assaulted in 2011, a rate of over 52 per day. and despite these scking figures, fewer than 2,800 assault against service members were reported to the department defense over this same period. the department of defense sexual assault prevention and response office's annual report, which was actually just released tod today, at the same time that we are filing ouregislation, concludes that the number of people who made an anonymous sexual assault claim but never reported the attack incased from 19,000n 2011 to 26,000 in 2012, nearly a 37% increase. yet the number of reported sexual assaults against service members only increased -- in other words, those that they did report and come forward -- only by 8%. and so this is a dramatic difference of people that were

victims but then feel that they canave the support to come forward and report the crimes that have been committed agnst -- agast them. and astonishingly, as senator murray mentioned, just yesterday it was reported that the police arrested a lieutenant colonel in charge of the air force's sexual assault prevention and response branch and charged him with sexual battery, bringing this issue very much to the forefront given the fact that this individual was charged with important responsibility over the sexual assault prevention program. it's important to understand why sexual assault is so destructive, especially when it occurs within our military. of course, when it occurs anywhere, but also in our military, sexual assault is a serious and unacceptable crime that can inflict lasting emotional and physical impact on the vicms of these crimes that can last for years and

throughout their lifetimes. but in the military, sexual asult can also damage unit morale, readiness, the preparedness of our troops and also military sexual asslt can negatively impact the well-earned reputation of those whoerve honorably, which is obviously the overwhelming members of our military who serve our country with great courage and with great character.e so we must aggressively tackle this problem to compassionately help victims but also to protect the good order and discipline that ultimately is undermining and supports t readiness of our military units. we do our military and our service members little good if we ignore this problem. conversely, it's very important that we pass common sense legislation that will help solve the problem, but we should make no mistake, the vast majority

again of our men and wen in uniform serve with tremendous dignity and honor, and the united states continues to be the very best military in the world because of the character, quality and courage of our men and women in uniform. but when a service member fails to live up to our values and commits a sexual assault, we must ensure victims have the support they need a that the perpetrators are held accountable and are brought to justice. that is why senat murray and i have introduced this legislation today, and our legislation titled the combating military sexual assault act would expand and improve military sexual assault prevention and response sources available to the victims of these crimes, building on the lessons we have learned from a pilot program that is already in place in the air force, our bill would provide trained special victims

counsels to victims in all service branches to help them throughout the process, and these counsels can help comfort and advise victims after the crime has occurred. the special victims council can also provide victims the confidence that they need to come forward, report the crime and seek justice. the chief of staff of the air force general welch testified this morning before the armed servic committee that the evidence is clear that providing special victims council to those who suffer from this crime has been -- quote -- "immensely helpful in the air force," and so every victim of crime within our armed services deserve to have the support of the special victims council. our bill would also ensure that sexual assault response coordinators are available to members of the national guard and reserve at all times, and regardless of whether the service members operating under title 10 or title 32 authority, this is very important that we

get this in the law now so that our guards men and women, they get the support that they deserve because we could not have fought the battles and the wars that we have fought without their courage and their bravery and the sacrifices that they have made. our bill would also make certain that sexual assault cases are referred to the general court-martial level when sexual assault charges are filed or to the next superior competent authority when there is a conflict of interest in the immediate chain of command. and rig now the way the system is set up, there isn't a set mechanism where there is a conflict of interest. this commonsense approach would recognize the uniquely devastating damage sexual assault crimes inflict on individuals and ensure that victims can have confidence in the military or justice system. in conclusion, allowing this problem to persist is simply unacceptable, both for the victims and for the morale and

readiness of our fces that do so much to ensure the freedom of this country. we must continue to make clear that sexual assault in the military simply will not be tolerated, and we must match these words with actions, and our legislation does just that. i look forward to working with e department of defense, continuing to work with senator murray and thank her again for her leadership on this, and my senate colleagues on both sides of the aisle to strengthen existing laws and policies so that all military sexual assault victims can come forward without fear of retribution and with confidence that they will receivehe support, care and justice that they deserve from our countryryryry i >> during his briefing with the president of south korea, president obama was asked about

the pentagon report on sexual assault and here is the a portion of the press conference and the president's response. >> let's start with the principle that sexual assault is an outrage, it is a crime. that's true for society at large and if it is happening inside our military then whoever carries it out is betraying the uniform that they are wearing. they may consider themselves patriots but when you encourage -- engage in this kind of behavior, that is not patriotic, it is a crime. we have to do everything we can to root this out. now, this is not a new we have been trying to create a structure in which we start to get accurate reporting. up and down the chain, we are seeing a process, a system of accountability and transparency so we can root this out

completely. this is a discussion i had with secretary panetta. he had begun the process of moving this forward but i have directly spoken to secretary hagel today and indicating to him that we're going to have to not just step up our game, we have to exponentially to step up our game and go after this hard. for those who are in uniform, who experienced sexual assault, i want to hear from their commander in chief that i've got their backs and we're not going to tolerate this stuff. there will be accountability. if people engaged in this behavior they should be prosecuted. and anybody in the military who has knowledge of this stuff should understand this is not who we are, this is not what the u.s. military is about. it dishonors the vast majority

of men and women in uniform who carry out their responsibilities and obligations with honor and dignity and incredible courage every single day. so bottom line is, i have no tolerance for this. i have communicated this with the secretary of defense. we're going to communicate this again to folks up and down the chain in areas of authority. i expect consequences. i don't want more speeches or awareness programs or training but ultimately folks look the other way. we find out someone is engaging in this stuff, they have to be held accountable prosecuted, stripped of their potions, --

positions, court-martials, fired, dishonorably discharged, period. it is not acceptable. >> in a few moments, the fiscal summit hears from members of congress about the u.s. debt and tax policy. in less than two hours the economic discussion continues with former president bill clinton and microsoft's bill gates. our live coverage tomorrow on the c-span network includes south korean president park geun-hye. you can see that on c-span at 10:30 a.m. eastern. on c-span3 the house oversight committee hold hearings on the attack on benghazi, libya that witnessesur americans. are scheduled to include mark

thompson, the acting deputy assistant terror -- secretary for counterterrorism. and eric nordstrom, former security officer in libya. >> weapons of war in previous centuries, for now, symbols of sovereign authority. of security and so much of the administration. we will see more of him in a short while. lord chancellor, kenneth clark. the duke of norfolk and the lord great chamberlain. the queen and the duke of edinburgh. >> my lords and members of the house of commons -- i focus on

economic growth, justice, and constitutional reform. >> queen elizabeth delivers her government's priorities for the upcoming during the state .pening of rich parliament a live simulcast by the bbc on c-span2, c-span radio, and c- span.org. fiscal summit today included interviews with key members of congress and the obama administration. there was discussion of the u.s. debt and tax rate is a little less than two hours. >> good morning. happy washington weather day. nothing like it. we have a powerhouse hour we're going to do. we're going to solve the budget crisis right now. there is going to be a deal. they are not up here together yet but by the end you watch. we'll have congressman paul ryan

back there in a room and maybe they will announce it in 62 minutes. before then, we're going to talk to some of the key players the administration, in congress, and see where we're at. i'm sure a lot of you are like me and you're wondering when the budget talks going to begin? maybe they began yesterday on the golf course, who knows with the president and senators. the lead person for the democrats in the u.s. senate, chairman of the budget committee senator murrey from washington ♪tate.[applause] >> i like when you said washington weather i thought you were talking about washington state weather. >> it's raining here what is happening in seattle? >> it is 80 there. >> we mixed up the weather. somebody's see his -- summit he

needs to realize which washington is supposed to get rain. simple question, where are we? excuse me, in the budget negotiating process? >> as you know, i became chair of the senate democrats in january of this year of the budget committee and began to put together a budget, which has passed out of the senate. the house has passed their budget and in a regular order world, which they have been calling for a long time we would appoint in the senate and we would sit down in an open, transparent way and work towards a compromise. unfortunately, at this point the republicans are objecting us going to conference. i find myself in a difficult position, unable to negligent a deal forward. >> no formal discussions have began with paul ryan? have you had informal conversations? >> paul has asked that he and i meet together and to discuss the

issues out there. we've been in this world before. if you are in a closed room you're not going to get far. the country needs to see what the alternatives are. when -- the reason the budget is important, it outlines our path forward the country.-- in the country. it defines where we're going to be, who we are, what are our investments, are how we're going to manage our debt and deficit. it defines not only today, but tomorrow. we can't do that with two people in the room. we need people from both sides coming together to compromise. that is what legislation is all about. >> even folks in this room may be confused about all the budgets out. you have a budget, republicans have a budget and the president has a budget. what are the common grounds between all three? you probably have studied all three, what is the common ground where we can begin the negotiating process?

>> that is a really good question. i think, obviously, the house budget and the senate budget and the president's budget are fairly far apart. i think the common thread is we all recognize that the debt and deficit is impacting our country's ability to make sure our economy is on track, that we have -- we know where we're going to go, businesses have certainty, and we need to find a path forward. i think the important part is we are looking for is a balance in solving this issue and making sure that everybody in america participates in helping to solve this problem. that's why the word balance is so important us to there that is there is reductions and revenue. >> why doesn't your budget balance? >> in fact, our budget moves towards balance. if you go back and look at simpson bowles, every bipartisan

recommendation that is that has been put on the table doesn't put out an artificial date to a zero balance. the reason is because our economy is fragile today. if we were to just immediately put out a date and cut trillions from our budget, we would really impact a lot. we're starting to see a small part of that with the bad policy with sequestration that is imposed upon us because we don't have a budget. we're going to see more of that if it moves forward. it is extremely important that we get our economy strong again, that we provide security to people we get back on track as a country, and manage our finances in the long run. >> you say that your budget and the president's budget is similar but there is one glaring difference. issue. the chain c.p.i., which would

change the way cost of living is done. some republicans say it would change tax brackets and hit benefits. this is not popular, would you say? >> it is not popular and it has deep impacts on social security when everyone agrees that social security is not what caused the deficit. the president put that out there to say my door is open to find compromise here. i think what he is waiting for, what i'm waiting for, what democrats in general are waiting for is for the republicans to walk through the door and say you have compromised a bit, we're willing to compromise on the revenue side. >> you -- do you think republicans are not interested in entitlement reform? are they interested in it because they don't have a plan out? >> the only thing to judge them on the ryan budget, which raises medicare, which is not going to happen.

in this time, in this country, and the history of medicare we know that medicare is extremely important to provide stability, security, and medical care for seniors today and in the long run. the question is, how do we do medicare policy for the long run to make sure it is solvent in the future, which we have as a party, said, we know we need to do. >> what is the idea? is it in the president's budget? >> i would disagree with you. in our senate passed budget we put in $275 billion reduction in medicare over the next 10 years. that is a significant give. we recognize on our committee that we have a number of people senator warner --

>> where are you getting this money, by the way? is this coming out of reimbursements from doctors from hospitals?>> i can tell you, having chaired the super committee numerous conversations that we went through line by line to say what are the changes that can be made that don't impact beneficiaries that solve the problem in the long run. plus, president clinton was here earlier talking about the ways we need to look at health care in the future, not just for the medicare population but the entire country. it is consuming our country at this time in terms of expenses. we, as democrats are willing to look at those long term adjustments. we can't solve this problem just on the backs of medicare and senior citizens and hard-working families, everybody has to participate in this debt and deficit problem that we have. that is why revenue is so

important. >> is there anything that is a non-starter? is it raising the age of medicare? >> the absolutely non-starter is the voucher for medicare proposal. it shifts the cost and creates a system that is not sustainable in the future. we're not going to undo medicare with changes but we certainly can look at ways to reduce the cost. >> could you accept what the president did on chained c.p.i., on social security if it is part of a larger deal? >> i don't think that is a good solution. most people don't think it is a good solution within this. outis a starting point he put there as a discussion. >> politically, he put it out there you own it. >> actually, it is a republican proposal to start with but now they are saying they don't support it because it raises revenue. maybe it is a non-starter because everyone says they are there are to go there.

a lot of other things we can look at in terms of getting our debt to a manageable place in this country. again, this is really important. by not having a budget deal today, this is washington, d.c. speak what it means to businesses and families they have to live with very bad budget decisions. sequestration is a very bad policy. we're beginning to see the effects of that and it is going to roll out more in the coming months and the following years if we don't replace sequestration request a budget proposal on where we're going to make our cuts and where the revenue is going to come from. >> is it going to take a crisis again? is the debt ceiling coming up is everything in this process it sort of forces action. the only time anything happens is when there is a proverbial >> if there iston.

nothing else i say today that is important, let me say this. our country is tired of congress managing by crisis. it has brought us to the point where we're at today with bad policies, sequestration being the most visible right now. i believe we have a job as congress and we should get to work putting together a budget. that's why going to conference is so important to me and my caucus. to many republicans i talk to as well. managing by crisis puts us in a bad place when the economy is a bade.compromise is not word. you don't get what you want for dinner every night. you have to make changes. >> you've been arguably -- you've already been a conference committee, you brought it up. >> sure.

