiner -- refinery industry, even when you make money, last quarter to send the dollar, the whole oil industry only makes 6 cents on the dollars. refineries are like bakeries, they did not pay for the cost of inputs and get whatever is left. when you have the declining demand but last year, margins are very low. caller: good morning, c-span. you do not suppose part of the reasons -- part of the reason the price of oil is staying high is because the money that the fed is printing? the saudis are not stupid. they realize $100 a the only worth $80 or $90 now.

they asked for 110 per barrel instead of 100. it has to have an inflationary effect on products. the product here did not go up. they just jacked up the taxes by a bunch on a gallon of gasoline. i think the one thing the stations are not allowed to do because the government will not let them do it is show how much a gallon of gas -- how much taxes are added on to a gallon of gas. it is incredible what they do and limit on the poor oil companies. have a nice day. the to for taking my call. -- thank you taking my call. i am basically retired but do a few other things. i'm pushing 69. i am slowing down in my old age.

why do you call them poor oil companies? some people may have laughed as the characterization's. -- at the characterization's. >> they make 6 cents on the dollar. most businesses are making 12-15 cents on the dollar. the oil companies -- the government keeps making bad guys out of them, and it is outrageous. guest: he is right. the numbers are big because the companies are big. in terms of international influences and the dollar, there can be an impact. opec does not like it when the dollar depreciates. you saw, for example, they cut output, because they want to try to keep the price higher because that is what they made money on. >> stayt fedor -- state and federal taxes, will we see the price at the pump, can you explain the different taxes

that go into that? guest: new york state excise taxes and in some states that sales taxes on top of that. then you have federal taxes, which are about 18.4 cents. gallon of gasoline at a consumer pays for, it is about 50 cents per gallon in taxes. federal government does not allow these gas stations to put how much you're paying in taxes? guest: those, i believe, or state regulations. and i have seen taxes on some palms in some states. host: bobby in alabama, democratic caller. caller: i would like to correct something that your guest implied. i watched the hearings on the pipeline. the question was asked him directly how much of the oil will stay in the united states, and the answer was, none of it, because they have already

signed a contract with exxon mobile to export all of it. the reasoning i have come down to in the united states is because they are blocked and do not want to cross canada to the west coast. one more question. the kalamazoo river, they had a big oil leak out there and i think that oil company said it would be cleaned up in a short time. i i think it went over two years and is not cleaned up. the but like to hear your comment. guest: in terms of spills, and these bill is one too many. the companies have been committed to cleaning of dennysville that they have.

second, i've never heard what you are talking about as far as all of it going to be exported. for every dollar that we send to canada, we get 90 cents back, compared to the middle east, where you get 30 cents back. it is a powerful economichost: here is a comment on twitter. guest: the market for oil is a world phenomenon. wherever it goes, it will be the same practical impact. the question is, who would build a refinery when the margins are so low? with crude oil, we have refineries that can handle it and it will replace oil that is declining from other countries. host: next call, democratic caller. caller: you characterize your deductions as not paying taxes

on expenses. to me, maya understanding of a deduction for by that statement is incorrect. to me, a deduction is you are taking that extends about from your income. you're actually not paying taxes on income. expenses. it seems like you incorrectly defined what a deduction was. these are costs. you do not pay taxes on costs. when you have a net income system you do not pay taxes on costs. it is really that simple host: julie, republican caller. caller: can you please explain how the democrats in 2007, i believe, created a law that forced the oil refineries to use a nonexistent bio

cellulosic produced, i was told that these retirees have to purchase labor and it is a huge penalty. is it being levied on the price of gas? and can you please explain how these mandates from the epa drive up our gas costs. guest: the renewable fuels data that was passed in 2007 requires the oil industry to use a product that does not exist, and if we do nautic -- do not use it, we are penalized. it drives up the cost of using fuel. between that and the ability to blend ethanol into the gasoline pool, it is an enormous challenge. we need to revisit it immediately because the costs are.

