jobs, increasing take-home pay for people across this country, and creating a better quality of life. that's what my grandfather did , and my dad and his generation sacrificed so we could have a better quality of life. i really fear we may be the next generation of americans were that's not true. the next generation may have a lower quality of life than we we have, and i think got some big challenges. it's going to require courage. it's going to require a willingness for people to come together around a common purpose , not unlike what has motivated previous generations when we face big challenges, but i would like to be part of that solution, and for me that is mainly focusing on fiscal and economic issues i think are so vital to the future of this country. >> let me conclude on a couple of personal issues. first, you are a pretty avid runner in high school and

college. do you run today? >> i run when i can. i have a foot injury right now. i have been sidelined. i try to do those things. running is a great outlet for me. i clear my head. i started running again. i ran track in high school and had some success with it, but i really took it up again when my daughter started running. they were competing in track and cross-country. i started running with them. my oldest daughter who became an accomplished runner, i remember running with her and having to break stride and allow her to keep up. i remember her having to break stride and allow me to keep up. that's a tough thing to get to that stage in life. i enjoy it, and i think that fitness and exercise is a great a. lifestyle weis have here. there are so many things coming at you every single time of day. it is a cleansing thing to be able to do it. i miss running day to day. i hope to be able to get back to

it at some point and all that comes with it. >> in terms of logistics, south dakota is not the easiest place to get to and from, so how do you do that? >> the congressional schedule and in many cases those who do go out back and forth will go out. whenever congress is in session, i am here. when we are out of session i am traveling elsewhere in the country as necessary, but we go generally through minneapolis into sioux falls, occasionally through chicago but you are always connecting somewhere. you get used to it. you develop a rhythm around it, but i have never -- travel is tiring, and i typically get asked what is the best part in the worst part of your job, and i will tell people the worst part is sometimes getting to and from it, but it's what i signed up for. like i said, you build it into your week in your schedule.

it's something you do, and you make the most of your time. i use the time when i am on a plane to do a lot of my reading, some of the light work trying to catch up and get ready for everything that is coming up in that week. >> if you have a chance to listen to music, what do you listen to? >> i was a rocker in the 70's and 80's, so a lot of those old 80's bands i really enjoy. some of them are reforming and starting to play again, so i catch a lot of those concerts. i really like country music. i really developed an affinity for that. toad a daughter who went university down in nashville. you are around country musical the time, but my wife and i started to become country music fans, and we have been christian music fans. there are great christian artists we listen to. we are a family who likes music. i wife was musical. she played the piano.

both of them saying. britney sings a lot. marissa does, too. it has been a part of our family. i enjoy all different varieties of music, but i suppose when you think of your formative years and the things you listen to, those are probably the bands that come to mind first, and that takes me back to the days of my misspent youth. >> finally you have a chance to read a book. what books are you reading now? >> i enjoy reading -- we are wired in different ways, and i enjoy because my life is politics you live this life. it's more than just work. orientedlot of stuff around political stories, history. i have always been a big fan of history, and right now i am reading the book "killer angels." his son jeff i have read several of his books. of history.s this one's about the civil war. the movie gettysburg was based

.n this book a period that is of great interest to me. i always had an interest in the civil war as a kid growing up. that's the one i'm reading right now. i enjoy those types of books. appreciate your time. >> thanks. great to be with you. >> the head of the national economic council is cautiously optimistic about the economy. you can see all his comments a christian science monitor on thursday, online, and on c-span.org. here is a little of what he said. >> in your view, are we at another spring swoon moment of the economy where we are going to see it decelerate, or should we be hopeful that we have had a really crummy winter and things

are going to get better as spring comes around? wax i think -- >> i think a lot of people are in a good place where they see a certain amount of momentum. i think the fact that it looks like we won't have a self-inflicted wound or the threat of a default or a government shutdown will be good for certainty. many peopleously saw good enough news about the affectedrm, that it policies at the fed, it affected other people's transactions. those words temporary little things. those were about pretty solid underlying trends, so i think it's most likely that a lot of what we have seen is more weather related. think we all have a responsibility to look. i think everyone is trying to figure out how much is weather related. i would be cautiously optimistic

