it is the growing unbalance in where that money is being spent internally. if left unchecked, spiraling costs sustain existing structures and institutions provide benefits to personnel and develop replacement for aging weapons platforms while eventually crushing of spending on procurement, operations, and readiness. the budget category that enable the military if these trends are not navaled, former chief of operations warned that pod could transform from an agency protecting the nation to an agency administering and if it programs capable of buying overpriced equipment. thanks to the efforts of my

predecessors and other dod leaders, we have made an effort in this crowding out in this budget and future budgets. much more hard work, difficult decisions and strategic prioritizing remains to be done. the political and institutional obstacles to necessary reforms need to being gauged and overcome gary i'm -- overcome. i'm concerned that pruning over the last four years that the strategy still require systems that are vastly more expensive and technologically risky than what we are promised are budgeted for. we need to continually move forward with designing an acquisition system that responds more efficiently, effectively and quickly to the need of troops and commanders in the field. and a that rewards-cost efficiency so our programs don't take longer, cost more and

deliver less than initially planned and promised. for thel recognition great stresses that our troops and our families have and placed forr, and been under nearly 12 years of war and the contributions that civilian employees make to the departments mission, fiscal realities demand another hard look at personnel. how many people we have both military and civilian? how many do we need? what do these people do? and how do we compensate them for their work, their service and their loyalty with pay, benefits, and health care? these are tough questions from a such as what is the right mix of civilian and military personnel across the department and its various components? within the force, what is the

right balance between officers and enlisted? without necessarily accepting the off stated claim that there are more than 300,000 service members performing civilian and commercial functions, what is the appropriate distribution of troops performing combat, support and administrative duties? -- therel like lace will likewise need to be a scrutiny of the command structure, most of which leads back to the early years of the cold war. the last major defense reorganization was during the major defense bill the been focused on improving dryness and establishing clear operational change of command. cost and efficiency were not major considerations then. goldwater nichols strengthened the joint staff and the combatant commands. it went about doing this by andring joint organizations

processes a top service organizations and the top hospices. the elevation of the former did not automatically lead to the diminishing of the latter. , the operational forces measured in battalions, ship's, and aircraft wings have shrunk radically since the cold war. yet our support structure sitting atop these smaller fighting forces have stayed intact. , and inor exceptions some cases, they are actually increasing in size and drank. -- size and rank. it is still not clear that every option has been considered to pare back the war office back office.

the fourth estate consists of the office of the secretary, the joint staff, the combatant commands, defense agencies and feel that the beauties, the missile defense agency -- the activities, the missile defense agency. with respect to the fourth estate, former secretary of defense gates compared the process of looking for savings as going on an easter egg hunt. secretary panetta was more polite. he called the pentagon "a big damn bureaucracy of mine -- a big damn bureaucracy." it does not sound like leon panetta at all. [laughter] the military is not and should never the run like operation.

but that does not mean we don't have a good deal to learn from what the private sector has achieved over the past 20-30 years in which reducing layers of upper and middle management not only reduced costs and micromanagement, but also led to more agile and effective organizations. and more empowered junior leaders. in light of all these trends, we have to examine whether dod a structured and incentivize to ask for more and do more. that entails taking a hard look at requirements. how they are generated and where they are generated from. it could turn out that making dramatic changes in each of these areas could prove unwise, untenable, or politically impossible. yet we have no choice but to take a close look at how we can do all of this better. ,n order to address acquisition personnel and overhead costs in smart ways, they have not been

done before. we need time, flexibility, and support and partnership of congress during we also need long-term budget certainty. one of the biggest problem's the sequester has brought is that it is requiring immediate, deep and steep cuts. this means that the department will by necessity have to look at large cuts in operations and modernizations to find savings to be quickly realized. reforms the department needs in other areas would take some time to implement and take longer for significant savings to accrue. if we get time and flexibility to implement savings, we could limit the impact of spending reductions on for structure and modernization while still making a significant contribution to deficit reduction. byontrast, the cuts required sequester afford neither time nor flexibility. these dramatic cuts would

certainly require reductions in would have long been considered core military capabilities and changes in the traditional role in missions among the uniformed services. we will have to take a critical look at our military capabilities and ensure that our core structure and modernization plans are directly and truly aligned with the present strategy. that includes taking a new look at how we define and measure readiness and risk. and factor both into military requirements. it also includes balancing the competing demands of capacity and capability. how much of any given platform we need and how much capability it needs to have to fulfill in real-world missions. the size and shape needs to be constantly reassessed come a mix of conventional and unconventional capabilities, general purpose and social

operations units, and the appropriate balance between forward stations, rotation we deployed, and home-based ports. we also need to reassess how much we can depend on our allies and our partners. what can we anticipate from them in the way of capabilities and capacity? and factor these calculations into both our short and long- term planning. a thorough examination of the way our military is organized and operates will also highlight .ur inherent strengths including leadership development, mobility, logistics, special operations, cyberspace and resurgent film and. another course -- and research and development. another core strength is the ability to adapting.

world lean years between war i and world war ii, during the great depression, a group of farsighted officers with virtually no funding or prospect -- you will remember in your history how long general eisenhower was a .ieutenant colonel a good example of what we are talking about. they conceived important new platforms and operating ,oncepts for armored warfare amphibious assault, aircraft carriers, submarines, and long- range bombers. proved decisive in the second world war. ,fter the korean war eisenhower looked into defense spending, exceeding 10% of our

gross to mr. product while investing in our -- gross and messed it product while investing in our long-range abilities. as the military grappled with challenges to morale and itdiness after vietnam, afte also made a transition to an all voluntary force and made should she just investments in stealth and platforms like the f-16 and the abrams tank. even during the 1990s procurement holiday, we invested in satellite guidance, in networking systems and remotely piloted aircraft that had been game changers during the last decade of war. the goal of the senior leadership of this department today is to learn from the miscalculations and mistakes of the past drawdowns and make the right decisions that will sustain our military strength, advance our strategic interest, and protect our nation well into

the future. let me now conclude with some comments on america and its role in the world. during this time of budget turmoil and after a financial crisis, in a decade when our country has grown weary of war and skeptical of foreign entanglements, questions arise about the merits of america's role in the world, america's global leadership. america does not have the luxury of retrenchment. we have too many global interests at stake, including our security, prosperity, and our future. , something, to lead someone will fill the vacuum. the next great power may not use its power as responsibly or judiciously as america has used its power over the decades since world war ii. we have made mistakes and

miscalculations with our great power. but as history has advanced, america has helped making her world for all people with its power. a world where america does not is not a world that i wish my children to inherit. more than a century ago on this campus, while laying the corner store and -- cornerstone on the building that now bears his name, roosevelt declared that the united states had "the mere trend of events been forced into the position of world power." he went on to say that america "cannot bear these responsibilities are right unless it's a is coded for peace and justice with the assured self-confidence of the just man armed."

what distinguishes america is not our power. the world has known great power. it is america's purpose and our commitment to making a better life for all people. we are a wise, thoughtful and steady nation. worthy of our power, generous in spirit and humble in our purpose. that is the america we will defend together, with the purpose and self-confidence of the just man armed. thank you. [applause] thank you. >> if you have questions that are not too tough, i will take a few. [laughter]

if a general asks a question, i will answer it. [laughter] yes, there's one back here. >> hello, thank you for coming. jessica lynch from national war college. i definitely think that you will have the steely eyed vision to lead us through this difficult time. but i do have a difficult question. i do appreciate that you said that civilians are important. but why are we still furloughing? in case your divisors haven't told you, it is affecting morale. >> thank you first for what you do. and your contributions to our security.

your question regarding furloughs, i wish i didn't have to answer that question. i wish we had other options. reality is that we are dealing with41 -- a $41 billion shortfall that was as also notedr. in my remarks, many of the accounts where we must focus our and our first mission, those arehis country, a counselor we don't have enough resources. operations, missions, we have had to cut training. many of you in this room are

aware of the wings we have had to stand down, other consequences. as we try to be fair and analyze where we take those cuts and we take them because we toe no choice, and trying minimize the hurt and the pain that these cuts are causing across our entire range of responsibilities and, first of all, people, we have had to look at everything. we have had to look at all of the accounts. we have had to look at where the money goes. we initially thought that we might have to make some difficult decisions on furlough as long as 22 days. because of congress's actions a couple of weeks ago, passing a continuing resolution, we have been able to move some monies around with a little more

flexibly. we still don't have a lot of flexibility. no matter how you look at it, we did not get any more money. so now we're looking at the possibility of furloughs up to 14 days. if we can do that ,etter and less, we will recognizing that morale will be affected. but the tough decisions i will have to be made and we will have to make them are done on the basis of what we think is the most fair way to do this. but our readiness and our capabilities have to always come first because it is the first mission and responsibility of this institution, the protection and security of this country. so as i began my answer, which i know is not a good answer, i wish i did not have to answer

that question. if we can do better, we will do better. and believe me, every person that the pentagon is working very hard to try to continue to for our this issue civilian people. at the same time, i want to be honest with you and not this lead you about the reason -- and not mislead you about the reality that we find ourselves in. yes. >> thank you, sir. i appreciate your remarks. i appreciate the news this morning that you yourself will be taking a pay cut as we go through this furlough. i very much appreciate the gesture. however, as we look into the future, you mention in your remarks that you are looking at strategic cuts that involve

military benefits -- healthcare, retirement, how can station. -- and compensation. are those cuts imminent where they are coming as a result looking into cuts in the future? toit is their ability sustain the commitments we have made to the men and women who joined the military as well as our civilians. we make promises. this country makes commitments to people here in we will honor those. but i don't think there is anyone here today that has not heard of or aware of the fact that, if you play this out 10-20 years, we won't be able to sustain the current personnel costs and retirement benefits.

there will be no money in the budget for anything else. as admiral ruffin said, we will become essentially a transfer agency. how do we do this now to get some lead time on this so we can adjust to the realities that we know are coming? social security is the same thing. may care is the same thing. you can't sustain those programs, those commitments. we know that. but that is not the question. the question is how do you then respond to it? we have time to get ahead of it if we start planning for it now. that is part of the review. it's not new. there is no one in this institution that has not been aware of the fact that we would have to start adjusting in some way. but what i believe is that your

immediate question, as far as immediate cuts to health care and so on, no, i don't see those kinds of things coming this year. we will go forward in budget presentations and ask the wheress to explore ways it is possible to increase fees on different programs. i think that is fair. and i think that we have to look at everything. as i said, i'm sorry. i wish it was otherwise. but that is a fact of life. and the longer we do for these things, the worse it will be for all of us. .o let's be smart let's try to get ahead of it. that is the whole point of why i directed our leaders to come up with a strategic review. we have resources. we will continue to have resources. but we have to be wise in how we apply those resources.

are your most important product. without people, systems don't matter. it does not matter how sophisticated your weapons are. your people are everything in any institution. and you take care of your people. i am committed to do that. i think every leader here is committed or we wouldn't be here. your families, the commitments we have made, we are doing everything we have -- we're doing your thing we can to ensure that. and we will continue to do that. good afternoon, sir. as much as i would like to complain about a pay cut, i have a different question. you mentioned the pivot to asia. i am interested in what you think we could do to build a better relationship with china to help work on containing the belligerence we see coming out of north korea. >> i had a long conversation

last night with the new chinese minister of defense. general chang. it was very positive. we talked about some pretty tough issues, starting with north korea, touchy issues like taiwan. as i think all of you know, general dempsey's going to china this month and secretary kerry will be in china this month. ofyou also know, secretary treasury lou was in china in the last few weeks. so we are continuing to reach and strengthen our relationship with china. china is a great power. it will continue to be a great power. we have many common interests. general chang and i talked about those common interests. he have differences. we will always have differences. we have differences with allies. it's not differences that

matter. it is how you deal with differences. you build a platform of a relationship based on your common interests, not on your differences. and north korea is a very good example of a common interest. certainly, the chinese don't want a public hated and combustible situation to explode into a worse situation. it is not in their interest that to happen. it is not in our interest or in our allies interests. like always, relationships are built face to face. they are built around common interests. institutional interests as well as personal interests. and using this institution as an example, 66 nations represented here in this room, this is the way you build understanding with each other. this is the way you start to accept each other' as a soverein

people, respect each other's dignity as human beings. then you work out from there. i think we can continue to build a strong relationship with .hina, with our differences and there are significant differences. but there are too many common interests for both our countries. and with why steady leadership, and i think the chinese have shown their leadership to the study, wise, careful, and the more we can exchange at every level, programs, especially military-to-military per grams, i don't know of a single -- military-to-military programs, i don't know of a single impact greater than building military-

to-military relationships. the best example is egypt. i'm not sure things would have turned out the same in egypt over the last two years without that. you can't solve all the problems nor should you be expected to, but you can do an awful lot. and as i said in my remarks and no one in this room has heard this for the first time because you all live it and in your capacities as leaders, military leaders today, as valleys have been, but especially today, they are far more than military leaders. your diplomats. your psychologists in your mentors. your educators. your referees. here ande educators you are referees. .ou are school board chairman you have many possibilities. that is real.

that is life. that is what makes the difference in people, in understanding people. so i am a bit of far field, but i am a former senator. [laughter] i will hear about this i'm sure at a hearing next week. [laughter] but i think it's relevant to your question. thank you. >> good afternoon, sir. i am when the joy from the department of navy, he civilian. like you for being here today. what do you believe are some opportunities that we have to partner with the department of state, the department of homeland security, and in order to secure and protect our homeland given the state of our budget? >> i think the interagency

is always a key part of any agency institution carrying out its responsibilities. your particular question department of state and homeland security. many times, secretary gates sounded like the secretary of state. why aren't we rebalancing priorities and the resources at state where some of these programs should reside and used to reside? in my opinion, he was right. state has a very important role to play in our foreign policy, obviously, but also in the

interagency relationships that you mentioned, homeland security, which, as you all knew, is a new agency. but they all connect. there is not an interest, not a connection point that doesn't affect all the other connection ,oints that serve our interests whether it's homeland interests, economic interest, diplomatic interests, and military interests, energy interest, cyber interest, whatever. they are all connected in. omen security, the way it is structured -- and i was there in the senate when we rolled up hascies and the one -- authorities in a rather significant for homeland security. we are still working through how we all work together. and that's ok.

but i think another part of your question is how do you maximize and add value to each other for the bigger purpose and objective in this country? .ou are exactly right you have just identified in my opinion may be the most important dimension of where we will all have to go as government leaders in this country over the next few years and beyond. we have not been getting a return on investment. the taxpayer has not been getting their return on investment in how we connect our agencies and departments and how we work together. we are getting better. everyday we are getting better better, far better today than five years ago. but we are kind of new at this. so you can continually overload the circuits like i think we have in the last 10 years in the department of defense and say, well, you will do it all and we will give you the money good but you have the resources on the 20's and the management and the people, so on and so on, so you go do it because you can do it faster.

most every case get it done better. that distribution of labor and resources has to now be rebalance. because there is a bigger return that can come from all of that. so i think that your question is a very important one. it is central to everything that we will all be doing and continue to do, especially you beng leaders who will moving into very important positions in your careers. you are here at a special time. you really are. every generation has an opportunity to reshape the world. but some generations really have big opportunities. your generation has a big opportunity to reshape things. and it will be you. this audience. yes.

