Skip to main content

tv   Key Capitol Hill Hearings  CSPAN  January 18, 2014 4:00am-6:01am EST

4:00 am
4:01 am
4:02 am
4:03 am
4:04 am
4:05 am
4:06 am
4:07 am
4:08 am
4:09 am
4:10 am
4:11 am
4:12 am
4:13 am
4:14 am
4:15 am
4:16 am
4:17 am
4:18 am
4:19 am
4:20 am
4:21 am
4:22 am
4:23 am
4:24 am
4:25 am
4:26 am
4:27 am
4:28 am
4:29 am
4:30 am
4:31 am
4:32 am
4:33 am
4:34 am
4:35 am
4:36 am
4:37 am
4:38 am
4:39 am
4:40 am
4:41 am
gentlewoman from florida, ms. ros-lehtinen,
4:42 am
.
4:43 am
4:44 am
4:45 am
4:46 am
4:47 am
4:48 am
4:49 am
4:50 am
4:51 am
4:52 am
4:53 am
4:54 am
4:55 am
4:56 am
4:57 am
4:58 am
4:59 am
.
5:00 am
mexico will host president obama and prime minister harper for the north american leaders' meeting. the lessons of the past will be at the forefront of our minds. our focus fundamentally needs to be on the future, and that is were it will be come on the growth of our markets, the strength of our partnership, the health and well-being of our people, and the security of our continent for years to come. mr. secretary? >> thank you, and good morning to all. thank you, secretary kerry. thank you, minister. this has been a very good meeting for mexico. it has been an opportunity to talk about issues that are relevant to the region. at the outset i would like to recognize from mexico the long hours, the long days that secretary kerry, the risk he is
5:01 am
taking to construct a better world, and i think those risks have paid off and mexico recognizes that hard work. we had a good meeting this morning. i would like to thank the embers of the press. [speaking spanish] >> i would like to thank mexican and foreign correspondents for their attendance. > as secretary kerry said, division of 21st century north america, we will work to become the most competitive and most dynamic region and the world. we will be honored to host president obama and prime minister harper in february. we discussed many topics on how to work, to increase our
5:02 am
prosperity, our leadership, our international engagement, and the opportunity of citizens in the north american region. the president has said he believes 21st north america is called on to become the most competitive region and the world. prime minister harper and president obama also share this. we are willing to make this work. as the secretary said, and the minister believes, we have shared values. we have a working partnership that has worked for the benefit of our people. we also are a region that enjoys an important number of competitive advantage is going forward. we have a competitive labor costs. we have huge transportation and logistic advantages. have qualified
5:03 am
in human capital. we have a new paradigm. we have had a framework that has worked and has worked well. as we marked the nafta 20th anniversary, it is important to see that the size of the resources. as this press conference is going on, more than 2 million dollars of goods are being traded every minute. behind that trade there has been job creation and prosperity for the region. mexico looks forward to partake in an effort to advance prosperity in the region. we know we must find news ways to go forward. we need to collaborate more on education, science, technology, nd innovation. e have the opportunity to work
5:04 am
together in addressing regional concerns, engaging with central america because it is a latin american region. we think we have the political framework and political will that is in place to implement the system that we have taken. it is a north american idea that is a very good friend of mexico. mexico, the u.s., and canada are working together to spread their regional community, and that commitment was reaffirmed this morning. again, thank you, secretary kerry, and thank you, minister, for your partnership in the september. >> thank you very much, secretary meade. >> it is a pleasure for me to be here today and to celebrate the good partnership and good relations between our two countries.
5:05 am
>> we had great discussions today celebrating 20 years of nafta and the huge and significant economic growth and trade we have seen between our three countries. we also have seen the growth of our political relations. to work together to see more jobs, or opportunity, what we can do to make our economies more competitive, what we can do to boost income, job creation in all three countries. nafta has been an unqualified success, and one of the side effects is the strength and political relationship between all three countries where on issue after issue after issue there is a strength in partnership were not only we're working together, but getting a lot farther faster than any of us could have ever hoped 20 years ago. we had an opportunity to discuss security and management, infrastructure. we had the opportunity to talk
5:06 am
about regulatory cooperation, all things that can help used job creation. this remains a significant priority for canada. we look forward to continued preparation for a successful summit. we appreciate the significant leadership from the president of mexico and the speed of reforms that have taken place in his first year in office. remarkable. we had a strong relationship with the calderon administration. i want to thank you, john, for the significant american leadership with respect to the palestinian-israeli onflict. i look forward to visiting with you tomorrow and to do what we can to support your effort to seek a resolution to one of, if not the most, intractable issues in the world.