that the general notion there are positive trends in the economy -- even during this time we have seen unemployment of 6.6%. number wasbs obviously not as good as we would like, but it was projected to be one hundred 80,000, and private sector it was 143,000. the other thing is to look at what is happening at the state and local level, if you want to ask what is frustrating to us in the president is when you look and see under our administration that during this recovery we have lost about 677,000 government, state, and local the president asked wednesday what if state and local jobs had the same growth as they did in the past? unemployment would be 5.8 or send right now. if you look at rabbit sector gdp -- thatrecovery,

private-sector gdp in this recovery, it is about 3.5%. i think to the degree we can see less contraction and a little more certainty, i think there is reason for optimism. one thing people have pointed at is consumer confidence has stayed fairly confident. those are things not affected by the weather as much. i would say cautious optimism. i think everybody is going to be looking at the numbers over the next two months and see how much was weather related or whether it has changed, but i would still be cautiously optimistic that we are having increased recovery with the following caveat. it's not good enough. >> in a few moments, transportation secretary anthony fox on transportation spending. in a few minutes ahead of the norfolk southern railway on how the weather will affect the

economy. then the columbia university journalism for him on how journalism has been affected by edward snowden's release of classified information. >> our next washington journal is live from the national institutes of health to look at the research of the nih. we will talk with landis, the director of the institute of disorders, dr. gary gibbons of the national heart and blood institute, and stephen cap, the head of the institute of arthritis and skin diseases. washington journal live at 7 a.m. eastern. of america is in this country we have the ability to write the script of our own life. we are in a sense in the driving

seat of our own future, and our biggest decisions in life are made by us. creates this sense of possibility, and out of that, you can become an activist, a community organizer. in this sense, what are you doing? you are living off the great capitalist explosion of wealth. >> so many strongmen it is hard to know where to begin. nobody said america is the most terrible place, but there are a couple of assertions you have to take on faith that are astonishing. what is the idea that america's great invention was wealth creation. what about the theft of the entire continent? that was a theft. 90% -- 90% ofean the residents who lived here were murdered. that's a part of it. >> they debate what's so great about america, friday night at

eight eastern on c-span. transportation secretary anthony encouraging americans to push congress for more transportation spending. during his speech he added that 100,000 bridges in the u.s. are medicare. to collect >> ladies and gentlemen, can i ask you to take your seats please? thank you, everyone, for coming today to the second infrastructure summit at the u.s. chamber of commerce. we are so excited to be presenting a program that really focuses on the intersection between infrastructure and the economy. you are going to notice from our program there is not a lot of what we call the usual suspects sitting out here today.

that is because we have been asked repeatedly to bring business to the table and talk about how does infrastructure really serve the business community, make it real for them, make them understand why we invest in roads and runways and inland waterways. make them understand why we focus on the need to have the federal, state, local, and private partnership to make infrastructure happen, that's exactly what we are doing. the committeelead along with jurupa reston, who put this entire conference together. we are thrilled to be able to start today with the new secretary of transportation. been selectedas by president obama to lead the nation's transportation infrastructure. our plantings, our systems, our air traffic control, and he

comes to it from a place of knowing just how transportation has work for communities, four regions, for businesses, and for people. he was mayor of charlotte, north carolina. he was a city council member. the four that he was in private law practice. the man knows what he is talking about, and he is very excited the charlotte bobcats are going to become the charlotte hornets once again. that's not really relevant to transportation, but it's a good thing to think about this time of the morning. without the long introduction, i am going to introduce you to transportation secretary anthony fox. [applause] >> good morning. for that very much wonderful introduction. just as an aside, i took office as mayor of charlotte in 2009 in december, and our football team

the carolina panthers had smoke the most challenging seasons during the time i was mayor. i left in the summer to come here to take this role, and they went to the playoffs. so i like to say i left the city better off than i found it. hopefully we can do that here in washington as well. i do come to washington after serving as a mayor, and every mayor can talk about a business considering his or her city with hundreds and sometimes thousands of jobs in the balance and invariablely the business representative will bring up a road or a curb cut or a bridge that needs to be built or repaired to make the site work or under the best of circumstances, the existence of one of those assets that makes

