at least 2011 when secretary clinton raised the issue. on the recentn budget deal in congress and its potential impact on future bipartisan efforts. later, segments from today's for him at the federal reserve system. at the federalg reserve system. the university of minnesota the budgetng about deal. >> good afternoon.

i would like to welcome you to the university of minnesota. we have a terrific program here today talking about the significance of the budget deal reached in washington in terms implicationscal for both the democratic and republican parties as well as the origins of some of what we have been seeing in washington. we have a terrific panel. i would like to introduce the panel. , he served gutknecht in 12 -- for 12 years in the minnesota house and 12 years in the united states house of representatives. , who servedin sabo

for a long time in the minnesota house of representatives, including a speaker from 1973- 1978. he went on to washington, where he served for 13 terms, i believe, in very important positions. it passed a budget act that played a major role in the reduction of the deficits during the 1990s. mine and colleague of teaches courses as well as working with us in some of our other programming. he was a representative in the minnesota house from 1979-2000 seven. he was also speaker of the house

from 1999-2007. i want to begin by recognizing like toague, who would ask a few questions. then we will broaden the discussion how to include stephen the conversation with our panelists. >> thank you, larry. country, the conversation has changed a little bit since yesterday afternoon. congress has had some action on a bipartisan budget agreement, which i think is very good for the country. i would like to look at my two friends. was my right arm on the house floor.

, as of-- speaker sabo yesterday, being the chair of the budget committee in washington, we have had to bring people together. the agreement yesterday, rather than talking about the specifics, let's talk about the tone of it and what it means for the future. thisit signal an end to hypersensitive partisanship? to the discourse that has happened in washington? should we see as -- should we see it as a sign of some cooperation in the future? >> i think it is a plus. it sets the framework for discretionary spending for this

fiscal year and the next fiscal year. there are major problems that remain unresolved. those will remain difficult. we will find a little bit more will we get to the question of extending the debt ceiling next spring. clearly, that is something that has to happen. >> congressman, being in the republican side, now in control of the house, you read some accounts where it is not harmony. maybe because of what is not in the bill. this is your caucus.

i did not want to turn this into winners and losers. how can republican be against this deal? it is going to reduce the deficit. it does not raise taxes. it is $200 billion less. it is not good enough. in the end, it will pass. the more conservative members of the caucus will do some public harping about the deal. both of you were in leadership in the legislature. caucus,elements of the

they are always unhappy with whatever deal is worked out. i suspect that will be the case this time. it does appear the republicans have given up quite a bit. others may disagree with me. end, it is an agreement that we will get the 218 votes in the house and it will pass. there will still be some posturing and there will be some angry people. understand you are focused on the immediate, but i am curious about what you think about the longer-term implications. we have now gone through a government shutdown. we had almost default on the government's debt limit. deal -- does this deal

signal a larger change in the nature of governance? are we getting back to regular order in congress where you will get give and take? >> the short answer, i think it is progress. the longer answer, and i hate to be cynical, there is more about politics relative to policy. the politics have changed dramatically since october when obamacare started trying to enroll people on the website. if you look at the polling theers, in some respects, republicans will be driven to compromise, not only on the budget, but on the debt ceiling. is old adage in politics when your adversary is

committing suicide, do not get in their way. presidentbers for the and the democrats look so bad, i do not think the republicans want to pick fights that they may not be able to win anyway. that this is a good budget agreement and it will pass and you will see some arguments on both sides. i think the deal will be struck on the debt ceiling. it has more to do with the politics than the policy. dealen you look at this and the dynamics within each party and the divisions within the democratic party between the mainstream and the more progressive elizabeth warren side of the party as well as within the republican party and what is the death grip by the tea party and the liberty

movement led by rand paul, does this strike you as a return to the power of the leadership? >> i do not know how to read the republicans at this point. my hunch is that the leadership is going to win on this one. continuing of the resolution, the leadership lost control. politically, they paid a price for that. do not know how to predict the future. term, we still have to deal with some very tough revenue and expenditure issues. i do not see that -- those are off the agenda for the next two years.

i do not see anything happening on those issues. at some point, we need to get to them. , you mentioned how this was a prime attic -- pragmatic political move by the republicans. it is interesting the reaction from the right wing of the party. red state refer to this deal as capitulation and they were upset that the budget deal for two important leverage over obamacare. is this the sign the mainstream of the party is not ready to get tough with that 25 hard-core right-wingers in the house? is this just a temporary tactical disagreement? somewhatk it is

demeaning to refer to people as right-wingers? we do not have left wingers on the side and you call them progressives. went to washington in 1994 and we were looking at deficits of more than $200 billion for as far as the eye could see and we were very serious about controlling spending. and allowing americans to keep more of what they earn so they could reinvested in the economy. you are going to hear some real gnashing of teeth from red state , tea party types. the more conservative wing of the party will not be happy with this deal. in the end, i believe they won't

capitulate, but they will not try to block the deal. cooler heads that are prevailing and leadership is prevailing, so be it. -- theyderstand that all understand that if the objective focuses on what will happen next november, he could not be preoccupied with what is going on here in december. this is december and i thought it was january. i think the republicans won the issue on discretionary spending. the cuts are in real. -- unreal. even the republicans who worked on the appropriations committee understand thet decision on the continuing resolution. instead of declaring deadlock,

they declared victory. in terms of dealing with budget in 1993,was involved going back to where we had no republican votes, even going back to 1990 when bush was president, divided control of congress, and we passed important budget bills, and overwhelming number of democrats or for it -- were for it. if they were there in 1990, they were part of the no vote. in terms of dealing with the budget issues in a bipartisan realistic fashion, the history

in the 1990s was most democrats supported it, some republicans. i would be very surprised if that pattern changes in the future. i expect there has to be a major deal and it will have to be significant. hopefully enough republican voters to make it possible. -- passable. >> it sounds like you to agree. the republicans have a big victory. they have been able to shift the goalposts. in the ryan-murray sideon the discretionary is less by what president obama

proposed. it is even less than what paul ryan proposed. would you agree with the congressman that republicans -- with marty that on the discretionary side that significant progress has been made to the sequester and this budget deal. the issues that remain that are the big issues that we continue to kick down the road are on the mandatory spending. they are the ones that we just cannot get our arms around. unless you deal with the youtlements, can/discretionary spending another 50%, but you can never really get to what i think we all want and that is a fiscally responsible government today -- does not

>> you have to deal with long- term retirement costs. any real solution will be a combination of the two. box that has been the holdup. -- >> that has been the real holdup. obama got hammered. the head of the house republican campaign committee came out instantaneously and slammed him. he was quickly followed by progressives who solve this as another betrayal by the president. termhe issue of long- deficit challenges, medicare, social security, do you see trends in health care spending or with reform that might provide some reason for caution in going too far in medicare?

i think social security is the least complicated of the two. health care is much more difficult. the trends have been down lately. , i hopethat continues that is the case. i am optimistic about that, but not certain. if that is the case, it would help immensely. out you need is to figure how we deliver our health care in this country without that rapid escalation of costs. congress todayn and involved in budget discussions, would you be rushing into the debate? would your attitude be, let's give it a little bit more time and see how severe this is?