to continue to go up. host: ethanol subsidies should be done away with? guest: they have already been done away with. the question is the mandate. that does not exist. it makes no sense. host: tom in burlington iowa. caller: i want to ask a couple of questions. when they bring the world stands down from canada, who owns that up in canada? what countries own it? through here, why don't they stop in nebraska, build a refinery, take half of the oil there, make diesel fuel and things out of it for the midwest and everything, and then ship send it to china? because that is what they're going to to do, they have already settled this. i think there's $40 billion that u.s. companies made this last year. can you tell everybody about it?

guest: first, in terms of the or company's earnings, their large because the companies are huge, but they were charging 6 cents on the dollar. somewhere, i would love to see a refinery in parts of the country, for example, the west northeast, and so on. it has very little return and it is hard to justify from a business perspective. in terms of export to i have no idea where that argument has fact. lot of interest in refineries. there's one story that refineries have gone offline and that is causing gas prices to go up. but when they go offline, why and what is happening? how long before they come back on line?

guest: first, there has not been that much of that going on. inventories are above average. the key thing is that you have to do required minutes or upgrade for environmental and safety reasons. they go down for a few weeks at a time, depending on what you're going to do. it typically happens during the low demand in times of year. but there's plenty of gasoline out there right now as far as i can tell. costs to make. republicans -- independent caller. caller: in 2003, 2004 fa barrel of gas costs $140. real peaked in gasoline prices was 2008. the average cost of crude oil was very high, $150 per barrel.

in fact, everyone was told a gallon of gasoline at your lost money on it. now we are seeing unfortunately you have to look at what the price of oil is,/42, and for example, up for west texas intermediate, the average cost of a gallon of crude oil is $1.16 and then you add on the 6 cents. you up costs for all of your exploration, production, refining, distribution, marketing. to get it around the globe. when you break it down in terms only about 6 cents. host: this is the headline on

the american progress website. one caller referenced $40 more money? that is not is not enough? guest: we have vast resources in year and imports from canada and biofuels, we can become energy self-sufficient. the center for american progress is constantly attacking house. they need to be dismissed in terms of their arguments. we want to produce more energy for america.

it will generate jobs, energy security, and improve trade deficit. host: on the keystone by, that has also been the argument, that it will create jobs if approved. do we know when that decision will be made? on this. answer. right now, i'd is clear that timeframe. host: the report that came out on friday? guest: correct. within the administration to talk about the keystone pipeline? but i do not have access in economist. we have been saying for a lot of years that this pipeline should be built and the economy will benefit from it. host: going to nick in california, republican caller. caller: good morning. i've been watching c-span off

and on for about five years and for me to watch it, for various reasons which i will mention-- i will not mention because you will cut me off. this gentleman has sloughed off all of the answers to all of your questions and the callers' questions. and this stupid old man has been around long enough to have a little common sense. oil. they control the conversion to gasoline. money, they cut back on the

demand. and because lower demand goes down, they raise the cost more satisfy wall street. host: mr. felmy, does the oil and gas control of those prospects? if you look at how much power the companies have, it is very little, if any. the key thing is they have hundreds of thousands of wells, 140 refineries, 170,000 gasoline stations all competing for your business. the notion that they somehow have control over it are simply not right. refiners have no control over their output price and no control over their inputs. host: william in arkansas, democratic caller. caller: i've got to ask mr. felmy one question. normally, people in the petroleum industry, they already know what projects are coming true. because through. and the same thing about the congressmen who want the stuff

to go down. how much profit? off of your investments that require your pushing this pipeline so hard? guest: 4 at six reasons, i do not invest in the oil companies invest in any of the oil companies or projects. what do you know it or not, you probably have an investment in the oil company. 50% of the equities of oil companies are owned by pension funds and higher rates and and ira's and the millions of americans on the will companies. it is not a personal benefit. but it is a country benefit. we need to develop this provides a weekend build jobs and energy security. host: thank you very much for talking to our viewers. guest: thanks for having me. " host: we will go back to >>

turning to capitol hill, the house and senate will be in today. house will vote on a bill to keep the government funded. current funding runs out on march 27. the bill will come up for a boat in debate later this week. live coverage here on c-span at noon. the senate will be enough to o'clock eastern. boats are district court nominations at about 5:30. -- votes. to say we could see a nomination of john brennan to hide -- head the cia. what coverage on c-span to. -- watch coverage on c-span2. janet the peloton know and michael chertoff marked the 10th generation of the homeland security department. they address immigration of sequestration during morning for