the investment sensible. and so i want to start out by assuring you that i understand that first-rate infrastructure and job growth go hand in hand and i've seen it in my own experience. and so i want to begin today with a statement of the obvious. that the united states faces a massive infrastructure deficit. and if this deficit is not addressed, it will stunt the recovery we've begun and cripple our economy. now, i don't want to tell the people in the room how big this infrastructure deficit is. you're moving goods around america all the time and the people that work in your businesses need efficient ways to get to work. but imagine how much harder that

task is becoming. when as a nation we have 100,000 bridges old enough to collect medicare. when we've fallen 20 spots, according to the economic forum, 20 spots over the last 10 years when it comes to the quality of our infrastructure, putting us just behind barbados, a country that has just one airport. it becomes more difficult when we hear the american society of civil engineers point out that without investment, deficiencies in our nation's infrastructure will cost businesses more than $1 trillion every year in loss sales. and further they say, and i'm quoting, that if current trends are not reversed, then our economy will take a $3.1 trillion hit before the decade

is out which is the equivalent of wiping out the economic impact of an entire state like the state of virginia. it gets more complicated when you consider a number of commentators are talking about what happens at the end of fiscal year 2014 when the highway trust fund runs out of its ability to stay solvent. little to some of them know -- although i think folks are starting to realize this -- that the highway trust fund is on track to bounce checks before f.y. 2015 begins, as soon, perhaps, as this august.

but, again, you all know this and that's one of the reasons why your president, tom donahue, rightly urged congress to stabilize the highway trust fund just a few weeks ago. i'm grateful to him and to you for stepping up and ringing the alarm bell on this growing crisis in america. that's also one of the reasons why we at u.s. d.o.t. put a ticker up on the website on how soon we're reaching insolvency and that's also why i am here today. because we need you to join us in raising the alarm bell and calling congress to act. for years, the growing

infrastructure deficit has been an issue akin to termites in the basement. slowly eating away at our foundation. and now it is a wolf at the door, and when we add all of this up, crumbling infrastructure, significant new capacity needs, economic costs associated with not addressing these needs, congress either unwilling or unable to deal with business until emergencies loom, a highway trust fund fast approaching insolvency, a surface transportation bill close to retiring and the rest of the world running faster towards building 21st century infrastructure than we are. transportation, and specifically, failing to tackle the infrastructure deficit, is the next crisis we're heading towards.

now, when i mention this looming crisis outside the beltway, when i talk to mayors or governors or business leaders or labor or n.g.o., folks, they are astonished. their reaction to me is, how can we -- they will tell me -- kill the golden goose that's laid so many golden eggs? like the transcontinental railroad, like the interstate highway system. some of the most heavily used transit systems in the world are right here in the u.s. built by us and our -- a significant legacy that we owe a duty to future generations to continue. these mechanisms day after day, year after year get products and people where we need them and they keep the economic engine of america going.

so two things -- one of two things can happen right now. the first is that we could push america into a larger pothole, a bigger infrastructure deficit by neglecting to handle our business as a nation. the second is that we can pull together and drive ourselves out of that pothole, address the funding gap and put our infrastructure on a sustainable course. and by the way, if we work our way out of that pothole, it will not be a democratic success or a republican success. it will be an american success. now, i have reason for optimism, despite this dire picture i'm painting.

it's too early to be pessimistic. for one thing, it's good and constructive that members of congress are now offering ideas about how to fund our transportation system. it's encouraging that chairman shuster of the house transportation and infrastructure committee has said that he hopes to have a bill out before the august recess. it's encouraging when senators boxer and vitter have agreed they want to have a bill by april, and i'm also encouraged by our administration and the president for putting ideas on the table, too, including in his state of the union speech when he put forward a proposal to fund surface transportation with the savings from corporate tax

reform. the truth is our problem isn't math. it's that for a generation the concept of government spending has been under attack and it's bleeding into our approach on an issue that's traditionally been bipartisan. but you and i both know that spending on transportation is really investing in our country. it's economy, it's people. this is a rube con-- rubicon that we've got to figure out a way to cross and we got to get there fast. how do we get there? first, we need to aim at the right target. for years our national dialogue is focused on how to get the highway trust fund leveled off. to translate that into business terms, we've been trying to reach the same level of sales revenue and expenditures as the last year instead of growing revenue expenditures to meet