>> there were key republican -- this was six and six, if i'm not mistaken.three from every caucus. six democrats, you were the chair there. what went wrong? if you could not solve it then when the sequestration gun was to your head, how is conference going to go any different between you and paul ryan? >> i think several things. first of all, what we ran into having worked many, many hours trying to come up with an agreement was a line in the sand from the republicans saying no revenue would be included. we could not solve this entire problem on the backs of the working class public who was struggling so much from the economic disaster that occurred. that would not be fair, it wouldn't be balanced, it was not what the public was asking for. we had an election where the public said yes, we want a balanced approach, we want compromise.

>> you got revenue. you got $600 billion in revenue. >> i will remind everyone two things. every bipartisan group that put together a proposal recommended much higher revenue than just the $600 billion. we're asking for those kinds of balanced proposals moving forward. secondly, what we're talking about today in our senate budget is closing tax loopholes that even republicans speaker boehner and paul ryan have said wasteful spending. we spend so much time going to cuts in discretionary spending and calling them earmarks. we have the same earmarks in tax expenditure that need to be looked at. are they benefitting just one class of people? are they working for all of us? that is a discussion that speaker boehner has agreed that we need to do but they will not

include them in their proposal. >> you segwayed into our it is fromuestion. lisa burke, from seattle. i believe we need a combination of revenue and spending cuts. is tax reform the way to get a compromise without setting off a firestorm? can there be a lowering of rates that raises the revenue that you're looking for? can everything be accomplished spendingwe need both cuts and revenue. the question is fair and legitimate. ashave looked at tax reform a way of bringing revenue to help solve the deficit problem. the difference right now is the proposal that the republicans are looking at does tax reform only to cut the rates for the wealthiest americans to give them a tax break. we're talking about tax reform,

closing loopholes to help balance our budget, which benefits the entire country and sets us on a better path.>> you'd keep talking about widening. is there enough individuals paying taxes into the government? you hear the argument on the republican side that everybody needs to pay more of their fair the idea ofis front. different rates. do you think a tax reform deal that sort of has people in lower income contributing some tax dollar? >> i think what the republicans are proposing is lowering the rates on wealthy americans. what that does if they are saying it is revenue neutral it raises the taxes of everybody else. right now, being able to write- off your first mortgage

is important for a lot of middle-class families, taking that away is a huge impact. >> when they want to lower the revenue neutral they are raising the taxes on somebody and you have identified where it is they have not identified it. they have thrown out a target number. anyone who looks at it to raise that revenue they would need to to revenue neutral is going require a lot of middle class families to lose a lot of what you use as deductions.>> were at a dinner with the president last week when he hosted 21 mins senators. 16 democrats, four republicans. the nature of the conversation, how much of it was focused on the budget issue? did you walk out of their more or less convinced that a deal would happen this year? >> i was very impressed with the conversation we had, the 20 youn who had dinner.>> guys get together monthly. the women of the senate have been getting together this way

ever since it was started a long time ago. >> 20 years ago. it was a very good conversation and a lot of it was about the budget. what impressed me the most is democrats and republicans in the room, and we run the range, were very serious about the budget issue. in that room, they said they were willing to take a tough vote if everyone was.-- does. that gives me hope. if we can put 20 women in a room, we can probably come out with a deal. >> ever heard that a number of -- i have heard of this in number of times. i don't disagree on that. last question and it's kind of silly. but if there's no deal this year, is it fair to say there will not be a deal until the next presidential election? >> the american public, all of us, we are tired by management of management by crisis. it's hurting our businesses and their families.

i said i wanted to find a solution to the deficit problem but i also wanted to show the american public that a democracy can work. if we are forced through another budget crisis, manufactured way of getting to a budget deal, that's going to reinforce that we cannot work. let's not get there. we need to start working out in full transparency. the president is reaching out to a number of republicans. he is looking for people more willing to work with us and i'm hearing from senate republicans that they are tired of management by crisis. let's show the country we can work. my door is open.i am ready to compromise. i know democrats are. we are ready to work. >> i'm tempted to leave this seats and paul ryan can come out. thank you, senator patty murray. [applause]>> thank you very much.

,> so i believe paul ryan is next. my apologies if i got our order wrong. there he is.he is right there. come out here in public and negotiations can begin in green room. coming up, the senators at counterpart in the house, paul ryan's from wisconsin. how are you? >> good to see you. >> good morning. >> we have a little policy, a >> process, policy, back to process? it sounds exciting. >> just what you like.>> when do the talks start? senator murray said that they are waiting for you guys ought to sit at the negotiation table. you want to meet with her one- on-one, but the regular order, harry reid tried to get it started last night and senate republicans blocked him.

when does the clock start? >> we want to go to conference, but we want to go when we have a good chance of actually getting something done.the reason we think it is not -- i want to get a deal. i want an agreement. we do not want to go to conference just for the sake of a joint conference. we want an agreement. this is more of a house thing than a senate thing, but if we go to conference with a monthlong stalemate in conference, which ends up happening is people dig in their positions making it that much harder to get agreement. >> that is your lesson from the supercommittee? our motivation is actually to get to an agreement and the decisions we are making right now is to maximize the likelihood of getting an agreement at the end of the day. >> does that mean that you believe you guys passed to political of a budget and they did pass to political of a

budget? >> do i want my budget to become law? i do. but they get that in a divided government, you do not get everything you want. we understand that. let me give you an example. the president should get credit for putting the changed cpi out there.it wasn't in our budget. he put it out there. let's say for the sake of argument that is part of the final deal.you will see votes on the house floor prior to going to conference where virtually no one votes for it and makes it harder for to be part of the final agreement. >> why? why would john boehner, eric cantor, allow that to happen?>> they wouldn't. the democrats can take control of the floor when you have a conference after 20 days and haven't come to an agreement. we would surrender the majority. we should go the conference when we have a chance of getting a deal. if you have a month-long stalemate with two political parties just fighting each other, you make it that much

harder to get an agreement. i'm not saying john boehner or eric cantor would allow that vote would happen. we want to make sure that when we go to conference we're going to get something done. this is where we are such worlds apart. patty was pretty clear about that. our budget balances, it takes 10 years to balance and i would argue from a keynesian standpoint we are not hurting by balancing in 10 years, but the senate's budget and the president's budget never balances ever.we have a disagreement on whether we should even balance the budget. that is number one. number two, both the senate and the president's budget have tax increases on top of those a party occurred in law.-- those already occurred in law. >> where do you get $1.60 trillion? >> the health and care -- the health care are in dispute. >> i am quoting the cbo. >> far enough. -- fair enough.you are saying no

more taxes. you don't start negotiations -- >> agree to raise taxes and then we will maybe talk about entitlement spending and spending cuts which, right now we will lot agree to in principle. that's hardly a smart way to negotiate.>> the president did. >> not the people negotiating in congress. i'm not trying to get a squalor here, but the point is spending is the problem. for the last 60 years, we have taken about 20 cents of gdp and by the time my kids are my age, we will be taking 60 cents. that is the problem. you need to reform entitlements. you need to get spending under control. then when we see the other budget offered. taking the president's budget for example. taking the smoke and mirrors a way, it is a $1 trillion increase and cut. they do not even proposed have net spending decreases, so that is a very, very different world from the one we are operating

out of and we're very far apart. what we're trying to do is have conversations to find common ground. you asked patty where it exists and there is really one thing i have seen in these budgets. >> of the three. >> means testing is the one string of, malady. -- of commonality. we propose means testing for medicare and that's about all you see with respect, and ground.-- respect to common ground. the point is that there are spending cuts, very few, that are washed out or unaffected by the massive spending increases. let's agree to get spending under control. agree on entitlement reforms prospectively to get the debt under control and we cannot even get an agreement in principle to begin talking about right now. >> there have been various studies to talk about the fiscal

issue. all of them propose higher tax increases than what the president ended up with. you ended up grudgingly coming to an agreement. >> 800 have clearly from their numbers out. where the president's number was, maybe it's another $400 or $600 million, but it did not seem in washington numbers like we were that far apart. >> two points. they're saying raise more taxes for more spending. we don't like that construction. the second thing is we want growth. the one thing that seems to be missing in this conversation is what we're doing to grow the economy, get people back to work, have faster economic growth with more revenues, one of the best things we can do to get this under control in the short run and this is where we think tax reform is very important. tax reform will be moving to the

ways and means committee and it is something we're very serious about and would like to see in >> you thinkreement. that needs to be part of the grand bargain? >> that implies you're going to fix a problem, but we have the majority party and willing to-- unwilling to embrace the types of reform to make medicare or social security solvent, the biggest drivers of debt in our future, i do not see a grand bargain happening. the question is, can we make a divided government work?can we get a down payment on the problem? can we buy the country time and fiscal space. we're shooting for something that's realistic. we do not want to overpromise and under deliver. our proposal does not voucher- ize medicare. but it is how the drug plan works today. it's what the federal employees have. we think it's a smart way to save medicare in perpetuity. there's no way they will agree to it which means comprehensive

entitlement reform which takes an unfunded liability off the books, get the debt under control in perpetuity cover those kinds of ideas. >> do you regret, basically, we believe you're doing it at the time or not that you're essentially continued the demagogue in medicare when you're running out that the president is trying to cut $700 million out of medicare? do you regret that conversation? it hurts our credibility as you're trying to have a medicare reform conversation. >> we never thought you should take money from medicare to thatd on new entitlements. is what we have been criticizing. if you look at my discussions of this issue, and never thought it >> you kept the. savings. >> i did. if you're going to take money from medicare, it should go to medicare solvency. you cannot take the money from medicare to spend on obamacare and counted in two places. >> you can make the argument

that if you reform the health- care system -- it will help reform medicare down the road. >> that's not the argument being made. this money helps drive down the deficit and makes obamacare cost less and it defend the medicare solvency. the cbo and medicare actuary told us you cannot spend the the fiscalice. charade, the double counting, that is what we had a problem with. if you are going to save money and medicare, keep it in medicare. >> you do not regret the language that was used? >> i do not. >> the campaign of lot of times took a shortcut and said, there's the president's trying to slash the issue. i've seen both parties do this, demagogued health care for their own and. -- own end. look will not dispute that. at our budget. we think there are problems with

the medicare provider community. we think this will lead to them losing coverage. we need to look at where in the beneficiary network we will have an adequate coverage and go back and look at it. to the point patty was making earlier in $275 million dollars, that's on top of the $716 million which will effectively shut down the provider network. we see that as monopoly money. we're going to keep cost controlling, a repeat of 1997. a bipartisan agreement between gingrich and clinton with price controls. what we learned quickly as medicare provider stop taking medicare patients. there would be two subsequent agreements and the savings did not materialize as the first envisioned. we do not want to redo that mistake.

