that has increased over time. guest: welfare reform was supposed to crack down and make people gets -- and help people get marriedfor them to get by wr children. host: professor cohen, put a period on our conversation. what is the effect on the changes in american households? aret: we cannot assume we dealing with a fixed family structure, and we have to be more flexible, and we have to allow the different family structures to bear resilience to emerge. but we have to realize that not everybody has got the same support systems. that is exactly why the census bureau collects these types of data is so that people can make informed decisions because families have certainly changed over times. host: jonathan vespa is a demographer with the u.s. census bureau, the fertility and family statistics print. is a sociology

professor at the university of maryland. we thank you both, gentlemen, and participating. now live a just a minute, the brookings institution is holding on theng or a discussion chinese economy, and we're going to go to that live in is just a minute here it you can see the crowd there. it is just about to get started. reminder -- today is friday, so tomorrow in the weekend on c- 48n, you have book tv for hours, and it is the 15th anniversary of book tv, and that will kick off tomorrow with a couple of special things. book club, the book tv book club is also happening -- it will be announced today as well for the month, and american history tv 48l be on c-span3 for hours. you can find information on our website, www.c-span.org. thank you for being with us on the "washington journal." we will be back tomorrow morning.

now to the brookings institution. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]

>> good morning, and welcome to this discussion about the chinese economy. sour remains a global ce of intrigue, interest, and to some extent mistry at the second largest economy of the world and the largest contributor to world growth. this morning, we have an extremely distinguished panel here to help us start with the issues. on my left is marcus. he is the deputy director at the imf and the imf mission chief to china. marcus has studied not just economics but also law and international relations, which makes him perfectly suited to help us figure out what is happening in a china's economy

and also what the broader applications for the world might be. on my right, we have steve roach , who spent a long and distinguished career at morgan stanley, and is one of the most prominent china economists in the private sector, and now he has talked to my side of the fence in academia. finally we have david dollar, who until very recently was the u.s. emissary so to speak at the embassy in china, and he has now also jumped to what is the right side of the fence company is now a senior fellow in the global economy at the brookins a decision. before that, he was the head of the world bank office in china. so these are all people who know china intimately and intricately. we will start off with a presentation by marcus. tell us a little but about the main findings of this year's

that the imf writes on china. that will give us the basis for discussion, and they will bring in the two panelists and we will leave time at the end for questions and answers. ?arcus >> good morning and thank you to brookings for inviting us here. thank you to my friend steve and david who agreed to be on this panel with us here. it is a great honor to be here, and thank you all for coming. before i start, i would like to what has been done on china, and china is a team effort. due to steve, the head of our division. and the senior economist in the division, and of course the team has many other members as well. let me start by giving you just a main message of our report

this year. a lot of concern early in the year about a sharp slowdown potentially in china. we were in april, may, quite confident that although growth has been moderate, we do not see a rift of a very strong -- sharp, imminent decline of growth. at the same time, however, vulnerabilities have been growing for years. they have continued to grow over the past year, and you can compare the tone of last year's imf report and this years, there is some heightening of concerns. growing vulnerabilities in the chinese economy and the greater urgencies to structure financial reform. but this economy on a more sustainable growth path. typicallychina is much more policy-dependent than it is for many other large economies. the actual growth production in

dhina is three closely linke to what people think about the policy reactions, how strongly will a contrast a contrasting decline or particular risk to growth. so far, the government has signaled a tolerance for growth in line with its own target, around 7.5%. in contrast to the past when whenever there was a sign of slowdown, the economy would move and quite strongly with strong credit push. this year, the response has been significantly more moderate, and the authorities have not appeared to want to prop up activity above the target as in past years. data coming out of china, the height and frequency indicators, and there are many of them over over 100 through the third quarter into the first few days of august, show that activity is indeed a stabilizing into the fourth quarter in the

second half of the year. slowing retail sales, still well into the double digits. you see any decline. -- you don't see any decline. we are confident that our system smith -- that our assessment, 7.75% for the to year as a whole is about right. as i have it sized since the global crisis, really a mix of investments, credits, and fiscal stimulus has underpinned activity, and though it has been good in any way for china and the world economy, clearly this pattern of growth is not sustainable and is becoming increasingly apparent that it is not sustainable because the signs of risk are growing. while there still are areificant buffers, they not an imminent crisis mode.

the margins of safety are clearly diminishing. when we look at the chinese economy, three risks jump out. ,he financial sector vulnerabilities and local government finances, and real estate. these three risks sort of jump out of us and we look at the economy, they sort of reflect deeper vulnerabilities, underlying problems in the g the current growth path, which means largely based on credits finance investment. in a nutshell, these three risks that you see here reflect a a keys whereby -- being related well ahead of final consumer demand, is financed by credit expansion, and this has led to widespread access capacity, pressure on corporate profit ability, diminishing returns to investment, and

rising corporate and local government debts. ahead, indiscuss order to sustain growth, the economy now needs to be controlled away from this path and this growth based on q mutations to one that is more based on total productivity. let's look a bit closer at the financial sector. credit on theof left-hand scale is among the highest in the world of his level of income. the red dot -- china. to 150% is clearly an outlier in income class. not only the level, but on the right hand, you see it is growing extremely fast, especially in the nonbanks that segment. on the right-hand side come easy total financing, bank credit and credit giving out of the banking channel.

60% of gdp andd just four years. the prominent source of the funding still remained in the banking sector traditionally, an increasingly larger share has come through other channels, such as the high-yielding, wealth management products and other nonbanking sources of finances. this is very positive in many ways because the movie financial closer to the -- it moves the financial closer to the market. it has risks because first of all it is basically a process of arbitrage,. mediations are trying to move away from the better regulated ranking system. it is an area of the weaker supervision where supervisors have a hard time catching up with what is happening in the so-called shadow banking. and simply the speed of growth, the speed of expansion of some of these processes is nearly overwhelming. the consequence of what you are saying here with the

nearly explosion of credit is a buildup of leverage. so this combination of rising profitability, means of course the corporate service burdens have also risen, and if you look at average leverage in the corporate sector, they are still manageable. a growing share of firms, where there is data available, a growing share are showing ratios below one. this is still a share which looks manageable, it is not a as proportionate continuing this recent trend would suggest worsening strengths on the corporate sector and macroeconomic lee. ally.croeconomic second point, the buildup and credit has been built up by a

large increase in government debts. infrastructure spending by local government is an important tool in china. a lot of the fiscal spending comes from the local governments, both social and investment. it has become much more so since the global financial crisis. of this localrt government spending, investment spending is being done off budget. it is not recorded as part of the general government spending. now to better assess the macroeconomic scale, the impact some of this off budget spending, we at the fund of try to construct what we call an augmented fiscal balance that puts the recorded official general government data together with the off budget fiscal transactions. of course looking at this together shows us that the actual debt of the public sector officialigher than the one, 22% official, but augmented debt including the off budget spending comes to somewhere around 50% of gdp.

we have 45% because we do not include something. it is not such a novel exercise. if you look at the right side, this is a plot of the market estimates. estimates, which have been around for the last two or three years. the size of this government debt. somewhere between 50% and 60% depending on what you include on the liability side. and of course, the official debt much higher means that the public deficit, if you include the augmented part, is much higher than what is measured at the official deficits. s were asnted deficit high as 14% of gdp during the crisis and have now oscillated around 8% to 10% of gdp.

on the left-hand side, you see that real estate now accounts for a very significant share of gdp already. about 12.5% of output. and urban employment, about 14%. it is now a key engine of growth. however, one has to realize that existing distortions make this market susceptible to very large swings, boom and bust cycles. on the supply side, we have local governments, which rely on land sales for financing and real estate development for growth, which often leads to excessive push of supply into the market. on the demand side, the market is prone to bubbles because represents a uniquely appealing investment opportunity for the private sector given that interest rates are close to zero, given the restrictions that savers can put their money abroad.

there is also favored tax treatment. on the demand side, huge incentive in there for a demanding real estate. this is a risky situation, and clearly over the medium-term, development what this load onto a more sustainable pace as the market matures. the challenge now is to do this in a way not just by restricting price growth or trying to control it from the top but by really removing the underlying distortions that create incentives to this risk. risks that we mentioned, they sit on top of the underlying deeper vulnerabilities related to china's growth model, which remains based on investments and capital accumulation. which is being implemented through a mask of fiscal, quite a fiscal, off budget local government spending , state on enterprise investment , that that investment has been used to supports domestic activity.

the impact of external shock, and this of hadse of had -- has spillover effect to the global economy. domestic imbalance between domestic and consumption. there are signs that this imbalance is no longer worsening, but a decisive shift towards a more consumer-based economy has yet to occur. for example, last year, investment rose slightly, private assumption remained flat at the share of gdp. the urban household savings rate has actually increased rather than falling, which would mean that more consumption. on the left-hand side, you see that china clearly remains an outlier with investment as the share of gdp much higher and consumption much lower than in other countries. on the right-hand side of the chart, you see from the supply ofe what the composition

china's growth is. the industrial sector remains the main driver of growth over the whole past decade. are the financial imbalances that china has to grapple with its growth pattern. let's not forget about the other challenges, other aspects of the rebalancing. for example, there has been a major reduction of poverty over the past few years. inequality has an increased tremendously over the past two decades. if you look at the staff report, we have a chart in there that increase is.h the the largest and all emerging economies. last but not least, the environmental challenges of course, and this growth pattern of acting factors of production on the investment and resource

intensive growth are tremendous and not sustainable. clearly, the time is running out on the current growth model. we have done a little growth accounting exercise that assesses and analyzes what the source of growth over china over the past 2, 3 decades, and clearly it is mainly factor accumulation, putting labor, move factories together, and producing for experts. clearly this growth can no longer continue. if it continues, and you see the orange line here on the bottom is china, if it continues, maybe you can go on for a few more years, but it will run out of steam eventually. you will create too much excess will fall,apacity bad loans will rise, profitability will follow up. there will be a sharp slowdown. china's convergence process measures here the ratio of china gdp to the u.s., which has

preceded continuously and steadily over the past few decades. the risk of the convergence my inply stall, as it has done many middle income economies at that stage of development. the choice for china, the challenge is to either change its growth model and sustained the convergence process so if there is a successful shift in the growth model to a more productivity growth, it can actually continue to converge to advanced income levels. policies?he key they are explained in detail in our report. successful transition in china will require now a new round of reforms that will combine to unleash these new sources of growth, which are based on productivity growth. at the same time, they need to address these growing risks in various parts of the economy. at the same time, make growth

more inclusive and more environmentally sustainable. and not to diminish the challenge, all of this of course government, which valerie likely will remain difficult for some years. the challenge is tremendous. it may entail over the next few years somewhat slower growth in china. 9%, 10% range, but somewhat slowly. clearly it is a trade-off that is worth making. what is the strategy? at the strategic level, i think we should highlight three points. an increasingly greater role to market forces, through continued lateralization and governments, stronger governance, and that is very important that we mentioned. as we increase the role of market forces, we need to see stronger governance at the lower levels of government, at the lower levels of economic units. local governments, state

enterprises and stayed takes. -- and state banks. shifting income for households and increasing consumption. these are the three strategic prongs. in terms of economic policies, the agenda includes a financial sector exchange rate another structural measures that need to be taken over the next 3, 4 years. many of these reform directions and policy objectives have dctually indeed been outline in the government's recent announcements. we are confident in our dialogue with the authorities, we do see a great recognition of the challenge, a clear understanding of the policy areas that need to be addressed, and that the direction the policies need to take. and you have seen it in the various announcements that have come out over the last six months. what is now needed is clear and specific policy measures and

timely and focused implementation. let me sum up again with our key takeaways this morning. outlook in china, we're confident growth around 7.5% this year, maybe slightly higher. but the vulnerabilities are growing along the current growth bars. and while margins are still diminishing, and financial and structural reform must be accelerated to contain the risk and conform the growth model. thank you. >> thank you, markus. [applause] let me start with you, david. you being back from beijing for just a few weeks. do you agree with markus' asse ssment of the short term and medium term prospects of the chinese economy, and specifically do you think what he laid out in terms of what china needs to do for policy reforms are the right ones? do you have anything to add, subtract? >> thank you.

i like the imf report lockard growth of 7.5% this year, no hard landing, but risks building up, i like the report a lot. i basically agree with it. as an opening remark, what i like to do is briefly in the size that i think the risks are quite serious. ae reason -- and then add couple of additional issues to the structural reform agenda. i agree with the issues that markus touched on. i just want to broaden the agenda of the appeared first on the risks, i really like his figure that shows china's private consumption and investment gdp compared to other countries. china really ethics ordinary -- extraordinary. it has high investment, low private event -- consumption. if you invested 50% of jv at this stage, you basically double the capital and stock to six years. during this big investment push, the capital stock have been double. the model continues, it will be

double again in six years. there is already evidence that the investment is dropping, and so i am pretty convinced that if you double the capital stock looking forward to the next six years, there is really not going to be demand to use that capital stock. you will run into some kind of financial or physical problems, and the imf report brings that up. i think that is quite serious. reform agendahe that was touched on. i would add two areas that i also think are important. reforming the household restoration system -- registration system. if you look at china, there has all that's obviously been some urban, rural migration, but it has been limited if you compare to the historical expense of other countries. if you include the migrants, china's urbanization rate right now is about 52%. when south korea was at the same level of her capita income, it had already reached 68%. the system obviously restricts

mobility, and one result is china has a very large rural, urban income does -- difference. by researching the ability of migrants who moved to the cities, you restrict the ability to many view -- many rural people to find and compared it is difficult for people to bring their families, their children, old people. if they did move to cities, that would provide quite a bit of additional demand for social services. the government would have to find these resources for those, so there will be challenges. but if you are thinking about shifting from such an investment-driven model to a more consumption-driven model, i think easing up the system and encouraging more real migration of families from the countryside to the city and able people to -- greater services. china still has a large state enterprise sector that we can argue exactly how big that is.