>> i would be trying to deal with them. ideal, id write my would have one bill with more spending for stimulus that is needed in the short term. some long-term modifications to the tax system and the entitlement system. i i would go further. i will credit president obama for really making health care a focal point of the national debate. i disagree with the plan he came up with. the truth of the matter is, if you do not get your arms around health care spending in the united states of america where we are spending 16% of the gdp,

most of our competitors are spending less than 10%. it is eating us. it is not just medicare or medicaid. when you think about the federal employees, the federal government, you the taxpayers are the largest buyers of health care. i think we have to be objective and honest with ourselves and say, despite the fact that we spend twice as much as any other society in the world, you cannot argue that we have longer life thectancies, that people in united states are healthier than the people in switzerland. -- and i started this debate while i was in congress to talk about what americans pay for prescription drugs. those kinds of studies, that kind of analysis has to be done. it should be done on a bipartisan basis.

have a so much more to hip replaced in the united states than it does in germany or anywhere else. we need to get to the bottom of some of these costs and figure out ways. i am not sure what the answer is. you could never really get control of the federal budget until you get your arms around health care. >> there is a lot of agreement on that. that is the area of nonpartisan agreement. the issue the congressman is raising is when you look at the last four or five years, the rate of increase has fallen dramatically and there is a debate as to why that is happening. is it the economy slowing down? is it affects from obamacare? the change in expectations among some of the stakeholders? i do not think anyone has a firm handle on it.

the rate of increase has come down and has helped to contribute. >> i want to ask both of you and get my colleague into the conversation. is there something about the agreement today on the budget that gives us any hints as to how other pieces of legislation by be handled by this congress? a lot of concern about the defense budget. enormous concern about the farm bill and getting a past. sed.nd getting that pas speaker, you are a farmer. a lot of our farmers in minnesota are very concerned about the farm bill. when you look to washington and

the agreement that was reached to have a two-year budget on discretionary spending, does it give you hope or realistic sense that congress is going to be able to move on the farm bill? >> it gives me hope that we will be able to move on to the farm bill. it is a path of success that can be built upon. meeting people's expectations is a very difficult thing. meet especially tough to expectations of members in a caucus. more difficult to meet expectations of special interest groups outside the caucus. the farm bill has only a few days left before esch of decision-making. -- a few days left of decision- making. everybody has to tone down their expectations.

this empowerment of murray and ryan, this empowerment of a ipartisan working group, think it does create a path for us to be -- the defense budget. there are 12 different budget bills that have to be addressed. i think this is an historical agreement, modest as it is. it does not include the big- ticket items, medicare, social security. once the appropriators have , i think they will work out those appropriation bills in a .ipartisan fashion

pass.k the farm bill will it comes into some of the things that we have been talking about. you have conservative republicans who are worried about spending and looking to the farm bill to bring some of the spending down. you have democrats that are offended by the magnitude of the stamps.the food if this scenario where this kind of murray-ryan compromise can work out the differences? or will they return to some of the deadlock? >> i want to strongly agree with marty on this point. something that is not understood by most people, once you have the number, once you have the

budget number that the appropriators can work with, once you determine how big the pie is going to be, it gets a lot easier to work out how big each slice is going to be. once you work out how much the committee gets to work with, then it becomes a much easier to work out the details of the budget. i agree with both of these gentlemen. once they have a master agreement they know will pass the house and senate and there is the will of the leadership of the house and senate to pass appropriation bills, all of this becomes a whole lot easier. it also becomes harder for whichever side, it gets harder for them to really fire live ammunition at the target because the deal has been struck and we are just arguing how big a slice everybody gets.

let me just say this about the farm bill. steve should have said, when we have record farm income and we have farmland is selling for $20,000 an acre in northwest iowa, it becomes hard for us to rationalize why we ought to be making these large federal payments to multimillionaire farmers. the whole argument about the farm bill, it a number of nuances to that. while i think it has been extremely ham-fisted the way the republicans have handled this, the whole issue of food stamp programs, the fact that we have 48 million americans on food stamps when it was designed for two or 3 million americans, it is an issue that deserves serious attention. why is that? what are we doing? understand why it becomes

incredibly partisan. we do need to have a dialogue about 48 million of our fellow citizens who have become dependent on the government for something as basic as nutrition. >> i agree. that is the question we have to deal with. it is also related to the -- to theo wherein, reality of our income has gone in this country. people at the bottom end of the income scale, that is a polarized this. -- polarizes. millions of americans are working hard and they are not paid enough for the basics of life. housing, subsidies for food stamps. .t is uniform for everyone

housing, some get it and some do not. in the case of health care, the very lowest are on medicaid. and then you have the problem of cost of insurance. of whatpart of the cost the affordable care act deals with. as long as we have that kind of polarization of income, those costs will increase. >> now that we are away from the issue of does the government stay open or not, we will get into the debate about what do we invest in? a national institute of health, reform of how the money is going into food stamps ? it seems like we will see a

shift in the debate and how we are focusing our attention. >> let me raise another issue. i think it is complicated. less have the committees been doing their work. when they do do their work, they are overruled by central leadership. projectittees produce a -- product and then they get vetoed by leadership. my observation is that it is not nearly -- leadership is not nearly as smart as they think they are. [laughter] this issue goes beyond

appropriations. this has been a major problem with the farm bill. i will give you a chance to way back in on the farmers. weigh back in on the farmers. minnesota, the upper midwest, the farm bill is big news. a lot of people are very anxious and i am sensing some increasing frustration and anger that this has not been worked out. >> we are talking about the wrong bill. we should not be talking about the farm bill. we should be taught -- calling it a nutrition bill. this is not necessarily over the farm 25% of it.

it is more about the 75% part of it, is it not? we should be focusing the disagreement on where it is. and hisman peterson republican counterpart have come together on the egg part of it. question? i ask a discussion of this when you bringt, people together, it is tough. nobody is ever totally satisfied. issue or whathat funding mechanism was not in this bill that you think could have been added with bipartisan support? do not know enough about the specifics of the agreement.

