the kids, but to connect to the teachers. there were young, passionate people committed to teaching young children who could benefit from her life experience. i think that we have government and public funded ways to improve the quality, but i do want to urge your viewers also to think about what they might be interested in doing. host: we have enjoyed this hour by olivia golden. the executive director of the center for law and social policy. thank you for being with us. guest: figure for having me. please join us again tomorrow at 7:00 a.m. eastern. have a great morning. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute]

>> congress returns to work this week. the house dabbling in at noon eastern for general speeches and aveling in at -- g noon eastern. the u.s. senate is also back today at 2:00 p.m. and lawmakers continuing work on federal flood insurance programs, able to advance the legislation set for 5:30 p.m. eastern and you can see the house to live on c-span and the senate on c-span2. hill,ut of capitol several news outlets reporting florida republican congressman trey radel resigning his seat following his arrest for cocaine the session. we will have more on this as information becomes available. first look at tonight's lady's program. began theirhillary

teaching careers at university of arkansas, bill after yellen 1973 and hillary came a year later. right outside this building at the university of arkansas where she was a professor and taught classes like criminal law, criminal procedures and trial procedures and the prison project. hillary was a wealthy educated ivy league law school grad who had worked in d.c. as part of the nixon impeachment campaign because at that time nixon had been impeached about two weeks before hillary caught her first class. >> first lady hillary clinton tonight at 9:00 p.m. eastern live on c-span and c-span3 and c-span radio and www.c-span.org. >> a facebook question regarding hillary clinton. should she run for president in 20 16? writes -- i don't want to see her go

through thes torture republicans who put her through. cott if the sink. -- scott is succinct. hell no. >> as we stabilize the financial system we also took steps to get our economy growing again. save as many jobs as possible. help americans who have become unemployed. that is why we extended or increased unemployment benefits for more than 18 million americans, made health insurance 65% cheaper for families who get their coverage through cobra, and pass 25 different statutes. let me forget, we cut taxes. we cut taxes for 95% of working families. we cut taxes for small businesses. we cut taxes for first-time homebuyers. we cut taxes for parents trying to care for their children. we cut taxes for 8 million

americans paying for college. >> watch president obama delivered this year's address. the preview program starts live tuesday night at 8:00 p.m. eastern with the president at 9:00, followed by response from republican conference chair cathy mcmorris rodgers and your reaction by phone, facebook, and twitter, the state of the union, tuesday night live on c-span, c-span radio, and www.c-span.org . secretary of state john kerry discussed the u.s. diplomacy efforts at the world economic switzerland this past friday and in his 45 minute speech he talked about the political unrest in the ukraine, iraneneva ii meeting in and new reports of torture in syria. the world economic forum is an annual event attended by world leaders in politics, economically -- economics, philanthropy and the business, and the theme this year is reshaping the world. this portion is around 40 minutes.

>> good evening. it is a very special pleasure to introduce secretary john kerry, secretary of state of the united states. welcome, mr. secretary. and i have to say welcome back, because you joined us first time 21 years ago. and you have been part of many of our activities. so it is really becoming a good old friend. >> welcoming a good old friend. i have to say, in all the discussions we had over the last days, it was always emphasized how important american foreign-policy is. we know it is in very good hands, and so far, we are eager to listen to you.

-- therefore, we are eager to listen to you. thank you. >> thank you very much. thank you very, very much. klaus, thank you very, very much. it is an enormous pleasure for me to be back in davos. and to share thoughts with all of you about american foreign policy. said, i have had the privilege of being here many times over the past 20 years. i always appreciate the diversity of thought and the thirst for new ideas that characterizes this forum. it is safe to say that doorposts -- davos pushes the limits of thinking, tries hard to find the new thinking. that is really what makes this forum so special.

so, klaus, i congratulate you on many years of putting together a remarkable venue for everybody. today, i want to share our latest thinking, with respect to the role u.s. diplomacy can play in addressing some of the most pressing foreign-policy challenges that we face. obviously, extraordinarily complex. very different from the world of the last century. i must say that i am perplexed by claims that i occasionally hear that somehow america is disengaging from the world. this myth that we are pulling back on giving up, or standing down. in fact, i want to make it clear today that nothing could be further from the truth. this misperception, and in some case driven narrative, appears to be based on the simplistic assumption that our only tool of influence is our military.

and that if we do not have a huge troop residents somewhere, or we are not brandishing an immediate threat of force, we are somehow absent from the arena. i think the only person more surprised than i am by the myth of this disengagement is the air force pilot who flies the secretary of state's plane. obviously, our engagement is not measured in frequent flyer miles. it would be nice if i got a few. it is measured -- and i think serious students of foreign-policy understand this -- it is measured by the breadth of our global commitments, their depth, especially commitments to our allies in every corner of the world. it is measured by the degree of difficulty of the crises that we

continue to confront. it is measured ultimately by the results we are able to achieve. far from disengaging, america is proud to be more engaged than ever, and i believe is playing a critical role, perhaps as critical as ever, in pursuit of peace, press parity, and stability in various parts of the world. right here in europe, we are working with partners to press the government of ukraine to forgo violence, to address the concerns of useful protesters to -- peaceful protesters to foster dialogue, promote freedom of assembly and expression, and i literally just received messages before walking in here about efforts of diplomats on the ground working to try to achieve calm and help move in this direction in the next days. we will stand with the people of ukraine. we are also making progress towards finalizing the transatlantic trade and

investment partnership, which would link the world's largest market, the eu, with the single largest economy, the united states, raising standards and creating jobs on both sides of the atlantic. in the asia-pacific region, we are negotiating the transpacific partnership, which will similarly encourage a race to the top, not the bottom, as it unifies 40% of the world economy. the united states is working extremely closely with china and our allies in the region in order to address north korea's reckless nuclear program, and also on diplomatic priorities like disaster relief and development. i was recently in the philippines. in a few weeks, i will be back in asia, my fifth trip as secretary of state within a year. we are working with our partners to encourage exploratory steps

and -- esage s that and conflict in the south china sea. this is a critical part of the president's rebalance to asia. across africa, home to seven of the 10 fastest-growing economies, we are investing heavily in both development and trade. and in the great lakes region, we recently helped and an armed rebellion, with the m-23 armed group. just yesterday, after diplomatic, intense engagement on the ground, we have helped to achieve a cease-fire in south sudan. and i can tell you that almost every day during the so-called christmas break, i was on the phone to either the president kiir or former vice president machar or the president of uganda as we worked diligently

to try to move towards peace. closer to home, we just completed a u.s.-canada-mexico summit in washington last week, in preparation for our leaders, who will focus on increased efforts in our hemisphere. -- increased cooperation in our hemisphere. renewed energy and educational exchanges. after a decade, that was perhaps uniquely and in many people's view unfortunately, excessively defined, foremost, by force, and our use of force, we are entering an era of american diplomatic engagement that is as long and as deep as at any time deep as at any time in our history. and such are the responsibilities of a global