5:07 am
your leadership as well with respect to trying to bring a political solution and end of the violence of assad and his war on his people, we will support you in those common values and efforts that we strongly support. thank you very much. > thank you very much. > the first question will be from michael gordon of the "new york times." >> a question for secretary kerry. after you became secretary of state, you made the point repeatedly that it was important to change assad's calculation to achieve a political solution that you needed. a year later, it is clear that the assad regime believes its position is stronger than ever. in his letter to the united nations, the syrian foreign minister who will be leaving the delegation suggest that the
5:08 am
purpose is not to discuss the olitical transition. he said some point in the invitation the syrian government received are in conflict with the legal and political position of the state of syria. my question is, how can you expect to make progress toward a political transition that you needed to if the assad government does not accept the purpose of the conference, which is what it's letter suggests? have you been in contact with the syrian government over the past 24 hours that it accepts the purpose of the meeting? doesn't the letter mean more pressure needs to be brought to bear on the assad government in order to make political headway? thank you. >> thank you very much, michael. yesterday i addressed directly the revisionism of the syrian regime in its effort to try to
5:09 am
divert the purpose that will not be successful. more than 30 nations will assemble, all of whom must be committed to the geneva i ommunique. you were in paris the other day when the foreign minister of russia stepped up and reiterated hat the purpose of the conference is the implementation of the geneva i communique. nobody would have believed that assad would have given up his weapons. but he did. the reason he did was his patrons came to understand that he had to. i believe as we begin to get the geneva and begin to get in this process it will become clear there is no political solution whatsoever if assad is not
5:10 am
discussing a transition and if he thinks he is going to be part of that future. it is not going to happen. the people who are the opponents of this regime will never ever stop. there will be a low-grade insurgency at least and at worst potentially at the level of a civil war if it continues because they will not stop. we are not out of options with respect to what we can do to further change the calculation, and we have made that clear to the russian foreign minister and others, and nor are other players short of an ability to be able to have an impact here. they can bluster, they can protest, they can put out distortions. the bottom line is we are going to geneva to implement geneva i. if assad does not do that, he will invite greater response in various ways from various people
5:11 am
over a period of time. am not particularly surprised that he is trying to divert this. he has been trying to do this for months, trying to make him he protector of syria against extremists, when he has even been funding those extremists, even purposely ceding territory to them to make the argument that he is somehow the protector. nobody will be fooled. we will not be fooled by this process. foreign minister lavrov has stated that he is supporting this communiqué and the government must support that communique. since russia is one of the primary benefactors of the regime, russians have a high stake in making sure that assad
5:12 am
understands what the parameters of this negotiation are. >> second question. thank you. >> you discussed how to improve the transit of goods here in north america. many people in the u.s. have been asking to update nafta, to take advantage of recent reforms in mexico. would your government be willing to update nafta or be willing to open it up formally? and also to include an issue -- secretary kerry, for you, how do you respond to those who believe that at some point the u.s. should include canada and mexico in the negotiations if only to
5:13 am
avoid future conflicts between the nafta rules and whatever you end up agreeing to with europeans? >> i would like each of my guests to address this also. over the last 20 years, as i mentioned, we have developed this incredible network of trade agreements in the western hemisphere. we have long wanted to open up these benefits. i think stepping up all of us to the tpp is a critical component to moving through next year post nafta. you do not have to open up nafta to achieve what we are trying to achieve. there are plenty of ways for us in cooperation -- and we discussed a lot of them this morning with respect to borders, with respect to regulations, with respect to energy cooperation, technology, innovation, investment. there are a host of things that we can move forward on that will
5:14 am
take us to the next level without having to go back and reopen it. i think we are well engaged and looking forward to a much more robust relationship. what we did do today was set down a series of specific items that we will follow up on quickly so that these can be the items that our presidents and prime minister will end up negotiating in february. today's meeting holds out the prospect that this can be eneficial. >> we believe nafta has been an unqualified success. the transpacific partnership trade negotiation which all three of us are in offers of us the opportunity to strengthen the trilateral partnership, and we are going to use that pportunity to do so.