marks. we will show you as much of this as we can prior to the house gaveling in at noon eastern time. >> we have three secretaries. appreciate you all coming together for secretary napolitano. the least of these is an opera fan. we will start with use -- start with you. everyone in washington very concerned about the sequester has landed. you said you are already seeing effects. >> right. as i shared with congress when i testified, now that we are having to reduce or eliminate basically over time, both for tsa and customs and have institutionalized a hiring freeze, we will begin today sending out furlough notices. we are already seeing the

effects of some of the ports of entry. some of their parts have very long lines this weekend. i want to say o'hare. i want to say lax. i want to say atlanta, but i would have to check. the new york airports cut through ok, but that will be temporary. we will see the effects cascade over the next week. >> what kinds of lines are we talking about? >> i would say 150-200% as long as we would normally expect. i am trying to give you your story so you can say is really long. i do not mean to scare, i mean to inform. if you're traveling, get to the airport earlier than you otherwise would. there is -- only some much we can do in personnel.

please do not yell at the tsa officers. they are not responsible for the sequestered. i have not heard however of from a customer, a traveler interaction. no one likes to wait in line. no one likes to wait in long lines. as a matter of sequester, this is happening and will continue to happen. >> last question on this. what will you do to mitigate it, or will it get worse? >> there is very little we can do to mitigate it, because the procedures we use to clear passengers and cargo, they are responsible for the fact we of a very safe aviation system and a very good land migration system where we know who was coming into the country. we will not cut back on those security needs. the end result is fewer people doing the same things. the lines will get longer. take a one more sequestered question.

-- >> one more sequestered question. in the report that the white house put out late friday night that everyone read saturday morning, the secret service is taking a 5 percent cut to the operating account. how does the secret service scamp? ? >> yes, it is. empire. obviously one of the major responsibilities, if not the major responsibility, is the protection of the president and vice-president. on the protective side, we will protect that, of course. what it really means is on the investigative side where we handle all kinds of financial, i did that, cyber crime -- identity theft. secret service is the lead in many of those.

a lot of those activities are being cut back. >> what is interesting is all of the secretaries got along, and the alumni get along. the three administrations have joined alumni events. i think there is a happy hour coming up wednesday. how many people here were in dhs on day one? a bunch. [laughter] backstage i asked governor ridge if i should call him secretary or governor, and he said governor, so i will go with governor. tell us about day one. you were there. take a what mo " -- what most people do not realize is although the gates opened on march 1, the national security council dropped by a couple days before, and thank god we had colonel bill parish who said in a couple weeks we're going to iraq.

so we had a liberty shield. with a small crew we build relationships with the state and local in the private sector just in case. the work of homeland security began before the doors even opened. >> governor, in your book, the test of our times, you have a chapter called unbuttoning of america. you talk about the early days. -- buttoning up america. he resisted its and saw it coming from the hill. you did it anyway. you were in the white house as homeland security adviser. was that how it happened? to go it is not the narrative for which i am familiar. we have heard it clearly. the president, president bush early on after i received a phone call in september,

obviously there is no architecture for how you deal with the new threat for sovereignty and way of life. his challenge to me was let's see how this plays out. we literally work within the department for several weeks. i remember during the first of the budget talks trying to move people and money around in order to create a border-centric agency without a massive reorganization. there was enormous pushed back by members of the cabinet at that time who felt we needed better communication and coordination. a success -- i suspect my successors ran into that as well. it was clear we needed something in the 21st century. even before 9/11 there was plenty of conversations that said we need to monitor people and goods coming back and forth. finally, with resistance of small maneuvers in order to create a mini me, the president

decided we need to do more. there was a lot of bidding for what belonged and what did not belong. once the president suggested we need a border-centric agency, then the cabinet finally decided it was a good idea. talked your colleagues who were there. the meetings got crazy. it was all the people who legitimately or thought they needed a seat at the homeland security table. it could not be done with in the west wing. >> truth be known, the president had very collaborative intense process within the white house. and vetted every conceivable agency that belong to or did not belong. should the secret service be under the new department? should be ma be under the new department? frankly, at the end of the day,

without any leaks, pull together based on the national strategy that was built about a year before, the aggregation of the traditional departments primarily with the layering on of a new set of requirements and new mission. it was done thoughtfully, energetically, and a handful of people who worked for a few weeks to get what blanc or did not belong. the president said absolutely not. the unsung heroes are around the organization may be here for those that does labored rather intensely and intensively in the bowels of the white house for about two or three weeks. when that was all said and done, brought it before the president approved it and the way we went. >> each of the secretary was suited to their task. tom ridge. a very public face. a comforting figure.