>> secretary, thank you. i am a student at the national war college. i would like to turn back to the front page. if i scanned correctly the headlines this morning, you make comments related to north korea and nuclear capability. as i understood it, you are saying a specific level, where some level of nuclear capability will not be acceptable. could you elaborate on that ? >> well, i was misquoted again. [laughter] thanks for the question. [laughter] george little is here and he likes that kind of question. he is the assistant of public affairs. so keep your answers short, he says. [laughter] [applause]

and and i like hell. [laughter] -- and deny like hell. [laughter] thank you for your question. i'm not sure i said quite that starkly. here is the point. north korea has been a problem for not just the region for many years. the responsible powers in the region, starting with national security -- permanent national security council and japan have been part of talks with north korea for number of years. to work withtrying the north koreans to persuade them it's not in their interest and certainly in the korean

peninsula's interest -- the south koreans have been part of this as well -- to pursue nuclear weapons. they have nuclear capacity now. they have missile delivery capacity now. and so, has they have ratcheted up her bellicose dangerous rhetoric, and some of the actions they have taken over the last few weeks present a real and clear danger and threat to the interests certainly of our allies, starting with south korea. and japan. and also the threats that the north koreans have leveled directly at the united states regarding our base in guam, threatened hawaii, threatened to the west coast of the united states.

as secretary of defense, and beginning with the president of the united states, and all of our leaders, we take those threats seriously. we have to take those threats seriously. have measured, responsible, serious responses to those threats. we are undergoing joint exercises with the south koreans now. we are doing everything we can working with the chinese and others to defuse that situation on the peninsula. in a newssaid conference last week when asked it only takes being wrong once. and i don't want to be the secretary of defense who was wrong once.

so we will continue to take these threats seriously. north will ratchet this very dangerous rhetoric down. there is a pathway that is responsible for the north to get on a path to peace, working with their neighbors. there are many benefits to their people that could come. but they have to be a responsible member of the world community. and you don't achieve that responsibility and peace and prosperity by making nuclear threat and taking very provocative actions. one last question here and i will take one -- yes. >> thank you, mr. secretary.

i am a kernel of the german army. generation ofthe young leaders, especially foreigners who have the opportunity to stay here in your country. for sure, me and my family will never forget this opportunity. it has broadened our horizons and deepened our friendship with your country. so my question concerns -- wouldn't it you wiser to have the same opportunity for my american colleagues, budget cuts, the constraints, make them stay here, not allowed to travel, to make the trips overseas and to learn about other countries? [laughter] [applause] so, if i may say so, if i were one of your advisers, mr. secretary, i would say probably delay the delivery of a warship

or a tank or f-35 about one year until we have overcome this challenge and let them go. [laughter] [laughter] [applause] what is your opinion about this, sir? kernel, you are well on your way to making general. [laughter] i don't know how i add to that with this crowd. that is a magnificent way to end this. and you all very much. [applause] >> thank you very much.

> >> if you missed any of his remarks, they are available in the c-span video library at c- span.org. president obama heads to colorado today. he will talk about that state newly passed gun control law. he will be at the denver police academy calling for universal background checks for gun buyers along with asking congress to at least vote on an assault weapons ban and limiting capacity -- limiting large capacity magazines. tonight, a look of protest groups in america gave we recently talked with code pink cofounder medea benjamin about how protest movements fit into the political discussion. we want to get your reaction to the discussion with your calls, tweets, and facebook comments. in the meantime, here is a brief look at a code think protest.

>> i am pleased to be joined by my wife kathy and my brother tom. >> i speak for the mothers. >> we will stop again. >> pakistan, somalia, and who else? >> please remove that woman. >> the obama administration refused to even tell congress -- they won't even tell congress what countries we are killing children. >> if you could please expedite the removal. >> the children of pakistan and yemen. do your job. world peace is hands on deck. >> these proceed. -- please proceed. ok, we will hold the hearing. i will ask that the room be cleared and that the code think associates not be permitted to come back in.

they have done this five times now and five times are enough. >> and you can see the entire conversation with code inc. cofounder medea benjamin tonight at 8 p.m. eastern. also joining us is the author of aolitics of protest" from company professor. let us know what you think at facebook.com/c-span and join us tonight for a live discussion on the impact of protest movements. >> we have to take back the media get independent media is what will save us. the media are the most powerful institutions on earth. more powerful than any bomb, more powerful than any missile. it's an idea that it's loads onto the scene. but it doesn't happen when it is contained by that box, that tv

screen that we all gazed at for so many hours a week. we need to be able to hear people speaking for themselves outside the box. we can't afford the status quo anymore. from global warring to global warming. >> author, host and executive producer of "democracy now," amy goodman. "in-depth" three hours on sunday at noon eastern on the tv on c- span two. 2. on book tv on c-span two congressman asa hutchinson presented the national school shooter report here in washington dc. his comments are about 45 minutes.

>> good morning. i am asa hutchinson, director of the national school shield task force and i welcome you to this important presentation of our national effort to increase school safety. last december, i received a call from the nra who asked if i would be interested in doing something, leading a national effort on school safety. we arrived at an agreement, which is my mandate and the agreement is that we would have full independence, that we would not have any preconceived condition or predetermined outcomes, and thirdly that we would have the full support that we needed to employ the experts to develop a review of our national efforts on school safety and to make the

recommendations that we believe this -- we believe as exports is appropriate. i'm here to tell you that the nra has fulfilled its side of the bargain and has given us the level of independence, given us the support that is needed to reach the product that we are presenting today. and even to the point that there is no guarantee, the nra will accept these recommendations. these recommendations are the recommendations of the task force. this is our event and the nra will separately consider and respond to it. i did want to introduce the task force members that are here present today. we are delighted that some of them have joined us. not all of them. but on the first row are ralph , former director of the united states secret service, former commissioner of u.s. customs and border protection,

former director of the federal law enforcement training center, truly an expert in the field of law enforcement and security. we also have a retired colonel john quattrone, u.s. air force security forces officer, three- time commander, former joint staff operations anti-terrorism homeland defense director at the pentagon. tony lamblia, ceo of phoenix rvt solutions. bruce bellin, former deputy director of the united states secret service, former assistant director of federal law enforcement training center. thomas do not know, former deputy assistant secretary for critical infrastructure protection of the united states department of homeland security. healso want to recognize success helpful in the

of this task force is well. today, i am pleased to release the 225-page comprehensive report of the national school shield initiative. everything includes from best practices to technology to review of surveillance that includes the recommendations that i will send later in this presentation. the process that we went through is that, for over three months, the past three months, these experts have engaged in assessment of multiple schools in a variety of sizes, of composition. i have done competence of assessments and evaluations of best practices and vulnerabilities. we have also conducted interviews of people who are knowledgeable in the field. i want to recognize augustine

pescatore, who is president of the national association of school security officials, but also a commander of school security in the philadelphia school district. thank you all for joining us, and example of one of the experts in the field has just offered their basic knowledge to us. this morning, i want to go through some of the findings from the school assessments and then the current state of school security. then we will present their recommendations from the task or should. we will also, at the end, have a comment from a special guest and then we will open up to question and answer. first of all, and the assessments come i wanted to cover some of the things that we found. the vulnerabilities and thus practices come again, we looked at the technology of the school, the interior and exterior doors,

access control, architecture and design of the schools, and then we looked at the armed officers, whether it's an sro, which is a school resource officer, to the staff that may be armed or considering being armed. obviously, we believe they make a difference in the various layers of security that add to school safety. we also found something i think very significant that we want to remind you of today. there really is a two-tier system of security in our schools. you have the security that is represented the largest school districts that have invested over decades in school officers, in technology and surveillance and magnetometers, and policy development. then you have the difference here at school safety, which are the smaller schools, the middle sized schools, those that have resource challenges.

and you really have to get outside of the beltway. they are part of the major focus that we have to have in school safety in our country. and many of the decorations are -- many of the recommendations are directed to those who are struggling with the resources for school safety. when you look at the findings that will be part of this report, we look at perimeter fencing, for example terry you will see in the common vulnerabilities, where there is not common perimeter fencing for schools and some may not be improper repair. in the terms of access control, using the technology that is needed to have a single point of access for visitors to check in and to show the identification. we looked at the surveillance monitoring and we find that many of them have surveillance cameras, but the monitoring my the at the ceiling level where

-- rather than at the eye level. a simple change that is a vulnerability, but can be done better. you look at the exterior doors that are so critical for delaying any armed intruder. and some of them do not have the hinge coverings to protect the exterior door. when you look at the locking mechanism, is there an anti- carding late for the -- anti- carding plate for the door, which is not expensive, but a effective tour to provide better security for teachers and her children in the classroom. the interior doors and windows, in our best practices that we have laid out, it shows some of the state-of-the-art design for in cheerier doors -- four interior oors -- for fdoors.

the bus operations, something that is neglected, i believe, in school safety discussion, where, at the end of the school day, all the buses line up to pick up .he students and there are better practices on how the buses online so you do not congregate students in one place and to have greater staff support for the students as they load and unload from the buses. we looked at the personnel badges and many schools require badges for their staff. but sometimes they are not worn. those are some of the findings that were related to sro training. what a great program for our school resource officers. but there are some enhancements in training that can improve not just their training and capability, but also their coordination with law- enforcement. and then the arm security staff. not every school has school

resource officers and there has been a movement actually to consider armed security staff to be part of our recommendation. also, the findings referencing managing threat information, which really goes to the mental health side of the school environment and whether there is proper collection of threat information from analysis of it, and response, whether it is a referral to law enforcement or whether it is through the action of counselors in addressing any particular mental health challenge in the school. there is a 100-page compilation as an appendix to this report of the best practices that we found around the nation and not just independent findings, but also reflecting some of the work at the department of justice, and thent of education, department of homeland security, and pulling that together in this tool that can be utilized.

let me move to the recommendations of our task force. first, these recommendations have three audiences. to the nra, the national rifle association, for program development and long- term port in the area of school safety to reflect their strong commitment in that area. the second one would be to state policymakers because there will be some requirements for changes in state law. and the third audiences the federal policymakers who are currently debating funding and assistance to the states in the area school state -- area of school safety. our first recommendation is for model training programs. we presented a model training program for school resource officers that is an enhancement of what they currently undertake and are required. , 40-60 hoursours

of comprehensive training for the resource officers. that covers everything from weapons retention to coordination with local law enforcement. that is an appendix in the presentation. we have also prepared for the first time that i am aware of a model training program for selected and designated armed school personnel. one itemrobably the that catches everybody's attention. why is this part of our recommendations, that we have this model training program? first of all, there is the incident in pearl high school in 1997 where an active shooter went into the school and killed two students and wounded others. there was no school resource officer. left thetant principal wha

school, went out to his truck semi-trieved his .45 automatic handgun and disarmed the suspect. that response is critical. that saved lives. ithe key is reducing that are sponsored time. if he had been trained, if he , he mayss on his person have saved more lives in that instance. is we wentfindings through one school that did not have resource officers and they were already planning to arm school staff for the protection of the kids. but whenever the inquiry was made and said what kind of training do you have, it was clearly insufficient and schools are undergoing that process all across america right now without adequate direction on what is a

good training program, a model training program for armed school personnel. let me emphasize -- let's not talk about all teachers. teachers should teach. but, if there is a personnel who has good experience, who has interest in it and is willing to go through this training of 40-60 hours that are totally comprehensive, then that is an approach read resource ash that is an appropriate resource we haveool should have. to adopt in the states need to consider changing the law so that it allows the firearm to be carried by school personnel when they go through this model training program. so we attach as an appendix a model state law that can be considered for this purpose by the various states. is anird recommendation

interagency agreement between the law enforcement agency and the school. you have heard the concern that armed guards in the school somehow increase the episodes of juvenile delinquency and the reporting of disciplinary actions as criminal offenses rather than treating them as routine school dairy issues. this is an internal issue as to how you manage your sro's. so you need to have clear understanding is reflected in a memorandum of understanding between the school and the law enforcement agency. the fourth recommendation is a critical tool. it is an online self-assessment tool that is web waste -- web- based that schools can utilized

free of charge to would be on the national school shield website. this online assessment tool has been summarized in the document that we are resenting. but right now, schools either have to go out and hire an expert or they struggle around with local law enforcement to develop your security policies. this online assessment tool is available for any school, private or public school, free of charge on the website whenever it is deployed and it will not be something a principal can fill out. the school will have to get key access to go on this web-based tool. when they do, they will be asked questions on access control. our classroom doors kept locked during instructional times? does the school and force its visitor sign in an axis control ? has the school -- and access control?