it takes more than 40% of the investment in recent years, has been in the state-owned sector. ownership, that is a low estimate. state enterprises, they operate in quite a few sectors, but i see them as being especially visible in modern services, like financial services, media, telecom, logistics, airlines -- these are all sectors in which there is a small number of state-owned incumbent. the vetoften report to these -- referred to these as the monopoly sectors. at these firms, there's a lot of profit. economists would call it a rent. they pay very little dividends to the government. the nice thing in the imf report, that statistic that in recent years, centrally-owned %tate enterprises had paid 0.4

of the evidence into the central government budget, so basically you have a system in which protected enterprises earn profit and then they reinvest it , creating a heavy investment by us. if you take more than to the government budget with a simple reform and expanded social services, that would be shifting some resources from investment to consumption. is there areint important institutional features of the chinese system that encourage investment and discourage consumption, and so as we look at transformation in the model, it makes sense to target some of those reform areas. i strongly agree with the report that the financial system, the repressed financial system is an area for reform, but i am also adding the labor market institutions and the state enterprise institutions as important areas for reform. so we look to the new leadership. i look to the new leadership open there will be some relatively bold reforms that are

announced over the next few months to tackle these issues conference of late. >> thank you, david. steve, you are the private sector guru on china, and your views are carefully watched by everybody. you generally send to be more optimistic in terms of china and its ability to undertake reforms. also about the in point of where china ought to go. ar, and like david, i really commend markus and stephen and the team for once again laying out a very of theensive assessment agenda that china faces in trying to deliver on this important and critical growth transformation. the only bone i would really pick with the assessment is

thestly in keeping with billing you just gave me thoma, eswar, as the optimist, i would call of these challenges rather than risks. i think in assessing the prospects for any major economy in the world today, we could point to a broad menu of risks for everything go one of these economies that are equal to if not more severe than the ones that you outlined for china, including the united states, europe, and the new poster child for economic revival -- japan. there is a lot of risk and every single one of these economies today. the one area that i would just pick up on, and i really agree with the point that david made new cal and the sle

reform, but i am a little but on the other side of the issue that you raised with respect to investment and a doubling of the capital stock. markus, you and your team pointed out that this capital stock growth in china, while it theigh and consistent with extraordinarily high investment share, the level of the stock is low, especially looking at capital per worker, which is what economists prefer to look at as the driver of long-term productivity growth. aboutt nearly as worried rapid growth in the capital stocks as many are. i recognize that's lacking a market based system that there are some areas to be very

critical by the way in which that capital is allocated, but i want to see the capital labor ratio continued to rise off of a very low base, and i think that is going to happen in light of the point you made on urbanization. urbanization is a capital- intensive endeavor. there is a lot more urbanization to go. you made the korea point. china is that 52.6% last year on the urban share, probably ahead 1570% over the next 10 to years, and that has got to require a lot more capital. that point i would make is in looking at progress on rebalancing, and i have to give a lot of credit to my friend, nick lardy, who has really written a lots on chinese

rebalancing and developing indicators to gauge the progress of rebalancing. thatew is the last thing tells you the economy is rebalance is to look at the of the big sources of demand, like consumption, investment, and the like. i prefer to look at the building blocks that drive those shares as early warning signs and one of the ones that i and most encourage about, and nick has got this as one of his components of his rebalancing gauge, is the accelerated growth in the services sector. i think it is impressive right now. and you have a chart in there, markus, that shows us the shares through 2012, but if

you look at the growth rates of those shares of the sectors, in the first half of this year, the service sector has grown by chinese data 8.3%, whereas the secondary or manufacturing construction sector has grown 7.6%. so there is a positive gap of about .7%. you have to put that into context him over the last 30 years, it has been the other way around. manufacturing, construction has grown on average for 30 years 2.7 percentage points faster than services. and now it has flip-flopped were service has grown .7% faster. it is a six month, you do not know if it will be sustained, arei like the fact that you beginning to see very early signs of growth momentum shifts servicesertiary

sector, which is less resource intensive, more labor intensive, more environmentally friendly, and allows the economy to grow at a slower rate, and still achieve a lots of labor of china's on thing labor absorption objectives. china has got a lot of challenges, and if you want to push me, i would say risks. we do, too. i don't see us addressing hours challenges and risks nearly as aggressively as i do in china. thank you. >> thank you, stephen. let's turn back to the short- term for a little bit. you talked about how you anticipate growth being 7% to 7.5%. what do you see as a worse scenario for china because the rest of the world gives a great deal about what happens to china, but you see it remains unfavorable.

if these reforms not to put into place, more of a medium-term issue, can you give us a cross -- a prospect of growth slowing, can you respond to that? >> in the near term, we do not see a sharp slowdown. the authorities have the policy levels to respond to contingencies. there are downside risks to the environment that we have seen, demand picking up quite strongly, and could probably be picking up even more. we actually see 7.5% plus for this year. -- you know, short of an outlying calamity that you don't envision, we do not see major slowdowns. >> in the short term, growth is a secure? >> i agree that the authorities have enough fiscal space to keep growth at 7.5% or a little bit higher. to me, the risk build up over the medium-term, growth is going

to be at about that rate, and the question then is -- is there going to be rebalancing that put that on a sustainable path for the long-term? or is it going to be the old growth model for a few more years? and in the risks start building up and you get something unpredictable in the world and you can imagine a rather sharp growth slowdown, but i would not expect that in the near term. >> let's turn back to the medium-term. we talked about china having enough fiscal space to respond in the short-term, but as markus pointed out in his charge, there are lots of problems when he take the overall fiscal accounts into the country, it is not just the central government that looks very benign, but once you , the adding in liabilities local government debt and so on, it start looks at -- it starts looking a lot more bleak. on the fiscal front, do you see major risks continuing to build up and really holding back long- term growth? stephen, would you like to think that? >> i think, enswar, it is really

interesting to look at china's response in terms of fiscal policy to the current slowdown, which i agree with david and markus. you, you have not divulge your position yet, but we were talking earlier, and i will tell this group that you are probably very optimistic on near-term. but there was a slowdown over that if couple of years you look at china's policy response to earlier slowdowns, what a vote a pretty strong fiscal stimulus. and they did not do it. bit, but done a little they are willing to accept slower growth, and they are trying to wean the economy off these major construction spending, and the structure-type packages. the biggest one that they have engaged or indulged and was

the one after the crisis and late 2008 and early 2009. what do you call this fiscal deleveraging, or just a more prudent, cautious, disciplined approach? is a striking contrast of this new leadership relative -- basically the two generations we've seen previously. now, it is early on in the leadership, but they do not want to go back to debt-intensive growth. that is not to say that your first question is the china disaster scenario, if china collapses for reasons that -- or if the environment classes for reasons that we have not figured out, they will go back to another big stimulus, but markus rolled that out, and i agree with markus -- it is highly unlikely.

so there is a lot of focus in dealing with the debt-intensive strain of economic growth, especially for the shadow banking system, the wealth management products, the non- bank institutions that are now under heightened scrutiny by the financial regulators. >> that is a good segue into the next issue i would like to raise. theus, you talked about financial system reform that is needed. i think there is agreement on this panel that's to achieve this allen's growth over the long term, to get the economy onto a more sustainable growth, you need a better financial system. they have been making progress on that dimension. just a few weeks ago, they remove the floor and lending rates. beijing, they announced they are reopening the government bond futures markets. so they seem to be taking steps in the right direction toward

liberalizing global financial markets. do you see significant progress ? and think it is progress, it has been progress. let's not forget that looking today at the financial sector the, it is already totally different that it was five, 10 years ago theodore this private sector activity that is going on is basically free lending rates to pay. we have margins around the public rates. i think a lot of progress has been made. know, weg forward, you clearly see the need to make a decisive break into a totally market-based financial system. for that, we need a number of things. interestiberalized rates. i mention that first, even though i myself always want to say for you to be able to liberalized interest rates and actually they will achieve what you want to achieve, which is a market-based financial system, you need not just a liberalized interest rates, but you also

need into these that are able and willing to compete on a market-based system, which means you need the financial thatraints and discipline andto come from an ability willingness to take risks but also a punishment if i take the wrong kind of risks, which means that investors who make a bad investment decisions because they take too high returns for two risky investments have to be able to go broke and lose money. in an overlyers competitive way have to be resolved out of the market in a transparent and clear way, which means you need deposit insurance on the one hand, but also a resolution framework for those who complete -- to compete to aggressively. current to remove the

moral hazard in the system that basically all deposits and virtually all government investment have been guaranteed, but so far we have not seen failure of fixed interest instrument. there is a perception that virtually everything here is guaranteed. changee things have to for liberalized interest rates to work effectively and not to raise new risks of crisis we have seen in the united states, what liberalizing created in the savings and loans and everywhere else in the world. her liberalizing too early into likely without supportive reforms underground that actually make it work is very risky, hence continued progress to work for liberalization, but that is not the end-all, be-all. they also need true reforms in the banking system, a true resolution framework, strengthening of the monetary system so that instead of controlled deposit interest rates, we will have a new system, a new policy rate.

it is a whole host of reforms that need to move together. on one bighan focus headline, i look for a consistent, coherent report that lays out to achieve what we need to achieve urgently, which is a truly market-based system. >> you have nicely laid out what economists would like to see, a little mini crisis get back and be managed. crisis that can be managed. the government is trying to understand that there is no our time it of for financial markets. do both of you see this proceeding in the right direction? do you see big risks, and what do you think they should do a front? david. >> there is a lot of talk in beijing about liberalizing the capital accounts fairly dramatically. frankly, i'm kind of surprised, this,k markus alluded to

there are definitely risks moving quickly to liberalized the capital account when other institutional features are not in place. one thing i would introduce into -- i thinkion opening up foreign investment and financial services is related to opening a capital account, but it is actually a different issue. china has rather restricted system in terms of openness to foreign investment and financial services. it is pretty much the most respective -- restrictive of the g20 countries, for example. anding up these nervous trade -- the service and trade strengthens the financial system. is beingncing issue highly debated and china. i would favor opening up financial services. i agree with the point about liberalizing interest rates. china has done a lot, there is room for china to move more quickly on liberalizing interest rates. i would think opening up the capital account would come later in this sequence, but as i said, there seems to be a pretty active debate in china about moving at more quickly on

liberalizing the capital account. >> stephen. >> can i comment on that? it is more of a question. maybe -- you are not just a liveator, you are a real, expert. may i ask you a question, if i might? [laughter] you know, modern china got going late 1970's, early 1980's with reforms in opening up deng xiaoping, aggressive reforms --lemented by former premier reforms were the driver, aggressive risks, reforms that took on these huge risks, both internal and external clinical risks. do you think china has forgotten what they got out of reforms?

have they grown so rapidly, have they gotten so strong, has the power structure coalesced around state-owned enterprises and the sort of local government fiefdoms where it is really hard for them to go back and replicate the intensity of early that we saw in the post dengthis xiaoping era. only question permitted for me at the moderator. that is a very good question. a very deep understanding of the history of reforms in china. my sense is that china is now a much more complex economy and the low hanging fruit in terms of her reforms have been plucked already. china is now the stage where there is a sort in innovative

ability for firms to keep moving forward, but also each of these reforms carry enormous risks. as economist, we can lay out what it ought to be in terms of freely functioning financial markets -- we know that aside this anywhere. for china, given the initial conditions starting with a poor legal form work, a poor judicial framework, the risk on the path to the in point are very significant are having said that, my optimism comes from the fact that the chinese are very effective at using external triggers and also good narrative form. the external triggers have been used in order to sort of shake free the domestic obstacles of reform. having said that, the question is how do you manage to get around the enormous political opposition to reforms because the system, actually the structure works for a well -- very well.

this is him and the chinese have creating clever at these reforms, so if you think an important country having an important cut in the country. it does create the right sort of momentum for domestic reforms. it forces you to think -- what do you need to do domestically in order to have the kind of world power? you need a better mobile account, a better legal framework. that is one attitude. earlier this year, they announced a plan to reduce inequality. usually when he government says they want to reduce inequality, that is a very bad idea. what the limited specifics and a plan work let's reform the state-owned enterprises, let's liberalize interest rates, let's undertake some reforms in the labor markets, so these are all the right things to do, but once you say these are going to benefit the masses, i think it is a much more effective way of sort of getting around the

obstacles. the obstacles to reform our very great, but i think they have their hearts in the right place. >> great answer. thank you. >> i will go back to my traditional role. given us a you have very good segue, stephen, to what we should be thinking about. talk about what reforms are needed, and the fact that leaders have talked about in their five-year plan. it does take political will, do you sense that there is political will right now among be senior leadership to get around the reforms? maybe we will start with you, markus. in other words, they know what they need to do -- are they prepared to do pay the price and take the risk of doing it? >> i think we will see over the next six months. [laughter] ?ho knows th >> i think there is political rhetoric, and it is stronger in addressing this issue than we

have seen in a long time come out of the senior leadership. i mean, it started literally the jinping first beingsed the media after appointed general secretary of the party. but rhetoric and actions are two different things. so there is this very important central committee meeting in putmber that will really down some important markers in judging whether there is teeth to the rhetoric, teeth to the types of reforms that you really did an excellent job of describing, enswar. some people, and there have been some commentary pieces written recently about the significance

third plan of the central committee in november, comparing it with the third plan 11th central committee meeting back in 1978, which was tolatform for deng xiaoping really put down what in retrospect were historic markers for the transformation. so we will see. answer is right -- we will know i think in a surprisingly short period of time as to whether or not this is rhetoric or a plan for action. >> let me push you a little bit on this, steve, because you have -- if you are asked to identify the steve roach action plan for china, what could the key

elements be that you would like to see in there? isservices is one because it a critical building block of the consumer transformation that i alluded to earlier. hasnization, as david alluded to, is also important because of the reason you mentioned -- huge income leverage provided you can couple organization -- urbanization with service-led his job creation. the third one is one we have not really talked about today, but it is really making the social segment in china far more robust. the focus and thus far has been on the number of people enrolled in the retirement plans nationally or locally, or the number of people covered by the -as a universal -- the quasi

universal health care plan, but the benefit levels are low. these plans are in massive need of an injection of funds. if you don't do that, you can generate a lot of labor income, but it will not be spent. it will be saved. and the point that markus made ban savinging ur rate in the absence of a robust, secure social safety net. so this is urbanization safety nets. beijing, you work very closely with the senior chinese leadership. what is your source of whether they have the stomach for reforms? and what might we hope to see in november? >> i think expectations are so high that they will definitely come out with some reform plan in the fall that will touch on

probably all of the elements that we have raised. i think they will announce something that sounds pretty very well not be a lot of detail in some key areas. i agree with colleagues appear that it will probably be six- month or longer until we know how very serious they are. the one way to look at this is they are going to announce something, and it is going to seriously pursue reform and most of these areas that we are talking about. this being china, they are probably not going to do anything radical, and you yourself, enswar, talked about some of the risks involved in reform are such that you have to think hard about whether you want to encourage them to do a lot of radical things quickly. so they are going to have radical,they won't be they will roll out gradually, we will definitely see rebalancing. to me, the interesting question will be whether this is fast enough reform to really put them on a sustainable path, or whether or not some external

will derail them. i do not see how anyone can confidently redact that because there are summary and variables -- so many in variables involved. it will be fascinating to watch whether you will get a gradual rebalancing that succeeds or whether you end up with some kind of -- more of a dislocation. >> external triggers, one of the things being discussed is the bilateral investment treaty. what do you see as the process of becoming a reality? do think that will help shake free some of the political structures in china that could help move along reforms? >> that is a good question. if you followed our economic dialogue between the u.s. and china one of the important outcomes was an agreement to move ahead seriously to try to negotiate a bilateral investment treaty between china and the u.s. this is very significant because it would require from the chinese side liberalizing a lot of sectors toward foreign

investments that are not currently liberalize peered i mentioned financial services, for example. many of the other sectors i mentioned would have to be opened up to direct foreign investment much more so than they are now. so this could become kind of an important anchor for one aspect of china's reform. china, in turn, feels like it s investment is not always welcome in the united states or to so it is asking if it will create a more secure environment for growing chinese investment into the united states. so it is very much potential for a win-win agreement. it will be difficult to negotiate the details. i predict it will take at least a year, but to me that it's going to be one of the signals about whether the leadership is really sick -- serious about reform, if they can bring that quite that would be important both as a signal in a real structural reform. >> david, how likely is that to get through the u.s. congress?