michael chertoff, a clerk at the supreme court. the late justice william brennan. now chairman and co-founder of the chertoff group. he go in and was more behind the scenes and made the department work. i wanted to ask you about the maturing of dhs as the bureaucracy. it took the defense department 50 years. some people will remember that initially the service secretaries were very powerful. they tried to impose the pentagon authority. unquestionably powerful of defense. where is the chest and that the evolution? here is dhs in that evolution? >> in a lot of the prophecies

that you are used to, it was simply actions. it was not the way to manage a schedule or briefing or press or things of that sort. there was a lot of showing to be done. we did not take a couple of existing pieces and put them together. there was actually are reshuffling. that made it more difficult, but also meant the entrenched way of doing business, which i think is the way defaced it at the pentagon, was not really present because no one was in any trenches. everything had to be built from scratch. that gave us the opportunity, which i know was continued under my successors, to really bring in a sense of join us. we looked at the department of defense and the model cold water nichols to say how could we promote people operating in a joint fashion? that is really what the value proposition of the department

was. >> within the u.s. government, because now you have more distance and can talk more candidly about this, how much credibility authority does dhs have at this point, and how much of that is still to be involved and earned? just in my four years of office, i saw a tremendous transition. it is the third largest. it owned a lot of missions that had previously been performed by other agencies. when i first got there, there was still a protecting your own race bowl mentality that other agencies had. getting them to coordinate and work in tandem rather than to resist was very difficult. i have to say by the time i left, a lot of that had fallen away. frankly it was because we have lived through a series of

significant events. terrorist attempts, natural disasters, which over time accustomed people to work with dhs, so that was a positive development. to go one of the advantages -- >> one of the advantages i had, there was a sense of missions internally. the offices and headquarters were spartan, and that is being kind. there were all over the place. building a new department and assimilating agencies and bureaus that some of them had a 200 year history, so creating the culture. you have the business line integration. you have to deal with it, budget, the sense of mission, really i think it was the glue that held them together during the first couple of years.

i think michael is absolutely correct. i recall the first meeting in the roosevelt room before the president decided to go with the department. there was tremendous resistance from everyone else that we ought to do it. once the decision was made to create the department, the sense of mission was really rather remarkable in my judgment. , 365. no one worried about overtime, they just did it. >> did you push for it? >> i thought it was necessary to have it. there was plenty of studies with regard to creating a border agency. right after 9/11, there was anthrax and everything else. whether you had a terrorism incident or not to build a network system with an america to help protect us, and i think

the real challenge was and unity of effort to defeat an asymmetric enemy. all the other agencies had traditional missions as well. we laid on top of what they were doing at homeland security. remarkable crew. >> the dream of the people who envisioned the department is eventually it would become a melting pot and would become a unified department, rather than the previous pieces with a disembodied head. this is a hard group to assert control over. very proud independent agency. customs 200 years. where are we in the process? >> i think a lot of molting has been done. we call it the concept of one dhs. it is the business of focusing on missions as we have matured. the ability to really say what

are the major missionaries? counter-terrorism and work on information sharing to the state and local that arises from that. air, land, sea, security. immigration enforcement. cyber security, which i think has been the most involved in the past couple of years. disaster response and recovery. for example, when we were dealing with hurricanes and the last fall, a fema obviously was up there on the ground, but the coast guard was their leading search and rescue efforts, among other things. we had employees from throughout the department, over 1400 of them who had taken extra training come to the new york area. they lived on a merchant marine and bustle. literally for going apartment to apartment, checking on people and making sure things were going right. helping recovery centers and the