what actions are taken when unauthorized visitors are detected? those are a sample of the questions that will lead them to understand the gaps in then they go to the best practices to address the solutions for their security policies. a change in state education policies. we define in our state education advocacy based on the curriculum the students ake. a key part is that they have done a safety assessment and they have a plan that is in place. that is a recommendation for he states. they do something in terms of ssessment.

the federal policy makers -- we need to have improved coordination and more directed funding. we have three departments of the government that are all engaged in school safety -- education, justice, and homeland security. they need to have a lead agency with greater coordination. the federal role is greater support for innovation and training grants. the school districts have absorbed the cost and they are prepared to do that. the seventh recommendation is o the nra. the national school shield

ecome an umbrella organization o support school safety across this nation the the free access into the best practices that will be available to the schools and to create pilot rograms to fine-tune the assessment tool and also to ook at pilot programs in mental health and to answer questions. we recommend a long-term commitment through the national school shield. we have a specific pilot program on a threat assessment

and mental health. the secret service found that 71% of attackers felt threatened or bullied. that is a pre-indicator. e recommend the nss partnering with other partners interested in mental health and that we can create programs that will be state of the art encouraging information sharing, identify hreats and offering counseling support. please read the report. it is accessible online.

please give close attention to the appendices that are attached to it. now i want to introduce omebody who is the parent of james who was killed at the sandy hook elementary school, which triggered the national review of this issue of school safety. mark has expressed an interest in school safety and has asked to make a comment. o, mark? >> good morning. wanted to take a minute and

applaud the task force and the nra for spending the time and resources for putting a program like this together. it is important that everybody recognizes -- we send our hildren off to school. there are certain expectations and in sandy hook, those expectations were not met. this is a comprehensive program. i think politics should be set aside. i hope this does not lead to name calling. these are recommendations for solutions. solutions to make our kids safer. i read a report from 2002 which has some great input. what was done at the federal, state, and local level out of that report to make newtown or yorktown safer? i put this on you to implement solutions so people do not have

to go through what i'm going through. i was on google this morning. nine school shootings since newtown. i do not know that everybody got the press with respect to the impact. i just applaud you for doing his. i think it is important. look what took place at sandy hook. mental health. that is a big component of this. we need the kids to be afe.

they allow for a positive interaction with a lot enforcement professional. -- with a law enforcement rofessional. people knew about what people had in mind but they didn't report it to somebody. we have to prevent this going forward. > thank you, mark. now we would be happy to take questions.

es, sir. >> you talk about training volunteers. >> is there a microphone around here? >> in terms of volunteers, my impression is there would be great reluctance from school superintendents. we have shifted to school staff, trained school staff that is designated by the school board. here is a discussion for every chool district in terms of

sro's and armed school staff nd volunteers as well. one is a liability concern. the issue is addressed in the best practices. the school's all-time elite make these decisions. u.s. about the cost of this effort. $1 million by the nra to fund this effort. they have supported it. looking at the support, you can see it it is a substantial investments. es, ma'am. our whole effort is about school safety. the impact i hope we have is that we talk about things that will keep children safe for in chool. these types of programs from the private sector and support from the policy makers. we want the debate focused on school safety. es, sir?

indiscernible] >> do you see any common ground to work together? >> well, i help they continue to talk and work together. i have not focused on the separate debate in congress about firearms and how they should be dealt with. when they are seeking common ground, i hope this will be the common ground.

there are common sense steps that can be taken by policy akers. president obama supports additional funding on school safety. it is focused and you can open up the biggest chunk -- additional grants through homeland security to the schools. they can compete with additional dollars. yes, sir? >> recent polling on gun legislation shows more than 80% of americans support universal background checks. why is that proposal not part f your shield?

>> my organization is represented in this room. we might have won a few of background checks. our focus is on school safety and making our schools a safer environment. we all want to make sure that criminals, those that had been declared with mental issues, that they not have access. that is a discussion that will go on. we're trying to do something about school safety. >> you would agree that non-sro personnel might be armed inside

a school and they should undergo an extensive background check. >> that is part of the recommendation. any school staff designated by the school to be a trained, rmed response. they would go through background checks and testing and screening and then 40 to 60 hours of training. everybody has a different level of background and experience. that is a very comprehensive program. anyone designated as an armed response should have the dequate training to accomplish the task and be safe. >> you mean in terms of an ccident?

one thing you know for sure is the response time is ritical. just like the assistant rincipal that i mentioned. he had to go to is truck to get a gun. if you can reduce the response time, it will save lives. hat is the objectives. firearm retention and how they know how to protect that and to make sure it is properly cared for. that is a key element of the model training program.

>> you talk about response time. the shooter in newtown got off ozens of rounds. >> in reference to newtown, what was the first thing the school did after the incident? they got armed officers to rotect the children. they did not have response capability. you had teachers giving up their lives. we want to have a better response, to give the schools more tools so they can respond quickly. es, sir. >> if any part of the national school shield involves oordination with the bureau of

alcohol tobacco and firearms or a push with the nra to support that? i'm wondering if the atf was involved? >> we focus on education, home and security, and justice. that has been our focus and not the atf. >> the nra is entering a gun problem with more guns. >> every local school district will make a decision. we have -- i talked him at the philadelphia school district. every high school student goes

through a magnetometer. i respect that decision. other school districts want to ave an armed response. they want to have a different capability. we are giving them an ption. if you're interested in making the schools safer and to save children's lives, look these recommendations seriously. the presence of an armed security in a school is a layer that is just as important as a mental health component. if you have the armed presence without locking doors, it is inadequate. t is a comprehensive plan in

which the armed school ersonnel is one element. >> does your report show how many armed personnel would be needed at a school? what do we do about recess? >> excellent question. there is no specific

recommendations on how many sro's or armed personnel is in a specific school. ohn? > not specifically for the chool. make sure you're looking at the entire posture of your school, your building, the number of students. >> it will be up to the school to determine the level of resources. an sro in every school building is important. right now you have sro's rotating between maybe three campuses. i would judge that insufficient. there should be at least one and every school campus to reduce response time. >> would you review the relationships between the school and the nra? > the relationship between

-- ok. the relationship -- i am employed as a consultant that leads this task force in which i have asked each of these experts to independently look at the issue of school safety and to make these recommendations. whether this is unanimous? everybody has signed off on this report. there is probably a lot of different political leanings and different viewpoints that are reflected.

here is a unity of opinion when it comes to these recommendations on school safety. it is important that they be trained with the firearm that they carry and utilize. they have to practice with that. there is no specific recommendation on that. it is everything from and sidearm to shotgunned to ar-15. here is a variety of weapons that are utilized by the school

fficers based upon their local leadership and what they determine is best for their environment. u.s. question about the presence of security. go into a mall there is security. there is security here at the national press club. there is nothing i am afraid of. i'm very wide open. there is nothing i'm nervous about. es, ma'am. >> is it the conclusion that every school in the united states should have an armed resence? > the specific findings is the

presence of an armed security personnel in a school adds a layer of security and diminishes response time that is beneficial to the overall security. we recognize that the decision is locally made. some school districts decide not to go that direction. we want to make sure our esources are available whenever decision is made. i come from a rural state.

the smaller school districts struggle. this is a key tool to provide more options for school security and safety. >> what is the average cost to train one of these -- to maintain them every year? >> what you come up here? tony. >> the program is about 40 to 60 hours. the average cost is somewhere around $800 to $1,000 per student. here is not set cost right now that we of the attached to the program.

we have made the ecommendations but we're not ttached a price to that. when i say student i mean student in the training programs, not students in the schools. >> last question. >> how does it cost the school -- how do you justify paying for that? >> you justify it because it is necessary. there is reference to a school resource officer might cost $60,000 in one jurisdiction and well over $100,000 in another. it varies. the trading costs should be a more constant. ow does a school justify

it? look at the armed school personnel. the cost would be for the 40 to 60 hours. then the training cost itself. there's a lot of different ways the trading can be accomplished by the states. t would be by professional private sector trainers. it could be by the law enforcement entity in the state. we want to make sure it is accessible and we have as many traders that are properly trained as possible. hat was a follow-up. [indiscernible] that is the sandy hook report ou are referring to?

i would be interested in what connecticut is doing for school afety. will cite it is totally inadequate. you can address assault weapons and a dozen stop somebody bringing in a .45 caliber firearm into the school. it doesn't stop violence in the schools. you have to do something about school safety and enhancing our safety measures in the chool.

it can be done. that is the purpose of this task force. thank you for your work in this. it is our hope the nra will accept these recommendations. >> this will be a long term commitment by the n.r.a. to be a leader in school safety. thank you for your attendance today. national captioning institute] national cable satellite corp. 2013] >> earlier today white house senior advisor was a guest on politic coe's play book breakfast. here he talked about the administration's position on gun control. >> today the president is in colorado talking about guns.

you are going to be joining him on monday in connecticut talking about guns. seems like the air has been coming out of the really tough parts of it we thought would be no brainers, why is that? >> i've read some of the stories that suggest that. >> it's not stories. it's a fact. >> it's not a fact to the american people. >> around the doesn't tri, the president has travelled on this and method with families in the white house of mothers who have mobilized. some of the mothers of gun violence victims, others motivated by newtown and other things. there are a lot of cardinal rules in politics. one is you don't want to get on

the wrong side of an issue. >> newtown may have changed america but it didn't change washington. why is that? >> i think on a whole host of issues washington tends to be a lagging indicator on public opinion. >> do you think that's the case on guns? >> there is no question on a 90% issue we shouldn't be having this conversation, we should be heading towards a solution of the problem. i'm still optimistic we will be able to work something out here which of all issues there are people in washington talking about winners and losers and what is going to happen there. never would i suggest there will be winners and losers at a politic coe event. this is a life or death issue. we will either make progress and people will have lives saved or we're not. >> what is this president going to do in frivet really push the senators of both parties in

tough races, your mark priors, what kind of horse trading is he going to do? how much of himself is he bo going to put to get these tough votes? >> the president has put a lot on the line to make progress here. he's put a lot of effort in this. he's talked to the house and senate twice since newtown. we've been working with others to make it happen. you have overwhelming number of democrats who are supporting this and not republicans. democrats have stepped up to the plate and trying to do the right thing. the question will be will we get every single democrat vote?

no. you can't expect unanimous minimumty. >> will the president twist their arms? will he go l.b.j. on this issue? >> he will make a very aggressive case to anyone and everyone. >> is it possible the president signs a gun bill? >> we live in a world where the republicans control the house. the republicans have made 60 votes a threshold for everything. if they decide to block it, they will do that. there will be consequences for them if they make that decision. >> you can see dan's entire comments on cspan.org. he was interviewed today by mike allen. he also talked about gun ontrol issues.

>> president obama goes to colorado to talk about gun violence. we'll have live coverage here on c-span tofment night a look at the impact of political protest. do they work? we start at ke7 eastern about how protest movements fit into he political discussion. we have a university of colorado professor to respond to your questions and comments. >> so she was out there in a way that as i indicated before respectable women did not do but this is a new rare. this is a time when the women's movement is under way.

and interestingingly enough someone like julia tyler fits in to a serb extent. she's very conservive in some ways but in terms of breaking through the traditional way women should behave, she's doing it. >> julia tyler is now available on our website cspan.org/first ladies. >> maryland congressman on gun control. he spoke yesterday at the national press club. he's promoting legislation to make gun trafficking a federal offense. those who buy guns for a felon or for someone who can't legally buy one this. is about> ok, so we will begin. an hour. welcome to the national press

club. happy easter and passover season to everyone who celebrates those. and happy spring. will the world's leading organization for journalists and, as we say, the place where news happens. my name is bob wiener. today we are honored to have congressman elijah cummings of baltimore, presenting it a reality check on congressional gun legislation. the representative is a ranking member of the house oversight democratic reform committee. he congressman is the former chairman of the congressional black caucus. now with more than 100 co-sponsors on gun tracking legislation. he takes the gun safety issue personally and points to his nephew, 20, murdered by a gun

shop when he was a student. despite projections of prompt action in the newtown, conn. massacre, including 21st graders, neither chamber has moved to final passage. resident obama insisted in his state of the union address that victims of mass gun violence deserved a vote. president obama designated joe biden, including an assault weapons ban, limits on magazine capacity, and mental health monitoring and assistance. he will discuss the state of congressional action and ubstance of the gun tracking legislation as well as other pending bills.