i am six years removed from that. >> i do not know. this agreement yesterday, i think it is foretelling of the future. maybe the boat has sailed on medicare and social security. this is an historic agreement. this is a good agreement for the country, i believe. when you're trying to put a package together, you form the coalition. issueot know there is an -- not extending unemployment benefits, that was an issue, right? not tax reform. there are things you could have added to bring more democratic support or more republican

support, but bipartisan support -- i think this was a pretty good agreement. point i come back to the that marty raised? i was on the budget committee before president bush was elected and i was on the budget committee through part of his presidency. once you have an agreement thaten house and senate we're only going to spend whatever the number is, 1.7 trillion, whatever the number. once you have the agreement, it everything get so much easier. was when frustrations the bush team came in and we had the house and the senate and the white house under republican control, i just assumed that we would have one number to start

with. it would have made things so much easier. the senate had a budget. the house had a budget. the president had a budget. to use a very simple analogy. we were at this number, the senate was at this number, the president was about at the senate's number. we ended up compromising at this number. the critical point of this agreement is they finally come together and have a number. then you can have legitimate and honest debate about how much should go to this or should go to that program. that is part of the legislative progress. years, has in recent important of a very

theme that margaret thatcher advanced 30 years ago. first you win the debate. then you win the vote. what we have seen going on in congress, and why there is so leadership on both sides no longer think they have to win the debate. they just have to get enough votes. if they have to break knuckles, promise bridges, that is all considered fair game. if we can get back to the basic notion of having legitimate debate about legitimate issues and not allowing personalities to be allowed in the debate, i think you will see a much more -- you will see a washington that can work. you an example of

that we have heard in response to the murray-ryan deal. big mistake to give up the sequestration number. it was better to stick to that number and cut spending from their. once you move away from sequestration, the republicans have given up the game. now it is back to the usual give and take. was it a mistake of the republican leadership to give up the argument about spending that was tied to sequestration? >> it was a big give. it was the one club that senator mcconnell had gotten into the budget agreement. it was an awful lot to give up. end, is the agreement that was reached worth what was given up?

both sides had given up a good deal. that is why you will see some gnashing of teeth. >> i want to invite members of our audience who would like to submit a written question to do so. congressman, i want to pick up on this theme and ask you to put on your hat as a strategist. think about where the underbelly of the democratic artie is right now. -- democratic party is right now. was this a smart strategic play by the congressional republicans to say, let's shift off of this debate over government shutdowns and the budget and clear the decks to go after obamacare with oversight hearings and a 24/seven watch? >> history will tell us.

mostservation is that large computer programs in the federal government have had a great deal of difficulty getting set up. that does not relate to the obama administration. that relates to the bush administration, the clinton administration. all the way through. it is beyond me why they pay more attention to that particular issue. we have are is great little bit of a program problem -- a little bit of a software problem. i think eventually, that problem gets work out. i think thet, republicans will rue the day they made that a central issue. it will be working for millions of people. right now, it is a plus for them, but they cannot count on

computers to be troublesome a year from now. >> [inaudible] it was a caucus that was quite rambunctious when you were trying to lead them. does this strike you as a smart leadership move to get control back? but the budget issues on the back burner, but the committees work their way and put the spotlight on what is the underbelly of the democratic troublesht now, the that obamacare is having? >> that was part of the strategy. republicans had to get off the crisis to crisis management. they received most of the blame for the shutdown.

it was not fair, but they did receive most of the blame. now the slate is a little bit clean. there is bipartisan movement on the budget. republicans have won the day on discretionary spending. $200 million less than president obama recommended. how could you not consider that a victory? clear the deck and move on to an issue -- websites will be corrected. whether it is two weeks or 30 days. to me, the underbelly is the law itself. obamacare itself. the websites will be corrected, that is not the issue. my kids and grandkids have to live with the law. that is the underbelly.

the strategic lay by the republican -- play by the republican leadership, let's put the budget issues on the back burner. way for obamae care to be front page news. it is going to move well beyond the website. all sorts of issues relating to the insurance companies and he was getting covered and who is who ising covered -- getting covered and who is not getting covered. ask a lot of people -- >> a lot of people will say, the shutdown in october was a dumb fight d umbly fought. it was a fight that had to be fought from a republican

perspective. there is this polar division between those who really believe that obama care would work and those who believe it is a train wreck. democrats and the country will rue the day we went down this path. time will tell who is correct. we think we will have a pretty good verdict by next november. republicans did make the calculation that they had made their point on the budget and on obamacare with the last government shutdown. it lasted 12 days. it was forgotten by the end about tilburg i most republic -- it was forgotten by the end of a october. there is nothing left for republicans to gain.

there are so many other issues happening and is not just health care. suggested, when the website is fixed, i think the problems become even worse because you will have -- millions of americans, we do not know the number, they will lose the insurance they have today. are they going to get better insurance? issues are going to play out over time. battle.a major the key question is simply agenda control. what is the issue being debated? the underlying politics of the budget agreement was, let's get these budget issues off the front page. let's allow obama cares to have

the space on the front page. >> a quick rejoinder. i think we look forward to a .ebate millions of american people are now eligible at the lower end of the income scale. millions more who have health problems and millions more find they get a fairly reasonable deal on the affordable care act. the focus is there. >> it is a great debate, but we will not have it today. i want to ask each of you this question.

shrewd leader in minnesota of the republican party. have you been surprised that the republicans in washington have not been a victory dance in the end zone? they swept into power in 2010 with a very coherent argument that spending was out of control. the budget deficit was unsustainable. here we are with the fastest decline in the government's budget deficit in washington since world war ii. the cbo is reporting that for the next decade, the budget deficit will be in the two or three percent range. why isn't that republicans seem to make that victory dance? >> you are correct. left-wing democrats should be

shaking their heads. they cannot believe that this has happened. the spending level is one trillion, far less than any left-winger would've ever imagined two or three years ago. they should be declaring victory on the budget. i was going to respond earlier. declare victory while you clear the deck. republicans have won the day on the question of discretionary spending. that should be something that we should be able to take to the american people. spending is less. let's not eat our own. it was a victory from a conservative standpoint. >> you made some tough calls on the spending side, decreasing

spending, raising revenue. it was not particularly popular. do you think republicans have now won the debate on spending? it it long-term spending, still gets to be a question how you solve that long-term. entitlement programs and what you do with the revenue side. -- cautionary spending discretionary spending is not what was driving the deficit. in the short term, those cuts [inaudible] art of of the negotiation is even when you believe you have had a big win and you know you will have to have democrats votes in the senate and republican votes in the house, you do not want to pound your chest too much.

>> it is helpful to the republican leadership in the house to have a lot of grumbling about this budget deal. it helps them pass it in the senate. you always have to have -- be a little bit humble about the results of any negotiation. in the end, that is how it will play out. grab the victory, but do not do the victory dance. >> never try to embarrass the other side. --do want to give it away the republicans want to pivot away from talk about a shut down. strategy,rt of the but it is not just to have hearings about obama care. there are other things going on in the united states of america and around the world.