power. the most bewildering version of this disengagement myth is about a supposed retreat by the united states from the middle east. my response to that suggestion is simple. you cannot find another country. not one country. that is as proactively engaged, that is partnering with so many middle eastern countries as constructively as we are, on so many high-stakes fronts. i want to emphasize the last point -- partnering. we have no pretense about solving these problems alone, nor is anyone suggesting, least of all me, that the united states can't solve every one of solve every one of the region's problems, or that everyone of them can be a priority at the same time. but as president obama made clear last fall at the united nations, united states of america will continue to invest significant effort in the middle east, because we have enduring interests in the region, and we

have enduring friendships with countries that rely on us for their security in a volatile neighborhood. we will defend our partners and our allies as necessary, and we will continue to ensure the free flow of energy, dismantle terrorist networks, and we will not tolerate the proliferation of nuclear weapons. in reality, all three of these challenges and the relationships that surround them, and accomplishing all of these goals, requires, in president obama's words, for the united states to be engaged in the region for the long haul. from security cooperation with our golf partners like like saudi arabia and the united arab emirates, with whom we are both discussing and longer-term

security framework for the region, as well as helping countries in transition, like tunisia, egypt, libya, yemen, to countering al qaeda and its affiliates, ensuring stability for world shipping lanes and energy supply, there is no shortage of the places where we are engaged in the middle east. the question is not whether we are leaving. the question is how we are leading. today, we believe there are steps that, taken together, have the potential to reshape the middle east, and could even help create the foundations of a new order. the agreement we reached with iran -- as of this week, iran's nuclear weapons program is being rolled back in important ways. the world has demanded it reduce

-- on monday iran took a series of steps that the world demanded, including reducing its stockpile of 20% enriched uranium, disabling infrastructure for its production, and allowing unprecedented transparency and monitoring to guarantee iran is complying with the agreement. they will have to reduce their 20% to zero. they do not have the capacity for reconversion. they have to reduce it to forms that are not suitable for making weapons. iran must also halt enrichment, and will not be permitted to grow the current stockpile of 3.5% enriched uranium. iran cannot increase the number of centrifuges in operation. it cannot install or use any next-generation centrifuges to enrich uranium. while we negotiate a final agreement over these next

months, iran will not be permitted to take any steps to commission the plutonium -- the iraq plutonium reactor. clearly, there are good reasons to ask tough questions going forward. believe me, we will. and good reasons to require the promises iran made are promises kept. remember, we certainly have not forgotten. there is a reason the world has placed sanctions on iran. there is a reason why they exist in the first place. there is a reason why the core architecture of those sanctions remains in place. that is why this effort is grounded not in trusting, not in words, but in testing. that is why now inspectors can be there every day.

that was not the case before the agreement we start. ck.stru inspectors can also be at andher location every day, that is also new thanks to the agreement. taken altogether, these elements will increase the amount of time it would take for iran to break out and build the bomb, the breakout time, as we call it. it will increase our ability to be able to detect it and to prevent it. and all of this will, to an absolute guarantee beyond any reasonable doubt, make israel safer than it was the day before we entered this agreement. make the region safer than it was the day before we entered this agreement.

and make the world safer than it was. yesterday, president rouhani stood here, and said that iran is eager to engage with the world. hopefully. but iran knows what it must do to make that happen. he said iran has no intention of building a nuclear weapon. while the message is welcome, my friends, the words themselves are meaningless unless actions are taken to give them meaning. starting now, iran has the opportunity to prove these words beyond all doubt to the world. let us be clear. if you are serious about a peaceful program, it is not hard to prove to the world that your program is peaceful. a country with a peaceful nuclear program does not need to build enrichment facilities in the cover of darkness, in the depths of a mountain.

it does not need a heavy water reactor design to produce weapons grade plutonium, like the one in iraq. -- at arak. it has no reason to fear intrusive monitoring and verification. it should have no problem resolving outstanding issues with the international atomic energy agency. this is true for every country in the world with an exclusively peaceful nuclear program. it is the tough but reasonable standard to which iran must also be held. so we welcome this week's historic step. but now the hard part begins. six months of intensive negotiations with the goal of resolving international concerns about iran's nuclear program. i want to say the p5 plus one has acted in unity and great cooperation. we welcome the international

community's efforts in this initiative. iran must meet this test. if it does, the middle east will be a safer place, free from the fear of the nuclear arms race. and diplomatic engagement, my friends. -- my friends, backed by sanctions and other options will have proved its worth. the second challenge is syria. an enormous, almost unimaginable, human tragedy is unfolding before our eyes. just this week, we have seen terrible new evidence of torture at the hands of the assad regime. this week, we also saw the syrian regime and the opposition sit at the same table, the same room, or separate tables but in the same room, for the first time since the war began. they were joined by more than 40 countries and institutions who

have ascended to the geneva communiqué, which clearly underlines how this conflict must conclude, with the creation of a transitional government of full executive authority by mutual consent. let me tell you in simple terms why that means bashar al-assad cannot be part of that future. it is simple. it is first because of the extraordinary havoc that he has read on his own people, a man who has killed university students and doctors with stud missiles, families, sleeping -- a man who has gased people in the dead of night, families, women, children, grandparents. a man who has unleashed extraordinary force of artillery against civilians, against the

laws of warfare. assad will never have or be able to earn legitimacy to bring the country back together. that is number one. number two, because of those things he has done, because of 130,000 people who have been killed, the opposition will never stop fighting while he is there. if your objective is to have peace, this one man must step aside in favor of peace and his -- of his nation. you can never achieve stability until he is gone. finally, any transitional government formed by mutual consent, by definition, will not include assad, because the opposition will never consent to permit him to be there. the united states is engaged in this difficult endeavor because we know that the longer the fighting continues, the greater the risk sectarian decisions will spiral out of control.

we know there are people who wish that american young men and women were on the ground fighting for them. there are people who would love to see america fight their war for them. but that is not the choice. the choice is first diplomacy. in order to avoid the devastating results that would result in the disintegration of the syrian state, and the instability that could spread across the entire region. we are engaged because of the number of refugees pouring into jordan, into lebanon and turkey. -- i see the foreign minister here -- it is destabilizing and it is unsustainable. we are engaged because while we are proud to be the largest contributor to the humanitarian assistance to deal with these refugees, the ultimate solution can only come when we stop the supply of refugees, when we stop the fighting. and that cannot happen soon

enough, because assad continues to kill and displace innocent civilians, and in doing so has become the world's greatest single individual magnet for jihad and terror. absent a political solution, we know where this leads. more refugees. more terrorists. more extremism. more brutality from the regime. more suffering for the syrian people. and we do not believe that we or anyone should tolerate one man's brutal effort to cling to power. we must instead empower all of the syrian people. that is why the united states and our partners sat around the table and continue to fight for a pluralistic, inclusive syria, where all minorities are protected, where all rights are protected, and where serious can