5:15 am
>> nafta has worked well on many levels. in the last 20 years, trade in the region multiplied by three. investment in the region multiplied by eight. mexico is now the third trading partner of the u.s. and canada. we are the second and the sixth largest markets of the u.s. markets respectively. extent is the first market for exports from arizona, california, and texas. we are the second largest export market for other 20 states. put the numbers in perspective, exports to mexico from the u.s. were larger than exports to china and japan together. they were larger than the sum of exports to germany, france, poland, and the u.k. put ogether. that is how we have an opportunity to deal. i agree with secretary kerry and what the minister said that it
5:16 am
is not necessary to reopen nafta, but we have to construct the idea of a dynamic north america. the three economies standing before you today is about 1/3 of the world's economy. we are the largest exporters of ost advanced industries. we have the obligation to review how the economic process is going in such a way as to remove any obstacles for trade, investment, and economic prosperity to be an advantage. what we agreed to today will llow us to have an agenda to
5:17 am
ave mechanisms that will allow for the commitments that we can reach to be fully implemented. in terms of the trade relationship with europe, at some point we will have three bilateral trade agreements with the european union. it is important for mexico that those are the benefit of the north american region. we think that is in the best interest of canada and u.s. as well, and we will work to ensure those negotiations further increase the north american competitiveness with a view eventually to having a more integrated perspective from north america and the european union. > thank you. a question from the canadian press. >> my question is on a bilateral matter. canada-u.s. issue, the case of pipeline. last february, secretary kerry, you said you were hoping to be in a position to offer a decision on keystone in the near future. it has been almost a year. since then the canadian government has said it would not
5:18 am
take no for an answer on keystone. this week your canadian interlocutor is in washington and has repeatedly asked for a decision because apparently the uncertainty is becoming untenable for the oil industry. i would ask you to answer your canadian friend. > i have to do it according to our administrative process and the rules and regulations under which i have to operate. i think he understands that. we are currently engaged in the environmental impact statement analysis, and an analysis will be made with respect to the national interest alternately, and we are just not at that point yet. i have not received it. they have not finished it. there were questions raised in all the public comment period, and those comments have necessitated appropriate
5:19 am
answers. the public has a role in this. we are all accountable to our publics. democratic process demands we do that. we are doing that, and i can promise my friend in canada that all the appropriate effort is being put into trying to get this done, effectively, and rapidly, and my hope is that before long that analysis will be available. then my work begins. >> john and i have had discussions with this in the past. we will be meeting later today. this is a tremendously important project for the future from the perspective of the canadian economy. 26 months ago hillary clinton explained the concerns that the administration had with the aquifer in nebraska. the state realigned the pipeline. we hope the final report is out
5:20 am
in short order. that the administration will be in a position to make a positive ecision. this is a great project for the future economic prosperity of anada. it will create a lot of jobs here in the united states. a great project that will increase the energy security of our closest friend and ally. we obviously want the report with a positive decision, a positive justice is and for job creation. >> thank you all, everyone. >> thank you very much. appreciate it. i think we are going out now. on the next "washington
5:21 am
journal" james bamford will react to president obama's speech about changing government surveillance programs. we'll be looking forward to your calls, tweets and emails on the issue beginning live at 7:00 a.m. on c-span. >> 300 years ago, the first pioneers crossed the ocean to a new world. the promise of a land where a man could build his own house, farm his own acres, raise his children in freedom, and yet in one of the great river valleys of america, something went wrong. in the tennessee valley, three centuries later, the descend ent of the pioneers were a neglected people. for these children, the hope and the promise were dead. >> the tennessee valley authority was a project, one of the early new deal projects, it was really a project and concept
5:22 am
that had been under consideration for some years before franklin roosevelt became president. frank norris of nebraska, a senator was looking to help improve the quality of life in the tennessee river valley, to bring flood control, to generate electrical power and improve the lives of the people living in the tennessee river valley. one of the poorest regions of the country at the end of the 1920's and it was a serious attempt of making the social and economic lives of the people. >> this weekend on book tv and american history tv, a look at the history and literary life of chattanooga, tennessee. today at noon on c-span 2 and tomorrow at 5:00 p.m. on c-span 3. >> treasury secretary jack lew spoke thursday about the health of the u.s. economy.