.e have a problem in syria we have a problem with iran. doubt thes no republicans will have a strong set of talking points. the democrats will have their talking points about strengthening the economy. this will get played out in the campaign. we have a question from the audience. do you think it is possible to convince an urban legislator to vote for a farm bill that would make significant reductions on the level that house republicans have talked about, more than $40 billion of cuts? do you think urban legislators in the house or the senate would ever go along with something like that? >> those cuts will be dramatically reduced in any farm

bill that passes. , therem bill in general are disagreements between the different commodity groups. at eliminatingg the basic blanket payment to farmers. perspective of urban legislators in minnesota, the farm program is one of the few programs the federal government where we get a disproportionate fare in minnesota. we do quite well in terms of money flowing to the state. >> another question from the audience, congressman. you are talking about how much larger it is in terms of the number of people.

for somee potential significant structural reform? maybe a shift towards some kind transfer? >> i do not know. we have to get our arms around it. we are supposedly in the fifth year of an economic recovery. the president has raised the issue of the income disparity. it is a fact and something we have to come to grips with. from my perspective, we have to begin to understand how and why that happens. from my perspective, we need to find out whether or not the federal government and federal policies are to blame for that.

unique things about the food stamp program is that it is universal for low- income people and it is tied to food products. sometimesme quarrel about what it is or is not. you have housing programs were a small percentage of eligible people end up getting assistance for housing. a significant difference between whether you qualify or unqualified for that type of income supplemental, one of the is thatof food stamps people qualify on a general basis. the truth of the matter is, i chaired the subcommittee that it oversight over nutrition program. -- it was done by other

people, but while i was in congress, we moved away from the paper food stamps to the debit cards, ok? we believed it would dramatically reduce the amount of fraud. cure for the number of people on food stamps is a much stronger general economy. when the real unemployment rate was down somewhere just north of three percent, we saw numbers collapsing on these programs. how do we really get this economy moving again? how do we get people to invest and build businesses and jobs in the united states? i think we are closer than we even think to that happening. policies in

washington are keeping that from happening. >> there is a debate about this issue. one of the concerns in the business community has been out the crisis nature of decision- making in washington and the government shutdowns and the threat to our currency has created a kind of a depressing effect on economic rose. this is one of those big debates. congressman, i want to come back to an issue we have not talked about that much. unemployment insurance, a lot of democrats feel the deal that has been struck in washington is basically on the backs of struggling unemployed americans, over a million will be cut off from unemployment insurance. if you were in congress, would you be voting against the steel? -- would you be voting against this deal?

>> i would be voting for it, but i would be disappointed. >> do you have thoughts about what we do about the long-term uninsured? >> long-term uninsured? >> i'm sorry, long-term unemployed? >> there are areas of our country -- you almost have to define geographically. in the coals -- states, eastern kentucky, something like 100 out of 130 mines have closed down. the ideas that you can have job training rogue rims for coal miners and turn them into training-- job programs for coal miners and turn them into computer

programmers, i have always thought that was a fallacy. i believe that simply extending unemployment benefits probably increases the unemployment rate. human nature is what human nature is and the longer people can draw benefits, the more choosy they will be about what kind of unemployment they will take or what kind of employment they will take. it is much easier to find another job when you already have a job. we need to get people back in the employment pool and extending unemployment benefits probably works against that. avoiding a government shutdown is headline news. are curious, when you

speaker, it was an interesting time in minnesota politics. we had gone from a fairly bipartisan -- there were a set of rules that both parties tended to play by. politicsbarred sort of like a government shutdown. can you put your finger on what changed that led here in that has gotten us to this point where anything goes? tougher. get i was a part of it. going to point to something specific that changed the atmosphere a little bit from , little bit more collegial

understanding of each other's positions as opposed to a hard- line partisanship, i would say preventedlaw, it individuals from getting together in the legislature and going out for a supper, getting to know each other. it might've been sponsored by an interest group. all of a was ethically wrong. if you do not know the people on the other side of the aisle, much less may be in the other body, it is more difficult -- it i think that is part of it. i also think the politics part of it, we have so many districts democratic orll

all republican. a democrat sitting right here, you will win. i like that in the 1990s and 1980s when all the challenges internally with the caucus primaries and the challenges to endorse candidates running democratic side. then they changed the republican side in 2004 and i did not like that is much because they cause problems. that did take place. >> are you finding when you are the speaker of the republican party of minnesota, that the type of people showing up and becoming part of the endorsement process of the republican party commitment,ntense uncompromising commitment, to their agenda? did he set of issues that they thought were the most up organ,

rather than to the party itself and winning elections? did you see some of that? >> there was probably less balance amongst the people who attended caucuses. that includes democratic caucuses as well. i've spoken to democratic caucuses. system the caucus intended to bring out those folks who were more passionate. less compromising, less balanced. that is why all day sunday primaries look better to me. >> i want to pick up on this point that speaker swiggum mentioned. the power of the single issue advocate. it was rising in the republican party, have you seen arising in the democratic arctic? would that make it harder for democrats to vote for compromise that would step on toes? such as the entitlement

programs. think there has been a growth of advocacy groups across the spectrum. many more than when i first started with the republicans. that is a constitutional right in this country. they are organized. hasnumber of people increased substantially. i think lots of them appeal to money for -- for money from a lot of advocacy groups across the political spectrum send out mailings to people. there is no ambiguity about what is right and what is wrong. >> does that make it harder to govern? if you were chair of the budget committee today, dealing with

well-organized, intense groups, does that make your job as chair harder? >> do you agree? in its mostcracy glorious form, but also a constraint on reaching some of these agreements that we are talking about today? >> absolutely. steve raised a good point in terms of socializing. i suspect it was true when martin was in the legislature. there was a good deal of socializing between republicans and democrats both top we got to know people on a more personal level. i never felt that my vote could be bought for the price of a dinner or a lunch. it gave more opportunities for us to get to know our fellow legislators. i do believe it. martin has in some respect contributed to the left civil behavior of members.

it is hard to call someone a name if you have spent time with them and got to know them. secondly, and i strongly agree weh what the speaker said, have seen an enormous which iation of groups would go so far as to say are not bound i the facts. they will selectively pick that about this issue or that issue and they have become incredibly effective at communicating that message to that group. vulcanization of our country with all of these various groups speaking specifically to their groups. then you overlay that in the sense that the way people get their information, the media. it performs its function, and we now have so

many different ways people get their news. amongst the young people here at the university of minnesota, very few of them probably watch the nightly news. they may have their particular cable news network that they prefer. it is obvious, at least to me and isis at two most, that each of these outlets tends to have its own point of view and its own storyline that they pursue. combine the fact that we do not get together and socialize with the geometric development andhese interest groups, what i would call the vulcanization of herbal media, media, but does that mean things cannot get better. strong leaders were committed to winning the debates before you win the votes, i think ultimately they will prevail, even against these almost

insurmountable objectives. >> i agree. >> a lot of it comes down to leadership. at the federal level, i agree with what the speaker has said. changes, thing that when i was first elected to congress, we put our house for sale and moved to washington. that was true of most of my colleagues. we got to know other people, spouses, kids of other members. today that does not happen. people run in and out on the last plane in and the first plane out. it compresses the congressional schedule. people.re to talk to career, ie end of my would see someone next to me and

asked if they would know who that was. they thought it was someone from the other side. it was dramatically different. to beyou feel, to add on persuasive list of reinforcing thatrs for factionalism, one of the challenges is the nature of our nomination process? who gets nominated today, is that different? what peopleects think of their districts. i think the reality is that people are more poor. reflected, whether it is a caucus or the primary system. swiggum, you live in the southern part of minnesota and you have been going to your precinct for many years. are you show up there, seeing the same set of people or is there a new crowd that seems

to be on the way? >> there are definitely knew people loved come. that is good. you want to branch out. anywant to be inclusive in party. that is good. as speaker of the house, when you have to go to your local precinct office and fight to be a delegate, that is questionable. but then it happened. >> one of the challenges you're there areta is that tremendous resources for groups like the tea party and they have figured out that going into the precinct office is a great way to get some leverage over the nomination process. and power to them. they are using the processes that are available and involvement and participation. you mentioned the tea party, but there are left-wing groups that are doing the same thing.