the representative represents maryland's seventh istrict. he is a member of the joint congressional economic committee. thank you to your staff. e is congress's leader on drug policy, which is how i met him

and first work for him in the white house drug office, where they incidently admire the congressman enormously. elected in 1996 after serving in the house of delegates for 14 years, he was the first african-american in the history of maryland and to be named to the second highest office. he states he has dedicated his life to uplifting and empowering people. congressman will speak for 20 to 25 minutes followed by questions. ariel? if you could stand up? a student at the university of pennsylvania in a course called dealing with the media will ctually deal with you and take the microphone around and make sure you do not abuse the privilege of the questions, ok? so, please send a fire self as u.s. questions. identify your name and

organization. questions but not speeches, please. i also want to thank richard mann, right here. thank you. my staff also assisted. and the staff of the national press club, as well as the "newsmakers" chair, and congressman staff, sophia simmons, jennifer hoffman, jean roscoe, jimmy fine fernagain. jimmy? >> yes, you got it. >> and carlos it seems that someone to treat gum legislation as an april fool's joke. or they want to wait until the next massacre to bring ttention back to it. today "the washington post," the lead story is pro-gun targeting key bills. i am going to read the first three paragraphs. "gun control measures that seemed desperate to become law

after the school shooting in ewtown, conn., are under jeopardy after the lobbying campaign from gun advocates. senators have been unable to find support within the system for background checks, something nine out of 10 people support. gun trafficking a federal crime could be gutted if lawmakers except new language being circulated by the national rifle association. should we not all be utraged? so, clearly the congressman is a leader in the field and one that we must year from today. the national press club is the place where news is made and today we are so thrilled that you are here to do it. congressman elijah ummings. >> thank you very much, mr. wiener for your kind introduction. i am indeed honored to be here this morning.

it is always a present -- a tremendous honor to be in the presence of my wife, i would like to thank her for being here today as well. today i want to talk about an issue that is extremely personal for me and my amily. that is the issue of gun violence. in june of 2011 i lost my nephew, christopher. lost him to a senseless act of gun violence. christopher was just 20 years old. he was a student at old dominion university in norfolk, virginia. ike the beautiful children who lost their lives at sandy hook, e was an amazing young man

ith his entire life ahead of him. it is a painful thing to see your nephew, your son, or your daughter, to see their blood splattered over walls and couches, or wherever they may have been killed. like countless others, i was living to the unimaginable suffering of losing a loved one due to gun violence. the pain that i feel in my heart today, even these years later. last week during a press conference urging the country ot to forget the massacre in newtown, the president was joined by mothers who are fighting the legislation to reduce gun violence. let me tell you, i fully understand their passion. i fully understand their pain.

i also fully understand their purpose. because when you lose a family ember like that, you just do not mourn them at their funeral. ou mourn them every single day of your life. you mourn for the person they could have been. or children murdered at five years old, six years old, as they were at sandy hook, you mourn every missed a birthday, every graduation, every

christmas, and that is right, every easter. every milestone list is a reminder of the life they could have led had they not been so cruelly and violently stashed away. not only are we morning we lost, but remembering what could have been. this loss leads to great passion. but it just does not lead to great passion in family members. it leads to great passion in those who hear about these incidents. those who were the neighbors and friends of these children. those who went to church with them. the passion is deep and powerful. i am thoroughly convinced that that passion must be to change. -- need to change. we will keep fighting for gun safety legislation. i will be fighting for that legislation until i die. i want to start today by talking about our fight against the problem of gun trafficking and straw purchasing, which i

have been working on for several years. the bipartisan forum but i organize last month included first responders and law-enforcement officials who were victims of gun trafficking crimes. far too often it is our brave law enforcement officers and first responders who find themselves on the wrong end of a gun barrel. i want to share some of their stories with you today, lest we never forget. we need to constantly remind ourselves of these stories so that they are printed within the dna of our brains as we ebate the gun issue. one of these brave men is ted kazino.

the fire alarm, the fire, turned out to be an ambush set by a name -- a man named william spangler, a convicted felon who served 17 years in prison for killing his 92-year-old grandmother with a hammer. despite his history of violence, spangler convinces neighbor to buy the 12 gauge shotgun and bushmaster rifle that he used to murder two firefighters and injured two others, including mr. scardino. here are the pictures of the two firefighters that lost their lives that day. 19-year-old thomas and his mentor, might chiapperini.

he left behind -- mike chiapperini. reality check, he left behind a wife and children. that is the reality check. they are no longer with us. hey're dead. we also heard about the loss of one of his own officers in pennsylvania. officer fox encountered and her homas, a convicted felon who swerved into oncoming traffic -- andrew thomas, a convicted felon who swerved into oncoming traffic.

for some reason a straw purchaser willingly bought even handguns and two rifles for this killer, even though he was a convicted felon. something is awfully wrong with that picture. officer fox was only 34 years old. e was one of our heroes. he was in iraq war veteran who returned home as a hero. he left behind a pregnant wife and a daughter. that is the reality. the chief told us that he was like a son to him. at the forum we heard from a san francisco police chief. the chief described a gun trafficking ring that stretched from georgia, rural georgia, california. it involved hundreds of irearms.

as a matter of fact, the chief told us that a lot of people who are convicted felons there are looking for ways to be legally make money. instead of going into drug crack -- drug trafficking, the going to drug trafficking -- gun trafficking. e was concerned that we needed a dedicated law to address this gaping loophole. many of these firearms, by the way, wind up in the streets of the bay area. they are recovered at crime scenes across oakland and the ay area. including those areas including armed robbery suspects. one of them fell into the hands of a convicted felon. multiple gang members and drug traffickers. ladies and gentlemen, let's be clear.

this problem is everywhere. it is not just sandy hook, not just baltimore, not just a rural georgia. just last week there were reports of another straw purchasing incident in colorado, which i am sure that you heard about. a convicted felon shot and killed colorado possible prison chief and a pizza delivery man. -- colorado's prison chief and a pizza delivery man. the shooter was on parole after east -- serving four years in prison for punching a prison guard in 2008. now, most americans already think that gun trafficking is a

federal crime. i have news for you, it is not. they have no idea that there is no federal law targeting firearms traffickers who use straw purchasers to buy guns for convicted felons and other dangerous criminals who cannot legally buy guns on their own. n congress we have heard repeatedly from law enforcement that the law to prevent straw purchasers, and this is their words, not mine, that they are viewed as nothing more than paperwork violations similar to getting a ticket for going 65 in a 55 mile zone. again, not my words, those are the atf and police words. after years of working on this ssue and hearing firsthand from law enforcement officials that they needed congress to

strengthen gun trafficking laws, i join my republicans and democrats in february to introduce gun trafficking prevention acts for 2013. this common-sense legislation will put a first time explicit prohibition on firearm trafficking, making straw purchasing a serious crime by increasing the maximum penalty to 20 years in prison. am grateful to have significant support from law enforcement officials all over the country. early 30 organizations support the bill, including law enforcement officials throughout the nation. these officials believe that this legislation it is very critical to combating firearms moving to criminals, cartels, and other dangers people. the bill also enjoys significant bipartisan support in the house of representatives hanks to the fall leadership

of rep scott mitchell. patrick me hand, carolyn maloney, they joined me in introducing this legislation. bipartisan support for the legislation grows every day. we have now surpassed the house of representatives. the legislation also has significant bipartisan support within the senate. it was passed by the senate judiciary committee with the support of republican ranking members, charles grassley, with the support of republican senators off the committee as well. this week, after months of work, the full senate will vote on this critical legislation. hen there will be time for the house to act.

i hope the house judiciary committee act to begin the process of marking up legislation so that the full house can vote on a package before summer. i know that we still have a long way to go before the president and sign this legislation into law. but it will be a tough fight. but it will be a fight worth fighting. we have so much on our ide. we have common sense. desperate need. most importantly, we have the driving passion of thousands of families who have been victimized by gun violence. the vast majority of americans

believe that congress passed legislation to keep guns out of the hands of criminals. i know that both the president and vice president share of the passion for reducing gun violence. for the first time in decades the white house made preventing gun violence a top riority. just last week the white house held a press conference on this issue. but we will never forget those who lost their lives because a gun man decided to pull the trigger. as the president said, " we are proposing -- what we are proposing is not radical. it is not taking away anyone's gun rights. it is something that if we are serious, we will do it. now is the time to turn heartbreak into something real." now, i have been asked apart from our gun trafficking bell whether i support other gun related legislation, and the answer is that i do. for example, i believe that fixing the background check

system is one of the most common sense actions we can take to prevent criminals from getting guns. i think that would complement our gun trafficking legislation very well. background checks would prevent many criminals from obtaining guns. the anti-trafficking legislation would impose strong new criminal penalties on those who try to get around the system. for myself, i have chosen to focus primarily on gun trafficking legislation, because it is an issue i have been working on for several years. i have worked painstakingly with both democrats and republicans to slowly build a ipartisan coalition behind this bill. i strongly believe that when people understand what this bill does, they will support it wholeheartedly.

in fact, even the nra has come around over the past several months. there are only two groups that still oppose this bill. let me say that again, there are only two -- that still oppose this bill. criminals and people who want to buy guns for criminals. if congress had passed this universal background check legislation, we will have made substantive reform to reduce gun violence across this great ation. we are not done yet. but i believe that if we work together and work hard and we focus on our common purpose, our common purpose of protecting our families from gun violence, then we will have succeeded. no parent, not one, should have to send a child to school, be it sandy hook or old dominion,

and wonder whether he or she will make it home alive. our country is better than that. we are better than that. in america's inner cities, suburbs, and small towns, gun murders take more than 11,000 american lives each year. more than three times the number of americans that lost their lives during the decade-long war in iraq. that is the reality. we must make these deaths by gun violence transformative. as a nation we must help to heal the families who have suffered so much. part of the healing process for me and for countless other

families is to prevent other senseless deaths from gun violence from occurring again. we are the congress of the united states. we must be vigilant and put party politics and rhetoric aside, taking protecting american families and future generations of our priority. this is our watch. this is our watch. to borrow the words of the great martin luther king, he said the be must substitutes ourage for cost. for passing meaningful gun legislation as soon as possible." ne last word, when i think about the many young people who have died, i think about the children in sandy hook. i think about the mass

shootings we have heard about and seen on our television sets, the ones that you have written about. i do leave with all my heart that we survivors do not have the right to be silent. we do not have the right. with that, i will take questions. >> ok, i will monitor questions. stay here with us. you have to reach far down. i am going to lead off the questions and ask the moderator to ask if, the politics of this issue, with 90% of americans upporting your measure and the background checks, in fact are there not more parents concerned

about the lives of their kids than leaders of the nra? not even the membership, which by a majority supports these measures. what are the politics that allow the nra to transcend and have a story like in today's open "the washington post," that your bill will be gutted and inserted with new language? what are the politics around that? how can we reverse it? are we going to lose the pportunity unless american collectively figures out a way not to pay attention to that kind of thing? >> i am so pleased that you will all have a in a few minutes an opportunity to ask wayne pierre ppear. -- lapierre that question.

i cannot answer that question, because i can only speak from my own reality. i do believe will all my heart that when you have 20 children murdered, little children, imply learning how to read run, spot, run," getting ready for christmas and somebody comes in and murders them -- i said in my speech that there are certain transformative moments that appen in all of our lives. if that does not cause folks to step back and say that we need

to look at the way that our country is operating and say that we need to do something about gun violence, i do not know what will. i will be interested to hear what the nra has to say about that. let me say this, having lived in politics as lawyers i have, one of my greatest concerns is that these arguments go back and forth and we wind up doing nothing. we wind up doing absolutely nothing. do believe that when you have these moments, they are pregnant with opportunity to make a difference. and if we do not act in those moments, then things will likely nly get worse.

you will not hear me beating up on the nra. i want to work with the nra to bring about meaningful legislation so that we get something done. i want to deal with the bottom line. do we get something or don't we? do we have legislation, or don't e? the arguments will fade into the universe. the question is, have we accomplished anything. great question. i would put that on to mr. lapierre. >> all right, are you ready? start in the back. identify yourself and your rganization. > one of the biggest stories

involving straw purchases was he fast and the furious. would your bill prohibits the federal government from participating? >> clearly, first of all -- yes, and other words it was wrong. everyone said the reason it was wrong. the legislation would address that issue. >> in the front? >> you talk about these transformative moments. but there have been a number of them. a congress woman was shot in the ead. what is different with sandy hook? or le say is it different .ack in the lub by's shooting

why would sandy hook be different? you talk about reading "run, spot, run" but why is this different? >> 5-year-old children. i do not know if any of you have children, but the idea of sending a 5-year-old to school and then someone walks in and murders them, i think that that -- in other words, every life is precious, whether it is a 100 year-old or a five year-old, but you can learn something. i'm glad you asked that uestion. believe that -- i wish that

all legislators could go and do hat i did last friday. one of the things i try to always do is make sure to feed my passion. hat i mean by that is that i stay focused on my job. about one week ago i -- two weeks ago i called our medical center in baltimore. i asked if i could come and see n autopsy. i wanted to see an autopsy of someone who had been the victim of gun violence. after about one week, a case came up and he allowed me to see t. i wanted to be reminded of how erious this thing was.

i had an opportunity to see a young man, the age of my nephew, who had been shot in the ead. i looked at him. a very healthy young man. i watched the autopsy. i do not know if any of you have ever seen an autopsy. t is not pleasant. i am glad that we titled this will be titled it. what is it? reality check. this young man the day before was probably sitting getting prepared for easter. his was a human being.