5:23 am
his remarks came before president obama signed the $1.1 trillion deal funding the government through september of this year. this is 45 minutes. >> welcome everybody. we're going to go a few minutes later than planned and we'll have a good opportunity for a robust question and answer session so please be thinking of some robust questions as we go along in your conversation this morning. just a reminder this is on the record. when you ask your questions, i'll ask you to identify yourself. if you can put your ringers off on your cell phones and put it on stun or whatever setting you have, that would be very helpful to us. since we have a lot to talk about, let's jump right into it.
5:24 am
>> thank you very much for joining us. this feels like a historic week. it's not quite like a moon landing but we appear to be close to having a budget which is an unusual thing for the united states of america. [laughter] it's not without a stop gap or so. but looks like this is going to move fairly quickly now. i wonder if you can talk about w this might affect business confidence, consumer confidence going into 2014, how it affects your outlook on growth of the u.s. and do it in the context of this strange number we got on jobs in december which seemed like it was out of the ordinary from the trend line which had been quite positive, a weak number in december, if there is something that worries you in it.
5:25 am
>> it's good to be here. thanks for doing this. i think we're starting the year off strong. we are starting the year off with economic tail winds, not head winds. i'll get back to the specific number you asked about. i think we're starting out with congress following through on the end of last year which was trying to get back to some kind of normalcy and away from the brinksmanship and uncertainty that was causing a great deal of impact to confidence of the united states and internationally. obviously we are not out of the woods completely. we still have a lot more to do to keep our economy growing. if you look at the last half year, the trend of economic statistics, job strategies, confidence have been strong. it's been strong across sectors and there is potential for more growth in key areas. i think the mood in washington makes a difference in two
5:26 am
different ways. the policy actually matters. the budget agreement which is being implemented through these appropriation bills takes away some of the drag from the economy. that matters. macroeconomics matter and going from policies that push back economic growth to creating economic energy help. but the question of business as usual versus dysfunction is extremely significant. just a few months ago we had a government shutdown. we were in the midst of a crisis over the borrowing authority of the united states. and it was very undermining of confidence. the reason we are not out of the woods completely is that as long as we have so many americans looking for work, our job is to focus on more jobs. we still have deadlines looming in washington. our borrowing authority runs out
5:27 am
again february 7. at that point congress has to act. >> tell us about december, about what happened with the jobs number. >> i have spent most of the last three and a half decades advising policy makers not to react to each month to month number too strongly, to look at the overall pattern. we will only know in several months exactly what that number means. i've read enormous range of views as to what the number means. the trend that has been clear for several months, i don't think one ought to look at a number that deviates from that being in and of itself proof that there has been a fundamental change. economies don't turn on a dime. so all of the evidence that there was strength in the economy is still there. and our job is to make sure we promote more growth, more investment. >> there are things we can o.
5:28 am
there is a debate in washington now about whether or not to extend unemployment benefits. you can look at that in two different ways and both are right. one is a question of simple fairness. people looking for work, out of work because of the deep recession that we took a long time to come out of, they need the help. you can also look at macroeconomic question. all those people looking for work are also putting food on the table and taking care of the necessity of life and every penny they get they spend and that is economic activity. i hope we get back to the discussion of how to extend unemployment benefits. we can get into discussion of other things we can do. but the more we do consistent with the spirit of the budget agreement that take step after step to make progress, the better the economy is going to be. you look at the budget agreement, there are things as people focus on them, there is
5:29 am
funding for manufacturing centers, there is funding for early childhood education. there are things that will be good for today and the future of the american economy and we can continue to take steps along that path. what the infrastructure needs in this country, it would help in the short term and long term. >> there have been good numbers in the past few months, export growth numbers were good. one number in december that was consistent with previous months is the erosion of the denominator in the unemployment calculation. that is people leaving the work force, giving up looking for work. how does that affect your growth forecast for 2014? are you still expected to be in the 2% range? >> we'll come out with our new economic projections in a few week when is the budget comes out.