the point i'm making is taking this entitlement, not reforming it, and then just that and price controls on providers does not work. we do not see that as real budget reform. we see that as a phony exercise where we know, as soon as they start dropping coverage, we put the money back in. we do not see it as a real, lasting, bankable reform. the point i'm trying to get at is we want entitlement reforms we know will stick, will work, will reduce the unfunded liability and get the debt under control. back to my earlier point, we need economic growth which is why we're very serious about tax reform. >> do you think the sequester is hurting the government?-- economy? >> i do not think taking 2% off the top in a $14 trillion economy will be a big drag on growth. in sectors like defense, there are issues. this is why pass legislation to

have smarter spending cuts in other areas of government to make government more efficient to replace the sequester. they say the sequester is not smart. we didn't insist upon it in the first place. here are better spending cuts to replace the sequester and we stand by those cuts. we think they are smarter. the senate never followed suit. the president just asked for a we thoughtse instead. that would also be counterproductive with respect to the economy. let me get back to my growth point. don't forget it. you need economic growth. if we keep having what we call static revenue increases, and it's really hard to get tax reform. here is where we have differences house well.-- as well. i like patty a lot. we have good, honest agreements with each other. they want tax reform as a means to grow and revenue for the government. we want tax reform as a means to grow the economy and get people back to work. that means lowering tax rates,

not keeping high tax rates. it is closing loopholes and alluring -- on corporations. >> if there is revenue that is brought out of it -- >> lets have ways and means and finance committees put those together and see what it looks like. that's something i think we should do. we should have that exercise. >> max baucus needs to get his committee and do that. >> go get him. >> the likelihood of doing it? >> we are doing it in the house. we are going forward. >> they're both genuine about it.he is in his last term. max baucus is in his last term on ways and means.will that get moving? >> we're going to do it in the house whether the senate follows or not. here's the point i'm trying to make. the president wants to take the corporate rate down to 28%. good idea.20% of american

businesses. 80% of american businesses are not corporations and they file taxes as individuals, llc's and partnerships. their tax rate goes up and it makes it pretty hard for them to compete internationally when the tax rate on businesses is 25%. this is why we take it seriously. nine out of 10 businesses in theyonsin fall under that. are not corporations. we want to get the tax rates down equally. >> you want to make it revenue neutral.>> that's right. in order to get the rate down to where we can be internationally competitive, you need to plug in -- plug the loopholes to get rates down. >> if you do that, somebody's taxes are going up. who is that? >> people on the high-end losing >> nottax loopholes. missing with middle-class? >> everything is on the table.

we will not take anything off the table because we think once we start getting in the game of picking winners and losers in the tax code, which is what the tax code does today, we will not get there -- >> it's been that way for a long time. >> o'neill, ragan, bradley, they came together and got it done. that's what we want to see happening again. we would like to think there's an opportunity for a bipartisan agreement on tax reform. we would like to think there's a bipartisan agreement on entitlement reform and that's what we want to see at the end of the day. >> i had a facebook question for could youwas a one-off. imagine -- it is about lifting the income cap on social security contribution. can you imagine creating a doughnut hole raising it on more wealthier people contributing more as a way to make social security solvent? >> there is a better way to do it without economic problems

which is a means test in the benefit formula itself. >> it does not sound like you're totally ruling it out.>> here's the problem. when you lift the cap, you also pay out in benefits. you get 15 cents on the dollar whereat level of income. this conversation goes, i've been on a number of commissions that look at this. we should cut the benefit off. if he's going to pay his fica on all of his earnings -- he should be the highest-paid player in the nfl. >> we should get a resolution passed.>> then he has a huge benefit. it turns into a welfare program, not a social insurance program. we do not want to be a welfare distribution program. what about the self-employed person? what about the dentist? the farmer? their income tax rate goes up.

over 50%. very bad for economic growth. the tax increases, i think, are the wrong way to go because it produces bad economic output. let's focus on means testing to benefit itself. we can get the same kind of savings without doing devastation to the self-employed community. >> i'm getting yelled at in my monitor.i have to introduce the next guy. congressman paul ryan, chair of the house budget committee. [applause] i'm not kidding. i'm getting yelled at in the monitor. it's in all caps.we all know how that feels. our next guest is current ohio senator robb portman, but he is someone who's the head of omb during the bush administration, the office of management and budget. he is well versed in budget issues and we will see where he stands. he is now chit chatting and

doing some green renegotiation-- green room negotiating with paul ryan there. let me introduce rob portman. [applause] you get introduction music. it's like a baseball game, do you get to pick your own entrance music? >> i prefer flo rida. >> "stairway to heaven" is another way to talk about the votes. >> there is. we thought paul ryan was the only heavy-metal fan. >> by the way, thank you for having me on. gene fans are here, he let me go ahead because they do have a >> did you threaten him? >> when are changing his schedule he said, i will do it, but you may regret it.[laughter]

so i will say it, there you go. thanks to gene.>> we have done this dog and pony show together so i wanted him to go first. it's easy to criticize what someone else as down come up-- what someone else says van come up with ideas. >> there you go. no one seems to want to start negotiating. paul ryan made it clear they are not ready to start the conference process.they want to have aside negotiation they do not think there in a first. good place. you're probably on the senate floor last my doubts all the -- and saw the discussion between reid and cruz. why won't the clock start? >> there is a formal resolution and a budget resolution. given the budget that was passed in the senate, the difference between the house and senate is so great.that is not likely. >> you think it would not be a useful exercise? >> not having the president's

involvement in a more middle ground approach that the administration can bring to the table if they choose to would make it difficult to make progress on these two very different approaches to the budget. the real negotiation have to-- has to take place, in my view, between the president and those of us in congress who want to get something done and that is beginning.i am having discussions. others are. >> these dinners, president golfing with a few people we assume would be in this group of 16-20 republicans. >> saxby chambliss and got a hole in one yesterday which means there will not be any tax increases.great news. >> they bet on that. great for the economy. >> he asked me to golf with him which is a huge mistake. i am so bad. i am such a hacker. >> mark udall and saxby chambliss are the two best golfers in the senate. >> the course was lucky.

>> we have these 16-20 republicans. this is how the process is going to go. patty murray and paul ryan have their budgets and they have done what they have had to do. this will be between a group of you now the president? >> everyone will be involved. nothing happens behind closed doors in this town, and that's ok.this needs to be something that is transparent. at the end of the day, this will affect the lives of millions of americans. it's going to be a process for everyone involved. patty will be involved. paul will be involved. it requires presidential leadership. if you look about whether it is tax reform in 1986, social security reform in 1983, or the last two examples when we try to do something significant to improve the economy and deal with a huge debt and deficit problem, which seem small relative to what we have now, it

always involves present -- presidential leadership. it must. the president must be supported in order for it to become enacted. the resources of the omb, a so on,ry department, and are critical to this. the president has to step up and show leadership.>> did he not with this budget? you believe he did? >> he started in a small way. as you know, i have talked about the publicly and privately and the hearings we have had about the president's budget, talking about chain cpi on the table is -- step inp forward. the right direction. talking about the savings that come from reducing the preferences in the corporate tax code ought to go back into lowering the rate rather than being used for deficit reduction generally is in the budget for the first time. you take small steps in the right direction and new build on -- you build on them. the president has taken some heat from his side of the aisle.

>> some members of the republican party seem interested. the campaign committee said just that. >> it's a more accurate measure of inflation. it the right thing to do in my view from a policy point of view. there are republicans to believe -- who believe that we should wait. >> wait for what? >> we have another election. >> the last one was not good enough? >> perhaps getting a majority in the senate in 2014, and the i don't think2016. the country can wait. we are in trouble in terms of our economy and if we wait until 2017, which is what that is in essence saying, we are taking a huge risk. we have to engage. >> how many people share your view in the conference? republican conference? >> i think the majority, honestly. >> you do?>> i do. there are some who are likely to be there no matter what, but others will take a hard look at those who might surprise you.

there are a lot of members to-- who understand this is a critical point in our nation's history. it's not just about the debt limit. it is dealing with what is otherwise going to be a huge impact on people we represent because their standard of living will go down. we are risking a financial crisis. it would make the one in 2008- 2009 relatively small.look at what is happening. the stock market is looking pretty good, but wages are going down. it's an economic issue. there is a real squeeze. health-care costs up, wages down. people who are serious legislators on both sides of the aisle recognize this is a point we have to attack.-- act. if you think about it, in the past, dealing with issues like tax reform or entitlements, 1983 and 1986, it tends to come with a divided government. george bush tried this with social security and he did not get very far. in part because of the top politics, no question about it. the third rail of the new york subway system, you grab it and

if youe electrocuted. grab it together, you spread the shock. that is the opportunity that i see really in the next several months. we have to take advantage of it. >> i have had some senate democrats, not the senate democrat up here, but those who will be unnamed, it did not realize they would never have an easier negotiating partner on the other side of the -- vanand president obama? president obama? some of that is out of fear. they think president obama will howmore of a compromiser. many republicans sort of believe that is true? >> chuck, you and i may disagree, but he had the ability with his own fiscal commission to step up. he chose not to. he rejected the recommendations. >> he unequivocal endorsed bowles simpson and the only place to find that right now is on whitehouse.gov.i like

pointing that out to folks. do you really believe there would have been bipartisan support for it? >> it would have been very difficult. you have senators including all the republicans who showed up on that commission, tom coburn b ingone. it would have been very difficult. >> that commission could have had teeth on it. a bunch of senators backed out including some democrats. >> my point is this. if you look at the president's record in terms of his inability to show leadership on these issues, there is no wonder there is skepticism. when paul ryan came out with his budget, there was a frontal ittack in the front row. understand the skepticism. it's healthy and it's based on some of the previous actions of the administration, or their inaction. i think the democrats are making a point that we ought to listen

you do buy into the idea that you may get a better deal than president obama then you would from harry reid.>> trust, but verify. but to not even engage, i think it's a huge mistake. let's see whether he is serious or not. if he is sincere, i believe we can get something significant. unless we get started, both on the economic growth side of this, in my view tax reform, and also on dealing with this long- term problem, it will not be solved unless we get at the mandatory spending, which is now 65% of the budget and growing at a faster rate than the rest of the budget. cdo just told us that they will grow at 95% over the next 10 years. they will grow by almost double. they also told us, by the way, that if we do not do something on the spending side. from 22% of g.d.p. today to 39% in three decades.

the historic averages nearly you can't catch that with enough taxes. it is not possible. when people talk about balance, you ought to ask them, are they talking about revenue is, now-- revenues, now projected at 90%, spending at 39% -- spending at 19%? arethat the balance?-- they talking about 29%? is that the balance? >> do you want doubling of your taxes? >> we cannot get there with 100% tax is on the wealthy so we would need a new tax reform based on the historical data on what it was like when we had a 70% tax rate and so on. when people like me say we up to -- we have to deal with the spending, as bill clinton said famously at the democratic convention, itsmath. it is not ideology. >> i heard this from senator

murray when it came to medicare age and i feel like i heard from paul ryan when it came to the issue of taxes and revenue. do you walk into this thing will -- into this saying, i am not going to be a part of any deal that includes any more tax increases? there is a sincere effort on spending and if we come up with some changes that are really structural changes to be able to bend the curve, if we do tax reform -- >> and if it is appraising a little revenue you could sign on? >> we'll see. >> we're making progress. >> one of the factors we should look at our behavioral changes. what people call macroeconomics or dynamic scoring. i offered an amendment that would pass in the senate that

said, yes, which have the benefit of looking at the dynamics corp. why did i want that docks of how you design tax reform and how you look at this issue in terms of revenue ought to include what the congressional budget office and the joint committee on taxation, what our internal analysis says about what the direct economic impact will be and will show with regards to the business tax reform, which you know i am very focused on, because i do not do this we will continue to lose jobs and businesses overseas. there will be revenue increases through growth. the president insists on status quo raises. those interested are going back to look at that in the context of what other aspects of tax reform are going to help the economy. this will be the discussion. by the way, it is a discussion that has been taking place really for five or six years. >> i was just going to say -- >> there are all these things on the shelf. it's a la carte. >> i like this quote from alice rivlin, is it that easy? >> there is a little thing called scoring.