who had friends and probably a irlfriend. who has a mother and father. the reality is i am looking at a body. it has gone through the autopsy process. we need some reality checks. do not know what it is. i do not know, i do not know hat has to happen. people are trying to do the right thing in their udgment. people concerned about the issue of gun violence are trying to do the right thing in their

judgment. there has to be a way to make these things come together and make sense so that folks do not have to witness that. i am convinced that it can be one and it must be done. people say -- do you have hope? i believe we will get legislation through. i don't know exactly what it will be. just because you do not get every single thing the one, i learned this as a legislator, you just keep pushing and pushing. hopefully the difference is what we're talking about. if something does not jerk your mind or cause you to step back when you witness that and see that and hear about that then you come home and you look at your small child, your

grandchild and think if they were in that position, i don't know what moves people. again, that is a good question to ask of others. >> second row? >> alito caldwell, associated press. if can post story is correct, as we assume it is,the language proposed by the nra would increase the evidentiary requirements. making an already difficult crime to prosecute that much more difficult because there is not a federal trafficking law. is that something that you would accept? >> i think that'd waters down the bill tremendously. according to what i read in the post, it appears that they are not solid on the language. it is apparently a draft but i

would hope that our friends in the any -- nra would consider hat. one of the things i work hard on every day of my life is that i want to effective and efficient in what i do. i want to be effective and efficient. we have laws that are meant to keep people who are convicted felons from getting guns. t would seem that we would close the loopholes with regard to that. that's just logical. mr. lapierre said something not long ago when he was talking about this bill and i want to quote him because i don't want to misquote him. he said -- we are working on

laws -- it was on "meet the press" he says we're working on laws to beef up penalties on straw purchases and illegal trafficking, which we want prosecuted. look, we are 5 million families. we're 80,000 law enforcement families. "we want to make people safe. that is what the n.r.a. doesi did not say that. every day. the nra said that. if that is the case we should be able to come together and create some common-sense legislation that is effective. i'm hoping we will be able to do that. we will have to wait and

see. >> could you tell us about the stacks of legislation to put restrictions on ammunition and magazines? > as you know, the leader of the senate has said that he does not know if he has the votes to do what he needs to get that legislation up. he says he has opened up a door for it to be put before as an amendment. personally, i would love to see limits on magazine clips and assault weapons.

but at the same time i want to make sure that something gets done. we can argue this and argue hat. and we would do absolutely nothing. we have to be absolutely careful of that. to her credit, senator feinstein has done a phenomenal job and i have tremendous admiration for er and her efforts, but at the same time i think what is happening is that they have a determination and we will have to see how it goes. > in the back?

> robert, from wjla. just a quick question, it has been made clear in the past, the point that was made today, a proposal made to congress even on speculation for the state changing laws about armed guards on campuses. your perspective out -- on armed uards on campuses? >> having more guns in schools is not necessarily the answer. ith all due respect, i think that any jurisdiction that wants to take care of their kids in that way, their students, it may not be a bad proposal. we still do not know exactly all the details. i assume that that is what he will be talking about in the ext few minutes. keep in mind that gun violence is not restricted to schools.

we have malls, movie theaters. in my neighborhood, the neighborhood i live in. see this. schools are one thing, but we have to look at it in a general scope. i have an area in my district, howard county, which has guards in schools in certain schools. talking to the guards, they tell me that the greatest benefit is intelligence. in other words, talking to the kids, learning what might be going on. things that nature. so, i do not know. but i would not just throw that suggestion out the window just

as i would not want them to toss " we are trying to address ere. it is a way to accomplish some good things and i would hope that they would take a look at those things and not do things o water them down. >> going back to the high support for the proposal, the like the universal background check. i was hearing you when you said than 100 ill has more

co spornse in coong. -- co-sponsors in congress. that is more than 500 members in the house. the fact that your bill has only like a 20% support of those members makes me think that the congress is in part responsible for this legislation because what we heard lately is blaming the n.r.a. but at the same time when there s high support among the country with this type of legislation. would you say using your words that congress is not being effective and efficient in the gun issue? >> 435 members of the house, 100 members of the senate, just to get the numbers right. > that is a lot.

most legislation may not even have that. my point is that the number of co-sponsors does not necessarily equal the number people who support the legislation, you get hat i am saying? i think that we have, as a congress, a duty to look at this problem very carefully. i think that when we have a responsibility to reach other to ome up with meaningful regulations, like those happening in our urban areas every day, one of the things about this legislation, and i want you to understand this,

what is happening is we have cases where as i said in my speech where folks are convicted felons. they are trying to figure out how to make money and supply their gang members with uns. there are a lot of cases where we have had testimony on his. a convicted felon gets someone to buy guns. one gentleman's girlfriend purchased 64 guns in rural georgia in a manner of months. those guns were sent to oakland, sold and distributed, the next

thing you know they are showing p at crime scenes. that is happening all over the country. according to testimony we have received, gun trafficking has become one of the crimes du our. the problem is that we do not have the necessary dedicated gun trafficking federal statutes to close that big hole. we hear about all these buy backs in vay you cities. only to find a year later there is another buy back. the guns are constantly flowing into areas all over the country.

we want to make sure that we do everything in our power to stop t. members understand only two people would be against this. the criminal and the person who wants to buy the gun from the criminal. i do not know anyone else who would be against it. >> thank you for doing this today. he said you had spoken to many congressmen over the years on this issue. what keeps coming up? can you generalize the major hings to keep coming up?

>> you know, i think -- i cannot ay one particular thing. i do know that i have seen to the republican co-sponsors. i think that the nra, not telling you anything you don't know, has put forward significant efforts to put orward their position. people would say that that is a consideration. others i assume are looking at , but ition possibilities believe there is a way when

you're dealing with something of this significance and something that can bring the kind of pain and suffering that comes out of this issue. we ought to be able to convince our constituents that what we're doing is on the side of what is right. by the way, our constituents are pretty much convinced already. talk about gun owners who say that they believe that background checks would be supported at 90%. people who actually have guns feel strongly about these easures. in some way the role that the mayor of new york has played has een significant in trying to

give folks a push to remind them to come up with reasonable ways to address a problem and at the same time, making it clear you're not trying to take the hunters' guns away or the collector or the housewife who wants to make sure she's protected in her home. i think you need to balance it out to make people understand that you're not trying to take their guns away but at the same time, you want to legislate so things like sandy hook does not happen. i think the balance for some is a little difficult. >> is the "baltimore sun" still here. i want to give you abopportunity since your the congressman's

base to ask a question. >> be more explicitly, are you frustrated by the fact that democrats in the senate have not moved on this? are you concerned that this legislation could be slipping way? >> a great question. i -- you know, frustration -- i am not frustrated. because i believe that everything has its moment. think that the cases being -- keep in mind that we were at a point where we could not even have this discussion a year ago. i may not have even been invited to the press club. but here we are.

this is about moving the ball up court. i do not know if we will score two points, three points, or ore. it may be that we laid a foundation to do even more in the next congress. the fact is that the passion that comes out of the parents from sandy hook, the passion that people that you and i know about in baltimore from those who have suffered so much gun violence, the passion that comes to me and others, i do not get frustrated because my concern about frustration is that sometimes you can get so caught up in the frustration that you

get distracted from your goal and i always try to keep my eye on the prize, to make a ifference. the prize is that when i think about a young man who is lying there dead, with a bullet hole from his ear -- under his ear and the shot on the side of his head, that is my passion. i believe that if he could speak, he would say that congress does not have the right to remain silent. you must never give up. you must never be so frustrated that you give up. there's another thing to keep in mind. a lot of people look at folks

who have suffered from gun violence and say -- they are the crusaders. but one thing that they do not think about and tend to forget, that they are acting out their pain and they have turned it into passion to carry out a purpose. it may take years to achieve hat purpose but you still keep pushing on. by the way, they are not doing it for their kids, their kids are gone. they're doing it so that it does not happen to other children, so that it does not happen to other young people. two other folks, like the teachers in sandy hook. ladies and gentlemen, thank you very much. >> congressman, as we conclude, thank you for the sharpness of your time. we have been yelled at for going oo long.

we have a very informative presentation and we would like to present you with this traditional national press club mug. thank you for coming. by the way, yes, we would have found another reason to ask you. [laughter] >> thank you, all. >> we are now adjourned. national captioning institute] able satellite corp. 2013] >> white house advisor said today he believes that congress can pass gun control measures. you can see his comments on c-span.org. here's some of had me had to say about the president's budget. >> the president's budget will come out april 10. there's a ryan budget. what does the president's budget tell us? >> i think the budget is -- i

don't think it will be a big surprise to folks. we've said in the state of the union and he has been clear how he wants to create jobs and grow the economy. he provides a detailed road map on how we're going to do things like provide, you know, more jobs and improve roads and bridges and having the manufacturing jobs come back to the united states. our fiscal policies are well-known. theyvy been posted on the web. so that will be there. the reason the budget is delayed because our budget is different than congress' budget. line by line how you fund every program. so the government prior to very late on new year's eve/new year's day was unclear what the revenue coming into the government would be. so we had to wait for that to

get over. >> what is your budget about? >> what our budget will do is follow the path of all the bipartisan commissions that puts us in a sustainable place. this idea -- i know this is the new -- i read this in politico the poll talking point that will republicans want to balance the budget. that is not what paul ryan thought because his budgets did not balance. you don't want to balance the budget simply for balancing the budget to slash everything that creates jobs and economic growth. what we're going to do is, we're going to have a budget that helps the middle-class, grows the economy, and reduces the deficit. >> the fact, it balances. >> no, it is going to put us on a path that is consistent with the mutually agreed upon levels of deficit reduction. >> high democrats on the hill

have been assured that change in how we measure the cost of living to save money, are they right? >> i'm not going to get ahead of the budget. this is a big deal for reporters in washington. i would not want to ruin that for folks right here, right now. what i can tell you is, the president's offer to speaker boehner is on the table. that offer included among other things, the change in c.p.i. that is on the table and it is waiting for someone to come take it. >> so be fair to expect to be included in the budget? >> i will let you determine what is fair to expect. that offer is on the table. it is important understand two things. one, this is not something -- our offer to the speaker is not our ideal position it is what we thought was common sense. they came to us said this is

what we would like in the budget. they said we would like c.p.i., we said we don't want that. this is not way we would approach it but in the context of a deal, both sides have to give some this is what we would have to do, it would have to have protection for the older senior, poorer seniors. that is what is on the table right now. >> you can see denver's entire comments on c-span.org. he was interviewed today by michael len. he also talked about the obama administration's agenda on c-span.org. president obama is in colorado talking about that state's newly passed gun control laws. at his remark in denver he's expected to call for universal background checks for gun buyers and encourage congress to vote

on assault weapons ban and large capacity magazines. we'll have live coverage here on c-span. tonight, a look at protest groups in america. our live discussion begins at 8:00 p.m. eastern. here's a look. >> i'm pleased to billion joined my my wife and my son, tom. >> i speak for the mothers. >> we will stop again. >> this is code pink protesting at a recent congressional hearing. we spoke with the group on how it fits into the political discussion. tonight, we'll be joined by the author of the book "the politics of protests." et us know what you think at facebook.com/c-span. >> people like to ask me, how

did you come across this story? people always ask writers that. what happens a lot of times is you find a new story when you're supposed to be working on something, which can be frustrated at times. that is what happened to me. i was doing a little internet research one day. look at this frothe. this is the frothe i came across. it was on a department of energy website. it had a newsletter and this newsletter said this month in history -- something along those lines. this one, i loved because it seems to be a vanishing point at the end of the room. i looked at these machines and i was so into it. the women look sod lovely and they have the nice posture and the 1940's hairs do and the i read the caption and it it is a,

these young women, many high enriching uates were uranium for the first atomic bomb but they did not know it at the time. >> one of the manhattan projects secret cities saturday at 11:00 tv. rn on american history wall street executive greg smith resigned from goldman sachs about a year ago and he wrote an op-ed about a year ago. he has since written a book goldman y i left sachs, a wall street story." he recently spoke to sanford students about why he left and the ethics of wall street investment firms. this is just over an hour. >> professor of political economy here at the stanford graduate school of business. this event is cosponsored by the center for ethics in society

which has a year-long series of seminars on the ethics of wealth. there are other parts of that series you may find interesting. this may be of interest to you going forward throughout the year. before we get started, i want to say a few logistical things. greg is doing an event at the bookstore at 6:00 p.m., if you have detailed conversations you want to have, that might be the appropriate for them. -- forum for that. secondly, this is being recorded by c-span, so this is forced future broadcast, just so you know if you are asking a question, you may wind up on television. because of that, we have microphones for q&a, so he will talk for about a half an hour and then do some q&a. if you have questions, head to a microphone and he will call on

you. greg came to stanford from south africa in the late 1990's, he graduated from here in the class of 2001 and immediately went to work for goldman sachs. as you probably know from reading the "new york times" he left in a high-profile way that a lot of people argued about. in some sense, the point he was making was that old man used to be a greedy type of firm in trying to build its long-run profitability by serving clients interest. his argument was that had changed. something in the operation of goldman said at people were more focused on their arsenal success and the success of their subunit. this is a topic that was very controversial here.