likes. pulling on the sense of mission that our employees join us with. melding them as we do a lot of our different activities has really accelerated. >> a week ago you gave a speech, your third annual address on the state of homeland security. in that speech you talked about dhs 3.0./ what do you mean by that? to go we are rapidly maturing department. 10 years is nothing in the history of the purchase through the large, complicated government institution. what 3.0 is we can take what we learned, we can take some of the evolving technology that has changed over time, and we can really focus on trying to identify passengers and cargo that require more attention verses those that are very low

risk. it is what we called risc-based. we can focus the attention on getting more and more people into global entry, which are kind of doing it your security stuff beforehand, before you get to the airport. we can really focus on the team's building out to state and locals that is needed to have at the network that the secretary was talking about. >> you brought up tsa, so we will plunge in. this is not a beloved department. one of the reasons is that moves people encounter with it for the impact is tsa. you mentioned risk-based. how are we going to see tsa check the ball? there is a new york times reporter that has a crusade being able to use devices on airplanes. it is something different.

taking liquid, gills, and shoes. -- gels. >> we have already been carving out things. 12 and under or over 75 you do not to take off your shoes. we have identified that as very low risk groups as a whole. i hope technology is ultimately the answer. that we will be able to move to something that allows almost every passenger to be able to keep their shoes on. in the meantime, we really have melded databases, another advantage to having things under one roof. you can check multiple things very quickly, and start at descrambler programs, global entry for those coming internationally. our goal is by the end of the year, 25% will be in the pre-

check programs. the chick -- allows them to accelerate through. that will help every traveler. most airports are not configured to add lanes. we are having difficulty staffing the lanes we already have. what we can do is make common- sense decisions to focus and removed some people from those lines. last week i was in argentina. when i got on the plane to come back i did not have to take my shoes off. what are the chances that when president obama has coffee with his successor on june were 20 -- what will it be? 2017. that we will be able to go through a scanner and the virtues on? >> i cannot put the number on it. if i could snap my fingers and let everyone keep their shoes on, i would do it. >> i think secretary napolitano

has to be recognized for moving this. it is all about evolution. they have seen the evolution of the department in maturing. whether it is the terrorist you are concerned about of the airport, or just terrorist in general, it is or is about risk management. what do you do to manage the risk? i think john pistol and the secretary had decided we are going to move in the direction. we will start pre-screening people more. it is all of our risk- management. you cannot possibly say to this country we are connected with the intelligence community, connected with the defense community, allies around the world and have eliminated all the risk, no. there's always risk of another attack. i think this is a very significant statement on the part of homeland security to the rest of the world and americans generally. we will start managing the risk. we can start managing the risk. i think the tsa has done a

marvelous job under the direction. >> recognize there has been a huge amount of change in technology that has occurred. 10 years ago we were just beginning to talk about what kind of data was out there and how you could manage it and make risk assessments and what kind of technology there was for screening. 10 years has seen a transformation in both the elements. that should reflect in a carefully-" the system for screening and we had 10 years ago. we will continue to improve. we of cutting edge technology. let me say this. i did not have to take off my shoes or keep my shampoo or what have you. we have to manage risk as it is represented by threats to the united states.

when you have a group that is very focused on taking down aviation or taking down the plane, be it a passenger or cargo plane, we have seen several activities by them over the course over 10 years. you have to manage the rest. aqap, but thataqa is the idea of what we're mount -- but we're managing to keep the public's faith. to ." >> there is a book out about flight screen, permanent emergency. even though you would like to choose liquid, it does not seem like it is in the near future, or is that part of the process and eventually that might be feasible? >> i would say option b, part of the process now, but we are working on technologies and

formulating pilot programs to see if we can believe that. in the meantime, this aviation system in the united states is the largest, most complex in the world. we're screaming and running 2 million passengers per day. i do not think people who get on planes worry about their safety. they know their corn to be safe. there is a value to that we should all recognize. -- they know they are going to be safe. when the tso officer is looking at something or making a decision about who can be and what line or what have you, it is all done to keep people safe. >> are we more likely to see a change in shoes or liquid first? >> that is a hard question. just say we are moving with every bit of wisdom we have to do both. >> how about belts? >> it is easy to get into one of

these programs. at that point you do not have to go through the other screening mechanisms we have. >> i will bring you into the conversation. i look forward to your questions. one of the things you were known for his i checked around was great relations with both sides of the aisle when you worked there. he maintained those, even through tough times in the government. there is a 552 page book about the origins of vhs. in their they summarize after katrina, they say you did your own, internal review of possible organizational structure after it. you did not call for basic organizational change but the integration of the unified into the command. was there a time or possibility that fema would of been changed, got rid of? >> tom will remember this.