we go through the process, you have the joint committee on taxation. you have to live by their score in order to legislate. it's a little more difficult now coming up with a recommendation in commission. having said that, there are a lot of good ideas. we are not lacking ideas. we are lacking political will. but we do not solve this problem, we will be in great jeopardy. >> i have a facebook question for you from louisville, ky. what policies can be put in place to help train for the jobs of tomorrow? it goes into the issue of how government spends the money and there has been some joint agreement that the government should spend money on things like this. >> one of the hughes -- one of the huge issues we face is the skills gap. we have thousands of people in ohio looking for jobs in ohio but we have 100,000 jobs open.

why is that? they do not have the skills to fill those 100,000 jobs. they say unemployment is going down, not really. the labour participation rate, people looking for work, we are at 11.3% in comparison. >> a lot of it is demographics. >> it does not account for the lowest labor participation rate since 1979, when jimmy carter was president. there is a huge skills gap here. one thing the federal government could do is to take the worker retraining programs that the federal level, because we have between $15-$18 billion we spend and have it work much better to close that gap. they are spread over nine agencies and they say there are all kinds of duplications, waste, inefficiency.

i worked on some legislation with this from a democrat from caught -- colorado. >> tests, ensure that the test people are getting -- the skills people are getting are needed in that region. this is one of four or five things this country needs to do right now to avoid us from continuing to fall behind. ?> where should this be housed apartment of labor with the work force investment pact and trade imports would assistant -- tade import assistance. there are opportunities for us to get people to work right away. >> two out questions. the debt ceiling looks like september or october. will it be a crisis?

if so, do you actually need that as the trigger to force those talks? >> yes. >> it will be a crisis and it needed? >> yes. "ever the president say we should take it out of the political equation and extend the debt limit and deal separately with it. over the last three decades, is the only thing that has worked. there is no one in this room old enough to remember it, but it came -- >> we want to pretend there's no one who remembers it. >> what did that come out of? a debt crisis. and the balanced budget agreement of 1997. the half-dozen proposals that have worked to reduce spending have come out of this same process. the american people do not like to extend the debt limit. why? they get it. it's like a credit card. you overextending your credit card and now you're going back to congress asking them to extend it.

what american people say it is to deal with the underlying problem like to do with your business or in your home when your teenager maxes you out. it's a good leverage point because they do not want us to extend without dealing with the underlying problem. i think this will be a positive way for us to focus people's attention come september or october. >> this year. deal or bust. >> i think it is. it's hard to imagine in 2014 it will happen. we have done things in an election year before, but it's difficult. >> i hope we're talking about implementation of something we have agreed to earlier this fall. i hope we're talking about the fact that we now have some bending of the curve that will otherwise bankrupt the country. there's no question about it. i hope we are talking about the economy starting to improve because people have more

certainty because of pro-growth tax reform because we are dealing with the training we were talking about an america gets back on track. senator rob portman. [applause] the joke and never gets old. every time he gets introduced, the audience will live to regret the joke. anyway, with about i bring out gene sperling, chairman of the president's national economic council. [applause] a man of many budget wars, a veteran. you are the last word here, mr. sperling. >> my privilege. >> you are on the white house side of things meaning you are probably aware of where the

level of conversation are. i will start with basically the same question. what is the status of the talks? have they truly begun between the president and senate republicans? that seems to be where this is headed. is it fair to say it's formally begun or not? >> i would say but you have seen the president do is doing everything he can to create the conditions for a bipartisan agreement. you see that by the fact that he was willing to keep his offer to speaker boehner on the table, even put it in his budget even after the speaker had pulled it back. yet seen it in the out -- has done to senate republicans and really to anyone he thinks would be a part of this. >> it has come down to golfing games? >> if people ask that we are doing enough, the fact that we

are arranging the republican senators to get holes in one -- >> that's an amazing show of power. >> i do not know what else you want us to do. >> one on one one. it was an extraordinary effort and it shows we're taking very seriously and doing everything we can to create those conditions. these dinners and the conversations have been important because the build trust. republican senators have seen the president is very serious and they see that he is willing to compromise. he is showing political courage in putting out things that he does not necessarily even want to happen, particularly in his budget, but he is showing willingness to compromise. you have this conversation earlier. you have heard quite a lot

before about the importance of returning to regular order. i'm often being interviewed on cable tv and i got, if only the senate would pass a budget. i've heard it so many times. here, you have that take place and even condition the debt limit extension on it. we have a chance to actually have a conference committee, like we teach our kids in their u.s. government classes, yet you do not even see a willingness to appoint conferees. we are calling for regular order, but the president is engaged in conversations to create the conditions for an agreement. the importance of what you saw in this budget is that is not just about having quiet conversations. he has shown that he's willing to go out of his comfort zone to put forward a real compromise, to take he even from his own side understanding that in divided government, if we are going to get a balanced agreement, it requires both sides to get less than 100%, both sides be willing to tell their supporters we have to compromise to do something positive to move the country forward.

one thing i think is important to recognize is how nonsensical the status quo is right now. everyone has said it, but it's true. you have a sequestered designed by both sides to be so stupid that it would not take place. speaker boehner said it would be devastating. people say they think republican leadership may be satisfied with the status quo, but only on substantive grounds, they have always argued for stronger defense budget and this has a harsh defense cut that last for 10 years. they argued for stronger border security and some of them support more biomedical research. this is $1.50-$2 billion in cuts to nih. this is one of the most important points i want to make. what you hear when you come to a peterson form is focusing on how we, as a country, are going to deal with the challenge of baby boomer retirement. what does the sequester do for the second decade of savings?

it is the big zero. it's important for people to understand that. this cuts the domestic part of our budget, the lowest it has been since the 1950's. it cuts it severely even though that's where a lot of our investments in children, innovation, and research are. then it has a small cut in entitlement savings which -- and this is important -- ends exactly in the 10th year. it goes away. they are serious about long-term entitlement savings but they think the status quo is acceptable, they are for an

approach that would have zero savings in the second ten years as compared to the president's approach which would have $1-$2 trillion in entitlement spending savings in the second decade. >> a big deal is when there is a political reward for both sides. is it fair to say when you see how republicans are not paying a political price, they do not believe that they are, does this tell you that the politics of spending has changed in such a way the republicans are just going to be in another place? >> i do not understand what what substantive goal it serves for them. it is done in an arbitrary way. you heard both paul ryan and rob

portman talk about growth. there is not a single independent forecaster out there, or not one i have seen, who does not think the sequester is costing us hundreds of thousands of jobs and economic growth. we are at a point where our economic recovery is showing strength in housing and we could be taking off. instead, we're putting a brake on the economy. why should people be satisfied with an approach that was designed to be so stupid no one could live with it, but that's hurting jobs, that's hurting economic growth? one can take that position, but i don't understand it. i do believe that there are military communities in many people's districts, people getting meals on wheels, head start programs. i'm not sure people are hearing it, but it's true. as much mcconnell once said, it takes two to tango and the president created conditions and he can do out reach for a serious bipartisan, balanced agreement that can help alleviate and remove the

sequestered have a more balanced approach with long-term entitlement savings with revenue from tax reform. again, it takes two to tango and the president has shown real political courage, leadership in what he's doing to put this out, but if we do not see some of the same leadership and encouragement from their side, it's going to be very hard to do anything about it and we understand that the reality we face. >> what the president mean when he said there needs to be a permission structure for the republicans to get on board? it was an interesting phrase that he used. he was asked about the dinners when it seemed we were kind of still in the stalemate when he said he was trying to create this idea where there is a permission structure for republicans to get on board. >> in a divided government when you have a budget agreement, i was a negotiator in 1997, deficit reduction is never easy. it's never fun. it requires hard choices. when you have divided government, whether it is 1997 or now, it requires compromise. i think what you need is for both sides to be able to feel

that they achieved enough of their objectives that the compromise in the areas they do not like is acceptable. what we care about, and many progressive democrats care about, is that you want a plan that's going to be good for jobs and growth and now, because we need this recovery to strengthen to help alleviate long term unemployment and help middle- class families. you need a budget agreement to allow us to invest in the future. you need something, while it will have long-term entitlement savings, it does not put all of the burden on seniors and middle-class families that is balanced including revenue savings from the most high and individuals. -- high-end individuals. then it is easier for a democrat to go along with things they wouldn't usually oppose.

when you listen to senator portman and others, while they may prefer to not have any additional revenues through tax reform, if the agreement is serious about long-term entitlement savings, such as in the second decade, as have spoke about, that, for them, becomes acceptable even if they would not prefer to have revenues. hopefully, many of them on both sides recognize that everyone has to give a little. everyone has to compromise their position so we can have an honorable agreement good for growth, good for the middle- class, good for the confidence that shows we're dealing with our long-term entitlement challenge. >> is there part of the ryan budget, specifically with medicare, that the president could adopt? i'm trying to have a negotiation now openly. >> we have always thought this negotiation would happen with you. [laughter] i've come running.

>> i appreciate it. >> december 3rd, paul ryan, speaker boehner, majority leader cantor wrote the president a letter saying, if we are accepting $800 billion in revenue, we would be willing if you took this deal that erskine bowles had suggested to the supercommittee basically calling for three things. it called for raising medicare retirement age, cpi, and means testing medicare. i do think the president -- then minority leader mcconnell called for those same three things twice in november and in his first appearance on "meet the press" in january. the president has put forward two of the explicit requests, means testing the premiums on medicare for couples over

$170,000 and, also, accepting the request that we have chained cpi in the budget. obviously, that has been very tough and some of our own supporters have expressed opposition to that. the president has shown a willingness to go at least half way, but one thing people do not recognize is when the president puts out $400 billion in medicare savings and you look at how that compares to paul ryan's budget, i don't know how answer it because they do not have any details of how they get any savings in the first 10 years -- none.

we hear a lot about, are you for structural reform? the president says here is $400 billion, calling for new beneficiaries do have some better incentives in their structure. we have details on the table. there is now time for the republicans who are serious to come back and start saying what it is they want to -- >> it you believe they owe you a deal, a new piece of paper. if we are doing a ping-pong game, you have put out your is, you have done your shot. they owe you something in return. >> i think even some of them recognize to some degree the ball is in their court, even if it is a private communication. of course i have heard the speaker and others say the president got his revenues, but let's be honest. the speaker was at $1 trillion in revenues in december. $1 trillion. it's true that $620 billion was raised by restoring rates to the clinton rates, but even by their last offer, they had nearly $400 billion in revenue on the table. it's not as much as the $580 billion the president has asked

for, but there should not be this absolutist position from them that you cannot have any revenue because they have already expressed it. >> do you think they want to deal? >> i think i have kind of given up on reading mind, motive, incentive. >> you will regret it. let's just stipulate that i am a very intimidating and threatening person. then we can go on. [laughter] i think i have conversations with republicans who i think are sincere about being willing to compromise. i think they want to see a significant commitment to the

type of the entitlement savings as part of a deal. i think they understand that to get an agreement in divided government, it means tax reform would have to raise some revenue to contribute. >> do you buy the idea that you can lower rates and raise revenue? >> i think it's difficult. you said what the president has done is he has put out explicitly how he would raise $580 billion through two reforms, the buffett role in having the 28% deduction limit. he has shown you have -- you can do it in a way that is reformed and spare the middle class, but he has always been clear that he does not claim to have all the good ideas in the world and if the congress wants to come back in a bipartisan way with a tax reform to raise that amount of revenue and met his basic fairness bowles, that he's open to other ideas. now, can you raise that much revenue for deficit reduction and still raise enough to lower rates? it's very difficult, but the president has never put it off the table. when you look at what the house

republicans are talking about going down to 25%, that has two problems. one, everything that chairman ryan said today, unfortunately they sit there cannot be a single penny in revenue which will not lead to a bipartisan agreement. i think as we saw from the report from the brookings urban institute over the summer, if you have to lower rates that much on the top 1%, you cannot cut their expenditures enough to pay for it. you have to actually raise taxes on middle-class families. i think if they were to put forward a plan like that in detail, had scored some people understand it, i do not think it >> you heardy well. rob portman say there is no choice.