i hope that we can have an interesting dialogue between greg and people in the udience. you probably have all sorts of different views. welcome back to stanford and we look forward to hearing what you have to say. [applause] >> thank you very much. can everyone hear me ok? is that a yes? it is a great privilege for me to be back here. like you said, the first time i ever came to america was the day i arrived at stanford. associate stanford with a lot of great things, a lot of idealism and optimism and it is great to see a lot of familiar faces. there are three or four people here for my freshman dorm which is terrific. i was sitting where you were

about 15 years ago, although the business school did not look like a hotel back then. it looked a little bit less fancy. a few things i will tell you about myself before i start. one is, i am from south africa. i have a slightly funny accent because i lived in california for four years and new york for 10 years, london for a year and half. people ask where i am from, i often tell them i am from brooklyn just to confuse them. when they get quite confused, i say, yeah, east brooklyn. that confused them even more. i hope everyone can understand me. i used to have a ponytail, which is also hard to imagine. a third fact about me, i started at stanford as premed. i started the economics and premed track at the same time. ultimately, i decide to go into

he business world. just to get a sense, can i take a quick poll -- who are undergrads in the audience? and business school students? and members of the community? faculty? great. we have an excellent and diverse audience. you will have a good dialogue, i imagine people are split on these issues. a couple things i will say -- the professor mentioned the op-ed i wrote about goldman sachs. everything i said i very much believe is true to the industry. i do not think -- goldman is a smart firm and excellent firm at hat it does. i do not think it practices are very different to the industry

more broadly. hen i wrote the book and the op-ed, i was using my career there as a view of what i think has become conflicted in the industry. the second thing i would say, i think a lot of people would would want to classify my views or this talk as in the occupy wall street camp or a different type of camp. i would say, i am very much a capitalist. i just have the view that free markets imply that the playing field is fair and there aren't a lot of conflicts of interest. a big thesis of my book and what i was trying to get across in the op-ed is the fact that capitalism, at least in the financial industry, i no longer think is on an even playing field. i think advantages are stacked in favor of banks and against

their clients. i will get to this more later n. let me tell you the three things i will discuss today. the first is, has anything really changed in the industry? certainly when i wrote the op-ed, a lot of people said, things have always been this way. or, wall street has always operated in a certain sense. i will tell you how, at least since i was sitting where you were 15 years ago, in my opinion, things have changed. the second thing i will tell you is, with all these changes, how do banks exploit conflicts of interest to make money in a way that i view as unfair at best and potentially very systemically dangerous to ociety at worst?

then, what needs to change in order to fix this and why hasn't enough changed? on that point, i would ask, how many people in this room have heard of the dodd-frank act? how many people think the dodd-frank act has been implemented? 2.5 years since dodd-frank was passed, less than one third of it has been implemented and more than three quarters of the deadlines have been missed. millions of dollars were spent lobbying against it. perception that conditions have changed -- i want to show you guys why they have not changed. why obama or romney or any number of politicians would want people to think. starting with the point of what

has changed, i think there have always been practices on wall street that are not great and are dubious. the simplest way to mark what has changed is look how banks make their money. and i joined the firm in 2000, when i joined wall street, at least half the money was being made in the original things that made finance get called finance. wall street finance, things that help companies raise money. they acted as an advisor in many capacities. when i joined, about 60% of goldman sachs also revenue within the banking side of the business. there will always be conflicts, but there aren't less complex than in the trading side of the business. fast forward to 2007, close to 80% of the money is being made in the trading business, which is a very marked change.

i do not think people can debate that as being non-factual. with that kind of revenue change does is leads to behavioral and cultural changes. what occur that allowed this revenue shift to change? three main things occurred around the time when i was joining wall street. the first thing, in 1999 there was a thing called the glass-steagall act separated commercial banks from investment banks. it was repealed. in 2000, there was a thing called the commodity futures modernization act which essentially took complex securities called derivatives and deregulated them. it allowed the trading of derivatives to move off exchanges and basically into the dark. the third thing was, a thing called the net capital rule was overturned.

what that did was allowed banks to increase their leverage range, forthose who do not know, is basically, if you have one dollar, you can effectively levy you can effectively leverage yourself up by taking on debts 10 or 20 or 30 times the amount that borrowing extra money. from the early 2000's to the mid 2000's, banks took leverage from five to one up to 35 to one. with these three things, which were all regulatory in nature and all lobbied for by the banking industry, it became very clear that as a professor said, the old model of long-term greed, which was the motto goldman sachs had for many years, which essentially said if we do right by clients over the long term and maybe turn away

business in the short term which can affect our reputation, they will keep coming back to us. we will have a collaborative relationship with the client as a partner and they keep paying us and keep doing business with s because they trust us. this shifted to a model i would call short-term greedy, which ultimately makes more profits for individuals and for the firm in a short-term but in a long-run standpoint does not serve your business well and does not serve the society well. because potentially you are doing business that is toxic to your clients and ultimately endangers the system, as we saw in 2008 where merrill lynch, aig, they had taken such huge risks that it ultimately brought the whole system down and the government had to come in and bail the system out. so we talk about all these regulations occurring -- what basically happens is it becomes

clear it is more advantageous for the bank to start betting with their own money. when you can take levered bets of 30-1 you may start seeing a client more as an information provider to help you bet more smartly as opposed to seeing eight client as a partner you help to make returns on their money. in the early to mid part of my career i saw this cultural shift occur. the firm started seeing what the biggest mutual funds and pension funds in the world were doing and started implementing their own bets using this information in a way that was not insider trading technically but allowed banks to use this big picture sitting in the middle position to bet. goldman sachs trading revenues in 2002 were $5 billion. i 2007 it was $38 billion. it is -- businesses do not multiply by five or six times in

five or six years unless there is some meaningful shift in the mindset. ltimately that leads to a what i would call a behavioral shift. it does not happen overnight. if people are being incentivized to use my information to better the firm's own money and nobody is telling them there is anything wrong with that, it filters up and down an organization. this shift occurred everywhere on wall street during that period. a few examples to show this mindset shift, in the last year or so, countdown what i call the scandals that show this kind of swing from the fences behavior. you had mf global, a futures brokerage in chicago, where the head of the firm started making

proprietary bets on the sovereign crisis in europe and alternately the firm went ankrupt. there was a scandalous situation where they were potentially using customer money to fund these bad bets. secondly, in the last few months we all heard about the libor rating scandal. libor is an interest rate that affects hundreds of trillions of dollars in assets throughout the world. this is, i would say, a example of this, where traders were collaborating with each other to set an interest rate because they knew they would make more money for the firm. look at the facebook ipo -- we can argue endlessly what is facebook's fault or morgan stanley's fault, the investors fall, but certainly a manifestation of this swing for the fences try and get as much out of the deal as possible. et me go on to point two, to explain how banks make this

money using an analogy i used in my books. if you compare wall street today, 75% of revenues come from trading, to a real casino. not everybody likes gambling, but whether we like gambling or do not, when you walk into a casino you can have a lot of faith that the rules are not going to change during the game and that there are cameras all over the floor and that there is a regulatory body that for the most part is keeping an eye on things. the other thing i would say is the casino, the house is not allowed to take bets based on what everybody in the casino is doing. it is what i call an objective counterparty. let's run through this analogy a little bit. if you think about an investment bank, they are not dealing everyone cards. let's say at the table is a pension fund, a hedge fund, a

mutual fund, hundreds of billions of dollars sitting at the table. that bank, or the dealer, can see what all those people are doing and can then go out and use that information to place heir own bets. you would expect someone not to lose very often if you could see everyone's cards. this is very much borne out in an example we see every quarter where banks have to release their results on the trading books for the whole quarter. there are many quarters where a bank will literally make a profit 100% of the time. that is like batting 1.000. i am sure most people in this room invest in the market. if you make money 50.1% of the time you are probably outperforming any people in the market. it is very hard to understand how trading books can make money

100% of the time unless you have some kind of asymmetric information advantage. that is where i would come back to the analogy of you are seeing what everybody else is doing, so you can bet a lot smarter with your own money. the second part of the analogy, i mentioned the cameras. what happened with the deregulation of derivatives is gambling can be taken to a back room where there are no cameras and no one is tracking who is losing a lot of money and making a lot of money. this is the example of lehman brothers and bear stearns and merrill lynch, where no one knew how much risk they had on their books. it turns out they had all sorts of risk and nobody in the market knew or understood them. this is the big danger of business being done in an opaque fashion, in the dark, in a very complex nature. i would argue that ultimately you need to bring began pulling out of the dark room and bring it back into the light. in exchange, where everyone can

see what is going on. to continue a little with the analogy. this is what i think is the most dangerous part of the way business is done on wall street today. the dealer. when you are playing blackjack, i think everyone knows the rules. if you get more than 21 you are bust. there are certain statistical probabilities you should and should not bet on. when you go to a casino, does anyone in the audience expect the dealer to give them bad information? for example, where the dealer is actually telling you when you are on 19 that you should take nother card? no one would expect, at least when i have been to casinos, -- the dealer is kind of on your side and somewhat friendly and will tell you. you often see people who never gambled before who will take another card of 19 and ruin everyone else's hand.

the dealer would like to tell ou this is a bad idea. i think you have what i would call an implicit sense of trust, we do not expect the dealer to miss guide you. what sometimes happens on wall street is a client or investor will get told to do something that if they understood the rules of the road very well would know is not in their interest to do. yet a wall street firm will tell them you should do this because they're firm might make 15 million or $20 million off of this. they are not technically doing anything illegal. that person walked into the casino. they are responsible for their own actions. i think this is where a big misunderstanding comes from. many of you remember, in 2010 there was a big sec lawsuit against goldman sachs. there was a big hearing in front of carl levin where a lot of

wear words -- one particular word was used over 20 times because of how bankers spoke about these deals. the big argument for why it was ok to sell someone something without full disclosure or without telling them your intention was this idea that everyone is a big boy. if they come to play they deserve what is coming to them. even if there is a sense of deception or a sense of misleading them. now, i think a lot about the words fiduciary duty. this is a word thrown around a lot. but the essential meaning of it is that when someone is coming to you for advice, if you are bound by a fiduciary obligation you owe that clients, that

person, the duty of telling them what is in their interest in what is not in their interest. over the time i was at wall street, it has turned into the sense that a fiduciary duty is not owed to anyone. the big problem with that is i would argue many clients with hundreds of billions of dollars of assets to not understand that. i will give you two examples that ultimately led to me writing the op ed. i would like all of you to think about this as an ethical dilemma, especially since we live in a time today where the idea of ethics versus legality are very different things. it if something is technically legal and will not get you sent to jail, a lot of people will do that thing. an example, we recently had a it if something is technically legal and will not get you sent to jail, a lot of people will do that thing. an example, we recently had a terrible storm, hurricane sandy. everybody gave donations to the

red cross society or any number of charities. i think what the general public does not know is that red cross, every university, stanford, harvard, teachers pension funds, governments, are the biggest fish in the market. they have hundreds of billions of dollars of assets and are investing with wall street. what i would ask is, as a hypothetical example, if the red cross society came to you and asked to trade a very competition derivative product that was going to pay the firm $20 million yet you knew it was not in their interest, but it would not necessarily get you sent to jail because the government classified it as sophisticated. would you do that business? more and more i saw the attitude and behavior moved to a point where yes, we will do that business because they are a big boy. i would argue it has reached a point where because of the asymmetric information i told

you about not everybody is on an even playing field. i think more needs to be done to prevent that kind of behavior. the second example i would give you is a very powerful one. for helping me make my decision. the european sovereign crisis, which is still boiling but we may remember last summer or the summer of 2011 when it looks like portugal, spain, italy were teetering on bankruptcy. i would go to trading meetings every morning and our traders would have a very negative view on the european banks, yet we were being asked to go to some of the biggest investors in the world and try to convince them why the european banks were such an attractive investment, purely because we did not like the investment and wanted to sell the banks but we needed somebody else on the side of the trade to buy the banks. if we were just talking about some arcane investment that did

not affect anyone this might not be so relevant. it i would go to my desk and would see the biggest banks in france and all over europe moving up and down five percent-10% a day. largely driven by this idea that every two days to drum up business clients at banks across wall street would be convinced that today's the day to sell, tomorrow you should buy, now is the time to panic. the truth is, traders across wall street did not really believe conditions were changing on the ground every day. to me this started having real world impact. millions of citizens across europe are affected by the fact that their governments cannot get their act together and banks are trying to drum up business in order to make their profits at the end of the quarter. this ultimately became something that i thought crossed the line of the letter of the

law versus the spirit of the law. ethical versus legal. it got to a point where i felt this was not the type of business i wanted to do anymore. the final point i will talk about before i take some questions and answers will be what needs to change in order to fix the system in my opinion. one thing i would say, which i do not expect a lot of people know, is that the five biggest banks in america are now bigger than they were before the financial crisis. whatever people claim or do not claim, banks still have an input said, and i would argue almost exclusive, guarantee that government will support them. just to explain a little bit, there was an example last summer where a jpmorgan trader who was nicknamed the giant whale or the london whale basically took a massive debt,

lost $6 billion for the firm, got a wrist slap, lost his job. the person who ran the group over the course of her career made more than $50 million, and left the job. if that loss had been $200 billion instead of $6 billion the thing that happened to the person who took the trade would be exactly the same. they would get a wrist slap, leave the bank, and a society would have to bailout the bank because of this existing implicit and explicit guarantee. anybody who talks about free- market capitalism, we saw in 2008 when faced with the idea of are you really going to let the banks fail, the truth is the government was not willing to take the risk and see what happened. everyone on wall street knows that. there is now incentive to swing

for the fences and do whatever you can to maximize profits because of the trade goes bad you will just lose your job. everyone has to bail the banks out. i think what this amounts to today is what i call a privatization of profit and a socialization of downside risk. that is still in force today. anybody who claims it is not in a force is not, in my mind, telling the truth. why is not enough done to fix this? i would -- at the end of the book i point the finger back at politicians. the truth is that i think the thing we should all be most outraged about is, look at the senate banking committee, who are the firms that are giving them the greatest campaign contributions? goldman sachs, jp morgan, morgan stanley -- look at the regulators. the hundreds of millions of