>> you probably can answer that better than me. i have been living in beijing for the last nine years. a good bilateral investment treaty would create benefits for both sides. u.s. business interests would definitely be behind. could you agree with that? >> when it comes to getting something through the u.s. know,ss, which is, you fearful of anything associated with the chinese, this will be very difficult. i agree with the significance and the importance of pushing ahead on a bilateral investment treaty. it would be absolutely phenomenal. , all thek at this handwringing over this smith deal involving pigs, and the hastors claiming that this

cut right to the heart of the food security in the united thees, and they accuse chinese company of offloading 15,000 pigs down the river in shanghai, when they have no pick farms anywhere near that river. it is absurd. >> so you think that deal is not going to go through? >> no, they send some signals that it looks like, fingers crossed, it will go through. talk.y from such since we are on the subject of washington, i want to get your on something that is of considerable interest in washington. the chinese currency regime. they widened the band of flex ability around it, and there seems to be huge pressures. do you see this as a big priority? one his a great deal about

chinese to move forward -- is that still a priority? >> absolutely. while the discussion about the level of exchange rate has obviously diminished, china has appreciated by about 40% since it started opening up the system in 2005. even at this year, in the face of a slowing economy, and of a risky's assist -- of a risky system, they have appreciated. it is not the issue of the level, but clearly the exchange will be tightly managed, even , youh there is a band consistently see the exchange rate. it is very tightly managed. if you want to truly liberalize the capital account, if you want to truly open up the financial sector, you need a more flexible exchange ratewhich means the exe can go either way. but less intervention,

mismanagement, gradually opening the ban, but within the band, managing flexibly how you set the reference rate every morning. that will give you more leeway to the exchange rate to act as a shock absorber if you have some flow of capital in and out. the exchange rate is an important tool both to help manage the bands of payments, absorb shocks that come externally, but also to function with greater market orientation and markets domestically. i think a flexible exchange rate is a key priority in the agenda. with distance from the u.s. treasury, a different view on that. do you think this is still a therity you have held in u.s., and whether china should take care of its own policies? am china's own interests, as marcus has laid out, the you

think it is a priority? >> the point on the question, the buffer, is very important. increasingmmits to market based transformations, having a flexible currency is an important part of the adjustment mechanism for any market-based economy. they have managed it a good deal higher over the last eight years. basedanagement and market- flexibility are two different things. they are going in the right direction. there is no doubt in my mind that is where they are headed. a number of pieces have to fall into place before they get there. >> both of you talked about urbanization as something that the government is keen on and is promoting. given what you said about the

extent of the social safety net -- and david, you talked about issues with the labor market -- juicy urbanization as an end in itself? given the support systems and so itth, if urbanization -- is essentially a number love for other reforms they need to do? -- an umbrellaft for other reforms they need to do? >> i already mentioned other reforms. some of the issues they mention bring up the larger issue of fiscal reform in china. local governments often feel they do not have the resources to provide the resources they are supposed to provide. sales, whichland is an unsustainable pattern of revenue rates. enter governmental fiscal reform intergovernmental fiscal

reform, reform in china of the pension system and some of the -- it is reform that would tend to make economy more efficient and would have the effect of leading to more urbanization. i see it as the result of people 's choices and not a directed effort. rightis a debate in china now about the pattern of urbanization in the future. some voices would like to create whole large new cities in the center of the country. most farmers now live in the center of the country. you can imagine building a lot of cities in the center takes a lot of capital investment. that would be a channel for investment over the next few years. the risk is that they will not be efficient platforms of production. i would predict we would see a lot of people move to the existing coastal cities, where productivity is very high. chinese cities are small in many

ways. there is room for more people to move to the city. there will be need for more investment, but it should be a less intensive path. >> someone who has lived in china as long as you have -- you want more people in those big cities? you did not have to worry. you had a car. >> in my nine years, the traffic time increased fourfold for me, the driving and commuting time, basically, in nine years. pattern ofirrational urbanization that is encouraging the use of automobiles, under investing in public transportation. beijing is a really flat city. there is potential to build up more dense cities in china. there will be a lot of policies involved, but there is room for a lot more people to move to coastal cities in china. >> the urban share of the chinese population in 1980 was

slightly less than 20%. 2012, it was 52.6. by 2030.ded up to 70% in 50 years, this is the most rheumatic urbanization we have seen. this is a transitional shift from a peasant society to, hopefully, a more modern, higher-productivity economy. thatrticle for report marcus and the team put out, they stressed that the critical transition between extensive and intensive growth in china, with the latter being an economy that focuses increasingly on an increase in total factor productivity. the transitions we are talking about -- this is a factor accumulation story. it is not a sustainable story.

the agenda shifts dramatically. with well more than half the urbanization behind china, the focus really needs to be on this intensive productivity story, as you guys describe very well in this report. >> another thanks to our panelist. i am sure there are burning questions among those of you in the audience. we have time for a few questions. identify yourself and no commentary, please. short and to the point questions. if you can, address them to a particular panelist. likes jennifer lee, with hong kong phoenix tv. i question is about global capital flow. during the g 20, the chinese emphasized that the fed should be cautious if they are going to withdraw the qe. economy andn the

other emerging countries. do you still see there is going to be any impact? seen innd is, we have emerging countries -- will it be the stimulus situation here? -- qe was an accident waiting to happen for the u.s. and for global markets. we are seeing the accident right now. is, itd news for china is not getting hit, in large part because it is running a current account surplus. the current account developing markets in the developing world -- indonesia, brazil, turkey, south africa -- with big deficits, are getting really hit hard. these are countries that were lax in addressing their own

structural problems during these five years of free money, yield-seeking capital flows sparked by qe. with the yield arbitrage swinging back to the united states, those flows are leaving quickly. for countries that need external funding, and china is not one, they are in serious trouble. this is a big destabilizing event for current account developing economies that have been inattentive to their reform agendas. >> good morning. my name is arnold seidman -- z ietman. i share my father-in-law in wenzhou complain about the cost of food in the market, and

finding a better place to live, and so on. i wonder about the impact of the slowdown on a population in china that has been accustomed to 30 years of relative high growth without much sacrifice, especially now that the talk of reform seems to be accompanied by an increased crackdown on dissent and criticism. >> if you look at the pattern of growth of the past, which was relying mainly on capital accumulation, it was holding back wages, to be frank. a of course provided tremendous shift of rural populations to more productively employed places. but if you look at the actual average wage growth and income growth, it has been very small compared to the amount of resources that have to be spent on investment and other things.

would think part of the strategy was to improve the life of the population by shifting more of the fruits of growth toward household increases, toward consumption. that could come from a variety of forms -- raising wages, raising social benefits, allowing a transition further from under remunerated activities to services in the cities, opening the doors for small-scale service expansion. we have seen the strategy of transformation benefiting income inequality innd incomes at all levels, much more than the current growth pattern. >> yes, albert? >> i am albert connolly, from

the u.s. treasury department. i wanted to follow up on what marcus was talking about. i ask a question about your outlier diagram. it shows china as an outlier in its share of investment in gdp, but the cluster of countries are not stellar performers. you are really criticizing china for being outside this club of failure. if you look -- i read your articles before the summer. it has a figure in which the leading comment is, perhaps cap -- per capita household income declining for the last decade. surely, that is a typo. the share has declined, but incomes are growing at eight percent to 10% in real terms. or needs to be a voice of sober reevaluation on the report in major conclusions

that china is facing these volatilities. banketa growth -- non- growth of 60% -- the general economy grew 65% over those five years, so the share declined. this seems to be biased in the report, trying to look for an economy where the government may need to optimize markets pretty heavily. it is doing very well. it is being compared to pretty poor performers. >> i think that goes partly back to, i think what steve also mentioned, an issue about labels. it is obvious that capital work is still low. i think what we are talking about is the speediness of capital capacity, and you invest half of your income, when you grow your financial sector by 60% of gdp over four years, when

of have periods of growth 60%, 80%, even a hundred percent in some sectors, with supervision that is at best trying to catch up. i think you have to look a little bit at your speedometer and say, wait a moment. maybe we need to look again at the risks. we cannot speak about a real estate sector of china. it does not exist. it is hugely diverse, an economy that is four times as large as europe. there is vast under service of real estate. there is excess supply and excess demand. you look at the speed of growth. you just have to say, in general, these are signals that point to increasing risk of a calamity. notyou need to be careful

to over extend yourself. >> leah lu from "voice of america." there have been a series of barbary issues. yesterdayan report said these foreign companies are being unfairly targeted by government probes. i wonder if the panelists can talk about the possible intentions of the chinese government about doing so? of --is not really part >> it is not really part of the economic focus of this discussion. i am the former general counsel of the senate banking committee, so i wanted to talk about that issue that came up here for -- and explain whether

this is a realistic concern. we run around $3 trillion worth of trade deficits with china. about $3.4ve trillion of foreign currency reserves. much of the investment coming into the united states from china is from state owned, party-controlled enterprises. that is why some in the congress have a concern, the ghost traditionally we have not wanted our own government to have chunks in the economy. is their concern with the fact that the chinese now have so of foreign way currency reserves? that could be a good chunk in our economy over time. >> could you comment on this, given your background?

>> my view is that those concerns are a foil for our inability to accept our own responsibility for an unprecedented shortfall of national savings, and the need import surplus savings from abroad to fund the and then our economy, requisite massive to -- massive account deficits to attract the foreign capital. 2012, america ran trade deficits with 102 countries in the world. china was the largest. that is at least 101 other countries. a massive, multilateral problem, because we do not save. china's bilateral deficit with the united states is large, but

by supplyly distorted chain dynamics. it puts china in the role as being an assembler of a lot of inputs from other countries in asia and elsewhere of final goods that are shipped out. chinesent on recycling foreign exchange back into dollar-based assets -- basically, the implication of is that we would like china to buy our treasuries because we do not want to control our deficit, but stay away from our companies. i do not know that you can have it both ways. if we do not like chinese accumulation of assets whether , we need toancial act more responsibly as a nation.

we need to address our deficits in the federal sector rather than the household sector. >> the production of household assets is rather minor. and shipments to china are rather minor. a treaty would enable significantly more two-way .nvestment whether we can negotiate that is an important investment. china could open up other sectors to direct foreign investment that is currently .estricted the united states has a careful

system in place that looks at national strategic issues involved in any investment. our bilateral investment treaty -- >> hold on. >> we use a small number of transactions every year, as steve knows. that essentially is not really touched, basically. they can look at the national security implications of an investment, including from countries with which the united states has signed a bilateral investment treaty. >> you should know that the chinese company asked them to review that transaction. they did not go out and grab the transaction to review it. the chinese country asked them to review the transaction. >> is that bad? thatam just pointing out they did not seize it and look at it. in writing the

statute in 1998. i followed that very closely. >> we do not have much time left. that may take four or five questions, and then the panelists will have a chance to respond selectively. university,ge mason probably a fundamental question concerning the climate change, andon emissions, correlation between gdp and carbon emissions, is there hope for a zero growth model? >> david mentioned earlier, we know there is a serious imbalance in local and central government budgets to china. is there something from beijing to address this imbalance? if we do not see any changes to it, will you be more worried

debt the local government sustainability? thank you. >> i taught environmental science for a couple of years a decade ago, and i want to add to the question that was asked before. there is an increasingly important water shortage. china,oss northern because of the shrieking of the himalayan glaciers, the yellow river has a water shortage for part of the year. the aquifers are being depleted in the north. the gobi desert is spreading. i wonder what will be the longer-term impact of lack of agricultural products and the need for china to be more dependent for its food on other

countries? >> matthew pearce from four seasons hotels. to build on hers and his , how can i phrase this? is the sustaining committee's thinking? resumable he, they have an economic strategy, but we see the crackdown. they are totally in disagreement with your thought of liberalization. we see state into price growing. aside from free trade zones being developed in shanghai, i do not see an agreement on your report. thinking ony strategy? >> we will take one last question. >> i have a question. so afraidhy pboc is rnb&b depreciation, --

depreciation, not appreciation. boc came out and defended pushing it back up. why are they so afraid of depreciation? >> you have a minute each. a zero growth model. i guess the europeans are doing that effectively, but i do not think that is what you have in mind. national resources. a question about what the central committee is thinking. localpreciation and government finances. perhaps we will go in reverse order. grab the natural resource related questions. it came out a little bit in the discussion, but the kind of rebalancing we have all talked about -- this should be a less national resource intensive

path. it should help china with air pollution, for example, with carbon emissions. we will see carbon emissions peak and decline in china. will it be by 2020, or 2030? the path we are talking about is essentially a resource saving path, including for water. urban living is less water intensive than rural living, the customer a living is mostly based on agriculture. you have raised an interesting challenge and question for china. an economist would say it is rational for china to import significantly more food, if china could still feel food self-sufficient and import significantly more food than it is now will stop that would help china deal with its water situation. the southern part of china is not so water scarce. the northern part of china is very water scarce.

rationally, millions of people should move from the north to the south. if you free up the system, that will be possible. war partial reform that allows people to move to a nearby city is not going to address that kind of water issue. >> i agree with everything david said. a broad range of topics. the only thing i would add on water is, do not forget about the south-north water transfer project. they are moving water up north, too. the point i would like to end on is the point i begin with. -- began with. it is more of a rhetorical question. why is it we in the united states continued to view china through the lens of risks and catastrophes, threats, and things that are about to go wrong? book, chang wrote this

come"ing crash in china about 15 years ago. hiss still out there with website, saying it is going to come any day now. us in the about united states that continues to see china as the threat that we do? what is it about us that uses that perceived threat as a foil to prevent us from doing a lot of heavy lifting in our own bilateral agenda with china? what is it about us that uses china as the lightning rod to from thettention congressional and policy agenda every couple of years that there

is an election? i do not have an answer to that. i think it is still unimportant important- still an question. haved environment, we tremendous growth for green growth. not bridges to nowhere, but maybe parks and other things, moving a factory from the inside of the city to outside, somewhere else. judgment is coming under control . the unchecked growth of liabilities and risks their are areg managed -- risks there being managed and performing.

the whole system of government relations and government financing is complex and will take years to a cobblers. i do not see -- years to accomplish. i think at some point they would like the exchange rate to depreciate, which would help investors with two way bets. i think the issue is very structural still in balance toward appreciation. that creates that surplus. to close, i would say there have by steve.point made we should not talk about risks, but about challenges, more about challenges. where do we come down in the end? are we optimists? are we bowls? are we bears. -- bears? at the fund, we like to say that we are cautiously optimistic that china will find a way through this.

has, over the past three years, at many times found a way to overcome seemingly insurmountable challenges. that makes it reasonable, in our view, to give them the benefit of doubt. optimistic,ously because there is a lot of uncertainty out there, how the global economy will evolve, how policies in china will evolve. or is, frankly, a lot of uncertainty about what is happening. there is still a degree of opacity about developments in china that make it simply impossible to be sure these problems and challenges will be mastered. in the end, both the authorities need toiders we will watch carefully. rather than being bears or bowls -- or bulls, we will be china watchers. with that, i would like to thank you again for having us here. >> thank you, markus.