5:30 am
i'm not going to thrift curtain early on them except to say we ended the year -- >> just between us. >> we ended the year with confidence that the economy was doing better and we start the year with confidence it's continuing to do better. the long-term unemployment numbers, the labor participation numbers are serious and we spend a lot of time pouring over them and ask what is causing it and what are the policy responses. there are a lot of competing explanations, some of them demographic, some of them cyclical and some structural. >> people getting older? >> people getting older. it's been a long slow recovery from a deep recession. so there is a delay in some of the employment growth. but it's that structural piece we have to worry about. we have to ask ourselves if somebody graduated from high school or college and didn't go to work, what can we do to make
5:31 am
it easier for them to get started? what can we do to take away the skill gap that may be presenting them from getting started and what can we do to work with employers to take away stigma from not having worked for a period of time. if you graduated college or high school when unemployment was close to 10%, it was really hard to get that first job. nd the fact that you are now delayed in getting started is something we have to worry about how do you catch up. that's a question of public policy and a question of working with the private sector to make sure that employers are thinking about how do we give those kids a chance. >> you mentioned february 7. that's another stumbling block for the economy. it's the debt ceiling deadline. having been through this drama a couple of times now in the last
5:32 am
couple of years and seeing the effect on confidence, the economy, the markets, wouldn't it be in the treasury's interest to say here is our battle plan. if this goes to the wire again, if it's a cliff hanger, these are our priorities for spending, this is how we are going to martial our funds, we'll buy enough time past the end of february, not just for a couple of weeks to see the economy through. don't worry markets, don't worry consumer? >> i don't think any treasury secretary of either party has ever said don't worry about what happens if the united states loses its capacity to borrow. it's something to worry about. if we ever get to the place where the united states cannot keep all of its obligations, we are fundamentally hurting our standing as a country that's always honored all of its obligations. i don't believe there is any plan that could give the kind of confidence you are escribing.
5:33 am
people ask legal questions about what do you have the ability to do. and i'm asking the more fundamental question why would anyone want to hurt the u.s. economy and the recipients of payments they are entitled to because of a self-inflicted wound, because of something that everyone knows the obligations are not made when the borrowing authority is raised. the obligations are being made when you vote on appropriation bills and tax bills. in the end, the borrowing authority merely allows you to operate under the policy decisions you've made. >> the spending you've already done? >> the combination of policies. now this is congress' unique responsibility. congress is going to have to act. it is not something that anyone should want to repeat the kind of hair raising brinkmanship that causes real uncertainty and
5:34 am
anxiety in market participants nd normal consumers. if you went outside of washington in october, it didn't take very much to get people to be worried about what was happening and what was going to happen. people worry about what happens if payments aren't made, what happens if there is an economic fallout that undermines their stability, their employment. these are not things that congress should play games with. it has to be done the sooner the better. we get into a washington parlor sport of trying to figure out the precise moment when is the last minute. it's a mistake to go to the last minute. the buildup to the last minute causes damage. it's a mistake to wait until the 11th hour. congress should do this as quickly as possible and with the
5:35 am
least drama as possible. will say in terms of how long congress has, aye communicated with congress saying we thought that the ability to manage through the debt limit being hit on february 7 would get us maybe to the end of february or early march. it's a very unpredictable time of the year in terms of cash flow because people are filing for tax refunds. when you start paying tax refunds, it's a time of year when money goes out. a month later when people are paying their taxes, money comes in. you cannot get from here to there without extending the debt limit. i think that if congress is looking at the numbers the way we are, we have the best data, they would see that they would be looking more at the end of february than anytime in march. >> let's talk about the global economy since that has such an
5:36 am
impact on if health of the u.s. economy. have you just been recently in europe. you did a trip to china and japan and asia a couple of months ago. you've been counseling the europeans to spend more domestically as opposed to export. that sounds like john snow saying the same thing to china a few years ago you need to build up your domestic economy. the germans said leave us alone, mind your own business when you said that. can you walk through what is happening starting with europe. is the crisis abating to the oint you can see growth? organically? >> i think if you look at europe now compared to europe in 2012, there has been a huge amount of progress. we don't have to worry from day-to-day about a half dozen countries.