there was a time early in the department where there was a lot of resistance on the part of feet of becoming part of the department. i actually believed it more after katrina than before that the answer was closer integration rather than separation. if you think about the capabilities you want in emergency, the mud itself does not have a lot of operational personnel. what you want to be able to do is integrate and deploy customs, tso, other agents and some of the air frames and other equipment and bring that to bear to support what is going on. the key here i think is planning. i used to get passed over and over again who is in charge, and people had the mental model we would have a domestic version of a combat where the director would order the various governments to move around.

in the united states you want event for this -- unity of the bench but not unity of command. you weigh your bridge the gap is to have a planning capability to get people to understand what you have to do when there is a crisis. the example is a baseball team. you play practice when you are actually in the ballgame the manager is not of their yelling instructions to the shortstop and third baseman. they know what to do because they have played together. that was the model we try to bring to the department. to go there was conversation about renaming fema. how close did we come to that? >> i do not think it was very close. and i find the least productive part of what people do in washington in response to challenges, either moving boxes around or worse yet, renaming things as if that will change them. you have to really get to the

actual mechanics. that is what we focused on. >> josh has a question. >> good morning. i wanted to ask you, the government powers in this area make people in the american public nervous, maybe a lot of people nervous. when you are out here today, i know you do a lot of the discussions talking to the public. dan claimant reports that when the administration was talking about how much it should chair with the targeted killing program that you were among the skeptics who did not think it would be very productive for the administration to be out there talking or giving speeches about the legal rationale for the program. is that correct, and can you lay out about how much the public has a right to know about the matters ballots with operational security? i have not read the book.

here is what the public needs to know. first, kill or capture. the should be among the most difficult decisions made. there is an emerging policy framework on how those decisions are made. it is a policy framework. there is a legal framework, which really when you read the law and read for example what the attorney general has said, among others, there is a very broad legal framework in which you can operate, but the policy framework should be much narrower. i think that is the framework that people should have confidence is being exercised and know if these decisions are made very carefully. >> first, we will drill down on border enforcement.

there has been a lot of publicity recently about releases of immigrants detainees. you were explaining that there is a numerical issue you face. explain that. >> there was a story last week that said we berbice 2000 detainees because of sequester. and that is really not accurate. it was not a political story. i will not say who put it out there. as in all things, immigration develops its own mythology. here is the deal, we are constantly moving people in and out of detention. these are illegal immigrants who for one reason or another are judged better in detention than under some alternative. with sequester looming and the end of this continuing resolution in a couple of weeks, it is like the perfect storm.

we really have to manage so many different things because we do not have a budget. and the normal ebb of low accounted for many of the releases. these are people that were removed or bonded out or their status was changed or for whatever reason. i think, however, for sequestered, getting ahead of the looming deadline, career officials made the decision that there were some very low-level, lower-risk detainees that could be put into a supervised release program. we will continue to do that, recognizing the secretaries are between the rock and a hard place. congress is to have to maintain 34,000 beds. on the other hand, they say we will not give you the money with which to do that. they also did not give you flexibility to move money from another account. we are going to manage our way through this by identify and the

lowest-risk detainees and putting them into some kind of alternative to release. several hundred are related to sequester, but not thousands. let me just make an observation here. with enormous expect to the political environment to which we were, you have had three secretaries that had to do tree osh because congress cannot find a way to create an immigration policy for the united states of america. secretary tarnoff and president bush tried to do it. right now there appears to be a bipartisan coalition around the notion of immigration reform. -- secretary chertoff. the job would be a lot easier if the united states congress would forget about the partisanship and come up with a broad-based conference bridge a