-- syria can come together to become the unified state it was, -- the secular and unified state that it was, represented by a government of the people's choice, where all minorities are protected. we believe this vision is achievable and will continue to work closely with our partners for a new syria that can't exist -- can exist peacefully as a sovereign, independent, and democratic state, where syrians would be able to have their voices heard without the fear of retribution, imprisonment, or even death. obviously, we know this is not going to be easy. it is obviously very hard. it is already hard. we have already seen syria, what forceful diplomacy is able to achieve. as we speak, a man who the day before he agreed to do it tonight did not have the

evene night -- denied he had the weapons, is removing all the chemical weapons from that country. the international community is on its way to completely removing all of syria's chemical weapons, an unprecedented undertaking that is making the region and the world safer, and is setting an example on a global basis. we are convinced that if the syrian people are to have the chance to rebuild their country, and if millions of syrian refugees are to have the chance to return home, it is ultimately diplomacy that will make it possible. there is no military solution to the problem of syria. that brings me to the most intractable of all conflicts, the struggle to make peace between the israelis and the palestinians. every time i meet my foreign

counterparts anywhere in the world, and they visit me in washington or when i travel to their countries, i am not kidding you when i tell you that invariably the first issue that they asked me about is the challenge of middle east peace. it may seem improbable, but i am telling you, it is absolutely true. from asia to latin america to africa, and all through europe, this question lingers. this intractable conflict has confounded administration after administration, prime minister after prime minister. leaders and peacemakers. , they always ask me this about the middle east, even before they complain about what we are doing or not doing. despite this global interest, my friends, people still ask me -- i am astonished by it.

why, with all the troubles in the world, and the middle east in particular -- why is the obama administration so focused on trying to forge israeli-palestinian peace? i have had this question directed at me personally, and in other ways. the reason we are trying to find the solution is very simple. because the benefits of success and the dangers of failure or him him us for the united for the united states, for the world, for the region, and most importantly for the israeli and palestinian people. after all the years expended on this, the last thing we need is a failure that will make certain additional conflict. there are some people who are sure this will be the last shot.

-- who will assert this may be the last shot. i do not want to find out the hard way. for israel, the demographic dynamic will make it impossible for israel, the demographic dynamic will make it impossible to preserve its future as a democratic state. its relative prosperity does not change the fact that the status quo cannot be sustained if israel's democratic future is in fact to be secure. with today's status quo, my friends, i promise you it will not last forever. president abbas is committed to negotiation. failure will only embolden extremists and empower hard- liners, at the expense of the moderates who have been committed to a nonviolent tracked to try to find peace.

what would happen in the west bank without that commitment to nonviolence? the israeli and palestinian members breaking the initiative who are here today know what is at stake. israel's economic juggernaut is a wonder. prime minister netanyahu was able to talk to you about it today. but a deteriorating security environment and the growing isolation that could come with it, could put that prosperity at risk. meanwhile, if this fails, palestinians will be no closer to the sovereignty they seek, no closer to their ability to be masters of their own fate, no closer to the ability to grow their own economy, no closer to solving the problem that has been allowed to fester for decades.

if they fail to achieve statehood now, there is no guarantee another opportunity will follow any time soon. this issue cannot be resolved at the united nations. they can only be resolved between the parties. if peace fails, the region risks another destabilizing crisis. one unilateral effort from one side or the other will beget another, and another, and another. until we have fallen yet again into a dangerous downward spiral at a time when there is already too much danger in the region. we often spend so much time talking about what both parties stand to lose without peace and we sometimes forget to talk enough about what they stand to gain from peace. i believe that the fact that peace is possible, especially in a region with so much turmoil, ought to motivate people. palestinians stand to gain a contiguous state, their own place among the community of

nations. imagine, this time next year, here in davos, if palestinian businessmen and government leaders from the state of palestine are able to catch the world's largest investors with a host of projects from the palestinian economic initiative. imagine if they can participate in building a new infrastructure and new life, free from occupation. for israel, the benefits of peace are perhaps even more significant. no nation on earth stands to gain so many new economic partners so quickly as israel does. 20 additional members, nations in the arab league, and 35

muslim countries stand ready under the arab peace initiative to all recognize israel and normalize relations the moment a peace agreement is reached. as a sheik said at a meeting of the foreign ministers of the arab league, he said to his colleagues, completely spontaneously, you know what? after peace, israel will enjoy richter economic benefit from relations with the gulf than it now enjoys with europe. imagine what that would mean for trade. stanley fischer, the former government of the bank of israel, nominated to serve on our own federal reserve board, said it could boost israel's gdp by as much as 6% a year. the jewish state of israel and the arab state of palestine can develop into an international hub for technology, trade, tourism.

unbelievable tourism. the holy sites of the world, of the major three religions. this will invigorate a region. it is long past time that this ancient part of the world became known for what they can create, not for the conflicts that they can perpetuate. it is long past time that jerusalem, a crucible of the three great monotheistic religions, becomes known not as the object of struggle, but as the golden city of peace and unity, embodying the aspirations of israelis and palestinian's. after decades of struggling with this conflict, we all know what the endgame looks like.

an independent state for palestinians, wherever they may be. security arrangements for israel that leave it more secure, not less. a full phased final withdrawal of the israeli army. a just and agreed solution to the palestinian refugee problem. and thence to the conflict and all claims and mutual recognition of the state of the palestinian people and the state of the jewish people. that is our destination. the real challenge is not, what is it? it is how to get there. how to get the leaders and the body politic of both places to make the courageous decision that is necessary to embrace

what would be fair and what would work. that is why i am working with president abbas and prime minister netanyahu to achieve a framework for the negotiations that will define the endgame on all the core issues, and provide the ability to forge a status and peace agreement. i was on the lawn in washington when the great handshake took voice. i have watched annapolis and madrid, and oslo, and all of these efforts. all of these people have to wonder when and if the real peace can be achieved. security. the palestinians need to know that at the end of the day, their territory is going to be free of israeli troops, that occupation ends. the israelis will not withdraw unless they know the west bank will not become benghazi.

no one can blame any leader of israel for being concerned about that reality. president obama's approach begins with america's steadfast equipment to israel's security. he knows and i know -- i know that there cannot be peace unless israel's security and its needs are met. we have put the full range of resources of the u.s. government behind this effort in an unprecedented way.

for the past nine months, a team led by general john allen, a four-star general and one of the most respected minds in the u.s. military, has been engaged in a comprehensive security dialogue with our israeli and palestinian counterparts. based on his efforts, we are confident that, together with israel, working with jordan, working with the palestinians, working with us, all of us together can create a security structure that meets the highest standards anywhere in the world. and by developing a layered defense that includes significantly strengthening defenses on both sides of the border by deploying state-of- the-art technology and a comprehensive program of rigorous testing, it can make the borders safe for any type of conventional or unconventional threat, with individual terrorists or a conventional armed forces. we are well aware that technology alone is not the answer.

but we also know that it can play a key role in helping secure the jordanian border, just like it has played a key role in securing israel's southern communities. security is a priority, because we understand israel has to be strong to make these. but we also believe that peace will make israel stronger. we are convinced the greatest security of all will actually come from a two state solution that brings israeli lasting peace and secure borders that they deserve, and brings palestinians the freedom and the dignity that they deserve. as committed as we are, it is ultimately up to the israelis and palestinians to reach an agreement on how to end this conflict.