the president said he will not use the debt ceiling as a negotiation tool. how is it not inevitable? >> look, the president has been very clear. he is not negotiating on the debt limit. he believes the era of anyone threatening -- >> arguably he has done it twice. even at the end of the year, the idea of negotiating, but there has been negotiation through it in some form, has there not? >> there was in 2011. what we saw was how harmful that was, the idea that the united states to, in all that we have done in 200 plus years since alexander hamilton to build up our credit rating, are full faith and credit, i think when the president saw what happened in 2011 and saw the hit to the confidence, the economy, are standing -- our standing, he made the right decision.

he will not negotiate on the debt limit. no one should never threatened a default of the united states as a way of getting their budget through. >> you are not thinking it will be used to trigger budget talks? >> no one for any reason should never use the default of the united states has a budget tactic or negotiating tool. i also want to make clear that this very bad piece of legislation that may be coming through the house, called prioritization, privatisation is the fall by another name. -- is default. it says, would you pay first when you are in default? it's the equivalent of telling a relative, if you pay your mortgage, it's ok if you default on your student loan, car loan, and a credit-card.

when we talk about our full faith and credit, we mean the united states of america meets its obligations and the idea that it would be ok for us to meet their obligations to bondholders, but then default to veterans, medicare recipients, small business contractors, it's completely unacceptable and no one should think that is anything but default by another name. >> what is your level of confidence that a big deal gets done, that he signed a big deal on the budget? punt the battle for 5-10 years. >> i would and i would get it so right, but then there would be a little for a professional to do. [laughter] >> what is realistic? better than 50-50? >> i think all we can do every day in the wake up and do everything we can to create the conditions.

>> this five months period is realistic in his last chance. >> i'm not going to make two months or three. five-year projections. i think historically, as we saw in 1997, the first year of a president's second term is a good time for people to come together and make hard choices that are good for the country. this has not been abstract. you have seen the president out there willing to accept things they need for budget agreement that he does not necessarily agree with. you see him having the political courage doing things that many of his own supporters disagreed with. people understand is having private conversations. the door is open and it is open to republican house members to

what private conversations. he is doing is in dysfunction where we have this harmful sequester, he is showing the country there is another way forward. >> thank you. gene sperling with the last word. for letting me do this. i enjoyed it. we have another onboard. chris van hollen, democrat. the ranking member on the budget committee with paul ryan.

>> you got an invitation to join the but i budget committee. >> there was a proposal ready for the last recess that said the conference committee between the budgets was going to be paul ryan, a republican of his jeffe, you, ron wyden, and sessions on the republican side and the six of you would start getting together. where did that stand, is that even a plausible beginning scenario for how the house and senate begins this reconciliation process echo >> we would like to do that. democrats in the house, we want to go to conference. that is the next step. republicans justifiably complained that the senate did not have a budget up for three years. now they have a budget. they justifiably complained.

>> it was a fair point. the senate should come up with a budget. they said it everywhere in the country. that was there big talking point. the question we have got is whether they preferred that as a talking point or whether they actually really wanted to get a budget because they need a big deal about no budget, no pay. do not reality is we have a budget. we are now past the april 15 in statute for congress to complete the conference committee action. they made a big wind about the president's budget. >> did you lose your pay? rex we will have to refresh our republican colleagues. people expect us to take the next step. we have been waiting. they want to have these conversations. i can tell you that is really not happening right now. >> let me get your response to

paul ryan. he said, i guess he was implying that it would, he believed the president's change cpi initiative, there would be a massive bipartisan resolution voting it down because of the way the conference process works. that once you start the clock it could make the process harder. what do you say interest bonds? >> my responses that the clock is ticking now. there is no evidence that we are getting any closer to agreement. so going to conference in beginning the clock ticking is a little bit of an action forcing mechanism. people will begin saying, ok -- >> why should republicans negotiate with you if the president you is a better deal if the president's deal is a better deal? >> it will include what has been raised by the white house and others. not as if the white house is excluded entirely from the

conference process. gene sperling just talked about the ideas the president put on the table. what is ironic, they talk about how the president has changed -- chain cbi, it was their idea and it is not in the republican budget. even though this was their request. look, this is why i think it is important to have a structure, to force the conversation. and we should not be using the debt ceiling, for example, and playing around and negotiating with our full faith and credit fullyne sperling said. clothed. to start.

you have jeff sessions, other republicans on the budget committee in the senate. obviously working with paul ryan in the house. so it is a for him for that conversation take place. a bit of an action-forcing mechanism. number one, it happens in public. that does not mean people cannot continue to have conversations, but i think it would be a useful way to finally get people's minds focused. >> but they are so far apart. how does it even begin? >> let's say we went to conference. you said there, to use the clich?, one budget is from mars and one is from venus. it does not seem as if we are in the same universe. they are far apart, no doubt about it.

as far apart as they have been before. >> how does the conference work? >> it would benefit the country and maybe force the parties to come closer together by having to put these arguments out in the light of day. after all, our republican colleagues set for a long time that they did not want these backdoor conversations. i heard rob portman talk about presidential leadership. look, one of the main impediments to moving forward, obviously, has been the republican position on revenue. they have taken the position that you cannot close one tax loophole, eliminate one tax break, for the purpose of reducing the deficit. that every dollar you raise in terms of eliminating tax breaks has to go dollar for dollar to reducing rates or some other --

it would be as if democrats said, we agreed this was not a high-priority spending program so so let's cut that spending program, but you know what, you have to back bill the spending dollar for dollar. why should tax expenditures, a form of spending through the tax code, get a totally different treatment in these negotiations? and yet that is obviously an impediment. >> as gene pointed out in december, the speaker said, number one, he would do one dollar trillion for revenue and that he had a plan to raise $800 billion by eliminating tax breaks. he said he had a plan. i would like to see that plan. that plan raises revenue not by raising the rates but by eliminating certain tax expenditures. >> do you think that is possible? >> mr. speaker, if you had a plan in december, do you think

>> is it possible to lower rates and raise the amount? i think that is possible. the issue was how much you will lower rates by. after all, there is a lot of running room between $800 couldon that they said they raise and $4 trillion. they say they can reduce tax expenditures by approximately $4 trillion to buy down the rate. so certainly you can generate $800 billion to tax reform. how much you can lower the rate by and still generate is another question. in other words, put your own plan that you had in secret on the table.

>> can you support the president's chain cpi initiative and means testing on medicare? >> the issue with chain cpi is it is presented as a more adequate measure of inflation. to the extent that is true, it is a policy that makes sense. the problem is as it relates to seniors, there is a lot of evidence that suggests it is not true because seniors use a greater share of their income on health care. healthcare generally has been rising rising faster in terms of price than other goods in the economy. therefore they end up paying a higher share of income.

that is a factual question that relates to seniors. other parts of the chain cpi, which help reduce the deficit, make sense. in terms of medicare, medicare part b has already got a lot of means testing. the president is proposing additional modest means testing. that is certainly something that can be looked at. there are other proposals the president has made, but our fundamental difference in approach between -- on medicare has been, paul ryan has his voucher idea, which we believe does not help contain rising healthcare costs but just transfers rising healthcare costs on the backs of seniors.

whose median income is $22,000. versus the approach in the affordable care act which begins to move us away from a strictly fee-for-service system into one that rewards providers based on quality of care. and can help reduce healthcare costs. in fact, there was very good news recently that maybe healthcare costs per capita were actually rising more slowly now than at any time in the last 50 years. part of that is the slow economy. part of that may be changes in the way people practice medicine. >> why should republicans negotiate with you in patty murray? -- and patty murray? or is was ringing among democrats, who though

exasperated by republicans are nervous and say it is amazing that they do not see they will get a better deal from the president then they will ever get from senate. is that fair? >> i think all the ideas should be in the mix. what comes out of the end of the day is part of negotiating process. but i think the president recognizes -- let me first say that there is a lot more in common between the senate democratic budget and house democratic budget. the republican budget is on the table for discussion. we need to take the next up in the process create go to conference. >> why doesn't the democratic budget balance? should it? should the federal budget be a balanced budget? >> absolute priority has to be economic growth. short-term and longer-term.

that needs to remain our focus. if balance can be a byproduct of that, if you look at the house democratic budget it is significantly reducing our deficit as a percentage gdp in 10 years. actually, our budget, because of what we believe are lower per capita health care costs, actually did balance in the year 2040. by the way, everyone needs to recognize that the republican budget last year, when did it balance? 2040. this new notion that somehow 10 years from now is a magic number is totally inconsistent with the budget they had on the table and year.

the other point i would make on this, there is this super- gimmick in the republican budget that allows it to get the balance in 10 years. that is they repeal all the benefits of obamacare but keep in the budget all the other components of obamacare that they railed against. taxes. one dollar trillion -- $1 trillion in their budget comes from the affordable care act. $715 million is the medicare savings that they railed against in the last election. you take out the medicare savings and the trillion dollars of revenue and the budget is more than 500 billion dollars -- out of balance. we need to keep these in perspective. our focus needs to be getting the economy going right now.

replace the sequester, adopt the president's infrastructure proposal, and act now to reduce our long-term deficit in a steady, sustainable way through a balanced mix of targeted cuts, reforms, and revenue from tax reform. >> you said significant progress is our to been made and long- term deficit reduction. do you believe we are in a moment of crisis, or not? >> i do not think we are in a immediate deficit crisis today. the main crisis right now is a jobs deficit. we continue to have high employment rates. the congressional budget office has said if you look at next year's deficit, 3/4 of next year's deficit is the result of high and employment. the economy is not a potential. lots of slack in the economy. so we need to do things to help the economy going. certainly do no harm, sore place the sequester, what should we act now to reduce the long-term deficit? yes. if you look at out years, especially because the demographic shifts, it will become unsustainable if we do

not take action. but the president's budget gets the deficit down and to 1.7% of gdp 10 years from now, stabilize the debt, and can we do better? yes. but let me say this in closing. because of artificial budget rules we focus on 10 years. there is no magic in 10 years. somebody could have picked five years, 15 years. the real issue is to take actions now that phase in over a period of time in a steady, credible way. that would help us focus on the real issues. >> we do a budget every year. should it be every two years? >> first of all, we have not gotten a budget. >> we keep going. >> so in that sense -- i could support something like a biannual budget. i do not feel strongly one way or another. it would give the appropriations process a little more predictability. but the more i look at the budget process, while some can

help on the margin, it is no substitute for an agreement on big substantive issues. >> is it fair to say that if a deal does not happen this year, then it is not happen until 2017, we are on the hamster wheel for another four years? >> i think it is much harder. right now you would hope there is enough pressure on both sides to try and get an agreement. i am not sure that there is. but, i hope there is enough interest in coming together right now. the president is working hard. we would like to go to conference. we should do that right away. the president continues to have this dialogue with members of the senate. >> chris van hollen, ranking member. thank you. [applause]

so now i can thank everybody. patty murray, paul ryan, gene sperling, rob portman, and chris van hollen. they may disagree on the issues, but they are all pretty knowledgeable about this process. hopefully this time next year we are talking about the incredible deal that happened. one thing we learned is everybody seems to agree it is this year or bust. so thanks for letting me do this. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national able satellite corp. 2013] >> this is little less than an hour. [applause]