>> absolutely. >> we have seen this in the democratic party. it does not matter as much anymore, they go straight to primary. this process of the single issue advocates has played itself out. we are just about at the end of our time. give each of you a chance to reflect on where we are. we are heading into 2014, should we expect to see a continuing level of strife? corner andturned a we will see some real movement and appropriations and perhaps some reform related to food stamps, or other issues like immigration? will it be more of the same, or will this be a shift where we roll around to the end of this session and there could be a record of real accomplishment? >> i noticed that the vikings scored today and their opponents

score touchdowns in the last two minutes. things don't if move much until the end of the session and their pressure point is valid. we will always find that more activity will happen legislatively as you reach a pressure point. whether it is the budget or the debt ceiling. those are the times when you will see action. i do not recall that when moses led the israelites out of egypt he told them that they would wander for 40 years, ok? they did not know that when they left. i do not know how long we will wander in this timeframe. but i do know that ultimately i believe churchill was correct when he said americans ultimately do the right thing. once we have exhausted every other possibility. i think we as americans understand that we are all stakeholders in this government that we call the federal government.

we are kind of in a tough situation. there is a chance that we will begin to see some light at the end of the tunnel. we will always have big differences. there are real philosophical differences. there are reasons that people started throwing tea in boston harbor. we are americans and we are entitled to have strong feelings about. issues. that will create friction. i am reminded of something that we were told at the bipartisan retreat one time. i have never forgotten it. what we do every day on the floor of the house of representatives in the united states house is a substitute for civil war. you have to assume that there will be friction. you also have to assume that ultimately strong people will rise to the occasion and that ultimately we will move ahead together. >> thank you. you agree that while fiction will remain, as a move into

2014, the pressure at the end of the session and the election in november, we may well see some touchdowns here? perhaps immigration reform, perhaps other big scores? >> that would surprise me. maybe immigration. i just hope the farm bill gets taken care of in january. i think with the appropriations numbers set, that process will work itself out. if the leadership left it happened. they could finish that work can be done in september. see lotse surprised to of high visibility political issues dealt with by the congress in the next year.

i think they are potentially on a very quiet cap. hapath. i want to swiggum, thank you. you are the guy who pulled together the panel. our staff here at the university of minnesota. they have put on more than three dozen programs this year. you tend to be bright and optimistic. this is one of the least productive congresses we have seen in some time. a you look at this deal as light at the end of the tunnel? more of a northern european cap this is of your friends?

>> looking to the outside, i would tell you that there are lessons that were learned. there were lessons learned from the shutdown, from the continuing resolutions, which the republicans had concerns about, the democrats had concerns about. i think there were lessons learned. i am encouraged about this agreement yesterday. it will a a path or the future. whether it is immigration or the farm bill, there will be a path. my students here at the humphrey school will tell you. here ifot govern from you cannot govern from here. you cannot govern from either polarized and. you have to bring people together. we have a path with the his store, i will say it's historic, agreement on the budget. >> that is what we are reporting today from the humphrey school, i want to thank everyone for coming.

[applause] >> on this weeks newsmakers, we will have more on the budget deal. on spending more and the appropriations process. kentucky is the congressman harold rogers, the chairman of the house appropriations committee. you can see the interview sunday when newsmakers airs at its regular time, and they at 10:00 a.m.. 10:00 a.m.. >> the archduke francis ferdinand and his wife were in sarajevo, the capital of bosnia, on a tour. it was a bad day, it was a big serbian national holiday. serbia was absolutely furious

that austria-hungary had taken over bosnia. it was seen as a provocation, and a radeon plotters who were seen to be plotting to assassinate the archduke as a symbol of oppression. they decided to kill him. and they did. it was sloppy police work. there were warnings that something was afoot. shot the archduke and his wife point-blank and they both died. >> the assassination of archduke ferdinand and his wife and the events leading up to world war i. sunday night at 8:00 p.m. on c- a.n q and a full -- q and >> next, a defense department briefing. will discuss the recent budget deal that was passed in the house and how it will impact air force operations. this is 45 minutes.

>> welcome to the state of the air force briefing. i would like to introduce general mark welsh. we will hear this morning is what we are accustomed to. they'd identify yourself and your affiliation. one question in a follow-up. we have 45 minutes, so we want to give everyone an opportunity. happy holidays to all of you. >> happy friday the 14th to everyone -- friday the 13th to everyone. we had a confirmation earlier this morning of our next secretary of the air force. i have known her since i first came to washington. we worked on a committee hearing the pentagon entering the clinton administration. i am very excited to go back to my day job as undersecretary full-time. secretariesa number

-- a number of secretaries and she string my time doing this. they will be the strongest team i have ever seen. i am excited to see her. she will be starting formally on tuesday as soon as the paperwork is signed. i want to acknowledge today the 377th birthday of the national guard bureau. part of theical overall force. today is also a for the delivery of the 100 joint strike fighter down and forward. it is unimportant milestone for us. iting my time as acting -- is on an important milestone for us. during my time as acting secretary, i have met with thousands of airmen. some in small and some in large settings. if you have any doubts as to why we are the best air force the world has ever known, it is our

air men in uniform. it was great to meet all these people that we recruit and retain in the air force. i have many people to thank in and outside of the air force for making the six-month easier than they probably should have been. i would like to thank general welsh who has been an incredible partner during this time. i want to thank him for all of his support during my acting tenure. i will focus most of my remarks on the budget situation. i will talk briefly so we can get to the q&a. i believe that the american people have the right as we come out of long wars to feel that they can spend less and invest less in national security. the national debt burden is a long-term national security issue. we are committed to being a part of that solution. we recognize that budgets are coming down.

after conflicts like world war ii and korea, we reduce spending. we have usually not started until the conflict is over. we are still at war. we have always had some kind of ramp to ease into the spending cuts. sequestration is not allowing for either of those things. thee are immediate cuts and law does not allow for flexibility. congress did allow some flexibility lester. it is not as the dollar cuts that we are taking in sequestration. it is the mechanics of sequestration. the immediacy of those cuts are forcing us to make choices that we would not make otherwise. down inrcing us to draw a more destructive wave than what i believe is necessary. it has also put disproportionate pressure on readiness. assembling our force takes time and that is not possible. congress is reducing -- resisting and attempting to put oversight on our books.