make no mistake -- this will require difficult political decisions and painful compromises on both sides. these are emotional issues, many embedded in an age-old narratives. at the end of the day, it is up to netanyahu and abbas to recognize what the world has recognized, that peace is in the best interest of their people. but that makes it no less true that, at every level, everybody has a role to play. the arab league and the european union have already shown how they can pave the way for peace, and they have been unbelievably cooperative, and we are grateful for their help. i think king abdulla of jordan, and the extraordinary efforts of jordan to help move this, the arab league, and the leader of the arab league committee that is working, month to month, to stay current and to be engaged in this. many states made contributions

to the palestinian economy, including a new infrastructure initiative that is making a difference to everyday lives. many companies, including some of you here, have invested in both israel and the palestinian territories, and you have shown the difference the private sector can make in this endeavor. and all of you can make a positive contribution by dismissing, please, the all too easy skepticism, by seeing the possibilities, and by building the momentum for peace. conversations here at davos demand the kind of cooperation that has to come from many stakeholders. as kyle schwab says, in an interconnected world, all challenges must be based on togetherness. that is true whether you are talking about this peace effort or what we must achieve in syria or insurer in iraq. intensive, creative, strong diplomacy requires cooperation,

and that is exactly why the united states is so engaged in the middle east and around the world, and why we will stay so. as our friends and partners take courageous steps forward, they can be assured that president obama and his administration will remain engaged for the long haul. though we will also confront these challenges with the urgency that they deserve. we dare not, and i assure you we will not, miss this moment. thank you.

the house gavels in at 12:00 eastern. be sure to join us for a look at telecom policy. michael o'reilly will discuss a topic at the hudson institute today. remarks live at noon eastern on the companion network, c-span3. senators mccain and chris murphy will talk about mobile security challenges. we will have that live for you starting at 4:15. tonight's a look at first lady's program. >> bill came right after graduating from yale in 1973. hillary clinton's career began

right inside this building. professor as she taught classes such as criminal law, procedure, and the present project. -- wealthy,th educated law school grad that had worked in d.c. as part of the nixon campaign. >> first lady hillary clinton tonight at 9:00 eastern and c- span3. also, c-span radio. we posted a facebook question regarding hillary clinton. we want to know if you think she should run for president in 2015. good luck to the gop in 2014 after hillary second term. the meantime, john says no more clinton, no more bushes, red team, blue team please. log onto facebook where you can

add your comments. >> as he stabilize the financial system, we also took steps to get the economy growing again, save as many jobs as possible and helped americans who had become unemployed. that is why we extended or increased unemployment benefits for more than 18 million americans. eight health insurance 65% cheaper's -- cheaper for families who get coverage through cobra and past 25 different tax cut. taxes foreat, we cut 95% of working families. taxes for small businesses. we cut taxes for first-time homebuyers. we cut taxes for parents trying to care for their children. for 8 million americans paying for college. >> watch president obama

delivered this year's address. the preview progress asserts live at 8:00 eastern with the president at nine. your reaction by phone, facebook and twitter. the state of the union tuesday night live on c-span thomas c- span radio and c-span.org. bernanke.en he was at the brookings institution in washington recently to talk about central banking after the recession. this is about 50 minutes. >> there we go. good morning. can i have your attention please. it is my club fred josh pleasure and privilege to introduce ben bernanke. at a recent meeting of the american economics association and economist with mr. earning keep did not want the first pagence of his wikipedia

to be ben bernanke, he studied the great depression and caused the next one, so he made sure that was not the case. his term ends in a couple of weeks after eight of the most small to us years in american economic history. oh he started at the great , he soon inherited the wind. a typhoon really and had to grapple with the panic of 2007, great recession and underwhelming recovery. he did this with scones, calm and creativity and in my view, quite literally saved us. despite the massive deleveraging over the past few years, we are still deeply in debt to ben bernanke. [laughter] i thought you economists would like to joke. on a personal note, through my service of the federal reserve board of new york am a i have

come to understand how much then is admired and regarded with great fondness for colleagues and staff at the bank. truly remarkable. the conversation will be led by my fellow trustee at brookings and friend. a student of the great depression, author of a pulitzer prize-winning book, the bankers who broke the world. i recommend everyone go on amazon and buy it in hardcover. it is a portrait of the 20s and 30s. mistakesighlights the met by ben bernanke's predecessor that led to the great depression. i am sure we have a fascinating discussion ahead of us. as my wife says to her kids and quite often to me, time to put on your listening ears. [applause]

>> let me start by thanking the and havingrthcoming this conversation. a great privilege. the way you handle the crisis in 2008 will clearly go down as a signature achievement. so let me start with that. you have said somewhere the playbook you relied on was essentially given by a british economist in the 1860s, and his stick them was in a financial crisis the central bank should lend unlimited amounts to solvent institutions against good collateral at a penalty

rate. impact this was that rule in guiding you? >> excellent advice. advice used by central banks theg back to at least 1700s. when you have a market or a financial system that is short of a -- short of liquidity and a panic, then the central bank is the lender of last resort, the institution that can provide the to calm the panic and make sure depositors are able to get their money. of the crisis of 2008, the main difference was the financial system that we have today obviously looked very different in its details. not in the conceptual structure

from what was seen in the 19th century. so the challenge for us at the adopt the advice to the context of a modern any actual system. for example, instead of having retail depositors standing in line out the doors, it was the case in 1907 panic in the united wholesale had instead short-term lenders like repo lenders or commercial paper lenders and had to find ways to essentially divide liquidity to stop them. a different institutional attext but very much approach entirely consistent, i think with the recommendations. you also intervened in markets.

he rule a similar pace you can come up with about when the fed should intervene with markets and when it should not? we are talking about the crisis, i would say all of the interventions we did fit under this heading. for example, the commercial paper facility we have set up was essentially designed to prevent a run on this particular financing. a different institutional structure that the same rule applied in a different context. now, we have done other interventions with the asset that is program, but what i recall the monetary policy part of the response. again, while the analogies

between it is a wonderful life and people writing on the thrift are not always immediately obvious, there was a very close parallel throughout the response. >> the crisis began in august 2007 when there was a problem .ith a french money market if you trace through it, it continued until this bring of 2009. at was a long time. despite major interventions, you still had a run on citibank, you still had a run on bank of america, why did it take so long to get it under control? >> it was not a kenyan -- continual crisis. in the fall 2007 we saw a lot of

stress in the markets, but at that point, it was not obvious whether this would be the start of something bigger or something more comparable to the disruptions we saw in the 1990s around the russian debt crisis for example. there was a critical point that occurred in march 2008 with bear stearns. intense a time of very stress. after bear stearns, financial conditions calm fairly notably for a while. we remained very alert. we were beginning -- the federal reserve was beginning to supervise the investment banks together with the sec over the summer. so we were not complacent about the crisis being over, but conditions were certainly more stable for a number of months. there was at least some hope, given that the bush

administration was undertaking a fiscal expansionary policy. some hope that it might calm, but we were very attentive. phasek the real intense began with the takeover, the putting into conservative ship of fannie mae and freddie mac in early september 2008 that followed by this very intense time of lehman brothers and aig, i think the very intense time from september 1 until the later part of the year, that was the time of the greatest stress and risk. the combination of the lending programs and injection of government capital, the fiscal thect of that, brought crisis down considerably by the

end of the year. into next year we were still working to stabilize the system with stress test tank and the shall i think -- addressing concerns. but i do not think it is fair to something asit as being continuous for a year and a half. rather, there were times of ads and flows. the most intense in september and october, i think we got that under control reasonably quick of theh a combination fed liquidity provision, tarp, fiscal injections and actions by the fdic and other agencies as well. describedulson sleepless nights at that time, agonizing he would go down in history as the herbert hoover of the fsa and -- of the episode. described you as the