>> we had a great conversation, a warm up in the scenes. i have to start off with a bit of honesty. i wanted to bring out my tablet or my smartphone to have my questions and the comments there. but i was afraid that the tablet would lock up in the presence of bill gates. as a result. , my notes look like a second grade art project. i was so struck i his comment that the fiscal debate is taking up all the oxygen in the room. ron believes we are not able to look at trends ahead because we are mired or being pulled down by this ongoing conversation that seems easily resolved with

compromise. mr. president, i will give you the first stab at that. .> it is self-evidently true the problem is that the nature of the debate goes to one the core ofute and the political differences between the parties in washington today. -- i will tell you what i think first. everybody in this debate has an obligation to say what they believe. i think paul krugman tried in the short run and pete peterson and simpson-bowles, and the question is planning. if you do not kick the long-term reduction plan in, at the right time, and we do not pass the plan in advance, there is always the chance that the economy will start recovering and

interest rates will go through the roof and it will will make the sequester look like a sunday afternoon walk in the park. do not forget, if interest rates today were what they were when i was president we would -- which were pretty low, concerted -- considering we would have growth annual payments would go from $300 billion to $650 billion. so, we need to deal with this. secondly, because of the debate, because it is stale it is taking up all the oxygen. but i think a lot of cuts have already been made and in the short run, the president has offered a long-term plan that basically reflect the private understanding he had with john boehner when they were negotiating. and i think that the best thing to do -- simpson-bowles has done update, which i just read and i

think is pretty good. they need to, the simpson-bowles update says we should not put any more real restrictions in until 2016 so the economy keeps growing well. it is obvious the defense cuts and general restrictions on public employment have in the near-term slowed the recovery. it is obvious that if you overdo austerity early you get europe, where the and implement rate exceeds 12% -- unemployment rate exceeds 12%. we need to get this off the plate. we are not debating about the future now. if you look at the fix for airline passengers, which since i have to trundle back and forth between here in new york all the time, i appreciate it -- it basically is a metaphor, a mini- metaphor for the choices made in the sequester, where 44% of cuts

were from domestic discretionary spending, which is 15% of the budget. 38% were from defense, 4% from the healthcare and other entitlement programs, and it basically, within the budget of the faa, we are making it possible for all of us to fly with fewer delays and not invest in improving infrastructure of regional airports. that is basically the constant choice we keep making if we just kick the can down the road.

that is what i think. so i agree. i think if we could get this agreement made it would lift a huge burden and would increase confidence. and they could actually go out and debate something that is worth debating. but if you try to do, which i support, tax reform and the whole thing, and have to relitigate the whole debate about whether there will be any more revenues, i do not see how you will ever get an agreement and we will just keep spinning our wheels. >> if we continue to spin the wheels we remain stifled. that brings us to innovation. mr. gates, when you see what is happening, you are not in the dc sausage making business but are certainly in technology. when it boils down to what we can afford and are so concerned on immediate concerns, from the faa to the small pieces of the equation, how do we think big and how do we invest big in america's future? >> well, people say the oxygen is being taken up by the debate. it occurs to me -- the health care cost problem, which is really the long-term problem, he have some retirement obligations because of the aged structure

change, but overwhelmingly the healthcare cost, which fortunately omb are honest that it is growing faster than the economy and all it needs is a little bit of time before that overwhelms your revenue rates and capability. it is interesting that the amount of deception about how you bend the curve on that is not there. it is not a partisan issue. the partisan issue is, given the costs, should the government or the individual bear the cost? that is fine, but it is definitely a zero-sum discussion of shipping it back and forth. the real question for our country is, do we stay on a trendline to beat everything else up? i am very disappointed about the conversation about how you take innovation and measurement and use it to improve the system is not taking place.

who is your favorite person in terms of this?where is your favorite panel? even the budget deficit efforts, simpson-bowles and others, which are fantastic, they sort of hand wave. by the way, you have to get rid of that piece in there somewhere at some point. so i wish we were having that conversation. this is a place where innovation can either be your enemy, because it is inventing complex things like organ replacement and joint replacement, or it can be your friend, taking on things like chronic care cost, getting rid of parkinson's or alzheimer's or diabetes, where you would have cost savings. so we need to bring in a discussion about how we use innovation and get the efficiencies driven by measurement of quality that is

simply not in the system today. >> mr. president, how do we get policymakers -- i was at the final space shuttle launch and i was literally moved to tears and he about how this country thinks big. if innovation is not understood by policymakers, how do we look for america's next big thing, so the next generation can feel, as many as you did in the 19 60s and 1970s and as i did at the kennedy space center that day? >> i will give you a very short answer. i would like to amplify on something bill said. that is a whole debate. we are continuing to innovate. there is a stunning amount of advance in human genome research and application. in nanotechnology. lots of other things. we need to do more. one of the few areas that i have clearly disagreed with the simpson-bowles report, i think any tax reform should not get rid of the research and development tax credit because

we are already less generous than 15 other countries, and we do not need to do that. we are continuing to innovate. we are not continuing to invest in the future. on the public side, as much as we should. here is the problem with what bill said. i think about this all the time. this whole debate, the healthcare debate, has been shoehorned into the budget debate, as bill described. clearly, it is crazy for us to pay 17% of gdp for health care. no other country does. the only rich countries that pay more than us are the netherlands and switzerland. that translates into $1 trillion a year. 43% of which comes from the public sector. so, the people who say we have to privatize medicare or voucher

as -- voucherize, and the people who say we have to project and keep in be sent on increases to account for both medical inflation and the delivery system as well as the baby boomers getting into the system, they are excepting something that is unacceptable. on the other hand, this is the dilemma. if you can figure out how to solve this we can make a change. we really need about five years to see whether the drivers in the healthcare law, which clearly are trying to give incentives for people to be healthier and incentives for the system to deliver health care where you pay for results, not by procedure, to see if that works. the problem is neither the office of management and budget or the congressional budget office -- they want us to score

this and do all this health care stuff based on what is a realistic projection of increasing healthcare costs if you keep the insurance system, the delivery system, and our lifestyle exactly as they have been and project them out. we have to change all three of those things. and if you are not willing to do that we are not going to get anywhere. keep in mind, in 2009, when this economy was on his knees after the crash in 2008, health insurance moffett -- profits rose. when everybody worried about

holding onto their business and not losing their own, the engine ground on. and i just read last week that in, on average, if a person is readmitted to the hospital because of a problem, the profit margin on that person for the hospital goes up 300%. which should explain why the system in pennsylvania, where the provider needs all the cost when they have to do that, is so successful in holding down costs. why are we still -- why is the government still getting medicated drugs cheaper than medicare drug? there are a thousand questions to be answered. but alternately the dilemma is that we are assuming we are not going to change the delivery him, the financing system, or our personal behavior. if we do not change all three of those things we cannot get our numbers down to where other countries are. >> you have traveled extensively, mr. gates. you just a day trip to south korea.

your focus with the gates foundation is vaccines, polio -- we talked a little about it behind-the-scenes. when you look at the domestic debate on health care and what you are seeing a broad in your travels, -- a broad -- abroad in your travels, what stands out to you? there seem to be legitimate solutions on the table. >> health care, there are big differences between rich countries, middle income countries, and low income countries. ÷]÷ó÷ññ]÷ñ÷]÷ñ]÷]÷]÷]

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>> what are assistance for libya during this traditional time and it is fair for the american people to ask why. at a time of fiscal restraint

and given libya's wealth. it remains in our interest to fund a limited number of activities of immediate concern to libyan security and to live the proper foundations for the transition to a democratic state. leaders have asserted their willingness and they are tapping their assets of the previous regime. as the government increases capacity and gains experience, the need for u.s. and other external funding will drop away. implement and programs now gives us the best opportunity to support and strengthen the government that is fragile but will be a long-term partner of the united states. atse are programs aimed weapons proliferation, providing governmental issues such as border security, rule of

law, human rights and promoting a vibrant civil society. money will pay substantial dividend. it is in our national interest as well as libya's to see it fulfill its potential as a stable and prosperous democracy with an active civil society and the full integration of all elements of libyan society and the geographic areas with respect for human rights and international norms. culture andtween governance can produce a healthy competitive yet conjoined -- the development of the full national capacity and sovereignty will enhance our security and economic well- being through cooperation, the steady production of and increased opportunities for u.s. businesses to partner in libya's

renewal and development. a successful transition in libya, challenges are significant, can be an engine for growth. goodwill formain the united states and libya and the toppling of gadhafi. i have been very moved and touched by the e-mails i received from libyan citizens following the announcement of my nomination expressing their deep attackover the heinous on a messner stevens. -- ambassador stevens. am well aware of the unique challenges i will face in the current environments. if confirmed, i am committed to working closely with the congress in carrying on the andllence worth -- work

forging strong ties between our governments and people, students and business communities and women and minorities leveraging power and all connections and tools at my disposal in coronation with our allies and like-minded powers who share our interest in seeing a stable and prosperous libya. our engagement with libya originates long before the revolution and includes a store cooperation during world war ii and the cold war as well as our cooperative efforts in developing oil and gas sectors since 1959. last but not least, i am conscious of the responsibility i would have for the safety and security of the approximately 4000 americans residing in libya. as we strive to balance safety considerations with a deep desire to engage and the work of the american people as expressed by members of this congress, i

would like to rest my deep gratitude to my colleagues and --in the planet security diplomatic security whose heroic efforts make it possible for us to continue our daily work there. honorable members of this committee, it is in my privilege and a great honor to have spent 31 years in the service of my country working with nine administrations to champion americans interest and values and expand the reach of freedom with nations at war and peace, most in some sort of political transition, some in poverty and wealth.njoying great it would be my honor and sworn duty to lead our mission in libya as we meet the challenge of establishing a strong libya allied with the united states. thank you and i look forward to your questions. >> thank you.

thank you, senator. mr. chairman, ranking member honored tom deeply appear today as the nominee to be the next ambassador of united states of america to the republic of chad. i think president obama and secretary kerry for the confidence and trust they have shown by nominating me for this position. i will work with you all to best represent interests and values of the american people and a moment when chad is becoming a stronger partner for the united states and allies in the critical region. i am pleased that my wife has joined me today. she has been my closest partner and the strongest supporter throughout my foreign service career. chad is a vast country. position would've the most important important crossroads of africa. haveeoples and cultures

shared the diverse environments. are a uniqueons culture but one that is faced great turbulence. it has been plagued by civil war and suffered struggles with the sudan and other neighboring countries. today, chad is emerging its legacy of internal turmoil and a regional conflict. shadow plays a positive role in the region determining to mediation and peacekeeping efforts. chad has been a key partner in the international community dissipating and sustaining heavy casualties in the international community. chad intends to maintain troops there is a member of the united nations peacekeeping operation.

the leadership in the economic community of essential african states, the community of the african forcetral commission advances the hope we share for the future of a more prosperous and central africa. ongoing instability and conflict in bordering countries such as we are now seeing threatens the progress chad has recently enjoyed. the president has led negotiations to bring a transparent government. chad has conservative trips to the peacekeeping mission. refugeesently hosts from sudan and the central african republic and new arrivals continue to cross the border due to ongoing conflict. the government of chad maintains a corporative relationship with the humanitarian community.

chad is also subject to the growing regional threat of wildlife trafficking by armed poachers across central african borders to attack a threatened elephant population. livelihood of local communities as well as security and the rule of law. in addition to regional threats, chad faces great domestic challenges. international investment in chad is severely constrained by isolation, limited infrastructure, lack of skilled workers, widespread corruption. the government of chad must improve its management of petroleum resources. the oil reserves are in decline and the urgency to overcome its persistent under development. the people of chad suffer from

great poverty, illiteracy, disease. mr. chairman, honorable members of the committee, as you know, i have worked to address these kinds of issues for many years. in iraq, i have had responsibility for reform. of theaw the completion challenge compact which addressed challenges similar to those confronting chad today. improvea i helped revenue. before entering the foreign service, i worked as a development racialist in this .rea if confirmed, i look forward to

addressing the goals of the united states. , i will support the government of chad's efforts to counter growing threats to regional security and to maintain and widen regional engagements. i will encourage the pursuit of democratic reform, its capacity and will for better governance. i will support and assist the government of chad to assure sound use of humanitarian assistance and improved capacity. if confirmed, my highest priority will be to ensure the safety and welfare of all americans in chad and the advancement of u.s. interest. please accept my thanks for this opportunity to appear before you today. i look forward to your questions. your testimony. let me begin with ambassador jones. it seems that today the defense

minister of libya announced his resignation this morning. the situation in libya appears to have hit a challenging point. over the weekend, gunmen intimidated the parliament into passing a political isolation law to ban anyone who served in qaddafi's government, including many professional technocrats in libya that needed to succeed in the future. it is a dangerous precedent. portend for events libya's future and how do we secure a democracy if it is being held by outside parliaments? reading my you are mind this morning.