comprehensive immigration reform plan. the story ends right there. [applause] >> absolutely. >> you were president bush's point person on immigration. you were on the hill for the key meetings. you were at the white house getting your marching order. that was the last time there was a big effort made on immigration. what was learned in your experience? i used to struggle with this. there is a racist and sometimes to recognizing things have gone better. i will not tell you we have a perfectly secure border or that you could have won, but if you look at a series of different metrics over the time of the last 10 years, there has been a steady improvement in terms of operational control of the border in terms of the net flow. we have invested a lot in this. obviously we need to continue

that. never to acknowledge progress is self-defeating. i would say the main lesson is reflected in a discussion to receive this year. there are three major pillars to immigration reform, and they're each important. one is making people confident there will be continued enforcement and security and will not simply go away once you some sort of amnesty. the second, the business community has a real need jobs -- not just for high tech but less skilled workers to do work americans will not do. people used to say you have all these agricultural workers coming in. i never had met a person who said to the graduating high- school senior, i want you to be lettuce picker when you grow up. the fact of the matter is, americans do not want to do that. you have to have a resolution for the people here illegally that have otherwise been law- abiding that will give them some path to straitening themselves

out with the law, and then having a more sustainable situation where they're able to contribute to this country. if you get those, and you make achieving each of those goals of priority, then i think you get reform. >> lets' top mechanics. -- let's talk mechanics. >> the president was somewhat late in his term, so somewhat his ability to move congress was diminished. second, although we had a really broad agreement, including a kennedy to jon10 kyl, the time in getting it to the floor allowed a lot of erosion. -- ted kennedy to john kyle. i think you do have to send a message that things have improved, and you have to put that's out there so that people

understand while it is not time to say we accomplished border security, you have to recognize there has been a lot of progress, and that has to be part of the message. >> i will ask a question on twitter. how is the deterioration of our manufacturing base created new homeland security threats? >> i think there is a lot to be said -- it is interesting, but restoring manufacturing is -- look right of the homeland security arena of look at the critical infrastructure we have off shore so that if you have a problem with the electric grid, a problem in other areas of our economy, the dependency on foreign sources of some basic manufacturing goods is a natural

security problem. i think whoever reference that, i think it is legitimate to say in the 21st century we have to be a lot more progressive and thinking how we can bring the basic capabilities back to the united states. it is not only a matter of economics, but national security. >> transformers are an example. they are all made overseas. they are big and really expensive. you have to find out what the high weight limits are. after sandy we needed transformers. that whole process fed into some of the delay in getting the lights turned back on. that is just one example we run into. that is what we have.

we're not going to rebuild the manufacturing capability in the near future. so to go to the secretary's point, now we have to do planning around that. it the great is down or transformers are destroyed for whatever reason, what is the plan from that point forward? >> one way to create jobs is not to export highly-skilled engineering technology graduates back to their own countries. when you allow them to stay here, you create jobs. the whole ecosystem rises around them. i was in california this week, and it boggles the mind, the smart folks there are out there using their ingenuity to create businesses, and that creates jobs. to do that we have to continue to bring in smart folks, not send them away. >> if we could just tabled a green card to those undergraduates and graduates in certain disciplines and invite them to stay, that is the notion

we need a broad-based immigration policy to give people with talent opportunity to stay here and utilize their talents, which would expand our interest as well. >> question in a row. >> national defense magazine. i would like to hear from the secretary about the evolution of the acquisition programs. as we all know there has been some high-profile failures, successes obviously. i would like to know about how it evolves and what the future might be and what the current state of the acquisition community within the it is. >> we will take one of you on that. take of that evolution has been one of the largest ones. as secretary ridge said, the nuts and bolts of the department did not exist as there were bolting -- and getting it together. -- knitting it together.

we have an acquisition review board that is in the department, component people from throughout the department. they look at acquisitions of $1 million or more. we have an acquisition program officer training capability now. we train our acquisition officers on what it is we're looking for, what the process these are, and we have really, i think, the undersecretary of management and that part of the department put a good governance are around acquisition, which is what you want. that being said, when you were dealing with new technologies, and particularly when you're dealing with new technologies in a new domain that has to be scalable to something as large and complex as the united states, when you are pushing the envelope, you are bound to have failures. that happens. what you want to do