i would like to thank our distinguished panel, to steve and david for their deep insights. thank you for being an attentive audience, and for your probing questions. thank you for coming. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> president barack the chinese president discussed topics such as syria, north korea, and cybersecurity in a one-on-one meeting on the sideline of the g-20 summit, closing today. as the meeting started, president obama said the countries will continue to have disagreements, at the tensions can be managed. china and the u.s. announced they are moving forward with efforts to phase out hydrofluorocarbons, greenhouse gases blamed for global warming. president obama had a news conference at the closing of the g-20, wearing which he announced he will be addressing the nation on syria tuesday night from the white house, saying "i will make he best case i can." the senate foreign relations committee approving the resolution of military authority for a syrian strike.

john on that committee. -- john mccain, on that committee, also held two town hall meetings. here is a look at one. >> i have always been a loyal supporter of you. i have always been a loyal supporter of you. is, right now, no one is denying their are a lot of atrocities in committed in syria, on the rebel side or on the other side as well. the point is, there is another good option. the good option right now is to take saudi arabia and force them supporting the two sides in syria. and you could do it. you can do it, by diplomacy.

and negotiation. afford -- we cannot afford to shed more syrian blood. personally speaking, i have a cousin who is 18 years old thomas who was killed 10 days , andy the so-called rebels al qaeda. and they are not syrian. they are coming to syria from all over the world. you cannot afford to do that. we cannot afford to turn a serious into another iraq and afghanistan. i beg you. my family is there. the majority of the syrian people want to save their country. you need to also listen to the majority of the american people, who do not want you to go there. [applause] takeis not an issue we can so lightly, senator mccain. enough is enough. we do not want another engagement in the middle east. we do not want al qaeda to take

over. whether you like bashar al-assad or not -- i am not a fan either. but at least he has a secular government going on over there. it is secular, senator mccain. we are the minority over there. christians, who are unfortunately, by you and so many in the senate, experiencing collateral damage. i refuse to believe that. i refuse to that. family's name in the bible. from the days of humanity, we were there. we refuse to be forced to leave and flee, and be considered collateral damage. [applause] >> thank you. thank you very much. thank you for your passionate plea. thank you for your very compelling and emotional statement. is that i too you

have been to syria. i know the people who are fighting there. i met them. i know them. i know who they are. i know serial well enough to know it is a moderate nation. it is not a nation that will embrace these foreign fighters. issay that bosher al-assad anything but a merciless butcher, we have strong disagreement. [applause] his phoenix town hall after the tucson townhome. he tweeted another spirited town hall on syria. shirts read, assad must go. u.s. employers added 169,000 jobs in august. that dropped the unemployment rate to 7.3%, the lowest in five years. the jobless rate fell mainly because more americans stopped looking for work or were no longer counted as unemployed.

the proportion of americans looking for work fell to its lowest level in 35 years. house speaker john boehner called it another mediocre jobs report. "the sooner president obama starts working with both parties -- some reaction on twitter. john lewis, congressman from georgia, says the jobs report this morning is a step in the right direction, but it could be better if congress would work together. kevin mccarthy, the republican whip -- the new un ambassador rice,

samantha powers, will speak on syria from the center for american progress. she talks about president obama's plans for chemical strikes in response for chemical attacks on civilians in august, killing more than 14 -- 1400 people. the full senate is expected to debate the resolution on syria next week, and the house is developing its own approach. we talked to a reporter about the diplomatic options available. we will show you as much of this as we can and tell e-house dabbles in for a brief session at noon eastern. >> joining us from new york city yoon.gwon

>> it looks like syria was not mentioned in the g-20 communiqué. the german counselor says there was no agreement on syria. the prime minister of turkey was saying that leaders agree that some sort of operation is needed to respond to the regime's chemical weapons use, which is what turkey has been claiming. as for president obama's performance, it is unclear. he has not met with putin. he canceled the summit weeks ago . it looks like there has not been as much diplomatic rugrats as one would hope, which is what many u.n. diplomats were hoping would take lice. host: what about in the u.n.? are there any efforts going on

there diplomatically? in the security council, the words used to describe this have been stalemate, deadlock, paralysis. to be crude, there has not been much progress. -- the u.s.sterday ambassador to the united nations to the united nations came out with strong words, repeating that russia is holding the council hostage, which makes the usc no viable way forward on reaching agreement, which to act the u.s. is going without security council approval. does that mean, diplomatically? diplomatically, it means there needs to be some sort of agreement. should be a diplomatic solution to creating a u.s. strike. that would have to be done on the leader level. that is what the australian

ambassador said two days ago. there has not been much progress. any sort of discussion for peace talks, a resumption of peace talks from the syrian regime in geneva -- it looks like the prospects for that are challenging. that is exactly what ambassador powers said yesterday. she thinks it will be extremely challenging for the syrian opposition to sit down with the of act regime, in the wake monstrous gas attack near damascus. the president of the security council is not planning to hold a security council meeting on syria until there is some sort of development in congress. host: here is secretary of defense chuck hagel recently talking about diplomatic efforts. i want to get your reaction to what he had to say.

>> there are a number of tracks we are on right now to accomplish what you are talking about. secretary kerry's diplomatic track, which has been ongoing and intense. our reaching out to our allies all over the world. i was in asia last week with 15 defense ministers from all over asia pacific. we were discussing this. they were leaders of countries in that area. our nato allies have been talking through our counterparts from countries all over the world. what the white house and the president are doing. working through institutions. we are still involved in the united nations. those tracks are still being run. host: sangwon yoon? guest: right.

yesterday, the u.s. mission hopes that a series of briefings to explain and they brought in officials from d.c., to explain what the u.s. has cited as how they see that the assad regime was responsible for the attack. the problem is that again, what the u.s. faces is russian opposition to any sort of blaming on the assad regime for being responsible for the chemical attacks. president putin said russia would consider a military strike perhaps against syria if there is security council approval. a foreign minister said there is a chest but verify relationship with the u.s., which i am assuming that russia wants to see more verification of the evidence the u.s. has been

fighting.-- citing. that refers to the inspection team when they ended their on- site surveys in syria about a week ago, 10 days ago. u.n. officials say it will take at least two weeks. the inspection team is under tremendous pressure from the world to get the results out soon. the expectation is going to be about two weeks from wednesday and that is the operating deadline. it is going to be interesting to see how -- what the results of the inspection report will be. who was responsible for the chemical attack? is that going to be enough for russia to verify what the u.s., france, and other nations have

been saying, that assad has been responsible? there has been in france in-- been inference pointing blame at the assad regime. it comes down to the united nations to confirm inferences that have been made. it has been clear that will happen. host: is it significant that the u.s. will be holding its annual meeting by about that time in new york city? guest: sure. if the inspection team meets the operating deadline, that comes about five to six days ahead of the general assembly. president obama is expected to speak september 24 to address the general assembly. i am going back to what i said. any agreement on syria is going to have to take place at a

higher level then on voice at-- than envoys at the u.j. -- u.n. president putin is not scheduled to attend the general assembly. is unclear there will be more progress. depending what the inspection team reports the results are, how is president obama going to address the general assembly? is that going to trigger a series of speeches by other states on the u.s. continuing to plant a u.s. response to the chemical weapons attack in syria? that is going to be the big issue at the general assembly. host: what about in the middle east? is the arab league active at all? where do they stand? guest: we will have to see. secretary kerry will be meeting representatives and perhaps he will make some progress there.

so far the arab league wants to see more of you and involvement. -- of u.hn. involvement. some key influential members of that leak had been saying they are against foreign military intervention in syria. it is difficult to say the u.s. has the support of the arab league. with nato, the secretary-general said the u.s. is planning a limited strike which will not involve or call for a wide participation of nato in an expanded series of operations. as the obama administration works hard to build support of congress, it is unclear they have been successful in doing so yet.

host: as somebody following diplomacy around the syrian issue, is there potential for a diplomatic solution to this issue right now? guest: talking to do but that's and they always hope for -- talking to diplomats and they are always hoping for a diplomatic solution. the u.n. -- there has not been progress on that front. right now we have to wait and see if president obama is able to get support and approval from congress. that will give -- that will be the key determining factor on the prospects for that. the u.k. does not see a military solution to the syrian turmoil.

it is unclear when there is no progress on geneva and there has not been four months, how do they see the strike adding value to bringing closure to the turmoil? like the general said, we need to see more clarity on what president obama's end game. what the purpose of this is. host: our guest is sangwon yoon from bloomberg news. previously a producer for al jazeera english. also worked for the associated press and is responsible for bloomberg's coverage of news on the korean peninsula and the diplomatic correspondent based in new york. ronald from michigan, a democrat, you are first up. caller: good morning. thank god for c-span.

i do not agree with anything going on right now. i do not believe we need to do anything militarily in syria. is there anything we can do to lessen the steam of the gases and things that are used over there, like sending a solution to wash themselves and to protect themselves when an attack is imminent? things like that. i will wait for your comments. host: sangwon yoon? guest: sure. the u.n. has been marking some traffic milestones.-- tragic milestones. 2fugees from syria reached million.

child refugees and about 4.25 million people inside syria who have been internally displaced. there might have been much progress on the diplomatic front. we have to know the amount of humanitarian work they are doing in syria. the chief was in syria in sa to provide support to some 4500 staff working in syria to help the people suffering from the civil war. the u.s. has the number one donor for humanitarian efforts about $818 million. the u.k. has been number two. about $500 million. diplomats talk about increasing that. this amount is very short to what the u.s. has been appealing for and what they need. hopefully this effort will be of some help. host: and on wednesday was this pretty dramatic photo of a refugee camp in jordan. you can see these are all houses about 130,000 people

are living in this camp in jordan. right below this is a chart showing how people have been displaced from syria. about 2 million syrians have fled the country. 4.25 million are displaced 5000 flee syria every day. one million syrians are registered as refugees. turkey has received about 464,000 people.520,000 to jordan. 111,000 to egypt.720,000 to lebanon. even in iraq, 2000 syrians have fled. 720,000 -- that is a really tiny country. that is like a brand-new city popping up. guest: exactly.friends in

lebanon talk about how it feels like their country has become serious. -- become syria. so many syrians are flooding in. that is a massive number. lebanon alone is struggling. the amount of support to host these people -- the civil war has been going on for two and a half years.it has been going on for quite some time. to house and feed them and to find work for them as the crisis drags on, there is going to have to be some kind of solution to which againse issues. goes back to the point of their needing to be some sort of diplomatic, political resolution to it. we will just have to see. host: mike in arizona on our republican line. caller: how are you? i have a comment or two, then a question and the answer to the my first comment is,

i believe that our president is over his head. as a result, because he doesn't have the strategic capability of president reagan, he has hired inferior people to make him feel more confidence. during the cuban missile crisis, it was to bomb the missile sites in cuba or pull away and let them continue to do it. president kennedy said i do not like those options. so he said, i want a third. that is when mcnamara came up with the blockade. we are concentrating on two options. there is a third. if we think and sit down, there is a third but it takes vision and imagination.

host: what is that third, mike? caller: i am calling ted cruz tomorrow. i think he has the most articulate and strategic mind we have in this country. there is one last comment that is important. we can no longer as we have said be the world policeman. saudi arabia has 25% of the world's oil resources. it is in their area. they should pay for this and willld direct the activity i be discussing with ted cruz

tomorrow. host: any comment for that caller? guest: i am curious as to option number three is. host: he is gone and he is going to share that with senator cruz before he shares that with us. guest: i see. president obama, his election platform was that he was going to get america out of two wars. now the tables have turned slightly. he is pledging a limited military strike. i am not entirely sure what the strategy is that the obama ministration has for the region. it appears he has taken time to respond to syria. the u.s. has been pushing for diplomatic solutions over the past two and half years, trying to achieve some sort of that is at the security council, on syria. russia is blamed for holding the security council hostage. i think there needs to be more decision made from the obama administration and more communication. i think they are trying to do that.

that is why he went to congress. i do not have any further comments. we should wait to see when congress reconvenes next week. host: we have a tweet from james. do they have a role? guest: number one, teaching the it is a loose coalition of opposition groups. it is unclear who they are teaching. we will need to see how effective they are in addressing that. i do not know. i think the syrian people need to see what form of government they would like to see as a resolution to the conflict. assuming that help is appreciated. >> another tweet.

guest: right now, at the u.n., officials are talking about how the most realistic outcome of the end of the civil war is to see the country divided along sectarian lines. the country has so many minorities. difference in the hold they have by city, by neighborhood, what have you -- that would the only viable solution. i think into two states might not be enough. i do not want to speculate. it is true the u.n. is preparing contingency plans to see how the syrianhelp people organize the country along sectarian lines. >> over the past two years, how has this issue been talked about, debated, worked on at the u.n.

guest: there were three vetoes of the security council by .ussia and china there were many discussions. do not think, obviously, there has been much progress. they have not been able to agree on a warning, when it comes to pointing blame at the opposition or the regime. if i may be sensitive, there is a little bit of excitement in the possibility that the gravity of this alleged attack on damascus could provide an impetus, a catalyst toward more progress on the diplomatic front. i think right now we are at the height of it. next week will be critical to see how this unfolds. host: this tweet --

guest: the chinese -- may i am not entirely sure. i think we need more response from beijing to see what is being discussed there among the leadership there. there is a lot of discussions with headquarters between the chinese envoy -- at all of this available www.c-span.org. the house is gaveling in for a brief pro forma session. the speaker pro tempore: senate concurrent resolution 22-113th copping, the house will be in order. the chair lays before the house a communication from the speaker.

the clerk: the speaker's rooms, washington, d.c. september 6, 2013, i hereby appoint the honorable jeff denham to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the chair lays before the house the text of the formal notification sent to members on thursday, september 5, 2013, of the reassembly of the house. the clerk: september 5, 2013, dear colleague, pursuant to section 2 of senate concurrent resolution 22 of the 113th congress, after consultation with the minority leader of the senate and the minority leader of the house of representatives , we hereby notify the members of the senate to reassemble at 12:00 noon on friday, september 6, 2013, and the members of the house of representatives to reassemble at 12:00 noon on friday, september 6, 2013.

signed, sincerely, harry reid -- reid, majority leader of the senate, and john a. boehner, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by our chaplain, father conroy. the chaplain: let us pray. almighty god of the universe, we give you thanks for giving us another day. as the tensions of violence continue to mount, we turn to you, lord god, as our hope and salvation. the darkness of military actions seems to be descending upon us once again. we ask that you might bless all efforts at diplomatic resolution concerning violations of human decency recognized by all nations. renew america in confident faith and deepen our commitment to seek peace as soon as possible. keep our focus on a full

recovery of healthy relationships and leadership in the middle east so that further bloody hemorrhaging might be forestalled. help us to realize it is never too late, nor too early to engage in a dialogue with opponents and that all our efforts should be in search of the way to a stable peace. bless and guide our nation's leaders for we are a people of faith across this country who claim you as sovereign lord over this nation and all the nations of the world. may all that we do this day be for your greater honor and glory, amen. the speaker pro tempore: pursuant to section 4-a of house resolution 322, the journal of the last day's proceedings is approved. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag

of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. under clause 5-g of rule 20, the chair announces to the house that in light of the resignation of the gentleman from alabama, mr. bonner, the whole number of the house is 433. the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives. sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on august 2, 2013, at 3:18 p.m. appointments, advisory committee on student financial assistance. signed, sincerely, karen l. haas. the speaker pro tempore: the chair lays before the house a communication.