buddha of central bank. did you have sleepless nights? >> sure. absolutely. think, toature, i focus on the problem. i was so absorbed in what was happening and trying to find response to it that i was not really in that reflect the mode. later on, if you are in a car wreck, you are mostly involved in trying to avoid going off the bridge and later on you say oh my god. crisis, there were very intense times during october 2000 eight times. not only were we trying to address the crisis, but trying to deal with international colleagues across the world and constantly testifying or

otherwise trying to keep the world informed about what was happening. again, i was focused on the task. >> now, your partnership with secretary paulson and secretary geithner was clearly central to solving the crisis. outsider, it is remarkable what a united front you presented. differentve backgrounds, different personalities and represent different arms of government. to some degree there is a natural. liquidity,tension of treasury does solvency. the distinction is not always very clear. were there any big this agreements? >> and you're right that we had a strong partnership. we're different people,

different backgrounds. i think we were quite complementary in different ways. we all recognize the seriousness of the situation. the need for cooperation among the treasury, the fed, and other agencies. that was the overwhelming imperative. to work together to try to solve the problem. there were certainly points to addressre trying the financial condition of aig or some other difficult problem. there was a little bit of discussion about whether or not the fed or the treasury should take the lead on that particular area. in the end, paulson in particular, during the heat of the crisis, was the person who is most exposed to the political wind. as secretary of the treasury, he represented the administration. in the end, he always did what

had to be done. i think that was the reason we worked together. the combination of our consummate three backgrounds and skills and the fact that we shared purpose. there are many people in the among them,nomists who thought it was perfectly safe to a financial companies go down. we heard that in jackson hole a few days before the crisis intensified in september 2008. the three of us were very much an agreement that that was not a wise thing to do. we were committed to doing that. let me just also say that while the interventions with large failing firms are part of the story that get the most attention, much of the good work that was done was a little bit more under the radar. it had to do with our actions to try to stabilize key financial

markets like the money market funds. our work to strengthen the commercial banking system and so on, to work with foreign partners to do currency swaps. the result will range of things that we did. it did not involve firm interventions. visible, buts probably occupied a greater portion of our time. they were at least as important if not more important in terms of stabilizing the system. david's book, there is a scene where he has you pushing secretary paulson to go to congress. if the treasury had gone to congress to get money earlier, could we have avoided it? >> no, for the following reason. even with lehman and the stock market tumbling -- it took two

votes in the house of representatives to get that approved, i remember a senator telling me when we were trying to explain why we needed the tarp -- he said, i have to tell you, my calls are 50-50. it is 50% now and 50% hell no. [laughter] it was a very unpopular policy. as barney frank has put it, it is one of the most successful policies ever. it is also most -- one of the most unpopular. there was no chance. no chance that we could have gotten a tarp program. before her was becoming evident how bad the situation would be. that was the catch-22. it was also clear to me at that thet in mid-september that

ad hoc interventions that we have relied on -- we did not have a framework for resolving these. they had reached their limit. we had no choice but to involve congress. it was clear. >> let me talk about that political backlash. i get the impression that dodd frank, for example, while giving the fed more power to prevent a crisis, limits the ability to intervene in the way that it did. can you tell us more about that? are you worried about what the consequences of that are? >> no. we were supportive of those tedious. we are totally comfortable. what we are talking about here -3 the so-called 13 provisions, which allow us to make loans to corporations under certain conditions. unusual and exigent

circumstances. we used those tools for the first time since the great depression to support the collective effort of the government to prevent the collapse of some of the critical firms, as well as doing broad-based lending for key markets. the former, the interventions for firms, they happened because there was no framework. there was nothing that the standard bankruptcy code. the trouble with the bankruptcy code in this context is that when bankruptcy -- what bankruptcy does is defend the interest of the creditors. that is a great thing, but there is no recognition in the code that you also have to worry about the stability of the financial system. in any case, we did not have anything like that in 2008. created arank act liquidation authority, which provided much more structure and

looks ability -- flexibility to address a failing firm in the middle of a crisis. we do not need that. we have tools now that we did not have to address individual firms. at the same time, the rules in -- we justdo permit wrote the regulation for this, they do permit a so-called broad-based program. our actions with regard to the commercial paper or asset-backed securities presumably would still be legitimate. they would still be legal. as with the state of the primary dealer facility. that was open to all fine -- primary dealers. the key things that we did would

still be possible. we have to give the treasury secretary permission now. happy thatectly there are alternative ways to deal with a failing firm. the fed does not have to intervene the way we did in 2008. >> we have all heard from don kearns this morning. he talked about the political environment. the backlashbout against the fed, the consequences from on -- for monetary policy and how they will respond to the crisis? >> it was not really a surprise. this was another place where history helps you. if you think about the 1930's, we had exactly the same kind of reaction. in fact, it was much more intense. >> those guys did the wrong

thing and you did the right thing. >> it was not so much the fed. it was because the fed did keep its head down in the 30's. but the government in general. there were marches on washington and strong populist movements. serious talk about revolution. roosevelt -- what he argued was that the actions were about saving capitalism. report that we had on the crisis in congress this time. there was the accord and all of that has happened before. it is not surprising that you would get this populist type of reaction. i guess the only thing -- the comment i would make, is that the alternative is not doing -- the fed was created to

address financial issues. the ability to react is a key issue of what they are out -- about. if we had not done that and the system had imploded and the economy had plunged into a heeper depression, i think t populist reaction would have been that as well. we were stuck. we did the right thing, i hope. we tried to do the right thing. there certainly has been pushed back. that, as the economy improves, as we tell our story, as more information comes out about why we did what we did and so on, that people will appreciate and understand what we did was necessary. it was in the interest of the broader public. it was a main street set of actions. aimed at helping the average american.

as time passes, that becomes clearer. i am hopeful that these political concerns will wane. that being said, the reason that the fed is independent is so that it can take emergency actions or any other actions -- policy actions, independent of political pressures. the day that we allow those short run political pressures to make us do something that is not the right thing for the economy, and our independence is effectively gone. keep on going about the financial crisis, but let's move to monetary policy. a playbooks, you had for how to deal with the financial crisis. the monetary policy posted the financial crisis. we heard from john williams this morning. essentially, this was -- there was very little -- there was a little bit of theory.