it cost money and takes time to reduce your personnel forces. the only accounts that be can be quickly accessed our maintenance and investment. this has resulted in a profound impact on our readiness. ae air force was already in 20 year readiness decline, something we were just starting to address when sequestration head. the air force is structured in a way that requires us to be ready. two year readiness model simply do not work for the air force. when the flag goes up, we are expected to be ready. feed is a key advantage of air power. we stabilize conflict until the army, navy, or marines can get there. provide trade space national security team. the number of air force squadrons equals requirements. we need to be all in, right away. there is no time built-in to bring some of our forces into readiness. they must be ready at all times.

if it takes months to generate, air power, we lose diplomatic influence on which the nation is come to depend. we are encouraged by the budget compromises being debated on the hill right now and we hope for passage. it takes us down to numbers than we would like, but it does not solve all our problems. it does provide some relief over the next few years. it provides additional funds to help us with our shortfalls. it provides for some stability in planning, which we have been which we have been without for too long. in order to protect investments for the future, we need to share -- shape and air force that can be ready. the sooner we can get on that path, the sooner we can get to a oural -- a new normal for aircraft. budget withtail a cuts that none of us like. each of those cuts will have a

constituency inside and outside of the air force, including on the hill. it is important to remember that we cannot use these cuts individually or ad hoc. we need to remember that even with the relief, this is a compromise offers, we are tilting a budget that includes deep cuts. if something is restored to the budget we present to the hill, something else will need to go. we must wait and see what level of funding the air force will be given. we must be prepared for real change. thank you. >> thanks, boss. good morning everybody. i would like to add my congratulations to these secretary and we are excited to have her on board. we are excited about what her leadership will bring to our organization and people. i am confident that she will love them just like we have for years. fanning,of secretary the greatest thing about eric he never acted

like the acting secretary of the air force. he acted like the secretary of the air force from the date you was put in this position. he has been absolutely fantastic. i do not need to butter him up. the guy is really good at what he does. he has taken on this job full force. he has made tough decisions at great personal pain at times. these are not easy decisions. he has taken the time to get to know our air force and air men. he has worked tirelessly on their behalf. the only good thing about losing him in this role is that he is still our undersecretary. the air force wins all around. i would like to add my congratulations to the national guard. i hope i look that good at 377. i would like to still be taking. kicking.g --

the commander of air education and training is down there. that airplane is our first training coated airplane. first airplane that will allow us to set up our training unit there. it is a big day. i just came up of two days with the chief of staff with all the wing commander. we reconcile to dca and we had a three-day conference land. one of them was snowbound, but we did get the last two days in. we focused on people's specific issues, sexual assault, harassment, diversity, respect, those kinds of things. yesterday we talked about the other things that are wing commander's need to worry about. we talked about what a great time it is to lead in the air force. there are lots of issues that people turn to us for help with. we talked about how people are not doing their job and the issues that sequestration and the resource changes in the

future have for our air force. we talked about the best way to balance capability capacity and modernization and readiness over time. themy to expand clearly to that the reality of sequestration is that the bill will be paid primarily from modernization readiness. that is where the money is. that is what will be affected as we look into how we will adjust for the next few years. we looked at the proposed budget deal and what it would mitigate. it will mitigate readiness. it is at the top of our list. if we can get any more funding here in the first few years of sequestration, clearly it does not change the long-term picture of sequestration, but it allows us to put the money back into near-term readiness. that is a good thing. sequestration does for the air force -- it gives us a dilemma. near-term readiness, or do we ?und long-term modernization

is it not we're trying to walk. we also talked about the great airmen were privileged to lead, we talked about them a lot. then we talked about you. thank you for continuing to tell the story, not just of the air force, but of the department of defense. some days it is not so good, but thank you for joining us. we would love to answer your questions. >> i'm with npr. if ato soon to know compromise will have any this -- impact on your decision? can you talk about whether your decision is still taking shape, and whether it is shaped by budgetary concerns? >> let me start last part. it absolutely has nothing to do with this.

support will always be a key critical mission for the united states. i believe in it completely. i have spent years working with the army. i have a son who is in the u.s. marine corps. it is not close to my heart, it is in my heart. aircraft that the we are examining as part of our budget proposal this year has nothing to do with that specific airplane. it has to do with the balance i referred to before. our job is to provide the capability for combatant commanders. your support is one of those aspects. -- air support is one of those aspects. deep strike, everything that we have on the battlefield, that should be issue for us, is how do you provide that in the best balance possible with a reduced force?

that is the issue. to pay our 12 billion dollar a year bill for sequestration, we have had to make savings. that is the problem. all of these discussions are based on. it is not about his pacific platform, it is about balancing relationships. they do it well. we have the best air support. are there other airplane that do it? absolutely. we have a plan to replace certain aircraft. the plan is not change. >> you know many supporters of this aircraft think that even if it survives, it is going to be a well before it is ready to take over that role. can you promise them that a decision on the a-10 will come before the f 35? authorities done

in afghanistan today are not done by the a-10. the b-52 is the air support. done missions on the a- 10 and the f-16. we can do it with other aircraft. they do other things for us. --i am the ground compounder commander, one of the most critical concerns is where is the enemies' resources? , and handle the fight there is no one who can stand in front of the marine corps and survive, but the operational concerns are that an air man's job on a big fight is to eliminate the operational reserve. we do not want into effect the ground fight. you have to eliminate the enemy's ability to fight by affecting leadership and centers of gravity.

that is what the air force does in a big way. you will see big numbers of people on the ground. those things are done by the other airplane they mention. the a-10 cannot do those things. decide how many to cave, those are the things we must factor into this. a dollars -- how do you save dollars -- to do that you have to start talking about the infrastructure behind the aircraft. facilities that do all the statistical support, etc., that is re-create big savings. to find $12 billion a year, we have to look at chunks of money. that is why we're having this discussion. proponents for a whole lot of systems and i agree with all of them, but somebody has to balance is. i believe that is our job. compromise, can

they give us some relief in 2014 -- it takes us down to those lower numbers and we have to put an for what we can afford in the long-term. >> the language of the defense opposition act says that you cannot spend any money in 2014 for retiring a-10's. is that helpful? >> i do not think the language has a major impact on the discussion we are having now. this discussion is about the budget and what happen five years after that. this is something that needs to play out. it is a fair discussion. we will have it inside the department and on the hill. we will have it would be white house to some extent. it will be about a number of things that we are going to have to take out of our budget to meet the requirements of the law.