the clerk: the honorable the speaker, house of representatives. sir, i cannot express what a tremendous honor it has been to serve the people of louisiana's fifth congressional district, and from the bottom of my heart i am eternally grateful and i thank them for their trust they have placed in me. i write to you today to officially let you know that effective september 27, 2013, i will be resigning as a member of the united states congress. i am honored that governor jindal has given me the opportunity to serve as a member of his cabinet as his secretary of veterans affairs. i am eager to get started and begin reaching out to our state's veterans in order to make sure they know that our state and nation are grateful for their service. i look forward to continue serving the great state that i love and the men and women who have given us so much. signed, sincerely, rodney alexander. the speaker pro tempore: the chair lays before the house a communication.

the clerk: the honorable the speaker, house of representatives. sir, this is to notify you formally pursuant to rule 8 of the rules of the house of representatives that i have been served with a third-party subpoena issued by the hamilton county municipal court, hammel ton county, ohio, for documents and testimony in a criminal case. after consultation with the office of general counsel, i have determined that compliance with the subpoena is consistent with the precedents and privileges of the house. signed, sincerely, theresa lewis, constituent service liaison. the speaker pro tempore: pursuant to section 4-b of the house resolu and>> as long as that house senate return on monday. a bill on theed

senate floor. leadership is working out their response in the house. also, keeping the government funded at the end of this month and raising the government are a wing limit. live coverage on c-span. next, we are taking you to the united nations. ony are holding a briefing syria. discussing this live on c-span. >> what we have raised so far is about 40% of the total. we have already nearly reached that $6 billion figure, so our concern is not just about raising the money for syria, it is also about raising the money sudan, southemen, sudan, afghanistan, and elsewhere, and that is why i and

pals have been going around and talking to our members to try to get them to think in different ways about how to -- how we can raise this money, because the need is so urgent. let's try to give everyone a chance. >> thank you, ms. amos. my question is, my name is celia -- french]g in my question is about the flow of refugees from lebanon. --s morning, the minister expressed his disappointment of refugee aid and warns of a bigger crisis. can you elaborate on that, tell us more --

hello, it is working? how much do we need to increase the financial support, the aid support -- do you hear me? can you hear me? >> yes, i am hearing you. >> how much do we need more conferencethe geneva and another conference, because the pledges are not there. thank you. all, it is not accurate to say that the pledges that not come through from the kuwait conference. at the kuwait, we had $1.5 billion that was pledged. thatu remove the amount the united arab emirates

overed, which was just $300 million, and they said very clearly this money that they would put towards the response, but not through the multilateral , not to us as the u.n., and what they have done you may have seen it is to fund the refugee .amp in jordan if you exclude that, and also if millionude the $183 ngo's saidortia of they would seek to raise, and they have raised about 1/3 of that money, and they're going to seek to raise the rest, the amount that is still outstanding from kuwait are extremely small. so i think it is very

important to thank the donors because they have come with contributions that they promised. lebanon, there are two elements to the appeal from lebanon. one is an appeal for funds for the government of lebanon itself is making, which we are including in our appeal document, and the other is the cr and ourich is unh partner organizations for working with the refugee communities and the host communities in lebanon. i will ask robert watkins to say little bit more about how much money we have raised in relation to that. on the issue of the flow of red shoes into lebanon, -- of refugees into lebanon, i have a meeting with prime minister today. he expressed concern that one in every five people in lebanon,

20% of the population, is now from syria, and that this was socialan impact on the services in the country, health and education. on the economy of the country, and there is an exercise which is currently being done to look ofthe impact on the economy the syria crisis here in lebanon. he also expressed concern that the number of refugees could continue to rise, and that his national support was not there. i was reminded -- i reminded prime minister that myself, others, heads of u.n. agencies, have been strong advocates for international support or lebanon and will continue to do so. i will ask robert watkins to

talk more about these figures. >> yes, thank you. indeed, the amount of contributions we have received for the appeals for lebanon have been very generous, but unfortunately, they do not cover the total needs that we have been seeking. oneeceived about 38% of the point 2 billion dollars which was requested for the entirety of this year. a quarter ofemains this year, and we are optimistic that we will be getting more, but the problems that we confront is that the number of refugees continues to go up. more than 725,000 right now. the numbers continue to rise. larger wave of refugees coming from syria as a result of the threats of strikes fortunately have not so far been realized. there has not been any major increases in the refugee flows into lebanon as result of his threats so far, and we are not

out of the woods yet. as was said, we have to be looking beyond not only the numbers as well as the expected inflow, and we have been projecting the amount to go up to one million by the end of the year. we have to be looking at the enormous burden that this is put on the lebanese economy, and for that reason, we are trying to diversify the kind of assistance we are bringing, not only to be helping refugees themselves, but the larger lebanese population who have been carrying a very heavy burden for the last 2 1/2 years. that is our strategy for the coming months, and we expect within the next month we will have a new development -- oriented strategy to help lebanon. thank you. thank you, mr.nd watkins. i have a follow-up on the question regarding the situation

in lebanon. would you please elaborate more about the numbers, the figures ,f the refugees in the country and what is your estimate for the unregistered syrian refugees nowadays in lebanon, and what are you trying to do in order to support lebanon? would you please articulate more what is your plan for the upcoming international conference here in new york and mrin this regard. i also have a question regarding -- a person was able to visit aden area. could you give us some update about the situation in that specific area that there are a

lot of allegations about the use of chemical weapons in that area. where you are to provide some medical assistance to the hospital there, what did you do in that area? thank you so much. i didhe question of -- not go there. with respect to the allegations of the use of chemical weapons, these are allegations that have part to the team, the chemical inspectors, whom physically -- on the tried humanitarian side to get into certain areas close to damascus over the last two months, and we have not managed to do so.

i will ask mr. watkins to address your follow-up on lebanon. as i mentioned the actual numbers of refugees that are refusing to assist -- receiving assistance now is 726,000, which includes 104,000 which is not been formally were registered, but which have saved assistance. we expect that number to go up to one million by the end of the year, if not exceeding that. as you probably know, inside lebanon there are many other syrians in the country and have been in the country for many years and even before the crisis in syria, who had been playing a major part in the lebanese economy as migrant workers. the government estimates there 1.5ore than 1.2 million to million syrians, including refugees, and on top of that we have more than 250,000 fiji's coming in from palestine since the 1948 conflict. as you can see, the number of

refugees and migrant workers from outside of lebanon is an arrest and is having a huge isact -- is a norm is and having a huge impact. this is why we are having this assistance package coming together, it would have assistance and health, water sanitation, and infrastructure sectors of the economy. >> thank you. if there is a military strike in expect how do you that would expect the humanitarian situation? how would affect the humanitarian aid delivery, and what are your staff doing to prepare for that? we continue to update and look at our contingency planning. we always have contingency plans on the basis that the numbers

might go up on -- unexpectedly. we of course have to make sure that we think about the safety and security of our own staff. we have a commitment to continue our humanitarian operation. we have challenges in doing that in any event because of the security situation that we face syria,ground, inside of but i say, and the conversation i have had with u.n. staff and with the staff of our partners, there is a serious commitment to continuing with our operations. and that is the commitment that we have made. please remember that a majority of our stop operating inside -- of hours that operating inside

syria are syrians themselves, so they want to continue to work for the good of syrians and to improve the situation of syrians on the ground. but at the same time, they are also mindful of the impact that any possible military action might have on themselves and their families. re, thanks a lot. on behalf of the u.n. free coalition for action, thanks for doing this over there. i want to ask about the reports that the u.s. state department confirmed of threats of humanitarian groups near aleppo, and threats they were told by organization to leave or face death. i wanted to know on that incident, which i tried to get -- it would seem that it is strange to talk to the state department -- but in other areas that are controlled mother described by extremist groups,

what is the status of humanitarian access and which groups are there? thank you. >> we have not managed to get town, but yesterday when i was in damascus, in my on, i was informed that we now may be able to get into the town, which would be very good news indeed. last few weekse and months faced threats to humanitarian work from various sources. you will know a number of volunteers from the syrian -- have been killed, and also that we have had u.n. staff killed, and staff have also been kidnapped.

we take all of those threats extremely seriously. this particular threat that you mentioned is not one that i have been made aware of, that we have had threats against our staff ofm different groups, some it posted on social media. >> how many you and staff have been killed -- how many u.n. staff have been killed? >> 11. >> thank you for the briefing. theyou please explain to us psychological impact that the alleged chemical weapons attack has had on the syrian population and also on humanitarian workers who are trying to get their work done. well, i can only speak from what i have been told from the

staff that i have spoken to. people feel very uncertain. people i havee spoken to, they continue to express concerns to me that the international community has abandoned them and that they actions, thatsee they would like to see the international community come together and agree on action which would lead to a political solution inside of syria. it is very hard for me to speak about the psychology, but i can fearful,people remain and a lot of people are just fearful because the future remains so uncertain. you have a number of

things on your schedule. do you have time for one or two more questions? there are still a few hands up. >> i've about two minutes, so if i take two questions together? >> two questions together. my question is regarding the influx towards turkey. there were reports today saying that turkish authorities have stopped the refugees from coming to turkey, especially after the panic regarding possible airstrikes on northern serious or parts of syria. that, and whatf is the capacity of accepting more refugees in turkey, especially that this area could be a front for any possible attack? >> and the second question?

when you were here last year, you asked the security council in making the delivery [no audio] what do you want them to do, or has the delivery of aid and your divisions with the syrian government solve to that? >> very quickly, on the refugee situation into turkey, the neighboring countries have continued with their commitment to keep their borders open. i have to say that there have been various phases in this process that the neighboring countries have said to us that they cannot possibly take any more refugees, and yet they have continued to do so. i think we ought ought to be extremely mindful of the impact

of having so many refugees crossing a border has on the social structure of any country. so i am not aware of any to say that turkey they will stop receiving refugees. with respect to the document i put to the security council, but i thought it was to bring thingsr, the different that i had asked the security council to do in a number of my of the last year and put them together in one document, like the protections supportians, and so on, to neighboring countries. there has been a continued discussion within the security council about what to do with that document, and i very much

hope that the security council will have a discussion on these issues around chemical weapons, that it will come back to this humanitarian document that i put to them, it is i think it is very important that we stay focused on the humanitarian impact of this crisis and that discourage council will be able to agree on a set of measures that they can all agree on which would help to facilitate speedier humanitarian response and in neighboring countries. thank you very much. >> thank you both for your briefing. thanks. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> i have a few other items for

announcement, and then we will .ake further questions the secretary-general has spent the day taking art in the g-20 summit and the meeting world leaders. he participated in meetings that focused on growth, jobs, and investment and attended a meeting organized by cameron on the margins of the summit to highlight the need for more funding for aid for the humanitarian crisis in syria. among the leaders, the secretary-general met today, the german chancellor, the french president, the turkish prime minister, and the indonesian president. details on those meetings are available online. he was accompanied by the joint special representative for syria. rahimi also attended meetings. the man spoke to reporters after their meeting. the secretary-general these st.

petersburg on saturday and will be back in new york on the same day. the office for the coordination of humanitarian affairs is concerned about measures and restrictions on the tunnels between egypt and the gaza strip . restrictions have resulted in delays for students and patients seeking medical treatment and shortages of construction at serial script thousands of palestinians are stranded on both sides. oakland sources indicate for the second week you are than 10 tunnels are operational, compared to 50 during previous weeks and an estimated 300 for the imposition of the current measures. the crack down has caused shortages of fuel. the coronation of humanitarians affairs openings for all crossings for the judgment imports and exports and movement of civilians. 's specialary-general envoy for sudan and south sudan welcomes the conclusion this week of the summit between the

president of sudan and the president of south sudan. he commenced a constructive spirit the president displayed thean agreement of transportation of oil, while compromise to find a as soon as possible. the un's refugee agency said today it is increasingly worry about the safety of civilians in central africa republic after staff reported widespread lawlessness earning a trip to the north of the country. last week staff from the agency and from the office for the coordination you ministering affairs travel to a town, 500 kilometers north of the capital. they found seven villages burned to the ground and asserted and eight villages partially burned with villagers hiding in the bush. refugees said people spoke of his apple assaults, losing, arbitrary arrest, and torture by armed men. inalls on the authorities the central african republican and on all groups to protect

civilians and make sure aid agencies can reach people. but a pretty secretary-general spoke at this morning's high forum on the culture of peace, saying all too often we see related and often systemic violations of the principle of the dignity of every person. in syria a tragic civil war has killed more than 100,000 people, of the population. to build a culture of peace we must heed the lessons of these numbers and conditions. moment inis is a history when we need a culture of peace, not just the absence of war, but a fully formed culture he so we can pull together the single human family to meet our challenges. and we have his remarks in our office. that is it for me. any questions? yes. >> thank you. does it work? >can you hear me? >> kind of eerie tried again. mr. --you confirm if

the special envoy brahimi and the secretary-general met with in st.minister -- petersburg? >> i am not aware of that meeting. i will check been, but as far as i know, that is not. you put readouts that there have been on the secretary-general, and i just mentioned mr. brahimi. we mentioned mr. brahimi's presser march. remarks. >> is obviously there are some that are against military strike without the approval of the security council. is it the position of the united nations now that any strike would be legitimate or legal at

this stage? thank you. >> we will have to see what happens. i do not want to speculate on the future. what the secretary-general has made clear, as he has done many times before, is the importance of u n charter and the need to uphold the charter, and he continues to do so. follow up on what valerie amos said, this idea -- did i hear her right that 11 you and staff have been killed? >> yes. >> is there any sense on the breakdown of what parts of the u.n. -- were they all national staff? >> i'm not aware of the nationalities. i believe the majority were. >> what were the circumstances of their death? were they killed by armaments? >> these are deaths that occurred in the course of a war. as you you know, many other nationals a serious have also been killed, so this is part and

parcel of what is happening on the ground. and yet another reason why the violence must be ended. >> what i'm asking is we have seen other announcements when staff are killed that there is some way to it in any information, in terms of who did what, where these things happened? >> there is a difficulty in letting some -- in getting some of the details and course of the war such as this one. there have been any number of violent incidents throughout the country. drawn attention to some killings as they occur when we have more precise circumstances. in this case he have an overall tally of casualties in the last years. >> to your knowledge are there u.n. staff that are held, kidnapped by armed rebel groups? >> yes, there have been. tohave drawn your attention some of the cases, for example, the detained peacekeepers who have since been freed.

weo not think at this stage can't comment much on any other detained staff. just to let you know that we are trying to get all our staff released wherever they may be held. that is it? >yes, heather. >> i will follow-up to a question about the secretary- oferal's understanding possible shrinks against syria. i remember 10 years ago the same question was asked to kofi annan, and he said the attack on iraq was illegal. in that context -- ben,was not the spokesman

and that is not quite what he said. that was a completely different circumstance. we do not try to equate dissimilar things. we have no real way of knowing what the future will hold. what we are hoping for, but the secretary-general and mr. raheem me are working for, is an effort to get a peaceful solution. the odds a be difficult from time to time, but it is more urgent than ever than a peaceful solution be found. yes. ofthe reports in darfur government bombing, killing seven people, including four people, and -- four children, and i wonder if the u.n. is aware of this, can you confirm these deaths, and what is the you and doing? u.n. doing? >> we will get you an update on those details. have a good weekend everyone.