some of which you have helped to develop. we were operating blind. devising she we and these other unconventional policies, were you confident that the theory would work? going into it? works problem is that qe in practice, but not in theory. [laughter] >> and the other way about forward guidance. >> is an exaggeration to say that this was all unprecedented. japan ande case of they had taken some of these actions. we had those experiences. we learned some things from the 30's and so on. basick of qe as being a

monetarist runcible. -- principal. these are some of the things that friedman talked about. the way you can stimulate the economy is by swapping liquid assets for less liquid assets. that is what an open operation is. side of forward guidance, some people like michael woodford and others had talked about those issues. and how that would work. so we were relying on research. we say parenthetically that monetary policy in general is an extraordinary example of how thinking within a policy and in the academic world can mutually benefit each other. we made use of the ideas that we got from academia. also ideas that came from our own experiments. the basic problem was that

interest rates, the short-term interest rate was effectively zero as of december 2008. any analysis would suggest that there was not enough economic monetary support to achieve a sufficiently robust recovery. we needed additional stimulus and these were the messages that we can do. -- came to. i do think that they have been helpful. we have learned a lot. i would disagree that these are completely novel ideas. there are a number of central banks that have tried various firms -- forms of guidance. we talked before the crisis about considerable period and those kinds of things as well. we were trying to build on what others have done. >> qe was much more

controversial than the lender of last resort type of things. you had to deal with them. a fair number of skeptics. how did you persuade so many people to go along with that? >> i am not sure i would agree with you on that. which was more controversial? i think they both had elements of controversy. we were looking for additional measures that we could take. additionalrovide accommodation and to help stabilize financial markets. of biggest measures -- some the biggest measures that we took were in late 2008 and march of 2009. we put in a very big program. that program, the beginning of it, was very broadly supported. it was felt that that intervention would both provide

very much needed monetary policy support and, in addition, it would add to the liquidity of markets in general. he were still under stress at that time. the beginning was a broadly supported idea. that, that gave us the opportunity to see what the effects were and do analysis. had a largealysis literature out there. john's leon murphy had some of that in there. it suggests that while there our differences about how effective qe is, the great majority of studies have found that there is at least somewhat effective. given that we were at the limits of conventional monetary policy, we felt that we needed to take additional steps. for the most part, it has been supported. beenber of folks have

voting against it or been critical of it -- they have, in some cases, argued that perhaps it was not needed or something like that -- i do not think that a large number of people feel that it is inherently not effective. >> so, we know what the benefits are. they are lower long-term rates. what are the cost that you worry about? >> i think that some of the costs that people talk about are not really costs. i will mention a couple. aboutst that gets talks will be inflationary. while, of course, it is always possible for the fed to raise rates too late or too early, i think we have went he of tools

now. we have developed all the tools that we need to manage interest rates and tighten monetary policy. even if the balance sheet stays where it is a good vicar. because we can do that, we can run monetary policy the normal way. we can avoid any risk of undue inflation or other such problems. i do not think that is a concern. those who have been saying for the last five years that we are just on the brink of hyperinflation, i would point them to this morning's number and suggest that inflation is just not really a significant risk of this policy. another concern that people have talked about is the idea that the fed might take losses. that is not impossible, but i would say that, from a social point of view, we have already

not only helped the economy, but helped the fiscal situation significantly. there are hundreds of millions of dollars we have permitted. that does not take into account the benefits for the public of a stronger economy with more tax revenues. that risk is again not a true social economic risk. it is perhaps a public-relations risk for the fed, but it is not a serious economic risk. the main risk that my colleagues have pointed to its various aspects of financial stability. the patent -- potential for financial instability. there is always some concern that for any kind of monetary policy, there will be some recent -- reaching for yields. given what happened five years ago, we are sensitive to that risk. that is really for

different kinds of monetary policy. qe works on term premiums to a significant extent. we simply have less knowledge and information about how they are determined. it is a little additional concern. volatility is associated. there are some risks there. notstrategy has been to distort monetary policy in order to address those risks directly. insufficient monetary policy accommodation will lead to a weaker economy and bad credit outcomes -- it is a financial stability risk. our basic protest been to rely on supervision, regulation, monitoring, the whole southern tools that we have at our -- and

our developing -- and are developing. we need to look carefully at the implications of any potential kind of financial imbalance, for example, is that asset class heavily levered? that would mean a sharp drop in valuation would lead to other types of problems. those are the kinds of things that we look at. we have greatly a bill -- increased our ability to monitor those. address financial instability concerns, primarily through supervision regulation and other microeconomic tools. but it is something that, i think the various costs that have been described, it is the only one that i find personally credible. it is the one that we have spent the most time thinking about. trying to make sure that we can address it.

>> bottom line for the moment is you are not worried about too much problem in the financial markets? >> it is always bad luck -- to make any forecast. [laughter] be markets currently seem to broadly within the metrics of historical ranges. the financial system is strong. the key financial institutions are well capitalized. we are watching this very vigilantly. a tremendousoped capacity for doing them. think, and i can speak for my colleagues, we do not think that financial stability concerns should at this point detract from these four monetary policy accommodations. >> last question and we will

turn over to the audience. has the crisis done long-lasting damage to the economy? if so, what are the channels that you really worry about? >> that is an excellent question. i do not think we will know the answer for a while. sayink it is important to that there has been a benefit, which is that we have done a reformation of the financial regulatory system. and the financial markets. i will provide greater stability, i hope. more effective credit provision in the future. there is that benefit. it was a very expensive gain. there are some ways in which the crisis could have effects on the supply side of the economy. we might have a longer-term

implication. one is the effect of long-term unemployment on labor supply. obviously, there has been decline in the labor force participation. part of that is certainly due to ongoing trends that will replace -- were in place before the crisis. also, due to the depth of the recession itself. available affect the labor supply going forward. it has very important direct effect on those who are unemployed and their families. that is a concern. it is also motivation for being aggressive and to try to prevent those kinds of effects from taking hold. , perhaps moref longer-lasting effects, has to do with productivity gains. we have seen a very slow

increase in productivity lately. we do not fully understand why. some of it may be low demand. that theuld be financial crisis has led to slower pieces of innovation. slower formation and capital investment. that has led to a less rapid pace of innovation. there is interesting work -- there is a historian who has written that the 1930's with a time of great innovation. it did not show up in the productivity statistics. with the economy and depression, there was the word market. i was sufficient to make things commercial. something similar may have happened here. that being said, these are important effect. none of them are permanent. they eventually -- the economy

will return to the growth path that it was on prior to the crisis. these are long-lasting and very serious potential effects. i do not think they are permanent. >> we're going to turn to some questions. >> a couple of questions. i want to ask if there are any people on the panel who want to pose a question. if not, we will go to the audience. stand up and wait for a mic. tell us who you are. keep the questions to questions. 140 characters. [laughter] mr. chairman, as a student of history, talk about the role of the president. during the great depression, we had franklin roosevelt doing fireside chats. explainer in chief. giving a sense of comfort in the chaos. do we have that in 2008? my sense is that the american

people -- there is still confusion. we are paying the consequences even today. >> it was a big challenge to explain what was going on. know, at the federal reserve, we try to do it. we did not always succeed, i am sure. i give president bush a lot of credit. leeway to me of and to secretary paulson to do a we felt was right. he supported us throughout the process. i remember him going on television and giving a speech about the tarp. that must've been very difficult for him, given his political predilections and the cost of that from the political side. it was difficult. was a challenge throughout the process. i would not put it on the president or anyone else. all of us who are involved in

role andymaking had a a responsibility to explain as best we could. , whenas a time -- i came i came to the fed, i was interested in increasing the transparency of the fed. i wanted to make monetary policy more protectable and more accountable. as it turned out, transparency was very helpful in another dimension as well. in particular, i tried where i could to bring the story not just to markets and other economists, but to a more mainstream audience. on television or town halls. it was very challenging to do that. we had other things to do as well. -- if you look around the world, there are populist reactions in most countries, where there were serious