dollars lobbying in order to kill regulation. this is very counterintuitive to me. a way to kill legislation in today's day and age is not to get rid of it or to get it struck from the act. it is to fatten it up. this was not obvious to me at first. a thing called the volcker rule, designed to completely eliminate proprietary trading, banks betting with their own money. it started out as a two-page document written by two senators as an amendment to dodd frank. two years later there was something like 700 pages. banks realize that if they can get the law firms to exert hundreds of loopholes and amendments you ultimately reach a point where the law is so complicated that nobody can actually -- you have achieved a victory were nothing has changed at the end of the day. we need to say the politicians, number one, why do you not have

the political will to actually fix a problem that affects everyone? banks can still be profitable, can still do things that serve economic prosperity, raising money, helping companies merge, but when 80% of bank profits are coming from trading i do not think of banks or are being honest with the public with how their money is being raised. look at commercials and tv for citigroup goldman sachs or jpmorgan. you would think they are in the business of helping new orleans rebuild or giving money to charities. certainly there is a significant amount of philanthropy on wall street. thei would say to you that amounts of money made by investing in urban communities is less than 10%. i think there needs to be a greater sense of honesty, where people are upfront and say 80% of the money is being made in a business that the public does

not understand, frankly politicians do not fully understand, and i would say to you regulators are not enough or nimble enough to understand things because they are so complex. so what i am advocating for is a return to the old long-term model where you do business, you make money, the clients make returns, banks can still be profitable. thateople who do things risk the systemic safety of the economy are held accountable. the way to do that, and i'm not a huge fan of regulation, but i think the three big things you need to do. one is derivatives. you need to bring them back the light. you need to bring them onto exchanges. proprietary trading, through the volcker rule, you need to out live. the law does not have to be 700 pages. it can be one page. a lot of times banks will hide behind market making or hedging, which is a more

competent discussion. what i would tell you is it is a way to hide behind something that will let you continue to do proprietary trading. the third one, which i'm interested to hear what people in the audience think, is about our bank still too big to fail and are they too big and too complex to manage? i would say they definitely are. i would say there is critical mass building where you do not want to be destructive of the banks but when they are still so systemically dangerous is there merit to making them smaller? spin off the trading business from the retail side? i would argue that yes, there is merit to that. with those three things, i will leave it there. thanks for listening. i will open it up for questions. [applause]

>> first come first serve? go ahead. >> thank you for speaking. it seems like a lot about what you are talking about was a policy analysis of what the situation is on wall street today. but there are a lot of us in the audience who are interested in taking those issues the way you described it from a personal perspective, if we were in your shoes, what is our duty and what is the best way to effect change? one thing that i noticed was since you wrote the op-ed and attracted a massive amount of media attention, a lot of that momentum seems to have died down over time. there does not seem to be the same degree of scrutiny over goldman or wall street generally. it made me wonder, maybe part of it is because publicly publicizing your reason for leaving goldman sachs, even potentially sympathetic employees at goldman think there is some pressure to defend

the integrity of the firm because they are attacked from the outside. perhaps you faced more resistance than you would've had you taken this internally. i'm wondering, given the information you know today, if you had to do it all over again would you think it would have made more sense to have the same content of the op-ed but not take it to the "new york times" but e-mail it to every employee in the goldman sachs worldwide directory? >> that is a great question. there is a way to send something to everyone in the global directory, which everyone fantasized about at some point. if you have mistakenly sent an e-mail to everyone. what i would say to you is it took me -- in the book, i say i wrote the op-ed over four months. i went through a process of having dozens of conversations, first with the people sitting around me. behind closed doors, a lot of people on wall street feel a sense of angst about the sense

that the game could end any day. i think everyone, 95% of wall street, are fundamentally decent people. askedthink they're being to do things that, as i have been talking about, step over the line of what i think is ethical at times. dot i would say to you -- i not think goldman sachs is the problem. i think this is a systemic problem. i know the professor was saying -- there is a real temptation to think that if we send two or three bad eggs to jail the problem will be fixed. the point i tried to get across in my book is that this is not a problem about a few bad people making bad ethical decisions. this is about a whole system that does not just encourage people to make these decisions, but incentivizes them. directlyus will be determined by how much they bring in.

i've had conversations to check with people who felt similar. i also had conversations with goldman partners behind closed doors, half of whom agreed with me about these ethical lapses and long for a time about returning to this long-term agreement tally. it gets to a point where it is the golden goose -- as long as it is paying people money, there's not a lot of incentive to pull the curtain back and actually change the system. what i would say to you is that there are a lot of people in difficult situations. not just relative to the world, but people who have kids going to private school, all sorts of bills. living an expensive life. peopleing a letter to internally i could very quickly see through my conversations with people, including a couple in the management committee. by the way, i think this applies

to any firm. there is not a lot of incentive to change something. if you are doing something and are not going to jail are going to trouble for it, in my opinion by talking to people about it internally you will not have an impact. i think this problem is as big as politicians and regulators not understanding the broader problem. alternately i decided i was going to leave. i did not think there would be merit in trying to say something publicly -- i did think there would be merit in trying to say something publicly, not to destroy profitability on wall street but may be restored to a more stable fashion. giving you an example for the business school students. look at, is a short-term greediness actually good for goldman sachs's business or jpmorgan's business? i would say i do not think it is good for the business. look at how the stock market values banking stocks. banking stocks are valued at below value. even the markets does not like this model where there is no

predict ability, no sustainability, no long-term orientation. look at jpmorgan's earnings statement. there is zero disclosure of how the money is made and where it is made from. investors cannot value companies correctly. i just thought there would be something to be said for saying something publicly. i think the people from within the industry do not say something -- nothing will change. we will go through a cycle where every seven or eight years we have bubbles that expand and ultimately burst. let's hope it does not happen again. >> that is pretty discouraging. goodring out a really point that the process of regulation seems to be kind of hopeless. big money will defeated over time by boring from within. who watches the watchmen?

is that an ethical thing we have to have, to change the structure? how do you see the move from these great investment houses moving from a partnership to a corporation, and do you see a correlation of that, the emphasis on a fiduciary relationship versus a counterparty relationship. do you see that? >> i see that as being a huge contributor to the problem. goldman sachs was the last large private firm on wall street. when you are a private partnership your partners' incentives are much more aligned with clients. if you do a deal with the government of libya and it ruins your reputation and people pull money from your firm, you will feel immediate pain because your capital is tied up. when these firms became public

it became much harder to take ownership of the problem. i do think that it is an issue. it is hard to go back in time and privatized firms, but when they were private incentives were aligned. i think client interest was better served and banks were less dangerous because they were less big. the reason banks became public is because of this move in the late 1990s to create what i call these banking supermarkets like citigroup. in order to compete every investment bank had to get bigger by getting public funding. if we could go back in time and reverse glass-steagall being repealed, reverse the derivatives being deregulated, reverse the leverage issues, in my opinion i do not think we would have had this scandal as bad. the financial crisis could have still occurred, but i do not think it would have occurred on the same scale. alternately i think the way you fix it now is point the finger at politicians and regulators and say, we elected you to understand what is going on.

if the system is too complex to understand you need to make the system less complex. oryou are being corrupted unable to be objective because people are giving you money and lobbying and funding your campaigns, the a left rate needs to vote those people out of office and say, this senator is no longer objective. this regulator running the sec no longer understands what is going on. i have said the public is not more tuned into this issue. my biggest goal in the book was really to write this book not for a wall street audience or anyone who knows anything about finance, but to write it for people who know nothing about finance. to pull the curtain back to show. there are a lot of good things going on wall street, but a lot

of conflicts of interest. only if the public holds politicians feet to the fire will things change. my hope -- an earlier question was how can business school students and college students change things. one thing, speak to politicians, hold them accountable. fill yourself in on issues. when you do work in finance, act within your own ethical compass. one by one people can change things. but i do think politicians ultimately probably harbor the largest amount of blame in this. mythis was a great segue to question. what are your plans for the future as far as her career? i think you would be great in congress are working for the sec or the department of justice with your background in values. i'm sure there are people in this room who would support you. >> thank you. becomingme people i am a dj, which is not a very popular thing, as a joke. in the short term my plan is to try to bring awareness to i would say the motion or term crisis, the fact that dodd frank is dying what i call a very slow death by a thousand

cuts. i am sure everyone tuned into the presidential election. not one candidate talks about financial reform. does not matter if you are democratic or republican. there is literally one person running for senate to even mention it, who is a elizabeth warren. we can agree or disagree about whether her views are accurate or not, but what i do commend her for is that she is talking about it. if it affects people's lives, politicians should talk about it. thist to give talks like to give a little bit of awareness to what i think is a serious problem. longer term, i would like to be helpful to congress and to the sec. i have been in touch with people in congress, and i hope to be helpful to them. in terms of my longer term plans, have not figured it out yet. a lot of people said, you have burned your bridges on wall street, you will never work

there again. but i think the point i make to people is that that is not what i hear from the public in terms of this idea of returning to fiduciary standards. the big players in the market are not hedge funds. hedge funds -- those investors account for five percent. the big players are teachers pension pants and sovereign wealth funds and mutual funds to hold 401(k)'s and donations and retirement savings. i would like to be part of the solution in terms of bringing a greater fiduciary standard back to markets. >> earlier in your talk you mentioned merrill lynch and lehman brothers and bear stearns as being three firms that were overleveraged and operating in the dark. and they kind of disappeared. could you give us your thoughts on why lehman was allowed to

burn up and the other two were rescued? controversialy topic, which i think conspiracy theorists will talk about for a long time. but i was sitting on the trading floor when that happened. when lehman brothers was allowed to fail, any record checkers or fact checkers should go back and look at the editorials the following day. liberal periodicals and conservative periodicals praised hank paulson for drawing a line in the sand and saying, you know what, if you take irresponsible risk in your leaders are not willing to fix the problem or show the right amount of transparency, you are going to be allowed to die. ultimately when the government reversed course on aig and molto other things i think it showed a tremendous amount of uncertainty in the market area everyone panicked, and it led to

more problems. looking back on that, i think there was a mismanagement in that what markets like, anyone who invests in stocks will no markets like consistency. they like to be able to see what will happen in the future. the fact that every day was a guessing game of who will be allowed to live and die was a very dangerous thing. i think perhaps everyone should have been saved or everyone should have been allowed to die. i think everyone would have been scared to see what happened. that is an extreme view. but ultimately i think history will look back on it and the crisis probably would have been worse if -- i say it is hard to say. you need a crystal ball in order to tell. forirst of all, thank you speaking out on wall street. a lot of paychecks are dependent on not speaking out. i wanted to thank you for that. there is precedent for

prosecuting people for securities fraud, like in the 1980s during the savings and loan scandal. i wanted your thoughts about how or why there have been zero criminal prosecutions of any wall street executives. >> an excellent question. i think the question everyone in america asks. the reason is quite simple. say,aws are not, i would on the level that allows criminal prosecutions to take place very easily. this is what wall street wants. right now you need to prove criminal intent to defraud people. look at any number of examples, the mf global example, a particularly egregious one where jon, the former head of goldman, a former governor of essentially $1 billion of money disappeared. the reason they will tell the

public that nobody went to jail or was prosecuted is because in order to prove intent that they were trying to defraud people, it is a very hard thing to do. i would argue -- as i said, i would not classify myself as a pro-regulation person, but any thinking person realizes that if everyone is driving race cars and there are zero speed limits and everyone is just mandated to self regulate and not crashing the people, alternately you will get bad actors to crash into other people. i think the laws need to be more strict. the hope was that the momentum coming out of the crisis would be used to change those laws, but unfortunately things are fading into memory. frankly, that is what banks want.

they want us to receive into memory. personally i thought the jpmorgan example was something that should have been a much bigger deal. thiss very symptomatic of reckless, we gamble and if we win we keep the profits and if we lose we do not have to worry about it. it was an opportunity for congress to change things. someone speaking at the business will next week has done great work prosecuting insider trading. go for the low hanging fruit. it is easy to prove a billionaire used misinformation in order to make some money for himself or herself. the truth is that insider trading does not actually affect that many people. the real issue in my mind that the justice department and lawmakers should be going after is the systemic issue of, i mentioned earlier the proprietary trading. i would tell you it is absolutely going on. it is just going on under what i call a new term, hedging or market making. we are doing this. the truth is in my mind much

less is being done in the service of clients. much more is being done by using the fact of serving clients to make yourself money and place your own bets. i think congress needs to become a lot smarter fixing the rules. if they can fix that rule i think it will be more valuable than sending people to jail. the great danger of that is then everybody says we have fixed the problem. the real problem is much greater and much more systemic in my mind. funds mentioned mutual are among the major players in the market. do these systemic factors that you mentioned have a significant impact on what i will call mainstream mutual funds that invest in equities or fixed income as opposed to the fringe players? should we as individual investors have concerns? >> absolutely. i will give you a couple examples. may 2010, there was a thing called the flash crash where

the market literally dropped 12% in one second. nobody could explain what happened. people who researched the issue speak about a thing called high frequency trading, which wall street firms have computers that they get to the stock a millisecond before anybody else. this creates a lot of volatility. i would argue that mutual funds, no matter how vanilla, are still investing in stocks. if the market cannot be assumed to be fair and without uneven advantages, i do think people should be concerned. i do think mutual funds should also be held accountable not to use products like derivatives when they do not fully understand them. a lot of the time they don't. >> thank you very much. >> i have a question that is related to some of the answers you have provided. i think all of your responses

have talked about regulations that are instituted and also talked about incentives and perhaps disincentives for some of the behavior that he this. i would like to understand, given the complexity of enforcing regulations and what you have advised the audiences and future generation of financiers in wall street -- what would you recommend on business side aside from the legal consequences of violating regulations, something that relates to the financial rewards? couldt context, if you also tell us what differentiates what goes on here in the us versus the european market? >> good question. i think a lot has been raised about compensation on wall street. i think one of the ways wall street firms will defend paying people 10 million or 20 million