5:37 am
but they are not completely out of the woods. they are looking at having turned the corner from minus to neutral or small positive. there is inconsistency as fragmentation in the financial markets, there is different rates of potential growth in different countries. our message in europe has been that you need to do what you can do to get overall growth in europe to a higher level understanding that not every country has an e equal capacity. there are surplus countries that have the capacity to invest more and create more domestic demand that. would be good for europe's economy and the global economy. let me put some pieces into perspective. this is how i think about the global economic recovery. we are now in a growth place that many in the world envy. we're in the 2's.
5:38 am
people are talking about can we hit three. they are trying to get to one. there is a decimal point behind the numbers they are looking at. in our most optimistic projections, we can't make up for europe falling half a point or a point behind where it should be. we can't make up for china falling behind where it should b. when i talk to my colleagues around the world i say we're going to do our part. we're going to keep our economy growing. we're going to shoot for targets that outperform people's expectations but you have to do the same. for europe that means countries that have surplus doing more to stimulate investment and demand. if you look at the german coalition agreement and the policies they are putting in place, they are doing more. they've made a commitment to invest in infrastructure here. i wish we could do that here. it would be good for the united states as well. you look last february, march,
5:39 am
april, the discussion was should countries in europe that have to meet fiscal consolidation argets do it more quickly? they've eased the time horizon. i think we've made progress. if you look at the questions of banking reform, they've made progress. but in each case there is more to do. our conversations, we have friendly differences of view on occasion. but i think they have impact. and we are pushing for more because more is good for them and it's good for us. you flip to china, it's pretty much the same story. hen i meet with my chinese counterparts, i am pretty confident they are intent on the path of economic reform that they describe. at the same time, i am not confident about the time frame or which targets will be
5:40 am
sequenced early in the queue. we continue to bring an awful lot of focus on the need for market determined exchange rates, on competitive market determination of allocation and price of capital and i think that they are going to move in that direction and our interventions will be designed to speed that process up. it's good for china's economy. we're not asking either europe or china to do things that aren't in their own nterest. >> one of the areas that still needs to be resolved is financial regulatory reform, we're five years after the crisis and there is fundamental disagreement between europe and the united states over banking requirements, the levels of
5:41 am
reserves, even executive pay between britain and the rest of europe with the u.s. why can't this be resolved? we are five years into the crisis. europe needs to have that confidence in its banking system for its economic well being. is this financial regulatory protectionism in a way playing out, we don't want to restrict our banks if you don't want to do the same thing? >> this is very difficult stuff. we in the united states have made enormous progress implementing financial reform. internationally we have made and are continuing to make progress. my objective in the g-20 is to bring additional focus to the international -- >> meeting next month. >> yes, february in australia.
5:42 am
the g-20 and the financial stabilization board are the places where the international community comes together to have conversations about harmonizing standards. just this last weekend some significant progress was made in terms of international standards on capital and leverage. for the last year there has been an argument about whether or not our differences were as big as people said or not as big because of difference in the way we calculated. i must say as somebody who likes to be able to compare apples to apples, when you have conversations where people are talking past each other because one is looking at a set of numbers on a net basis and the other on a gross basis and trying to do the conversion in your head is almost mpossible. there was an agreement to do it on a standardsized basis.
5:43 am
that opens the path to finalize rules consistent international standards. i made clear as we engage in conversations internationally, we cannot weaken standards to get to international harmonization. this has to be a race to the top, not a race to the bottom. we should harmonize them to eliminate confusion especially when it's technical differences as opposed to policy differences. when i look at the challenges ahead, i also look at what we've accomplished. there is much more capital in united states banks and global banks. we have put in place a resolution program that is something that the world is seeing as a model where we do stress test. we have living also. -- wills. and we're seeing those become
5:44 am
things that other regulators around the world are trying to ut in place. we have country so we pass rules. we have multiple regulators and it's sometimes a challenge to get our regulators to the same place. we've been doing a lot of work to get them to put forth consistent standards. you go to europe and you have multiple countries and multiple legislators that have to take action after there is an agreement in the larger group. we are very sympathetic to the challenges of coming up with policies. t the end of the year put in place a mechanism that is new and important. it is a path towards over a period of years having a fund that banks contribute to that is loosely modeled on our fdic. we don't think it's big enough or fast enough. as i look to the future, the
5:45 am
challenges of 2014 and beyond have to deal not with what were the risks in 2008, but what are the risks in 2014 and beyond? we are focusing heavily on shadow banking. >> banking that happens outside the regulated banking system. >> money sloshing around that is not -- >> there is a natural shift of money from the more controlled environment to the less controlled environment and the risks are not always as visible because of a lighter regulatory presence and because of a lower set of requirements. so that is an area that we are focusing on. my international colleagues also are focusing on it. we have made progress. we can make more. cross border resolution. this gets to your question about the differences of standards. we learned from the collapse
5:46 am
of leam that the problems when a lehman that the problems when a major financial institution fails don't respect international boundaries, the transactions don't live within one country. the implications don't live within one country. it's very important there be confidence when an institution fails, if an institution fails that the resolution internationally works because that's the way you can avoid the domino affect that is an accelerant to a financial and economic crisis. we have more work to do there. we've made progress. we need to make more rogress. >> you mentioned china's economic reform program. so far we've heard a fair amount of discussion of this and it's going to focus heavily on developing out the private sector of china. is that good or bad for american business?