>> the state department today ordered nonessential u.s. to formats to leave lebanon due to security concerns, as the administration and congress and a possible military strikes on newhboring syria in a travel warning. the department said it had instructed nonessential staffers and urgedeirut american private citizens to depart lebanon. also today, at the end of the g- 20 summit, president obama had final news conference and announce he would be speaking to the nation tuesday in the white house on a possible strike against syria, and reaction of the congress from the last couple days, including tweets, marsha blackburn, john lewis, the jobs report released today. we will bring you those reactions highway of twitter

day-to-day. the new u.n. ambassador samantha power will speak this afternoon on syria. we will have live coverage from the center for american progress as she talks this afternoon about president obama's plans for strikes on syria in response to the chemical attack in that country. after average beginning this afternoon from the center for american harvest at 2:00 p.m. eastern. -- american progress at 2:00 p.m. eastern. that's me take you to comments of the chief of naval u.s. operations. he said the military is ready for a fast spectrum of operations. the admiral spoke at the american enterprise institute this week. this is about an hour. >> ladies and gentlemen, i am jon kyl. i am the visiting or senior or and it is myaei,

pleasure this morning to help us engage in what is a third in a series of meetings with our chiefs, of our military branches, and today we are especially fortunate that we here.dmiral greener to because of issues that are unfolding, we are fortunate that he can be here with us today. it is my pleasure to introduce him. of naval 30th chief operations for the u.s. navy. a navy of butler and soap in, he has served at every label text level of command, including the command of the uss honolulu, seventh fleet, the u.s. did thee's command, and now as chief of naval operations. following command of the uss us honolulu, he was per presented an award for his visionary

leadership. of other reciprocal awards and honors and commendations. we owe him a debt of gratitude for his distinguished service to our country. our navy could not be in that her hands. ladies and gentlemen, please join me in welcoming admiral greenert. >> thank you, and thank you for your service, taking care of our sailors and rings and servicemen during your time in the congress. thank you for the opportunity to address you today. i am a service chief, and i think i got the best job in the world because i get out and about and get to see our sailors and marines, coast guard men, and they are doing a remarkable job. as we look around the world, it is dynamic and there is a lot of stuff going on. ours the peak will who are

asymmetric advantage. all the technological things in the world are great, but without people, you can forget it. this is the 40th anniversary of the all-volunteer force, and it is a good idea to take a minute and the thankful that we have a generation and have had generations of people willing to step up and serve like that. if i can, let me talk about navy update today, what we are doing out there today, and what i think we will be doing for a while. budget challenges we have out there, and we will talk about the long-term sequestration impacts, how we see it as we plan into the future. pleaseave the slide up, question mark 630,000 people in 100 navy today, 320 active, 10,000 reserve, and 200 thousand civilian. as you can see we have 200 85 chips today, an average of 95 deployed, and this is a 90-day average. today there are more due to

operations as we position around the work, but we are about 10 down. 105,000 deployed about a year ago, and that is a factor of this last year of the budget limitations that we have had. ourpresence remains mandate. we have to be where it matters and we have to be ready when it weters, and i think where are posture today and the things we are prepared to do is a clear example of our ability when required to quickly position ourselves as necessary and offer options to the national command authority. we reassure our allies. we deter aggression and assure that u.s. interests around the world are properly served. we have out one third of our forces, of our ships, excuse me, deployed, and we have early two percent, but we have about 33% in 2001, and we have 25% for that in the 1990. you can see more of your navy is out and about in ratio as we

have gone to the relaxed decade. a little bit about where we are today. go to the next one. if you look at in the eastern the train in, this is where the destroyers are, and the nimitz is down there in the red sea, ir strikeis there group. two destroyers and a cruiser, and let's not forget the truman is in the gulf of homoman. i would give you a factoid here. you might recall a while back we countermeasure ships -- four countermeasure ships to the arabian gulf. we are about to move to more back to the pacific command theater of responsibility. the capability means the sake. we have been able to be involved in the arabian gulf and our capabilities.

my point to you that we are our rebalanceng to the pacific, and that is a small tab of that. this rebalance of the asia- pacific, despite operations are in the world, despite mid east operation, continues. it -- the continuing resolution and the sectors are shaking -- and thus sequestration has slowed down. we are moving forces to the asia-pacific region, the first ever of that, tangible, is the freedom, was continuing her deployment in singapore. there will be more tomorrow joint strike fighters, from the the broad area maritime surveillance, to combat ships, to japan and continuing down to similar for -- to singapore. western pacific or mains our benchmark for capabilities, from anti-submarine warfare to electronic warfare two surface to surface warfare. we bench mark the asia-pacific.

our home port migration to 60% less, 40% east continues as ships are being commissioned and as ships come out of overhaul. it is continuing apace. it is also about intellectual capital. we're continuing our advanced exercises and we are stepping up a little bit our operations with japan, with the republic of korea, with australia, singapore, with asia wants to do more today, and i want to meet starting this weekend and into next week with my counterpart who is the head of equals liberation army navy as we continue our relationship evolving and maturing of that relationship. you probably know today we have three prc ships going to hawaii. there are two headed to south the hospital ship continues operations.

we have operated with them recently. there is an evolution going on, and it is about the intellectual capital and capacity as we look to the asia-pacific region. i took a trip in may to japan, the republic of korea, and singapore and put eyes on what is happening out there, and the message that i got back was we see you are rebalancing in the asia-the city, we see the tangible nature, we see -- we look forward to this continuation as you continue that rebalance. the budget will slow it down. at east operation cause a kitchenette them about the fact is we are considering that -- cause a hitch in it there. i am very comfortable where we are in the undersea domain. i get reports when our folks commanders,ummering i am comfortable we can do what we need to do, what our country needs to do. also the electromagnetic spectrum.

to me that is a big part of our future, the ability to detect, jam, understand it, the ability to maneuver in it, the yellow the to understand what we are putting into the atmosphere, into the electrical magnetic spectrum is a very important and a big part of our future. our arctic roadmap continues. 18 months ago and oceanographer of the navy came and said i think we have got about 15 years before there will be major traffic off in the northern areas. about a year ago, he said, i think we got about a decade before we have operations up there. we are looking hard up there at what is the appropriate amount of presence, what is the appropriate amount of discussion with our allies. i look forward talking about the arctic with the admiral. of thed with the chief russian navy recently, and we have are people getting together and sorting out what is the appropriate for to call and

presents for all of us, including the coast guard, including our northern nato nations as we continue to think of that. how are we going to integrate together as the marine corps comes back to sea, and general amos and i have talked about this quite a bit. our exercise, as we look in concepts for the future, matching up with our ships, and their equipment for the future. those are my big four. and airy that continues to my of attention is sexual a sound -- assault. this is a challenge for my time, for our time, for our time in the military, and make no mistake about we are at this challenge every single day. key areas thatur summarize what we're are after. one is prevention about a climate of dignity and respect for people. we owe it to them. sons,that join, your daughters, anybody that joins our military deserves that, and leadership that will make sure

that this happen. it is about victim response and advocacy, the folks that are victims that they have a special victims council, that it is easy for them to report. there are 10 different ways, and only one of them involves a chain of command. it eliminates the perception of retribution. our folks feel comfortable reporting these offenses. it is about investigation, make sure we have the right investigators. butre not completely there, making good progress there. investigations are taking less and less time to bring to fruition and to completion. it is about having to write senior review of these things and getting on with the process and bringing this to accountability, pursue a graph -- pursue aggressiveness and prosecution, and make sure we published the results of our folks can see we are serious about this and there is a tangible outcome. we will continue to assess this

as we go through the years. if you have heard me before or read what i write, i had four areas, one was sexual assault. the other was suicide, and we are making progress in this regard. the resiliency of the force is showing better, and i get feedback from that. our suicides are down. i wish i could tell you why. i do not know precisely why. i know the force feels more resilient and we talk to them in that regard. gaps at sea, manning at say, we are making measure of progress in that regard. i see that and get the feedback on our people, and we are getting a better handle on our up trouble, particularly individual people. what are their operations, as they go from unit to unit, what is there up tempo of an we call it individual tempo, and we are doing good in that regard. i'm reasonably happy. there are a bunch of challenges. a few words on that. effects of of sequestration, the

continuing resolution, in fiscal year 2013, it pretty much came about as we predicted and as we testify to. the budget reduction was about $11 billion to us to the navy them and we were fortunate enough to reach back to prior year money, which had not been fully obligated and told that forward into 2013, and it helped mitigate that. that is a one-time operation that we were able to the. we had to cancel five ships deployments in 2013. our search opacity, the ability to respond, those ships that are back in the cubs little u.s., usually we have three carrier strike rips into which bond within a week. we have one now, and that will be the story in 2014 as we look ahead. it is a reception in surge. that is where the reductions in them budget manifested themselves. we have done very little of maidens upgrades, and it is in

the area i am concerned about and have to watch closely, our sure readiness. that is where we are taking a lot of reductions, and we have to be careful on that. anwe look into 2014, we have $11 billion reduction in 2013. it is $14 billion in 2014. 10%. as you have read, have exempted manpower, and it is the right thing to do, so that means instead of 10% for appropriation, the appropriations that receive a manpower, getn- 14% reduction. subject to any action and help run the congress as we move ahead, we have to cancel about half of our service ship availabilities, so that is 34. we will cancel a lot of aircraft availabilities, about 190, and master we canceled about 90. we are a backlog that is concerning in that regard, and it will take a long time -- if we restore the budget after 2014

and said, you got full up operations in the maintenance budget, it will take five years to get that backlog in aircraft maintenance down. 80 wide, we will reduce training for those who are not going to deploy. that gets back to that search element that i mentioned before, reduction in that regard. those that are not deploying in 2014, will have less training. we have -- we will have some air wings that will go to tactical hard deck which means they will fly, the pilots will fly, and the aircrews will receive training at a level which is really just above what we are comfortable with for safety of flight, and it gets them to a point when they get ready to deploy they can ramp up relatively quickly. there's nothing magic about it. it is a statistical point, not where i want to be, and i will be pursuing to see if we can get more funding and money to train our polyps -- our pilots above that level.

reprogramming the ability, the ability to get money. our capacity will be about 1/3 as we look into 2014. sequestration, and we assume it will occur, takes a reduction in every single account. our shipbuilding reductions, each we were able to attenuate with prior money in 2013, we'll take a hit in 2014. i would see lots of little in a ships there, float -- forward staging base, which is an important part of our age, and advanced retirement for virginia -- class submarines. -- aght lose a summary submarine procurement in 2014, and if we are not able to move money into the shipbuilding accounts from this account. these will be issues we will be working with the congress as he

move ahead. in aircraft, we will lose about 25 aircraft, and if you say what kind, there is no kind that will 35's, they will all be affected because he does every single account. the hiring freeze will probably continue through that time, and there's a great potential we will have to do a reduction in force in our civilian workforce. we will start on terror immediately in 2014, offering programs for voluntary retirement to help attenuate the need to have to do a reduction in force. thisey to all of this is transfer, being able to transfer money to get reprogramming for us in order to have a balanced approach. and if i were to estimate what i think we need, we need about a billion dollars to get into the operations and maintenance accounts and about a billion dollars to get into the procurement accounts. if we can get that into shipbuilding, a h will be our

number one priority in the navy. if you look beyond 2014, if you look at 2015 to the rest of that eriod, we are looking right now in the building in the pentagon about the services, we are building an alternative look from fiscal year 2015 to fiscal what would this mean, and the strategic choices management review was a snapshot of that. it we took scenarios and said if we looked at it this way, this would be the impact. it helped write the secretary of defense that understanding of what kind of scenarios might be out there. we do not have the scenario, but we have scenarios that we lay in their. i approach to this is going to be a chore we maintain a credible and modern c-based -- sea-based deterrent. that is my -- as long as

command and control features. need to maximize toward presence. navalforward-deployed force, the concept we have in japan and the concept we have been offered to bring ships, our sailors and families, over there. we get great leverage from that. also to forward stage stationships, also. we have to have adequate readiness. the ships that are deployed have to be ready. important int much a smaller budget, with a smaller navy, that that navy which is out and about is absolutely ready. we have to make sure that our asymmetric capabilities continue to be developed. the undersea domain, electronic warfare, and the electromagnetic spectrum, the electromagnetic -- is laser technology, which coming along, and we are to pointing a laser gun this coming summer, if you will him in

summer 2014, i should say, to the arabian gulf, and we're looking to bring all along the electronic rail on. people are our asymmetric advantage. we were reduce force structure in this plan, but we have to do it while preserving the right capacity to at least do a one mco as a lookout into the future, and we will have to got toricher met, but i look at the industrial base and make sure as much as possible they're doing in a deliberate and planned navy. so that is kind of the principles of this lookahead. let me give you our scenario. if you say, ok, what might you look like, and our scenario could be in the future, if you take 2020 and you say what was your plan? some of you may have seen this, the plan was to get to 295 ships, and we said our future, if we had to retire a number

ships, it might be a 250-ship navy in 2020, and able to get 96 ships the point. this is really leveraging forward operating as it is one of my tenets there, using the forward-deployed naval force, bringing along ships take the ship, andombat putting them into the area s of the world. you get a picture like that. there is not a lot of surge here. this is a navy which you can do by 257,, 97, 96 divided you see is forward. the reduction of our manpower associated with such a future where we reduce forces is completely connected to our force structure. what i mean by that is we man equipment.

that is a principal in the navy with regard to manpower, or as some of the other services, they equip their manning. it is about where our people are, and we have it about right. they are about where i want to be on the number of people per unit. it is about retiring units, if you will, if you want to get a lot of savings out there as opposed to reducing people. there is compensation reform which is part and parcel to the future look. we are studying that closely. and say preserving presence is key. that is our mandate, to be where it matters and be ready when it matters. we will continue that rebalance. we will move ships forward. that is a key element as i look into the future. we have to remain ready forward so we can do the things like i showed you in the graphic today, to be able to respond quickly to what the nation needs.

sailors and our civilian workforce, our civilian sailors will be the asymmetric advantage and will be assured that we keep a force which iswhole and not hollow. i look forward to your questions and thank you very much. [applause] why don't you join me and we will have an informal conversation. i would like to take your questions. let me begin with a question that may be on people's minds and then that will give you the opportunity to lead. admiral, on the minds of many folks is how we will be able to deal with the situation in the middle east right now, potentially some action with regard to syria. the navy is a big part of that. could you speak a little bit to both our capabilities without getting into the technical operations -- this is the second part of the question -- how these cuts in funding may affect

your approach to such an operation and how it could be affected five or six years down the road and continues. ? -- if it continues. ? >> the ships that you saw in position were all forward deployed so we have not surged anybody over for this potential operation specifically. they are ready. they were organized trained and be fully ready for a vast spectrum of operations. that includes operations they do, launchingo tomahawk missiles to protect the ships themselves in that regard. i am very confident in that regard. we have them loaded but they go over. -- when they go over. we will continue that into next year and that will be a centerpiece on a future budget

that those ships we put forward are ready to vote no matter what the number do, launching tomahawk missiles to protect the ships themselves in that regard. in the navy are and we get as many forward as we can using the principles that i discussed from forward deployed naval force, rotate crews, whatever that might be. let's go ahead. >> i'd like to follow-up on that. congress has developed a plan that would give you 60-90 days. do you need that much time to do strike?d what would you estimate 60-90 days would cost you? do you think that perhaps you might need a supplemental to do something like that? to what extent do you think limited naval strikes would reduce assad's ability to reduce use of chemical weapons? >> let me see -- a strike? supplemental might be the order of the day.

i will give you some factoids and as we work through how long operations are going on, i think that will help us understand the degree of the problem. abouthawk missile costs $1.5 million. a carrier strike group operating , inthere will cost you extended operations, a lot of flying, as opposed to routine flying -- will cost you about $40 million per week. if it is not flying that much, it is about $25 million per week. a destroyer, i think, costs about $7 million per week. i will get you those numbers if you want to follow-up on that. for theps us understand extended amount of time the additional burden on the budget. many of these ships will be out there anyway. nimitz, sheof the

was going to be headed home. if we extend her much beyond a week or so, she starts being in the theater longer than we planned. she was on her way back and we said hold on, we may need you. there are a vast number of options provided to the national command authority. which oneo i not know they will use -- that is the business of the theater -- i organize, train, and equipped -- i don't know which package they will use. there is a long list of things that are available. there is a long list of opportunities or effects that are also available. >> what effect would the strikes have? of there is a long list defects that could be done. that would be up to the national command authority, what they choose to do. >> someone here.