or $30 million is that if we do not do it they will go somewhere else and do it. i think this is a circular thing that keeps going around. if firms decided to bring incentives back in line things would change. the way you do this is you have to tie compensation and incentives to the performance of your clients, and have to tie it to a long-run orientation where you take away the incentive the london whale had to swing for the fences because they wanted a big bonus in year one. you have to make compensation based on a five-year or 10-year record where clawbacks are very strict and are enacted. yesterday i am sure many people saw jamie dimon, ceo of j.p. morgan, his compensation was cut because of the london whale yesterday. people might say that is a great

victory. i would say that to me it is more of a band-aid, trying to show the public. there needs to be a more systemic change in incentives. the truth is that human nature and agreed it is something we as a people in my mind cannot regulate. if one had to fall some of the protests that took place around wall street, what i think is effective is to protest something very simple and factual, like bring derivatives onto exchanges. outlaw proprietary trading. do not give people the ability to swing for the fences. you take away the product they are using to do that. i think you try to tell people you need to make less money or we are going to your pay at x amount does not -- i do not think that jibes with american capitalism as i see it. people should be able to get rich and make lots of money. i just think they should be

required to do it in a transparent way that does not endanger other people. inhink the easiest solution my mind is to hold regulators accountable, hold politicians accountable, and take away the things that allow people to swing for the fences by regulating the markets. in terms of the question about europe versus the us, europe i would say is more like the wild west than the us. the last chapter nine book, when i moved to london i actually called the chapter the wild west because there is very much a greater sense of anything goes. i would say the us is a leader in a lot of these products, and the europeans follow. if the us can get these laws right, one reason congress doesn't want the passes he does it they do it here banks remove

the euro. i guarantee that if the us changes something makes the system more responsible they will be a sense of arbitrage around the world where everybody will try to get somewhere else, but ultimately the us is the strongest market in the world and i think others will follow if we do things here. >> in terms of your second of the asymmetric nature of information and the casino analogy, when we talk about deposit creation like what is going on right now, the last month of last year there was $220 billion of deposit creation in the us system, it is working its way into fractional reserves and then the banks are obviously hedging as you pointed out, possibly not in a best interest. in terms of the deposit creation, the largest in history, who -- where is that money coming from, and in the casino analogy who is that person?

>> i think deposit creation comes from the fact that you look at retail investors and how much they have been the stock market. since the flash crash in 2010 it has dropped significantly. i think there is a sense that people just want to put their money in a bank account and keep it safe to an extent. i think it is the fearfulness that come to invest in the market. do i believe that a big bank

like citigroup or jpmorgan is using those funds recklessly? i do not think so. but are they proprietary trading? yes. that was the example of the london whale. i would hope that the system and the stock market become more transparent. investors do not feel the need to put their money into savings accounts but in vast. because that has helped the market grow. >> you mentioned a number of banks that have behaved rather badly. what are the banks that have behaved well? that have been more profitable than the banks that paved badly? if not, you have a reversal. >> look at the canadian banks. just as an example. unendingnot have a leverage. they did not get the same complex products. they weathered the financial crisis just fine. i would say in the us, you look at banks like wells fargo that did not have a similar ratcheting up of risk and the

fiduciary responsibility, look at the more boutique asset management places whose interests were not all over the place and did not have all sorts of conflicts. i think they survived a little better. in retrospect i think banks like goldman sachs and morgan stanley and frankly jpmorgan were lucky to have survived the crisis. i think there was an effect occurring -- the government would step in and save. i think the people who weathered the crisis just fine were the ones who retained this fiduciary duty, where they were not betting against their clients, were not using client information to make themselves money. at the time they were less profitable but five years later i would argue they are a lot stronger and on less shaky ground. >> in the case of, was it because of any government regulation? >> it was. governments were not allowed to take 31 leverage. there were not allowed to proprietary trade in the same

sense. well we as americans want maximum profit and maximum capitalization, the speed limit topic is relevant. if you have smart curbs that do not allow you to make 50 times the amount of money but also do not allow you to lose times the amount of money, i think it is just smarter. >> i wanted to say, i applaud your courage. that was a great day to post on facebook your announcement and get feedback from friends and family. you talked about the ethical and legal dimensions of your decision-making process. this is your token seminarian question. was there a moral or religious dimension to that? >> you know, a theme that runs through the book -- i am jewish, and i do think that my upbringing has some effect on

things. aen i talk about the idea of charity or philanthropy or university being charged hidden fees, i do think there is a ethical element that ways on that that stems from one's religious upbringing. i do think it had some impact. i think it goes to this final line between ethics and legal, and there are too many people willing to make decisions that are technically legal but not necessarily immoral. i think religion in my mind plays a part in that. that is a good question. one last question, and let's wrap it up. >> in order to effect change you have to almost use the kiss principle -- keep it simple, stupid. could you boil it down to two items on a macro basis -- repeal the repeal of glass- steagall and derivatives, bring

it back to where it was in the clinton era because it seems to have worked for 70 years. secondly, on a micro basis would've restrictions such as what happens with morgan stanley where the treasurers get compensated in deferred compensation over five years, would that not create the disincentives to bet the house for next year's bonus? >> to keep it, i agree. -- two major history regulatory things i am advocating for are the repeal of the two things that happened in the early 2000's that led to a lot of problems. derivatives being re-regulated. the cftc has been sitting on it

for two and a half years and has not made a lot of progress. the second is the volcker rule, which in a sense is a little bit like many of the things steagall stood for. there are certainly people who stand for the full repeal of glass-steagall. there are huge political fears about doing that, but i do think some form of breaking up extremely large banks and disallowing reckless trading activity is noteworthy. i do think the thing about compensation and deferring is essential. but does it fix the problem completely? i do not think so. the truth is that if you swing for the fence in year one and your bonus, things do not work out, you can still leave and go to a hedge fund or go do something else. i do think that the law actually has to become stricter. i think greed and swinging for the fences will always be around. it is impossible to stop.

so i think you actually need to change the root cause, which is if someone gambles with client money or bets against their client, that person needs to potentially go to jail or have some disincentive that is so great that if you're reckless person, there are only two or three things they think about before they endanger the whole house. addition to change in to compensation. but not irresponsible laws, just ones that create curbs that do not allow reckless activity. thank you very much, everyone. [captions copyright national cable satellite corp. 2013] >> defense secretary chuck hagel said that spending cuts could affect military readiness. >> the department of defense has been preparing for this downturn in the defense budgets and has taken significant steps to reduce spending and adapt to the

new strategic environment. nevertheless, a combination of fiscal pressures and a gridlocked political process has led to far more abrupt and deeper reductions than were planned or expected. now, the department is dealing with serious and immediate challenges, which is forcing us to take as much as a $41 billion cut in this current fiscal year. if it continues, we are reducing projected defense spending by $500 billion over the next decade. the cut, because it falls heavily on operations is already having a disruptive and potentially damaging impact on the readiness of this force. the department has made many .uts we have imposed hiring freezes and halted many activities.

however, we will have to do more. across the board reductions of the size we are looking at will demand furloughs of civilian personnel which could affect morales and may impact productivity. the cuts will fall heavily on maintenance and training which further erodes the readiness of the force and will be costly to regain in the future. as the service chiefs have said, we are consuming our readiness. meanwhile, our investment accounts and the defense industry are not spirit damage. we take indiscriminate cuts across these areas of the budget. these are the challenges that face us right now and i am determined to help the department get ahead of them.

we're all in this together and we will come out of this together the department will appear for the future but not in a way that neglect or is oblivious to the realities of the present. we are undertaking a process to develop choices, options, priorities to deal with further cuts in the defense budget which could result from a further deficit reduction deal or the persistence of sequester all anchored by the strategic guidance. my goal in directing these choices in management review which is now being led by the deputy secretary who is working with general dempsey is to ensure that we are realistically listing the strategic and physical challenges.

we cannot wish to our hope our way to carrying out a national security strategy. the department must understand the challenges and the uncertainties plan for the this exercise is about matching missions with resources, looking at the ways and means. this effort will, by necessity, consider the choices and it could lead to fundamental change and a further privatisation of the changes are you sources -- of the resources. changes that did not involve chipping away at existing

structures or practices but are necessary for fashioning entirely new ones better suited towards 21st rallies and challenges. all this with the goal of better executing the strategic guidance. in order for this to succeed, we have to be steely eyed and clearheaded and our analysis. we need to challenge all past assumptions and we need to put everything on the table. that anyar to me serious effort to reform or reshape our defense enterprise will confronts the drivers of growth during the budget. namely, acquisitions, personnel costs, and overhead. >> you can watch all the speech and the question and answer

session tonight. it will take you to denver, colorado. they recently instituted a new gun controls limiting fire are magazines to 15 rounds of ammunition and aren't background checks for all gun buyers. president obama will be speaking shortly out of control and the colorado legislation. at this hour, the president is taking part in a roundtable discussion. coming up this evening, a conversation on protest groups in america. our discussion is live at 8:00 eastern. here is a look. >> we're very pleased to be joined by my wife and my brother. >> i speak for the mothers. >> we will stop again.

pakistan.stan, who else? and obama administration refuses to even tell congress what countries we are killing children in. , what is moreein important than the children? do your job. we are making more enemies. >> a look at the code date protesters at the confirmation hearing for john brennan. calling and one for your comments and questions. we are asking you for your thoughts on the role of coat paint and other protest groups. code pink and

other protest groups. >> she was out there in a way as they indicated before that respectable women did not do. this is a new era. this is a time when the women's movement is under way. interestingly enough, someone like julia tyler, it fits into a certain extent. she is very conservative in some ways. in terms of breaking through the traditional way that a woman should behave, she is doing it in a way that other women are not. >> a conversation with historians on the second wife of president john tyler who is now available on our website.

>> it is really significant that this has been preserved. at one point, there were probably about 30-40 of these. >> this offers us an opportunity to learn about the lifestyle and learn something about how complex their social and political organization was. one of the great things we have about archaeology is that when we look at what people did, like a building these canal systems, if they could do this

in the desert with the digging sticks, what is it we can do? >> this weekend, book tv and american history tv tour the -- and and military life of mesa, arizona. >> here, a live look from the denver police academy waiting for president obama to talk about gun control. he is participating at a roundtable on colorado's legislation. also speaking with some of the parents of victims of the zero were shooting. the president should get under way shortly. we will have a life what's a

does start. until then, part of our conversation from this morning's "washington journal." pro-gun forces target key bills. you write in this piece that when the senate returns to take up gun-control legislation, there are provisions that are in peril. what are they? >> well, basically, all of it might be in peril. there are concerns that there might not be enough support for a proposed expansion of the background check program that is supported by nine in 10 americans according to polling. basically, the various democrats running for reelection, not enough of them have signaled that they would support this plan. the other access of this is the

provisions that would make gun trafficking a federal crime for the first time. it got out of the senate judiciary committee but the guy who voted for it has now said to be working on a bill that would alter what was approved by the judiciary committee in part because the nra has suggested a better way there are the two leading pieces of this bill which could be in jeopardy. we will have to wait and see. >> harry reid said recently that the assault weapons ban as well as limits on magazine clips, those two pieces of us those two provisions would not be part of any bill that they would get a vote through an amendment process. do you suspect that background checks as well as making gun trafficking a federal crime, that those also get a vote

through the process? >> no, they would be part of the bill. this is having the support to get through. we also suspect from the developments that signal that there is language now regarding background checks which would be amenable to a enough democrats and republicans. the senator from west virginia, one of the real centrist is said to be working on making sure that the language is amenable to folks like yourself and other moderate democrats and republicans. they're hoping to get people like tom coburn, or mccain to put enough of those together.

the capital is empty, the void of lawmakers, because they're continuing their recess. they are scattered across the country and across the world. >> what do we know is slated to happen? this could change. what has the majority leader said about when they return? >> we expect it could come up as early as tuesday. what would delay that is if they get new language regarding background checks. this will let it go out a few extra days. right now, the bill has languished that is democratic only regarding akron checks because it would extend it to all private and commercial sales. what they're hoping to get this language that would allow for

some exception. perhaps for people that carry concealed permits. perhaps people that want to transfer the weapons from father to son. asking whats are they want. that.ave to change and what that right out for a few days. >> what about the gun trafficking part of this? what they talking about? >> it would make the practice of someone it knowingly buying a weapon for someone that is ineligible. basically, someone buys a weapon for someone that they know is a convicted felon or someone who has committed some domestic violence crime. will end up using that in a crime.

also, potentially the person that bought them the weapon. you can remember the shooting in upstate new york around christmas time that left two firefighters dead parent of the woman who helped the guy who did the shooting get the gun, she could conceivably face charges in that situation because she knew that this was someone who was ineligible to get a weapon. about the role of the nra and this? there are some people who are saying that the nra has one. guest: there has not been a vote as but we know that the nra, all interest groups do, they have been suggesting which, they have been sending lawmakers and staff some proposed changes to the legislation. this is the way it worked.

this is why they are lobbying. they sit back and they try to change the bill in every way possible. we have received suggestions that some of the moderate democrats running next year. ,here is a long list of people those types of senators had basically been reminded by the nra that if you vote against us, we will do to what we have done to set people to mobilize our supporters and suggest that you don't support the second amendment. there are a enough of them out there was states with large a loving constituencies that see that and realize that they have to be very careful about what exactly they might support. on the flip side, there are groups like mayor