5:47 am
is that something that is going to be more inclusive of u.s. business or are we seeing the cultivation of national champions in china to the continued exclusion, not entirely but to the continued exclusion of a lot of involvement from the us, this anti-monopoly law to hammer foreign businesses is reminiscent of the problems that american businesses have. it doesn't feel like the situation is changing there much. >> well, the goal has to be to open markets and to have market forces determine the answer to the question that you are asking. if there are artificial barriers in place, then it's not really letting market forces work. i think we'll get some tests pretty soon. when we had our strategic and economic dialogue last summer,
5:48 am
we had a set of important agreements come out of it. i was very pleased that china moved on opening a shanghai free trade zone. they altered a policy of presuming industries were closed to foreign trade to presuming they are open unless individually closed. we have yet to see what the implementation looks like. if it opens up to real competition, that will be a meaningful signal. they go through the designations of what is open and what is closed, if you designate everything is closed, it doesn't amount to real change. it's still early. the direction of the policies that they announced was consistent with what they agreed to in our bilateral discussions. i think that they know that it's critical to the chinese economy to let market forces drive much
5:49 am
more, if not all major economic policy. they look at state own enterprises and they see built up inventory that has nowhere to go. they see empty buildings. they know that is not a way to maintain the growth they need for china to be where it needs to be in 2014 and beyond. now at the same time, transition is difficult in any economy. it's difficult in our economy, it's difficult in their economy. they are obviously concerned about the pace at which change happens and managing it. but trying to stop it would be very damaging to their economy and i think they know that. i can't tell you that at the end of this year, we'll be able to say they made the move we open hoped they would make. we are going to engage with them to keep pressing forward and making the case. i believe that is welcome.
5:50 am
when i was in china just a few weeks ago, it was important for the president to meet with me. we had an exchange that was our second exchange in the time i've been secretary. and when i meet with my counter part, we talk about the tough issues. they don't tell us to stay out of their business. they want to learn from our economic experience. i think our continuing to bring focus to these issues is something that helps them to make progress. i approach it in a very clear headed way. intentions are critical and important. but it's results in the end matter. >> one of the pressures that might be brought to bear on china and europe are the two new trade agreements being egotiated now. the transpacific partnership in asia and europe.
5:51 am
can you get those tread agreements without fast track from congress? these countries don't want to negotiate with congress people. they want to negotiate with people that can promise them the deal they are striking will be the deal put in force. >> we made it clear we think fast track authority is important and we are going to work with congress oh on it. as far as the negotiations go, i remember when we started working on the trance pacific partnership back in 2009, there were skeptics who said you can't start a conversation setting high standards with some of the smaller countries in the region and think that the big countries are going to join. the big countries are at the able and even bigger countries are continue plathe coming to the table. -- contemplating coming to the
5:52 am
table. >> japan is at the table and china has mused out loud about should they come to the table. that is an enormous change since 2009. the principle is setting high quality standards as the future of trade relations in the pacific and the atlantic has already moved very far. there are still tough issues to be negotiated. i've never been a trade negotiator. i would defer to people who have been successful in the past. the tough issues are always resolved at the end. it's not as if any party before the final round of negotiations make the things that are really difficult for them at home. we have to keep driving forward and getting to the final tough issues and we have to lock in both trade agreements and fast track authority. we need to do both. >> let's get to some questions. and if i could ask to you identify yourself and who you are with. yes, please? >> nelson cunningham mr. secretary good to see you.