customer demand. the plain fact is that the gas tax is spending off less and less revenue. meanwhile, we're anticipating 100 million new people in the u.s. by 2050 and we're going to have to move four billion tons of -- more tons of freight by 2050 as well, which i'm told is the equivalent of 40,000 washington monuments. less revenue, more people, more freight, more gridlock, that is not a formula for success. so in my view, we should stop aiming just to get the highway trust fund level again. we should aim to cut into a bigger piece of the infrastructure deficit by investing more and investing more now.

to put this in perspective, the american society of civil engineers has estimated that our overall infrastructure needs as a country are $3.6 trillion by the year 2020. now, that is an all-in number. it includes more than just transportation, infrastructure, but it's a magnitude far greater than our investments. further estimates say that we need more than $70 billion on an annual basis just to bring our highways up to a state of good repair. and if you think about it, every year we wait, it's compounding the investment that our children and our grandchildren will need to make and passing that along to another generation flies in the face of what every generation of americans have done, which is to leave things better off for those who follow us. second, we need to be reminded that in the case of

infrastructure, fiscal -- the fiscally responsible path is to invest now, not later. yesterday, i stood with vice president biden in southwestern illinois to commemorate the fifth anniversary of the american recovery and reinvestment act. this act made the largest investment in american infrastructure since eisenhower built the interstate highway system almost 60 years ago. and it turned out that making investments at na time, rather than putting -- at that time, rather than putting them off, was actually the right thing to do. because while we all remember those years, as difficult as they were, the time period between 2008 and 2010 was an incredibly cheap time to pay for infrastructure.

the cost of construction had dropped by 18% and has risen since. and to put it bluntly, we got more infrastructure projects for the dollar as a result of making the investments at that time. and you all know the time value of money being what it is, the same project today pushed out five years, 10 years, 15 years, 20 years becomes exponentially more expensive. unfortunately, given the picture i've painted of our funding situation, the increasingly more typical example is the investment we weren't able to make due to a lack of funding. i'll give you an example. in 2009, norfolk southern, one of our class 1 railroad companies, decided it wasn't cost-effective to maintain 135 miles of track they owned in michigan. so the state of michigan decided to try to step in and buy that

track because it was part of a crucial artery connecting detroit and chicago. good idea. the problem was the funding wasn't available to acquire that track in 2009. it took almost four years to secure the funding, and by that time the tracks had been neglected for so long that the repairs costs hundreds of millions of more dollars than they would have if michigan had been able to make that investment in 2009. that's just one example. there are hundreds, if not thousands, around the country. at the federal level, it is perhaps noteworthy that funding challenges like this -- it probably isn't as noteworthy that this type of funding

challenge exists. it's called of balled together with all the other challenges we face. but the cumulative effect of years of instability and uncertainty is now creating a massive chilling effect at the state and local levels. there are literally projects that aren't being put on the board because folks don't know what world they're walking into as soon as next year. in fact, two weeks ago i was in missouri and learned that the state department of transportation there has stopped investing at projects that build new capacity in part because of unpredictable funding. and then there's a small community in texas, i'm told, that began digging up their roads and turning them back into gravel because they couldn't afford the maintenance. in america? folks, that's not who we are. we are a nation that finds a way, and over the next several

months, that must be our mission. third, as part of our case for more investment to tackle our infrastructure deficit, we also need to double down on reducing costs, just like any business would. as executives, you all know that sometimes when you have a low-performing asset you can't pass the entire cost to fixing that on to your customers to get it fix. sometimes you have to cut costs to make room for the investments you really need. and there's an illust tiff case -- illustrious case and i'll use ford. they were on the brink. they didn't know it but the company was about to lose $12

billion that year and another $2 billion the year after. their new c.e.o. was tasked with restructuring the company ahead of and in the midst of the greatest financial crisis since the great depression. nun was certainly part of the solution, and in fact in 2006 ford put up nearly all of its assets as collateral, including its logo, and secured a $23.6 billion loan. but that wasn't ford's only problem. it was also where the cash was flowing. for almost 30 years, ford had been known for its pickup trucks, its big cars that right before and during the recession few people were buying. so ford got smart. they streamlined, they shifted their portfolio towards smaller,