, but i challenge believe again, if confirmed, one of the reasons i believe we need to get an investor out there -- ambassador out there is to support the government that will help it to enhance control. the libyan people deserve far better than this. they struggled bravely to throw off 40 years of intimidation, i don't believe in exchange for another government of intimidation or commissioned by armed groups or malicious. working on the three that you -- groups or malicious -- militias. supporting its government and training of professional military and security regime which we have started to do in .any ways, disarming them also, engaging with them on governance and getting them to work with them to look at the

impact of these kinds of laws, this isolation law and the impact it would have on their unity and future of the government and civil society which is a critical part of libya. the role that civil society has played, the role of women has been significant. the people themselves are going to have to make their voices heard and we will help them with that in ensuring we don't go back to a situation of intimidation. it is one of the reasons i feel an urgency to get on the ground to have an ambassador there to guide our efforts of the side of the ocean as well as guiding and helping libya to achieve objectives they want to strengthen the security and to disarm the militias. in thedo you intend security environment you will be in to reach out to civil society inside of libya as part of fostering a greater, more participation by it society?

>> that is a good question. and ambassador doesn't wake up without considering security. that just goes part and parcel with the job. when i was the ambassador in kuwait, even though it was a completely different situation, i did not wake up one morning without thinking what possibly could happen to us that day. place where i canceled the marina ball the day of the ball. you have to know that means ,ecause the invasion of iraq the liberation of kuwait was the marine deployment since world war ii. a combination of factors with intelligence led me to cancel the ball and to wake up and rouse the head of the security and ask them to swap

out all of his guards. i think it's very seriously, our security. that said, i see -- think there are a number of ways we can connect. we have a package. the situation is changing all the time. it is very unstable. we all know that. it is something we look at everyday. we are working close at it. we have a a package for travel that allows us to get out. other ways of connecting with people, whether ,t is through media, skype through all kinds of connections within libya to have us be able to talk even while we might not the waycally present we might like in other environments. until i get out on the ground and see what that is -- first thing i do with every mission is to do a terrain that walked with my security officer. i did in kuwait, in instable -- assemble.

-- istanbul. i will talk about meeting people in other locations. we can't take advantage of trips outside of libya and take advantage of other locations inside. i have to be creative and we will look at that as we go. >> to both of you, chad and libya share a porous border. what do you see as some of the could you and how work together to improve the u.s. ability to respond and help shape development in the region? >> thank you, mr. chairman. it is clear us being here together speaks to the importance of a shared approach to regional threats in the area, in which we will both be working if confirmed. the importance of this coordination is key because as you know, there has been a

historic division in the state department in the north part of africa. i think that is a good first step in the structure. it is clear we have to maintain personal communication and personal coordination of our efforts to address the threats as they emerge along our shared border. it is also important to recognize that it is not simply along the border but there is a to this dimension which extends from senegal all the way to the other side of sudan. if confirmed, i look forward to working with all of my colleagues in this effort to address the continually worrisome threats of terrorism in this area. senator, also i would second everything jim has said. i would say that the problem has gone beyond the border.

we know the flow of weapons from in a rejects far as syria very challenging security environments. we recognize working with these countries is not a bilateral issue but a global issue. i intend to not only draw on my around all of our resources but also other countries who have assets and interests who are like-minded, who can support our efforts to disarm, which we have been working on with the libyans to pads and ton destroy chemical weapons and things that have been left over from cut off his collection of and alsover the years results of their own the civil war. >> thank you.

, mr. chairman and thank you for your testimony and for the families for being here. i guess i would ask the first question, what have you done to cause people to send you to libya? [laughter] i know we talked to love it about that yesterday in the office. my serious question as we talked a little bit about safety and we traveled through there in october after the unfortunate events in benghazi. you stated the importance of security. if you would emphasize that, i would appreciate it area -- it. >> absolutely. think our daughters are asking what they did to us i thinktheir dad -- they are wondering they did to cause that. it was to pay for their college. [laughter]

what i would say, on security -- again, this is something that deadly serious for us, how do we manage security in the building. over the course of my career, my first assignment, no one mentions, it happened to be falkans war. it changed the nature of diplomatic practice and may people worry if we were not safe anymore under the vienna convention, how were we going to make this work. throughout my career and in the later years as ambassador have always had a direct connection and picked up the phone with washington and worked closely haveagencies at post who

access to intelligence. it is the role of the ambassador. the ambassador is the personal iturity officer at post and is the ambassador who has to decide to allow people to travel here or to ask for additional assets or to insist on additional assets. if you don't of the answers you need, you pick up the phone and speak to people who are responsible for that. intend to do. that is what i have always done. there are many ways to approach that and to continue to press that. we do know in the past -- >> that's good. thank you. andere involved in libya certainly have a result ability there because of that involvement. it would appear to me and i think i would love to hear your comments that we have underestimated the challenge is there. met with government officials there and it is really

not a government. when you look at the responsibilities that they have, you look at militias throughout the country, it is almost remarkable that the country is functioning. do you think we have underestimated the challenge is there -- challenges there? >> if there is one thing i have learned based on the briefings, i don't know that we underestimated. i think there has been frustration. i know we had a setback in these last nine months without having an investor on the ground. it has set us back to support the government there. beyond that, could i say we underestimated? again, progress after these kinds of transitions is unpredictable. it is organic, not linear, not formulaic grid -- formulaic.

we most certainly will lose if we will not make the effort. we have never won a battle we have not shown up for. on theow you want to get ground and see how things are and they are changing daily and so your briefings a few weeks ago regarding libya today would be very different, i think. based on what you know today, what is it and typically when an abbasid or in at the beginning where you have -- you lately groundwork for what you're going to do, what are your goals the first six months? is to principal goal address the security vacuum, to address the capacity vacuum of the government in terms of security. proa that comes from a different -- a number of different arenas and it is not purely training and military training or security training or intelligence, although all

those things are hugely important. in the what we also see aftermath of benghazi was the importance of civil society as well and the importance of the libyan people themselves making their voices heard and getting involved in supporting and holding to what they have fought so hard to gain, which is the democratic transition. more skin in this game than anyone else, and they know that. >> what happens in that transition? that end up with the law passed on sunday and others that are being pursued, what happens to our relationship if we end up with militia men in these cabinet posts? i might say when we end up with them. >> i am not going to accept that quite yet, but we need to be prepared to engage with anyone who is committed to a democratic transition in the

via through peaceful means. >> what if it becomes an islamic state? >> people talk about the muslim brotherhood. we have to look at many layers, whether cutting off support for extremist groups, however that supports, whatever form that support may take. we also need to be engaging with those groups who have issued violence, who are committed to a democratic libya. until i get on the ground, unselected do more, i am not , ruleed to rule it out anything in or out at this stage. i am not saying it is simple. it is not. , how you are in briefings do you think the issue that we are dealing with in libya right

but note were involved overly involved. we ended up being where we are there today, and we have serious, which is developing and has similar characteristics, not all. how do you think our experiences in libya are shaping our responses as it relates to syria? >> i would not be in a position -- i have not been involved in the policymaking on syria. there are challenges out there and all of these are indicative of transitions. people want change. if there is one lesson we have learned, it is that authoritarian and autocratic governments don't develop societies to sustain itself in the aftermath of change and that is where we need to be prepared .o step in and support

if anything, it gives that -- i was reading the other day -- there are three books i am recommending to people before i go to libya. i am not getting royalties. the american revolution. , andecond is the prince the third is the federalist paper to look at how the idea of sovereignty emerges from the people and how people in these places need to understand they are not yielding authority, they are creating authority as a -- whenhen they allow they votes. that is a manifestation of national will of the people. that is the lesson that the syrians and libyans have to learn. >> thank you. i can stop or keep going. what are you go ahead, then i

will go again. thank you for your testimony. int do you see was recently mali and i know chad has played a role there. where do you see the threat to chad being relative to mali? >> thank you. my sense is that -- i think this is a widely shared view that the government of chad sees the regional threats very clearly. becausee opportunities it is -- since 2010. there is a greater step -- domestic stability and chat because the regional threats have since -- subsided. these were perceived as essential threats to the government of chad and made --

they have done a superb job there. they have been the strongest contingent both in terms of numbers and proactive engagement with the insurgents and terrorists. withworked effectively the french. this began with their own strongly driven desire to participate in the earliest possible opportunity. how fragile do you see the government of chad being? it to bet consider fragile as it lacks the capacity it needs to be if it of. -- effective. the president has been in power since the 1990s. he just recently won a fourth term. the people of chad appeared to with the way the government is emerging towards

a more democratic and inclusive approach. aain, one sees a sense of greater interest in acquiring the capacity to govern and support and pursuit of human rights and respect for democracy across the board in terms of what it does directly as a government and how society is taking a broader role. get the sense there is some question about the interagency court nation that is taking place and chat. do you have any comments regarding that and the lack thereof? >> knows, sir. i have not heard of significant problems that have impeded any u.s. government policies or objectives there. the larger issue that i consider to be the most urgent is the

effort to make sure all our efforts across agencies are coordinated, and mutually beneficial in terms of their pursuits. my best guess is that the kinds of issues that you may be referring to our momentary and addressed effectively by the team. >> it is noteworthy that both of you are going to be involved in the country and regionally both of you are going to be important in your positions. one last question, and thank you mr. chairman for your courtesy. there is no usaid involvement in chad at this time. you see that as important to change at this time? whohere is a representative is their full-time as a member of the embassy staff. he has done a well-regarded job

in terms of pursuing the ongoing efforts there. there has not been a mission in chad since the 1990's. resides with the usaid and also with the funding that is available. my personal view is that chad offers the optimal opportunity for what a mission can provide. and empowerp shape the government of chad to pursue support thelp capacity engagement is necessary to ensure that economic development proceeds as quickly as possible, diversify the capacity to participate in the world economy and improve management of oil resources. >> thank you, mr. chairman.