>> thanks very much. admiral, i am worried about 2020 and the out years. we have a crisis now but 2020 plays into that. i read that the maybe maybe down to two carrier strike forces available worldwide by 2020. that reduction also means a reduction in the industrial race diminishmenton or in our ability to build back up if we have to. frankly, this reminds me of post-world war ii when we went and we almost paid for it in korea.

am i right to be worried about that? >> you are right to be worried about that. we don't talk about people. we've got to do that right. you might recall that we had a training issue after world war ii. in the early days of the korean conflict, we were concerned and we found that these folks were not ready to go. the job that i do, people are the foundation. i am pretty comfortable about what we have today but we've got to watch how our folks are motivated for the future to want to stay in the military. -- what isequation the quality of the service i am providing the nation? it is not a money seeking group. they look at it allen's of what is my quality of life. are you taking care of me and do i have a decent place to live and decent pay and are you training before the future?

they have a quality of life. do you support my family? there is a quality of work which i am looking at that those added together equal eight to the quality of service. they have a proper supervisor. does that supervisor motivate them? is there division manned properly? do they have the right spare parts? do they have a predictable schedule or are we wearing them out? that's what we have to be careful about as we look into the future. everybody is looking at the big guys, i think we have to look at the next level down and maybe one more india nuclear industrial base. ofhave well over 50% suppliers for nuclear technology aresole-sourced. , how do weunder

recover the high-quality material? if you want to reconstitute are you prepared? that is the balance in the industrial base that i am concerned about. as we build toward the future, we think we need to do this very deliberately, not year by year. we have to sit down and do this in a broader more deliberate manner. >> there was a question up here. this gentleman right here. >> i naturally turned to my right, you're left. >> thanks for speaking here today. i am john harper with a japanese newspaper. are you concerned that potential u.s. strikes to syria could lead assad to retaliate in u.s. interests in the region? senator kyle, can we get your views on whether the u.s. should intervene militarily there and what concerns you might have about that? >> the central command is

vigilant for just such a thing and have their eyes open very wide on that. we've got all our sensors out in regards to what could be the potential reaction to make sure our force protection measures are in place and we are postured to react accordingly. >> i will refer you to a " wall street journal" op-ed piece that joe lieberman and i authored that will run tomorrow that expresses our views. the summary is that not withstanding a series of mistakes and putting the united states in a bad position with respect to syria, sometimes you don't have any option, but to take action. this is one such situation. let me try to get this gentle man in the back. admiral, two questions --

can you give a sense of the capability that this new tactical tomahawk brings to the united states that would help overcome the advantage ofassad's forces to disperse and hide. ? it can check out targets. do russian navy vessels have? that take away the use of submarines that would track russian vessel movements to participate in strikes? >> you've hit on a key advantage of the tactical tomahawk which is you fly it and it can receive changes in targeting, changes in direction. it can go up and actually loiter. some all at an unmanned aerial vehicle. when it's done, it distracts.

it creates an effect. yes, it is quite a good capability. we have quite a few of them out there. it creates an effect. yes, it is quite a good capability. we have quite a few of them out there. it brings a really good option to the commander. i don't discuss fleet operations. the wherewithal particularly of our submarine forces with vessels is inappropriate. do you see this as an impediment to a neutral factor? i guess i would characterize it as a neutral factor. the back and i will get this gentle man on the isle. >> thank you. alternative, can you talk about your thinking on aircraft carriers? if you have 11 carriers now, is there thinking there would -- they would not be ready and equipped properly and you would rather have nine or eight better trained and equipped properly?

you keep emphasizing that point. what is your thinking on that issue? >> our aircraft carriers remain a key and critical element. it is really about the air wing piece of it. into the future, i look at what the air wing of the future is. i mentioned the asymmetric's. electronic warfare, bringing in a new class into that air wing. what do i need in a capability and how does this get dispersed around the world. aircraft carriers is the way to get out there. i would like to have 11 and that remains our requirements requirements and our force structural assessment. when you look at the limited fiscal resources, you have to look at it in balance. what kind of for structure can you afford to sustain and that which you sustain or maintain has to be organized, trained, and equipped to deploy and respond properly. mistakes have been made in the past.

you said you will hold onto the for structure and we will recover. you let it go too long, any of those ships, they will make their expected service line. you have not maintain them properly like your automobile won't make its expected life if you don't. forces, theaving right kind of forces, the right number that i can organize, train, equip, and maintain ready. it is really about the air wing piece of it. of procurement and we talked about the industrial base. it is a balance of people. we have to take care of the people and the quality of work is appropriate. if we start losing them and their commitment, that is the very foundation. >> there was somebody over here. maybe this gentleman, here. richardsisk. on your slide, you had four destroyers, one amphibian in the eastern mediterranean. what happens, is that on its way

home? tomahawk commandert is discussing what to do with mohan and it was not in that eastern part. she could be made available if necessary. i think they're it -- they are still commiserating for the need completing her expected time and will determine what to do with her. >> right here on the isle. switching gears -- what future confidence building do we have with the pla navy and efforts to reduce crisis stability? we have done to anti-piracy efforts in the gulf of aden, what else can we expect in the future? >> the surface action group

will arrive in hawaii in a few days. one of the things they will do is a search and rescue. that seems rudimentary but it will run quite a spectrum. in the gulf of aden, we recently did a piracy operation. landed on our thereand hours landed on is. you can start wrapping that up into all kinds of operations, counter smuggling, maritime intercept operations. i have my folks working on this to determine what kind of are within our policy constraints in the national defense authorization act of 2000 and present them in modules to my counterpart p and thelan and let them look at it and we can bring those modules to bear so they can be approved tootively quickly, it is

constrained. it takes too much time to get one simple operation going. i want to move ahead so that when folks get out there they can do more. we recently did a mediterranean assistance operation in brunei with their hospital ship. that and move out on explore the opportunity of maybe doing a combined operation. we have the comfort mercy and they have the peace arc, medical, bringing comfort and assistance. project hope has been in china. project hope is here. i am looking for overlap in that regard. they are interested in putting together a vote of conduct, how do we talk to each other, how do we agree to talk to each other, our commanding officers. officers, get a midgrade officer exchange going. and senior and listed. we've got to build on that foundation. when they grow up to be my chair 's chair, they

know each other and they know internationally who folks are in that way we can solve problems. up, when i wasw- in the senate, i was a supporter of the military not only with the big countries like russia and china but some of the smaller countries that could become important at any given time in history. militaryeen how those to military contacts have a beneficial effect for us. with respect to the chinese in particular, could you share your view of the attitudes of your counterparts and what they think they get out of it and more importantly, what we think we get out of these contacts? >> with regard to the chinese, what they get out of it and all the signals i get from admiral he was here with their minister of defense and

our secretary of defense so we were chatting. they want to move on to consistency of dialogue and get away from miscalculation. he has a challenge of a growing an intent by their nation to operate in the south sea. they know we will be there, too. they frankly know that the japanese navy will be there. he wants to move -- he wants to get away from miscalculation and embarrassing scenario that they wish they had not got themselves into. we know these things can happen. secondarily, they realize that in order to be out and about, things can happen. humanitarian assistance -- you have probably seen the chinese have shown a proclivity to contribute in this regard. in our recent libyan operation, they did a noncombatant evacuation operation. they want to get better at that

so they, too, can take care of their citizens abroad. there is a pragmatic and practical approach. are want to say they responsible for their people and have an assignment and a task and they want to approach this in a manner which is responsible and deliberate and not more helter-skelter. they don't want to get themselves into something they did not intend. >> we have another 13 minutes or so. let me get this gentleman here. i promised -- we have two in a row right here. -- formcurry, nbc news the taxpayer that does not follow these events outside washington, dc, they hear about parts rest or and other of the federal spending being cut as well as the navy. read about the libya operation and they read in the newspaper that maybe 11 u.s. navy ships were involved.

if there is a syria operation, maybe that number or fewer. terms,most simple because they are not engaged in this full-time, if they ask you the question -- why do we need 285? it seems like a large number of ships that are typical operation in this era every couple of years is a dozen ships? what would be the answer? >> we have to be able to respond wherever it matters. the economy of the world flows through what i call the maritime crossroads. any event in their -- any interruption in there hasn't an immediate economic impact and if you walk your way back through to the price of oil and you watch the cycle of the price of that, will not get into that is an obvious economic impact, the straight of hormuz has to remain open. you have to be sure that the

lifeblood of the world flows. we have to be there to make sure that happens. they operations here that you have seen, the crisis that is emerging, has had an economic impact and to be able to respond to that immediately is key and critical. you have to have a navy that is out and about. having 1/3 of the navy out and about is not that. if 90% are out there, there's a similar number that have to be ready to go out there. that rotation alone is pretty good. i would tell america that i think you're getting a pretty decent bargain when you have over1/3 of your navy out and about all across the world able to respond like we have done here, able to respond in the north korean missile crisis were there is a threat of a launch and in 72 hours, we are on station that we can protect

qualm and the united states and protect japan from a threatened missile launch and able to respond to haiti or japan in days. whereas, if you look on that andt, if we have to wait steam over there, it is a two or three-week operation. i think this is what the american people are owed in response -- in how their country responds but also in the future. >> right here -- admiral, you mentioned a supplemental. if you do not get a supplemental and there is an operation that is more than a flash in the pan, what gives elsewhere? you have a tight budget and without supplemental, do you take that bite out of ship the link or maintenance or out of

faster for structure reductions come out of training? something will have to give if you don't get extra money and you are doing extra things. >> for the remainder of this year, for the remainder of september, we are comfortable that we could accommodate the operations that would occur there. many of those ships are already over there and already budgeted to be over there. you's what you get when have a forward deployed navy. if you run into 14 and you get something like the carrier strike group minutes -- carrier strike group nemitz and mayhem -- and maintain them over there for a long. of time, we could go with a supplemental or we could add for a forward apportionment of money, take money we were going to get in the fourth quarter and say forward us that money into this court or to help for these costs. then we would reprogram in the middle of the year to pay it act. it is a are a wedding.

-- it is a borrowing from our own budget. there is a simple reprogramming. give me the opportunity to take it from an investment account into the operating account. the numbers are nagging and they are another challenge but they are not extraordinary at this point. >> way in the back here. there is a lady and there's a gentle man by the door. i'm wondering, with the budget cuts, what are your thoughts on development and diplomacy being included in the country's national security strategy -- a strategy? >> in the budget you mean? >> how that can work together? i'll tell you what -- right off the bat, i look at my week next week.

mym sitting down with chinese counterparts and taking the time to work through where we want to go strategically with our requisite navy and synchronizing that with the department of defense policy and the department of state policy which we work together. countryrking with their teams abroad in our combatant commanders and making sure where you want to go in this region and how can we in the navy help that. in this rebalance to the asia- pacific, there has to be a balance to that. are going to rebalance. we are going to move equipment. what is the right equipment to put down in southeast asia? should it be high and? should it be missiles and guns? no, it is a ship that resonates with the need for the missions and our allies and partners there. destroyer an aegis is what we need to assure our

allies in northeast asia. we need to synchronize their efforts with our state partners in this regard, working with the country teams who are out and about right there in the countries in the future. we need to leverage each other's budget so we are not going at cross purposes or on parallel paths but not connected. senator, thanks for being here today. for 22020, or in light of budget reductions, it can you speak about where you see unmanned? how does that fit into global operating forward? you, the broad area maritime surveillance is called the triton which is a global hawk. deployed by 2020. it will be in the western pacific, probably operating out of qualm and provide us -- out

of guam and provide us with about 2000 miles. we will have that kind of maritime broad coverage. we don't have that today. we have maritime patrol aircraft but that unmanned feature is good. that is in the air. on the aircraft carrier by 2020, i would hope to have an unmanned carrier launch surveillance and strike called the u-class which has to fit into the air wing and can provide isr and ordinance and you can put a ball on it or other surveillance equipment. if you fly, there is an extraordinary amount of weight , onciated with an airplane a person in an airplane and you remove that, you are talking

payroll or ordinance or fuel. some feedback on unmanned underwater vehicles. these are things you can program and send them out to surveil. it can report what's finding and that will give us a broad picture of the undersea domain. that should be on the plummeted by 2020. little combat the ship, there is a mission that has a mining feature and it will provide us four times the area and 1/4 the time of our counter mine capability we have today. we got great potential out there and it is starting to become quite tangible. we are at the point where we are getting it wet. not the aircraft. >> a quick follow-up -- in the past, eric technology and advances have been one of the reasons we have been so

successful compared to any potential challenge. more and more, we find that even through espionage of one kind or another or simply dedication of other forces, the time lag between our developments and a capability like this and that of another country has been shortened. how far behind with regard to these kinds of technologies or some of the other leading -- are some of the other leading powers in the world? >> the concept of owning something in the air or under the sea unmanned is out and about. it is commercially driven. the ability to put an appropriate sensor on it or weapon and the ability to network it in the ability for it to be safe, for it to be reliable and have the persistence of some of the stuff we are developing is not there. that is our advantage. in the end, our people can

operate this stuff. it is people who can swap over from being over on a helo deck to going to the drone. about six weeks ago, we had the demonstration of the unmanned carrier vehicle that was in the press quite a bit. i am out there on the flight deck and i watched the flight deck crew. it is an amazing teamwork feature. that vehicle integrated into the it is unmanneda but you the guy bringing it forward and signaling to the drone and the guy that was operating it was looking at him. it fit right in. our kids adapted and adopted around that thing. it was flawless. that's the difference. >> i'll take one last question and we will wrap it up.