5:53 am
thank you for doing this. last year in the president's budget for the first time that i can recall a democratic president proposed changing in entitlement programs sbind to -- designed to reign in that growth. did it disappoint you that was not picked up by the other side and would you expect the president's budget this year to try to start that conversation once again? >> i think we ended the year and begin this year in a place where we've made some small progress but important progress, getting back to more normal way of congress doing fiscal policy, making budgets. and i think that is very important. obviously we started the year in a place where people were talking about a grand bargain. the president put out a budget that did have very tough policies in it, that are hard in terms of making changes to entitlement programs.
5:54 am
he also had a tax reform program that would raise revenues in a balanced way. we would have been able to put in place what was at the core of earlier negotiations he had been having with republican leaders. i have worked on these issues for most of the last 30 years would have hoped we could have reached an agreement. i thought then and continue to think that would be in the best interest of our long-term fiscal path and long-term economic path. i think that the president's budget will speak for itself in just a few weeks. i'm not going to get ahead of him announcing any of his specific policies. but i think he demonstrated last year in his budget that he remained committed to a fair and balanced approach to having long-term fiscal policies that keep us on the right path. and i think that last year's
5:55 am
budget reflected a deep set of onviction. > in the back. >> good to see you. i want to ask you about china and cyber, a big issue when the summit came up and continuing issue with your economic and strategic dialogue. the accepts that the snowden revelation have taken the pressure off of the chinese. it has given them a way to argue we are doing something akin to what they are doing and there is very little evidence that you see much of an abatement of the kind of behavior you were so concerned about this time last year. i was wondering if you could give us a sense of where that is going? >> i have to push back on the premise a bit. i don't think there is any way to compare the kinds of
5:56 am
intelligence activities that almost every country engages in for national security purposes with the deliberate theft of trade secrets for commercial advantage. there is no comparison. i don't think that anyone credibly believes that there is a comparison and i don't think that the issue has in any way been taken off the table in terms of our conversation with the chinese. >> [inaudible] >> we have been very clear. i can't tell you that they have done an about face. but i also think they understand that for them to play the role that they want to play in the world as one of the great powers, as one of the rule makers for the world, you can't be a rule maker and engage in
5:57 am
those kind of practices. >> in the back here. >> barry wood. mr. secretary what about the i.m.f. one for the i.m.f., the overdue payments all the other countries talk about. and what about boosting emerging markets in the i.m.f.? it's moved at a snail's pace. what's your view on that? >> i think the united states commitment to the i.m.f. remains solid. we're the biggest contributor and participant in the i.m.f. it's critically important to u.s. economic well being that the i.m.f. be strong and we have the kind of role we've had since its inception. in 2010 there was negotiation which i think made very important progress in terms of rebalancing some of the shears -- shares of interest in the i.m.f. while maintaining the u.s. position
5:58 am
with a significant enough share to have a controlling voice on important questions. i have made no secret of the fact i think it's critical for us to finalize the ratification of those. we made a full court press to get it done and got close but didn't get it done this past week. we are continuing to stand by our commitment and we will get it done. > yes, please. >> my question is about the role of money in the supply chains that enable mass atrocities like those in syria. some people have argued including some former treasury officials that the treasury ought to take stronger action against russian banks that are involved in financing armed shipments to assad. i wonder what you think about that? and if, i know it could be
5:59 am
awkward since we are partners in trying to resolve the issue. do you think treasury ought to be taking stronger action on banks that are directly involved assad?orting >> through our responsibilities in overseeing the close of financial funds and whether or not there is compliance with international laws, we have been very aggressive following -- we take action without regard to the home country of the financial institution. it does not always make us popular. sometimes it is friends who are very close. sometimes it is countries with whom we have more tension. our policy, whether it is sanctions regarding syria or iran, the designations are not all the same, but our policy is to be vigilant.
6:00 am
in using these financial tools. i would just say that we implement these laws and we do not look at the country of origin. >> thank you so much for your government surface -- service. i want to touch back on -- there seems to be a lack of accountability among the federal officers. we cannot get a name or a number and we are trying to provide food, shelter, clothing to people in refugee camps. our banks have a question, we have a conversation, we cannot seem to get everybody at the table.