it will be an entertaining time. fewer --aining time entertaining time period. >> you announce important management tools in the last couple days. the budget deal that has developed, does it affect that in any way? do you have a target for how you are looking to affect that with those tools? what led to the selection of those specific tools? i do not think the budget agreement will change the fact that we will put these guidelines out. our intent by doing this is again, as the secretary mentioned, are planning window is 10 years. through the end of sequestration, what will our --ernet like in 2023 after what will our air force look like in 2023 after years of

sequestration? force ink at that air 2023, it has to look different than it looks today. it will have to be smaller. he cannot afford to operate and maintain readiness at the size we are. we will have to draw down people. of the tooth and detail that comes of that structure. as a result, we need tools in place that allow us to do that. if we are going to consider impacting people in that way, our belief is that we have to but the guidance out as early as possible to they have a way to think through the impact and if they are eligible for any of these particular measures. we would like to get this all done with voluntary measures. if we had the leeway based on budget decisions to do that, we will go that route. take don't, and we have to involuntary measures, i would like everyone to have six months a time to talk to their families and think about the impact this could have on them.

they will need to look at the reality of where they are in their career and where they are going in their career. are they at risk for any of these matters occurring to them? they will have to have that conversation with someone in their immediate chain of command. they have to make a fact based, as opposed to an emotional one. that is the reason for putting this out early. i hope something changes in the budget environment and we put out a note saying, don't worry about that. tools --ere specific why does it not others? >> most of these are things that we have on the secretary possible ready to do. a couple of these are tools that we have not used in the air force before. knownare tools that are to the department, understood by the department, and we have the authority to execute them full top that is the reason. >> we used every voluntary measure that we could use.

the others are again those tools that are available to us and to the greatest extent possible, we will try to use them in a , but the tools do not always allow that capability. the most important part is, the airmen know what is coming. they see what is happening with the budget. they want this information and we want to give them as much time as possible. we do not know what our budget will be. to get this information out there in order to have those tools available. we want to give the airmen as much time as possible to complement their -- contemplate their futures. >> wall street journal. i wonder if you could talk a little more about if the budget deal goes through and there is relief in 2014 and 2015, where

will you put the dollars back in? could you talk about that a little bit and then after the deal is over and we go back to the sequester, are those readiness problems that we saw this year reappearing? will that readiness problems >> we have issue? not fully sorted through the budget compromise. we do not know how that will impact as a whole. force, does for the air whatever funds become available for us, is not alleviate readiness problems. in 2014 us with them and 2015. what we saw over the summer as a result of this strategic choices management review is that if you're going to change and resize your services, in this case, the air force, it takes

thoseo get money out of structures. there is a cost upfront when you do it in a voluntary way full top -- voluntary way. we are working with congress. went into the last round with an estimated 24% capacity. we are smaller now than we were done -- then we were then. these efficiencies that you try to bake into the budget and into your organization take time to realize. hopefully the relief that this through those first few years when readiness is an issue. it will take us a while to dig out of the readiness backed up that we are in. we will not face the same problems in 2016 that we would without this release, but we will not have the readiness problem fixed by then.

>> you talked about resizing different parts of the budget. given that the f 35 program was born in a much different era, and the threat was different, ideological to resize the f 35 program? should it be less of a sacred cow if you have these very difficult choices. is it too much money to devote to this one program? >> operationally, we have to have it. the decision to truncate the f- 22 line has left us in a position where even to provide air support authority -- air superiority on a theater scale in a full spectrum fight against a well armed foe 10 years from now, and that was a platform we are testing today. you have to have the f ready 52

argument the f-22. 35 two argument -- to augment the f-22. a new fighter will not survive. operationally, it is a fact. i am certainly not willing to go to my secretary, the secretary of defense, and say that i would recommend we keep our old equipment and updated and accept more losses and compound the incredible ability of our aviators to win the fight anyway. i do not believe we have to settle for that in this country. operationally, we need the f-35. we at the point right now where reader going up and production costs are coming down. i am confident that the company knows what it cost to build an airplane. since 2011, the program is that

milestones consistently. the 100 airplane coming out of the production line -- we have allies buying into the program and committing to purchasing aircraft that will keep being more of a financial benefit for us over time. the cost will come down and operations will be lower. the development of new capabilities over time will be lower. that has been a huge financial benefit. this is not a good time to walk iny from the f 35 program any way, shape, or form. that is my opinion. i do not believe that this is a good time to talk about truncating and capping at some number. that will put the program at risk of financial costs eating more. operationally, i come back to that all the time.

we need the fifth generation capabilities. it is the only option available to us. quite a few are steeped in acquisition issues. the 100 airplane is significant from a milestone stamp point -- standpoint. going from 29 airplanes to 42, based on what you know, has lockheed martin's reduction capability improved? you may not have insight into that, but i wanted to ask you that. >> it has not been a factor since they completed the aircraft. they were starting to install them, but i have not been down tents. i will refer you to the po on that one. >> i saw a movie the other night that emphasize the importance of helicopters.

74 congressional numbers fundsday were asked to the search and rescue helicopter , and that is contingent -- is that one of those things that is nice to have, but they might need to kill it to get this big chunk of dollars? >> it is a program that we must have at some point. we are talking about lots of things that we must have. the airport -- air force must recapitalize. how do we recapitalize that the budget comes down? if there's not enough money to do it all, what is our priority? below that, we will use our best knowledge as we can. combat rescue helicopters is something we want. we will see where the budget end up. >> you were awarded a contract in the second quarter of this year -- >> we need to know what the

budget topline will be. that itt to point out is not an issue of killing it. because of the pressure we are facing with sequestration, it is an issue of prioritizing and deciding when we get around to recapitalizing the platforms. it is a critical platform and a critical mission that we provide. and we takeed trust it very seriously. in the next two years, investment dollars are going to be precious. we will have to prioritize them. >> the mission is part of the fabric of our air force. it is not going anywhere. >> there are those who say that the marine corps or special ops will be better positioned to do the search and rescue missions using an existing platform. why must this be an air force mission?

why can't this be a mission for the ground forces? visityou had a chance to a common search and rescue unit, which you probably have at some point in time, -- >> i have that same question to a combat search and rescue crew member. >> you get the feel of why this is so important to us. if we are going to send air meant -- and we send more people into enemy airspace than anyone does in a major conflict. if you look at aviation, we do about 690,000 people to deal with. the other services combined have about 100,000 people. goingjority of people across the line in airplanes will be people who are air meant. -- airmen. if you're going to send people

that way into harms way, there is a certain sacred trust involved in saying that we will come get you if there's a problem. we have a group of people in our government siege and rescue force will go anywhere and do whatever is required. i don't know how you logically explain the impact that that has on aircrew members. but as someone who has gone across the line, knowing that someone was coming to get me, even if it was just to bring my body home, and that they were willing to risk their lives to do that, that gave me a confidence i did not think i would have otherwise. the mission is part of the fabric of the air force. who not know an airman would not say that we should not be doing combat search and rescue. we owe it to them. >> following up on that, i want to ask you -- so much of the debate about the a-10 --

specifically on combat search and rescue, as you well know, the a-10 has an observational role. it is a key component of that mission. if we are looking at a scenario where we are not doing a combat search and rescue a few years down the road, what does that say about the mission itself? how will you have to reconfigure the heart combat nature of the mission? if you take those little pieces out, how was the air force going to make that mission hold in the coming few years? >> we have been doing this since 1947. we have developed a tax on different platforms and ways to do it. the mission will continue to get done guys. we will continue to provide air support. the mission is not going anywhere.