financial crises. avoidableobably not completely. what we have to do is explain what we did and why we did it. try to win back the confidence of the public. that is important objective for all of us. >> gentlemen here in the blue? thank you very much. i rate the mitchell report. i would like to ask a question that broadens from mr. lamont's question. you have been in a remarkable place during a remarkable period of time. you are a great student of history. i am interested in knowing whether this experience has caused you to think in different terms about the strengths and weaknesses of our political

system. in particular, how you think the system -- i mean that large, the executive branch, the congress, the people themselves -- whether it gave you a different perspective, a stronger perspective, a more questionable perspective on how well american governance is working at this point in the 21st century? >> yes or no question? >> there are two separate questions there. one has to do with the structure of the american government. that was given to us by the constitution. all of the evolution of the government since then -- and then there's the question of our current political situation in terms of the mix of views and ideologies. particular, in terms of the

former, without making a judgment at all -- i am not qualified to make a judgment about overall clinical systems. one thing that struck me during the crisis was that the government that had more parliamentary type systems were better able to respond quickly to a financial crisis. i think that it was envisioned in the constitution that the president might have to act quickly to respond to a military foreignkind of relations crisis. that is why the president has a lot of flexibility to take action in the event of a military attack, for example. of course, ultimately going to congress to get ratification. crisis, say the british, for example, very quickly put together a plan to

address their banking problems. in this particular case, they had a government which controlled the legislature and was able to respond quickly. i think that turned out to be one of the problems during the crisis. legislative actions that have been taken in. frank and so on have tried to set up remarks whereby the fed, the treasury, and other regulators would be able to take necessary actions. for example, the liquidation authority. there has been an attempt to address those structural problem's. problems. on the ground or -- on the broader question, i have frustrations. certainly, it has been a concern that we have had these periods of fights over the debt limit and things of that sort. those have caused problems for

the economy. they have hit confidence. they certainly have prevented more positive constructive action on the part of the government to address some of these concerns. in terms of unemployment, for example. again, that is not a feature of the nature of our government. it is just the current situation in terms of the disagreement and range of views that are currently on the hill. >> another question? >> isi. mr. chairman, when we look beyond the legacy of the crisis itself, in terms of deleveraging and the other affects that can rub off -- there are other

factors at play. the aging of the population here and in much of the industrialized world. gains.reasingly fragile and international factors. the accumulation from emerging-market economies. when you look at the longer state and when we achieve full employment, do you expect that we will be in an air of sustained low interest rates? >> i was not expecting that and there. -- end there. [laughter] hopeful that we will not be in a situation -- part of the implication of your question is will this be relevant or not?

hard to know. a couple ofhere are ways to avoid zero low bound. one would be to avoid recessions. we are just emerging from one. another would be to use a more balanced mix of monetary fiscal policy when responding to recession, so as not to over rely on low interest rates. given inflation, the long run interest rate will be rate of return to capital investment and so on. that is a huge debate. i guess that i think the jury is still out about longer-term technological trends. one of the other things you mentioned is part of this. that is the global savings glut. time before the

crisis, we had a six percent trade deficit. we still have a trade deficit. that means that six percent of beingmestic effort is drained off abroad. at the same time, we are among the richest countries in the world receiving large amounts of capital inflows. both of those things will tend to push down interest rates. to address low interest rate problems would be to get better balance in growth in terms of trade and capital woes. another way is to have a better balance of monetary and fiscal policy, including good investments and productivity at enhancing products, like ineffective infrastructure. on returndepend a lot to innovation, returned to new capital area i think that

question is still very much open. to conclude ready that very low interest rates will be a permanent condition. >> i think that today has been fantastic. i think we have at least as many questions to pursue at noon as we did at 9:00. that means that we have a great opportunity. i want to thank not only the participants, who were both helpful in helping to frame the event, but mainly kept to the schedule. that is always a challenge. have the long list of names of people who made this possible, who make an event like this successful, but anonymously, i want to thank you in -- ask you to join me in thanking them. [applause] >> thanks a lot.

>> taking a look at capitol hill, the house and senate are back in after a week break. the house is in in 20 minutes. 4:00 noon. back at 2:00 after that. recessing again until later in the afternoon. three bills on the calendar today with any request to vote being held at 6:30 p.m. eastern. the senate is also back in at 2:00 eastern. they're working on federal flood insurance programs. they have legislation that would post on a rate increase. the vote is that 5:30. you can watch the house alive here on c-span. news affecting capitol hill. trey radel is resigning after his recent arrest for cocaine the session. he issued a statement saying his struggles had consequences. he dealt with those on a personal level, the police that

professionally he cannot fully and effectively served as a representative. he has spent some time in a rehab program and this is his first term. with the house recessing this afternoon, we will take you live to the center for strategic and international studies for discussion on this the -- future of nato. john mccain will be joined by military experts. we will have that live here on c-span at 4:15. tonight, the latest installment of c-span's "first lady" series with an in-depth look at hillary clinton. >> bill and hillary began their teaching careers at the university of arkansas. later. came one year her career began right here in this building. the loss goal at the mercy of arkansas. she was a professor. she taught criminal law, criminal procedures, child procedures, and the prison project.

she was wellesley educated, ivy league, law school grad. she worked in d.c. nixon had been impeached about two weeks before hillary taught her first class. >> first lady hillary clinton tonight at 9:00 eastern. also on c-span radio and c-span.org. to join thefacebook online conversation about hillary clinton. we have a face that question up and we want to know if you think she should run for president in 2016. forrest writes i love this woman, i will vote for her in a heartbeat. allen is of a different opinion. he says should she run? yeah, back to arkansas. add your comments. tomorrow, we will have live coverage of president obama's state of the union speech. we got a preview of what he might talk about today on "washington journal."

host: he is the correspondence for takeaway international. tomorrow president obama heads to the capital for the state of the union. guest: this is his sixth speech. for those of us that work around here, let's be honest. and it is one of the rare occasions that the public really pays attention to the president and congress. things pop up when there is a big news event. this is his chance to capture the attention of the country in primetime. ratings last year were down for the state of the union, among the lowest in the last 20 years or 30 years. still there were 30 million viewers, which is a lot. it is not celebrity "bachelor." you are looking for public attention and that is the president's opportunity.

from the president's perspective this comes as no surprise. he has a congress that is recalcitrant, not coming along with his agenda in any way. the only thing congress is getting done is among itself, things that have to get them like fiscal cliffs and spending bills, 15 days late. it looks like we are on the cusp of a "farmville". they have been working on a farm bill. they have been working on it for two years. most people watching the speech should know legislatively it is not going anywhere, especially in election year. what the white house is told us to expect is a president who will work for the congress when he can. he uses executive power to get

things done. the president can issue executive orders. this is a president who is traveling a lot, getting with ceos, getting with captains of industry so that he can be seen as doing something for an agenda when congress won't come along. congress is extraordinarily unpopular. the president is not doing great himself. congress is much much worse. one thing the white house has been saying, and it stands to reason -- if you are going to congress saying please pass this, please pass that, you don't want your success rate tied to people who are batting 7% or 8%. see what you can do on your own.