senator mccain. , mr. chairman. welcome the witnesses and ambassador night. congratulations on your many years of service. ambassador jones, i thank you for yours as well. we had a good meeting in my office. ambassador jones, a quick glance at the headlines in libya from the past several days a stark reminder that the transition to democracy remains rough and incomplete. i know to headlines from this defense minister ands over siege by gunmen despite what is happening, i continue to believe we can't get into the visitation dictation that our support for fordemocratic aspirations

people in libya and elsewhere is not mistaken. i don't think we can resigned are that -- ourselves to the false belief that the arab be definedoomed to by terrorists. i conceived -- i continue to believe in freedom that has inspired millions of people to action. even the worst dictators can be overthrown and swept into history, where they belong. i am deeply concerned by the libyan parliaments vote on sunday to adopt a political isolation law and the ongoing siege of government ministries. the passage of the law exposes the government's inability to deal with armed groups as well as overall weaknesses of a libya's central government. impact assessment, what

will the political isolation law have on libya's transition and the integrity of prime zaden's cabinet? >> i share your views that the libyan people oh yes we owe them the best to succeed in their transition. the primeike minister may have convinced the defense minister not to resign. let's hope that holds true. again, it is an uncertain situation. i believe that the isolation law is something that i certainly would hope to address is confirmed to get members to rethink the application of that law. how it is defined, how to find many of the conditions. i think we all know from our own experience with legislation and

dealing with that as americans that sometimes much lies in how we apply it and execute the law. i am hoping to get out there to be confirmed and have some influence and let them look to the future of the country instead of immediate desire for revenge. i think they know that and i think the majority of libyan people have fought too hard and wanting badly to succeed in a government that is not one of intimidation. they have had that for 40 years. they need a government of representation, sir. >> you would agree the libyan people are largely appreciative of the united states assistance in the overthrow qaddafi. there is strong pro-americanism. >> absolutely. , ior to your arrival mentioned i have received a number of e-mails from olympians

once the white house announced my candidacy -- from libyans. offering hope for my relationship to continue strongly. we have lost a lot of time and we need to get going on this. >> that is what i was going to mention next. after gadhafi was overthrown, light footprint was enacted. helping organize the military and i think it is pretty clear in the objective view of most observers that we have done very little. .e had 30,000 wounded i think we've treated three in a boston hospital. there is issue of a sovereign

immunity which seems to have hung up our ability to send people there to train their military. 'srt of it is the libyan fault. one heck of a lot of it is our fault. have talked to secretary kerry about this problem, and you're going to have to start on sticking things but you have to get the support of the administration, which so far has not been there. to succeed ing libya, ambassador, you're going to have to speak truth to power. it is that we are not giving them the assistance for a whole variety of reasons, not all ours that will assist them in becoming a function in democracy. you will not be able to go to eastern anytime soon because it just longer -- not because of what happened in the gaza, but it is no longer in

control of the government. the situation in many ways as evidenced by yesterday's vote continues to deteriorate and it cries out for american assistance, which is not the --e in some other countries it will be more than welcome. i wish you luck. there are a lot of us who want to see you succeed, but most importantly, the people of abya to be able to realize opportunity that they sacrificed a great deal of blood in trying to achieve. you know the list of concerns that we have, you know the areas where we should be cooperating, and i would hope that you would strenuously advise the state department and the president of the united states as to how we can salvage what is and unfortunately deteriorating

situation in libya. >> thank you, senator. i appreciate your support. .> one last thing when you and i spoke, i just want to make sure for the record. interested ong behalf of the families of pan am 103 to pursue whomever or in that were involved bombing which lost many lives americans, including many from my home state of new jersey. i assume that i have your commitment upon your confirmation to pursue that line with the libyan government. >> absolutely. in one of my previous had the honor and the painful opportunity to speak to some of the parents who have lost family members, children.

i am a parent for it i can't begin to imagine that kind of tragedy. i can assure you that i will continue to press the government to support us. in fact, there has been some effort -- i think there has been some progress. to goss may be too far and the fbi would have more details of that. we continue to press them, and i shall -- i give you my word i will continue to press to bring it to resolution, bring justice to that. >> i have one additional item that i forgot to mention. when it is my turn. >> go ahead, senator mccain. >> there is a small graveyard intricately, as you know, that supposedly -- in tripoli that contain the bodies of the american sailors who were unsuccessful in an attempt at raid in our attempts to bring the pirates under control.

there are remaining family members and others who are interested in the identification and an effort to repatriate those bodies. it is not a big item in the grand scheme of things, but i think we probably should do what we can to give those brave americans that perished so long ago a place to rest that is fitting with their sacrifice. that is the first i was aware of that. behink small things can very important leading to bigger things, and i appreciate that. inas telling me senator reading the history the first time we had a siege in benghazi, it was a crew army from tennessee who came to save the day. we will follow up on that. >> i am sure you remember the

doine corps hymn that has to with tripoli. >> absolutely. >> thank you both for your testimony. i am convinced of one thing, you ambassador -- american assistance without an ambassador. we need an american ambassador at both of these locations, and i believe that it is imperative to have these nominations move forward. not in the interest of the united states not to have an abbasid or at these locations of national interests and the ultimate outcome of libya's or we can'te helped allow it to be shaped by a course of events in which the united states is absent.

our best way in which we pursue of theional interests united states is to have an ambassador at both of these posts. the record will stay open to the close of business tomorrow. i urge nominees as was the state department to answer any questions posed by committee members as soon as possible so we can put these nominations on the next business meeting. with that, this meeting is adjourned. >> in a few moments, defense secretary chuck hagel orders the armed services to take

immediate steps to reduce an epidemic of sexual assault. in about 45 minutes, several members of congress comments on sexual assaults in military. after that, president obama says personnel who engage in sexual assault are betraying their uniform. live coverage this morning includes the south korean president addressing a joint meeting of congress. 10:30s live on c-span at a.m. eastern. at 11:30 a.m. eastern on c-span 3, the house oversight committee holds a hearing on the attack in benghazi. mark thompson,de acting deputy assistant secretary for counterterrorism. the former decorating -- deputy chief and former regional security officer in libya. >> this home was a gift that 13 businessmen purchased to give

it the grant family in appreciation for his service during the war. she mentions in her memoirs coming of the hill and being presented this lovely villa that she said was furnished with everything good taste could offer. isare in the parlor which the entertaining of the home. juliet was an avid imitator. -- julia. their daughter played the plo. -- piano. launched his presidential campaign -- the headquarters were located in downtown. the day after his election, they opened up their home and parlor for people to file through and congratulate both of them on his election in the next step of their lives.

this has mrs. grant on it. kept herbly count -- correspondence here and kept and stored in here. we have a bible that was given to mrs. grant by the methodist even scoble church in 1888. -- episcopal church. this is the room where she would come in to get ready in the morning, get ready in the evening, ready for bed and to get solitude from everybody in the house. kit to mendsewing socks or sew a button on. we have her shoes that she wore in some purses that she would have used as the going out on the town. this is where he came back after he was a military hero.

this is where he was living when he was elected and she became first lady, and this was home to them right before that. >> our conversation on juliett grant is now available on our website -- julia grant. tune in monday for our program, lucy hayes. chuckense secretary hagel has ordered commanders to create a climate in which victims are taking care of. a pentagon report estimates there are more than 6 -- 70 sexual assault involving military personnel everyday. this is 45 minutes. >> good afternoon. i'm going to make an

announcement this afternoon. after that, i will take a couple of questions. i have asked general patton to get into the specifics of the briefing. last night, i spoke with the secretary of the air force about the allegations of misconduct involving the officers responsible for the air force of sexual assault prevention efforts. he has been removed pending the outcome of this investigation. we are outraged and disgusted. it is one of the challenges facing this department, and a threat to the safety and the welfare of our people. that reality is underscored by the annual assault on sexual

assault being released today. to recruit and maintain the people we need. it is unacceptable to me and the leaders of this institution. and everyone associated with the united states military. we need a cultural change where every service member is treated with dignity and respect. where a victim's privacy is protected, bystanders are motivated to intervene. and defenders now -- offenders know they held accountable in the system of justice.

responding to sexual assault and their ranks and under their command. last month, i announced a set of measures. the code of military justice, the change will eliminate the ability of the convening authority to change findings except for certain minor offenses. these changes require the convening authority to explain in writing any changes made to court martial sentences as well as any changes to findings involving minor offenses. i am announcing a new series of actions for sexual assault and prevention efforts. a revised sexual assault prevention and response

strategic plan. by clearly defining priorities, objectives, tasks, responsibilities. this plan and its effective implementation will help ensure that the dod's ongoing initiative to eliminate sexual assault is closely tracked and they are achieving their purpose. i am directing implementation for measures addressing accountability. command climate, and victim advocacy. these actions are as follows. i am directing service chiefs to develop methods to hold all military commanders accountable for establishing command climates of dignity and respect and incorporating sexual assault prevention and victim care principles in their commands. i am directing methods to

improve victim treatment by their peers and chains of command. direct victim input will be incorporated into these methods. i am directing that all commanders be provided the results of their subordinates climate surveys in order to enhance accountability and improved insights into command climate at every level. i'm directing the department to improve the effectiveness of sexual assault prevention and response programs and recruiting organizations to ensure the awareness and safety of aspiring service members. i am directing component heads to direct regular visual inspections of all dod workplaces to include military academies. to ensure that it promotes safety for all members and free from materials that create a degrading or offensive work environment.

this will be completed by july 1. i am also directing the acting counsel to develop a method to incorporate the rights afforded by the crime victims' rights act into military justice practice. the general council will evaluate the special pilot program and other approaches to ensure victims of sexual assault are provided the council that they need. it is important for them to better understand their rights and feel confident in the military justice system. a particularly important point that they have the feel confident that if they come forward, they can rely on our system of justice and action will be taken in the responsibility at all levels of command.

and commanders will be held responsible. last week, i named a set of experts to serve on a panel in the defense authorization act for fiscal year 2013. the panel will conduct an independent review and assessment used to investigate, prosecute, and adjudicate crimes involving adult sexual assault and related offenses. no later than july 1, i will ask the panel to accelerate its work and provide a final recommendation in 12 months. everyone in this department at every level of command will work together to establish an environment of dignity and respect where sexual assault is not condoned or ignored. there is clear accountability placed on all leaders at every level.

the leadership has no higher priority. that includes insuring that they are free from the threat of sexual harassment and sexual assault. i will continue as secretary of defense to prioritize the department's efforts to turn this problem around. thank you. >> a quick follow up on your statement. you had the goal of eliminating the problem of sexual assault -- >> completely eliminating, yes. >> how possible to you think that is considering societal problems? my question is on north korea. and there is discussion on this provocation. do you think the removal of the missiles constitutes calming or aggression of north korea?

>> on your first question as i said in my comments, we are going to stay focused on every aspect of this problem and hopefully eliminating sexual harassment and assault. it should be our goal. is it going to be difficult to attain that? of course it is. if we don't have that as the goal, where we have measured or accepting a 80% is not good enough. we recognize what is ahead, and this is a cultural issue. it is a leadership and command issue. we are not unaware of the challenges. it is not just isolated in the military. it is a cultural issue. second, north korea.

i will answer this way. we are prepared to always respond to any contingency. as you know, the president of south korea is here today. i was in one of those meetings and i will see her later this afternoon and be with her tonight. we talked a lot about this issue. the united states is prepared with its allies to deal with any contingency. we hope that the leadership in north korea understands the wiser course of action is to participate in a process towards peace. we hope and believe that can happen. >> the case involving the air force officer has gotten a lot of attention for obvious reasons.

do you think it says anything larger about the pentagon's efforts for sexual assault? >> my personal feelings i have expressed. secretary donnelly, chief welch, they expressed themselves clearly and directly this morning. no one in this building is happy about what happened. we are disappointed. it does not fix the problem. you saw the reports and we will see more reports today on this issue. it is bigger than just the pentagon. we are particularly disappointed because this alleged incident occurred here.

the heart and the main leadership of our institution, the men and women around the world give themselves and their families -- and they expect more it is bigger than just the pentagon. we are particularly disappointed because this alleged incident occurred here. the heart and the main leadership of our institution, the men and women around the world give themselves and their families -- and they expect more and deserve more. we all have to take some responsibility and i have said clearly in my statement that we will all be hold accountable -- and held accountable. i will take one more. >> he said people should feel comfortable coming forward. senator gillibarand and others said as long as commanders have control over the sexual assault cases, whether it is the convening authority or moving court cases, they won't feel comfortable. are you ready to endorse some