it is part of what we do. we are really good at doing it well. when i flew the a-10, it was not the ideal platform. i had a great partnership with men and strongm support from congress. we built a platform that is fantastic, but it is getting old. we have to figure out how we're going to do this in the future? .t is like the b-52's we cannot rely on the b-52s for the next 100 years. >> i am with inside the fence. 35, how comfortable are you with addressing software risks on that program? will he see any further delays as a result of software problem's? what we willnow see. i'm confident that we will get the software in place that we need for 2016. i'm pretty confident we will go

there. about theoncern budget impact on the rnc for the software development. -- research and design for the software development. of the firm --es fully operational. that is what we are watching most closely. we are spending the majority of our time focused on that. if the software development to this point has been good. it is a cop located airplane with lots of software integration problems that we have not had another aircraft. it has a similar problem to the f-22. it is often compared to the f-22 when it comes to software integration. it is integrated at the censors. is brought together for display. no central processor like the f-22 were all the data came together in the same place. it is a different design.

it will help with some of the data integration of this. the company will tell you that they are worried about -- they are always worried about software. they are worried about having enough software writers, software engineers. that will be one of the demands that we must focus on for the rest of the program. it will not be easy. >> i have another question. when the budget is out early next year, do you think we will see any examples over the services have collectively gotten together and fought -- thought through ways to reduce militaryy in terms of capability? >> we hope so. i will give you an example. because of the demands of the conflict in afghanistan, we have gotten into every service performing support. the air force provide isr support for army maneuvers.

you that theytell are developing their own isr capabilities for maneuvering. that is what there were your program is all about. they are attempting to provide direct support. that frees up the air force to provide isr platforms and capabilities at the operational level to inform the commanders. we get a higher level isr work. it is a different set of priorities. that allows us to get up to 65 orbits of medium altitude. wheret about a situation you have two services potentially doing the same thing? and one of them would stop doing it? >> we are doing the same thing with predators and reversed. we need some capability to do that.

air force command will maintain a capability. we need the ability to support the units as required. i mentioned the numbers a minute ago. service is that the aviation group is incredibly good at what they do. provide -- we will need to augment that a little bit, but not to the level that we are right now in a in a stand of stop if we want to build on isr -- in afghanistan. if we want to provide theater support in the pacific or any other kind of fight, then those commanders will tell you that what we have right now is not the centers they need. they need a different type of isr package. for us, the problem is how do we take what we are doing now and then reshape it into something that is more beneficial? that will require downsizing

what we have and reinvesting into new things. let's let me come back up. yes sir? what about the future of manned isr programs? and a possible move of that program to the army? play out here in the discussions over the next 3- 4 months. anything platform, how can the department best use it? the air force does not feel that we have ownership over these things. it is a good platform and we should share it. if it is more useful for a mission in the army, we will have that discussion. and we are, in a number of areas. >> going back to the budget agreement, what tangible impacts are there on flying hours and red flags? >> when i talk about readiness, there are two pieces to it.

one is individual readiness meeting that pilots are flying enough and security forces are trained well enough, it is about you and every unit being prepared to perform for the job you get. readiness for the air force has another implication. that is what you are talking about. what makes the difference and otherr air force air forces? it is not just size, it is also capability. a lot of air forces have weapons that are trained to use them. the difference with the united egg air force is the way that we train. in level of sophistication our training and the level of difficulty in our training. that.s integral to the weapon school creates our actual phd's. last year we had to cancel red flag exercises. that cannot continue. litigation that

we can do with this relief effort will ensure that this does not happen. >> i will use the term rpa instead of drawing. when you talk to people -- instead of drone. when you talk to people in the the ideanity, there is that fewer airmen will be taken from man's platforms and moved to rpa. it may even curtail the career field. a reductionng to be in the rpa community following 2014? so the rpathink creative fields is going to change. is goinga career field to change. over the next 50 years, it is going to look dramatically different than it does now.

the united states air force will be in the middle of that change. we are not walking away. at a point where we will go to 100% of our aircraft eating remotely man's. manned.g remotely- we are going to evolve in the type of system that we operate. we will still have a force that is significant. it will not be the majority of our force, but it will not shrink. a number of people find different types of systems may change, but we are not getting out of this business. we are not getting out. eventually this will explode nationally. and that is going to get really exciting. evidence from the combatant commanders that demand for this will decrease? is it quite the opposite?

>> does that mean you are going to need to pull further people from manned aircraft -- >> it means we will reinvest the money that we save from that into reshaping the isr enterprise. whatever that means. they're looking at all kinds of options for that. -- we are looking at all kinds of options for that. >> both of you travel a lot to the bases. you meet thousands of airmen. i'm curious, the questions that you get from them, are they worried about what is happening? what are their concerns specifically to you when you speak to them? >> they are very smart. they know what is happening to the air force and what is happening to the military. they see better than any of us the impact that this is having. they are not training, they are not flying, they are not able to maintain some skills to the

level that they would like to. they do worry about that. they worry about what their future will be in the air force. what i see from this summer and from everything we have done for people in uniform, the concern is that the budget system is keeping them from doing what they need to do. during the furloughs, civilians even complains about the impact it was having on their pocketbooks. people could not do what they needed to do for the air force in 32 hours a week. they worry about their ability to contribute to the mission in the way that they would want to. they worry about the impact it is having on the air force. >> if you're a pilot and you are sitting inside your squadron building and looking out the window at the airplanes that you are not flying at all, i think you probably believe -- you would feel pretty hollow right now.

and that squadron, it certainly feels that way. we have to be concerned about that. that is the readiness issue that we face. we have to figure how to solve this. we do not want that to be the picture we are dealing with. that will have an income -- impact over time on our ability to fight wars. >> are using problems of retention? >> no, no we are not. >> you travel to china earlier this year. they tested a stealth aircraft. how much do you know about this capability and their intentions? >> i do not know much about their intentions at all. we are getting a picture of the capability over time. much time not be until they feel that. we will get a better picture of its capability.

when it appears, we will see what it does. in the meantime, we will do everything we can to figure out what we need to compete with that capability. it will no longer just be china, once they feel -- when the russians are fielding that feels the platform, others will feel it. t's the capen't, the technology, not any particular country that has it. gentlemen, closing thoughts? >> thank you again for telling the story. the air force is in good shape. excited about what they do. they're proud of who they are. hey believe what they do personally and in the view of the nation. they're motivated and strong. doing the job as well as they can. the job from here is