i went to norman is re- things -- i want to numerous briefings. one point you kept making is that it is an enabler. anderms of the new t-lams what it's able to do when you talked about taking feeds and route from air force and t-lams -- will the potentially being used in syria be able to take input from aircraft? >> that capability is resonantn thetaccom, the mod-4. it is an option. i don't know precisely what they will use. we will train to equip them and they are forward and ready. >> ladies and gentlemen, it is

easy to focus on the negative that we have self imposed on ourselves through the sequestration and budget cuts that will drastically affect their military capabilities if we are not careful. i think you would agree that we are fortunate to have somebody in admiral greenert who appreciates the priorities and has an understanding of the centrality of our men and women in the military and maybe to be the forward part of our national security. and who appreciates the constructive approach, the positive ability to get something done rather than focusing on the negative. we will leave the negative to -- focus to people like me. put forth a very positive view about how we can get it done that's we -- that's what we expect of our leaders and the military. we want to thank you, admiral, for not only being here today

and sharing your views but all of the challenges you are dealing with, the constructive way in which you do it and would ask that you pass the support of everybody in this room to those folks you work with who are 24 hours to let them know the support we have for their efforts britt i hope all of you will join me in thanking admiral greenert for his presence. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] presidentr today, obama announced he would address the nation tuesday on serious saying i will make the best case that i can. that topso hearing

administration officials will be briefing the entire house on the president's request to use military force on monday night in a closed session. otherited states and 10 g-20 countries released a joint statement on syria as the g-20 was wrapping up saying in part that we condemn in the strongest affect.e heart chemical weapons attack the evidence clearly points to the syrian government being responsible for the attack and we support efforts undertaken by the united states and other countries to support the prohibition on the use of chemical weapons for the senate faces debate next week on the syrian resolution. intomccain heard about it town hall meetings yesterday in arizona. >> we are very eager. and iet you years ago have always been a supporter of yours. i have always been a loyal supporter of you. now, no one is denying

there is a lot of a trot disease -- a lot of atrocities being committed in syria. there is a good option. to listen to you saying there is no good option, i refuse to believe that. is tood option right now take saudi arabia and iran and force them to stop supporting --the two sides in syria and you can do it. you can do it by diplomacy. bombs,otiation, not senator mccain. we cannot afford -- [applause] we cannot afford to shed more syrian blood. i have a cousin who is 18 years old and was killed 10 days ago by the so-called rebels. and al qaeda and they are not syrian. they are coming to syria from all over the world to fight

this. we cannot afford to do that. we cannot afford to turn syria into another iraq. or afghanistan. i beg you. [applause] my family is there and there are so many syrians. the majority of the syrian people want to save their country. you need to listen to the majority of the american people who do not want you to go there. [applause] issue that we can take lightly, senator mccain. enough is enough. we do not want another engagement in the middle east. we don't want al qaeda to take over. [applause] whether you like a solder or not, i am not a fan either. least he has a secular government going on over there. it is secular. we are a minority over there. we are the minority christians who are, unfortunately, bite you areso many in the senate

just collateral damage and i refuse to believe that. i could trace my family's name through the bible. we were there prior -- from the beginning of humanity. we refuse to be forced to leave and fully and be considered collateral damage. [applause] >> thank you. thank you very much. thank you for your passionate plea. thank you for your very compelling and emotional statement. you is that i, too, have been to syria. i, too, know the people who have been fighting there and i met them and know them and know who they are. i know syria well enough to know that it is a moderate nation. it is not a nation that will embrace these foreign fighters. assad isthatbashar al- anything but a merciless butcher, then we have a strong -- disagreement.

by the way, members reacting to the syria issue in both town hall meetings and what they see passed in the senate -- 105 members are against the strike and 117 are against.

in about 20 minutes, we will hear more about syria and the diplomatic efforts in that country. ambassador samantha power, the un ambassador, will speak for the center for american progress live here on c-span. to take us up there, we will hear from lieutenant general david barnow with the center for new american security and talked about the cost of a potential strike against syria and we will show you as much as we can until ambassador power begins at 2 p.m. eastern. >> we want to introduce you to general david barnow who is retired and is now a senior fellow at the center for a new american security. he joins us here to talk about some of the military potentials when it comes to syria. when we talk about a limited strike, what are we talking about? >> that is one of the critical

questions of this whole debate is how limited this will be. what the presidente spoken about and we will hear more about in the next week or two is what kind of military power we will use. what the leading reporting on this suggests is it will be cruise missiles, potentially some standoff attack missiles off of aircraft and cruise missiles from navy ships in the eastern mediterranean and these would be launched at this since as of several miles -- several hundred miles and beyond from a long-range. we have a bit of capability in our navy forces in the mediterranean to do this now. >> what kind of forces do we currently have in the area? >> it is not entirely clear. we don't signal what we have. 3-4 destroyersy -- we've got probably three/four destroyers and a large u.s. that is in ther

red sea, the uss nimitz which has 48 fighter planes on board that can launch strikes if necessary as part of this campaign but most of the leading discussion is likely pointing toward missile strikes off of those destroyers in the eastern mediterranean. >> what can cruise missiles do? what kind of damage and how pinpoint can they be? >> they are accurate within several meters and the have ranges that go as far as 1000 nautical miles. they have the ability to be steered on the way to their target. some can be slowed in their movements and trajectory to loiter. they are precise and may carry a significant warhead, typically a 1000 pound warhead which is large in terms of explosives. not to be awful but if a cruise missile were to hit the u.s. capitol, much of that would be destroyed? >> probably a good bit of it if not collapse the capital home. it would be a significant blast print >> what about the use of

fighter jets? >> that would be another echelon level of commitment and that is one of the big? 's on this entire enterprise. at what point in time do we have to escalate to the point of perhaps getting american aircraft involved. they could end up flying over syrian airspace. we have missiles that could be launched off of aircraft that are of sufficient range that you can shoot those from over the mediterranean sea. the aircraft could play a role but that is not a serried. it depends how large the president decides the strike should be. host: if the president makes the decision to use military might attackfter this chemical in syria, were we ready at that time? guest: we had ships in the area and based on the crisis in syria that is on going, those ships are well aware they could be called upon to launch their ordinance to support a military

action. all of our ships are on standby. they might've had to move move closer to syria to be within range. host: when you look at this map from yesterday, this is the military buildup around syria. there is some airbases in different countries, u.s. airbases in different country. here is syria in the center and turkey is up here and several airbases. if we needed troops on the ground, how quickly could they be mobilized? airbases and troops on the ground are two different things. we don't have actual troops in any sizable numbers in this part of the world. in the eastern mediterranean, we have some troops in kuwait which is a distance away. where americans aircraft are based. our air power is readily available. if we can get overflight

permission, and if they are willing to allow u.s. aircraft to launch from there territory, those forces are there and capable and ready to go. ground forces in measures we might be needing for this campaign which is unknown, they are less available and would have to be moved into the theater, most likely. host: what is your background? >> i'm an interesting -- i am an infantry officer and had about 20,000 american troops under my command and i spent most of my time as an army officer of army ranger battalions and paratroop units. i spent time on the ground doing the close infantry fight is this which is a tough line of work. host: you are also at the national defense university? >> i spent four years there and ran the southeast center for strategic studies and traveled allss the region to visit of the alumni of our classes we hold for foreign military here in dc.

if you were still active in the military right now and the president said what are the pros and cons of a military strike, what would your answer? guest: we can certainly set depending's military how high you dial up this strike. there's no question question the u.s. military can inflict on his air force and ground force and to some extent his chemical launch capabilities. the downside is that once you start this, it's not clear where the end is. if we launch a strike against chemicald degrade his weapons capability which is one of the president's objectives, that does not mean we will take away those capabilities. we don't have the ability to do that without going into syria with a major operation. we could cut it back and limit his launch capabilities but would pretty much cannot shut that down without actually physically being there. that is one of the major cons,

what happens after the first strike? what is the cost to launch a cruise missile? it could be asit much as $1 million. on average, some of these other long-range air delivered missiles are in the same category, several hundred thousand dollars. host: how many would you think would be launched if congress approves and we go ahead with a military strike? guest: it depends what you want to accomplish. it is not clear what the resolution will allow the president to do and it is not clear how seriously the president wants to damage assad's military. if he wants to go against the chemical striking ability, we could be talking one or 200 cruise missiles. if he is looking to knock out significant portions of his air force and degrade his ability to resupply his forces, it could be much larger than that.

know if you know retired general robert scales. >> i do. >> he is a retired army general of the u.s. army war college. he has an op-ed this morning in " the washington post."

i think general scales speaks for himself. the u.s. military will salute smartly and execute whatever mission the president gives them. he can advise the president privately. he also has an obligation to provide that to congress when they ask and so it puts him in a difficult position. oftentimes, the congressional questions and hearings are in the public domain. the broader issue that he gets

that is that this is a military that has been at war for 12 years. they have been involved in very difficult and long contentious bloody ground wars in this part of the world in iraq and still with 60,000 american troops in afghanistan. hermilitary -- i spent years in the military and have two sons in the military, anyone who looks at this will cringe. they will also be prepared to execute their orders. host: when you see the uss nimitz carrier group here in the red sea number the uss harry truman over here in the arabian sea -- what is a carrier group? >> that is usually a big deck aircraft carrier that will typically have four dozen strike aircraft on board and other the two doesn't support aircraft surrounded by several protective ships like destroyers and cruisers that can do air defense. group of ships for protection. its primary purpose is to launch strikes to be able to hit targets ashore.

to significant capabilities, floating airfields in that part of the world that could be called into this fight if necessary. host: what kind of alert are those sailors on right now? guest: they are prepared to go to battle at short notice. you have to expect to do with a combat situation. these folks are training day after day and launching missions. you will be flying missions most every day. you are always prepared to go from and training to a combat mission. the weapons on board those areacters -- those carriers practiced on on a regular basis. host: how much does blow missy -- how much diplomacy does a u.s. general have to conduct with some of our european allies? guest: there will be several layers of military command in this case. geographic combatant

commanders at the four-star level who have responsibilities for big chunks of the world. i'm sure the ones looking at this particular part of the world and their responsibilities are having some of these discussions with their military counterparts to explore ideas on what might be possible and we are doing that with the state department on the diplomatic side. is military commanders at the four-star level who have huge chunks of world geography and their job is diplomacy and they will be in agent supporting this effort. of thef you are one commanders over here in the middle east right now, how much of your time is spent dealing with washington? guest: quite a bit especially in terms of crisis. that becomes a date part of your it they and your typically ready to brief in the morning and at night and your staff is working up different options and course of actions. you are involved at the military chain of command above you that ends with the secretary of defense and the president. if your demo the middle level and below, not really. you are preparing your unit to

go to war so you don't have to worry about that too much but the senior commanders, that is part of their portfolio. host: our guest is retired areral david barno and we talking about potential military strategies when it comes to iraq. we will take your phone calls now with wayne in connecticut, democrat. caller: hi, thank you for having me on. i have a question -- thanks to general barno and my question is related to the general scales op ed piece. how long can our defense establishment ignore the real threats to our national security which is the refusal of congress evidence that the twin towers were brought down by explosives on 9/11? the general and i both agree that the law of physics applies every day. we can understand the behavior of mortars and cruise missiles.

ignore thesewe real threats to our national security which is our inability to figure out whodunit? guest: a better way to look at that would be other threats to our security outside the syrian crisis and there is a wide range of those. those extend from al qaeda around the world and its powers and the danger to american interests and to our facilities in this country and our people at home. in some ways, it is a tremendous budget crisis the military is in right now. you realize that we have large numbers of our flying wings sitting on the ground not training an army units that are not allowed to do their normal rotational training because there is sequestration. there is significant impact on military readiness around the world because of budget dots some this is happening at the

same time. here had military folks in around the table, they would say they are as worried about the impact on military capabilities by virtue of the budget cuts and how they are being rolled out as they are about other threats. host: if the president came to we want toy and said change the battlefield, we want to pick the winners and losers, is that something the military would adapt to? guest: what is the purpose of this strike? is the purpose to set assad back. the verbiage i see from the senate resolution yesterday and the president's remarks were that the primary purpose is to determine assad from using chemical weapons again and degrade his ability to use chemical weapons and 10 and that

is a limited use and that may be hard to do. it again to prove he can do it and then we go up and escalate torry latter. you have to define for the military what the objective is. then they can craft options for the president to select that they believe will help achieve that. --t: here is a tweet drones is an open question. we will not use them over serious that we are using over afghanistan because they are not survivable in a battlefield were the enemy has a defense network. the taliban and do not have air defense network. we can operate with impunity with our drones over that battlefield but we cannot do that over syria. we can use our standoff weapons that we have a naval ships

offshore and coming off the rails of our aircraft that are based around the carriers were based in the region so we have some ability to launch the strikes , at least the initial sortie, without having americans over the target. host: another to eat -- -- another to eat -- -- anothertweet - guest: that is the $64,000 question. we don't knowand then what? what happens after the first strike? the enemy always gets a vote. the enemy can choose its iuntermove and assad says will do this again and again and see with the americans do. that takes us up that ladder where we have to cap to respond and he counters our move and where this ends is not entirely clear. before we start this enterprise, it it would be wise to think through how we get to what our endgame is in the region and how

we build a strategy to allow us to do that. host: republican line, daniel, go ahead. wondering since russia is an ally with syria, what would stop russia from making a strike on the u.s.? guest: that's a good question. all of the syrian allies with iran being another one are of significant concern to the united states. my own opinion is that we would be unlikely that the u.s. would strike us directly. we were in a cold war with them for over 40 years for it we never actually had face to face shootouts with the russian forces on the ground. i don't think that will change now. i think the russians would do much to embarrass us politically and work against us in the united nations. they would potentially increase their supply of military capabilities quietly to presidentialassad in syria. i would be more about the

iranians taking action. there has been some reporting about the possibility that iran has triggered some of their agents in iraq to be prepared to attack u.s. interests there if the united states chooses to attack syria. is that part of the planning for any strikes/ guest: absolutely, the military has to say what is the impact of the strike that what comes next and after that? the is now a chess game and military has to think three or four or five or 10 moves ahead. of devising the strategy. you want to know what your game- winning strategy is and build steps to get there but you have to have excursions that say the enemy did something we did not expect and we now have to move over here and we thought about that before hand. ofre is a great deal contingency planning going on now to think about the different possible options and you never get those right. your ability to react effectively when something

unexpected happens is one of your skill sets in the military. maryland, you are on. caller: if old, cannot get his buddy cameron in britain on his side, why should we believe obama's excuse for war with syria? guest: i an not certain that the source of the reluctance to vote had so much to do with the proof as it did the overall principle that the u.k. does not want to get committed into another war in the middle east. they were alongside us in iraq, one of the few countries. they stayed with esther most of the conflict. they stayed in afghanistan for over a decade. they are very close ally, but i think the parliament's reaction was more along the lines of we have done enough and we do not see the benefit of this particular conflict