more importantly see what you can be perceived to do on your own and a time when the middle class is not doing well and the country is hobbling back to economic recovery. people don't like washington but they want to see some measure of action. that is the marketing mileu the white house is operating under. host: our phone lines are open. how much of the president's approach will be tied to the fact that 2014 is election year, a number of competitive races, democrats need to regain control of the house and senate? guest: democrats, roughly half the people, are looking up at

that podium and saying give us some firm ground to stand on as democrats. you mentioned taking back the house. we can name one or two -- i would say they have a good chance of taking back the house. really what's democrats are fighting for is preserving the senate. democrat scored and mated a message that started to emerge a couple of months ago. we saw a lot of debate over extending unemployment benefits. it dovetails with a large part of the message you are going to hear from president. the white house is recasting this as economic mobility. of as the country is limping

toward recovery, middle-class wages are stagnant and have been for many years. that is not new. you are going to see a message the democrats like that they think appeals to a lot of modern voters. one of income equality, employment insurance, minimum wage increase, making college more affordable. the bread-and-butter middle-class issues you are going to see the president mentioned. we just got done talking about the fact that congress is not terribly interested, particularly the republican house and the senate minority, in passing anything the president will call for. the president can go around and say i have my pen and i have my phone and i am going to be executive about these things.

article one of the constitution does not give him a a lot of leeway in terms of federal minimum wage increase. the white house has not said this directly but there are people who know the policy here saying the white house can do something about the minimum wage. i don't know if there is a federal employee that makes minimum wage. the president can drag his pen across an executive order and say that federal agencies have to favor contracts from private companies. they have to figure companies that offer at least $10 an hour. that is the increased immigrants want. that provides a little bit of a market push and it will cause employers who do business with the federal government, which we all know is worth billions, to boost the wages of their workers.

and for those workers, questionable about what kind of accomplishment can be agreed upon. host: our first call comes from milford, delaware. caller: i think in the state of the union -- i hope he does address the minimum wage. what the guy just said about favoring companies, using executive orders to lead them towards that. i hope he also addresses immigration policy. i think that will help in 2016 with taking back some of the seats. don't think we can take back the house but i do think the democrats could gain a lot of momentum. minimum wage is something everybody needs and wants. i thank god i do not have to work under minimum wage.

i have a great job. i don't know how much but i think it needs to be addressed. host: the caller mentioned immigration, which is something i left out. i bet you a dollar we will hear the president's talk about immigration. in a congress that does relatively little, immigration has a pulse all of a sudden. democrats have been confidence that the immigration issue is playing well for them. they either get the policy -- politically untenable for any party that wants to run nationally. in the midterm election, they have their own local issues.

republican leaders know that something has to get done for 2016 and they have to improve their position. it does have a pulse for 2016. and they do have to improve their position. but we are told to expect from the republicans and immigration plan that is designed to get bipartisan support. one of the key areas of disagreement between the president and house republicans is a pathway to citizenship. not expecting the republicans to have a pathway to citizenship in their bill. republican leaders have been telling us that this is specifically designed to sit down and try to get something passed. this may be the one bright

legislative spot you see early this year. i would say after immigration, the only other thing that gets done in this congress is things like the debt limit. host: jay carney was on abc's "this week." let's take a look what he had to say. [video clip] >> what we saw this week was an america that cannot deliver to the people. folks want to come up to the middle class. guest: congress has had a bad year and the president has had a bad year in terms of the public's perception. the president has not had a lot

of legislative victories. no big legislative successes. republicans perceive that conservative republicans caused it. it affects everyone's rating. obamacare was a disaster, that do not help the president. syria has not helped the president. if you remember back a couple of months, a sort of diplomatic stumbling where russia came to the rescue and rescued the syrian chemical weapons confrontation. that did not play well for the president. they are looking for some perception victories as well. the state of the union is as good place as any to push off on solid ground. democrats want that, too. the risk very little room except maybe on immigration for this

divided congress and this president to come together on major policy issues. going it alone is the best he can do right now. host: eric is on the line from baltimore. caller: good morning. i think the state of the union is like a traditional thing to be done. it does not resonate with the american people like i believe it used to. we are not united in any way. some of the things obama wants to accomplish, he will not be able to do. his big shot at doing controversial things. now he couldn't have made a dent

in our budget crisis and being united. republicans are not going to give him anything he wants. for us to sit here and he says the state of the union and we are united, we know that is a lie and a farce. hopefully we have some republicans to try to sign on. you talked about immigration. let's worry about jobs. jobs, jobs, jobs. if he can get some of that done, we will be united. without getting these people unemployed, getting them back to work. that will unite the country. thank you. guest: the caller is correct. the president did use a great deal of political capital.

that is why we have the affordable care act. a health insurance program for tens of millions of people is a major a congressman, assuming the law continues. there is no reason to believe that it will not. beyond that, i don't know the president to try to convince people that the country is united. the subtext of his matches is that we are not. dual not cooperate with me. you do not like my agenda. i will go around you to the public. you saw rand paul yesterday criticizing the president.

the republican leader mitch mcconnell has used similar language about abuse of power in the white house in many different regards. i do not think he will be disappointed to see a president play act like the country and the congress is united. >> next up from oklahoma. caller: i have a couple of points a lot like to make. we have provisions to feed people, house them, take care of them and other provisions. i was wondering what laws do we need? you say congress is not working with the president to pass laws. i do not know what new law that we don't have that we need now.

for my last question on whether the president is black, he is as much white as he is black and people need to get over that race. guest: taking the second question first. may be we will leave it there. the president is a first. there is a national conversation about it. i don't know that we have to go much further than that. in terms of programs for the poor. when you talk about income inequality, one thing you are going to see, i mentioned the farm bill. it is a gigantic bill with lots of complicated formulas for sugar and dairy.

the largest part is food stamps. supplemental food assistance for the poor. house republicans passed a bill that would've passed -- cut the food stamp bill. and looks into the emerging deal that house republican leaders say they will find the votes to pass on their side with cuts of roughly $9 billion. there are some various programs that are perceived as gaming the system. looks like it will cut about $9 billion over 10 years without cutting the value of benefits. that is not a new law. you have obamacare.

there is a medicaid expansion that was designed for low income people. many states did not expand it. i do not know the president will last for any new laws in the state of the union to assist the poor. there was some money for head start. under sequestration, a lot of these programs were getting cut. progressive democrats insisted and went to the mat on that issue and got more money for early child could education. there is not money for everything right now. host: i want to ask about the politics. many republicans are departing from the state of the union response script. and once careful response to be

as uniform a message as possible is given away two free agencies. host: talk about -- guest: which ones is the question. this reflects accurately the state of the republican party right now, which is divided into itself. you do not need a bunch of desperate state of the union responses to know that. look at the republican members of congress who are getting primaries. mitch mcconnell has incredible challenge from a tea party member. you have the tea party response. rand paul is giving the rand paul response. there is the official republican

response. let's start with rogers. not the only woman but the highest ranking. she is from washington state. republicans are hoping she can really speak in a railway -- in a real way to the american people in response to bread and butter issues. >> you can watch the rest of this discussion online. taking you live to the floor of the house, working on three bills on the calendar. any votes will be held at 6:30. 2014. i hereby appoint the honorable steve womack to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: pursuant to the order of the house of january 7, 2014, the chair will now recze