more economical cars and they made sure that the entire company and all of its employees knew what they were doing and why. every employee carried a one ford mission statement in their pocket, and they've turned things around. there are lots of lessons to be learned from ford and many other of our automakers and other folks in the transportation industry, for sure, but the necessity of investing wisely even if it means rethinking how you do business is one of the most important and relevant ones to us. while in transportation, we should take that lesson seriously. not only do we need funding, but we need to, as my grandfather would say, leave no stone unturned, to squeeze every

productive ounce out of our transportation dollars we can. and that's one reason why i don't think we should simply let the funding questions alone dominate the debate about transportation this year. we have a surface transportation bill that will expire october 1, and we need to go further than just technical corrections to mapp 21. we need a bill that reshapes the transportation landscape for the 21st century, building on mapp 21 but going further. we need a transportation system that is smart enough to plan along economic lines, not just political lines. we need to expand our ability to harmonize federal permitting process and incentivize states to do the same. and i believe we can do so without jeopardizing the environment or project integrity.

and in the process we will save valuable time and money. moreover, when gogh so we create a more conducive environment for public-private partnerships. a recent mckenzie study found, looking at the globe that countries can obtain the same amount of infrastructure for 40% less spending. just by adopting best practices. now, sure we have examples of best practices in the u.s., but i know we can do better. and so just for the sake of argument, let's -- let's say we could only achieve half of that 40% savings. if you apply 20% savings to our last funding bill, map-21, that would have equaled $21 billion. that's a lot of additional projects that could be happening all across america.

now, the truth is we can't do this work by ourselves. our partners at the state and local levels are critical to this effort. we have an agency with a $70 billion-plus budget, but one lesser known fact about d.o.t. is that about $40 billion of that goes directly to the states. we cannot be efficient if our state and local partners aren't efficient. and so in addition to stabilizing the trust fund, new investments could introduce new competitive programs that reward innovation and adoption of best practices at the state and local levels. by taking this approach, we will dramatically increase the value proposition of federal dollars by encouraging investments that help whole economic regions, improve mobility and quality of life. now, you all know how much this

matters, and i want to in closing finish where i started out. because somewhere in america right this second, as sure as we're sitting in this room, there is a mayor or a governor or a county commissioner or in some cases all three of them sitting down with some business representative who's talking about bringing jobs back to the u.s.a., bringing them right into their community, but they need an access road or a bridge or some rail built into the right place. and if that happens, hundreds, if not thousands of people will start working again. i've seen it happen in my prior life as a mayor, and i see opportunities for this all

across the country. in dubuque, iowa, dubuque, iowa, u.s. d.o.t. helped redesign the roads in part of the city where old mills and factories laid vacant. and when we did that, i.b.m. moved in and gave those old factories a new lease on life. you all know this. you get it. you understand it. and the chamber, as i mentioned, has been one of the loudest voices calling for an increase in the gas tax to fund surface transportation. your president, tom donahue, has been a very vocal leader on this issue prodding congress to be courageous. now, d.o.t., we happen to believe we can pay for infrastructure a different way, but i would much rather see a national debate about how we get there than whether.

that's why i'm glad tom is standing up, and we absolutely agree that congress is going to have to show a little political courage to fix this problem. their courage increases when their core constituencies, like the folks in this room, tell them it's ok to figure this out. it's actually the fiscally responsible thing to do. we need you to speak up. all of you can play a role in putting our transportation system on a more certain and sustainable course, and we do it by letting congress know that a one or two-year band-aid won't cut it this time. tell them what's at stake for you. tell them what's at stake for your employees and the products you sell. tell congress to get to yes. i know they care about your priorities. i know they care about your companies.

i know they care about the jobs you create, and they care when you tell them yourselves. so our mission is pretty clear. we've got to create the context for a solution this year. i'll be committing malpractice if i didn't tell you that, but the truth of the matter is we got a lot of work to do and you're a critical partner in that work. thank you very much. it's great to be with you. \[applause] >> the secretary is willing to take a couple of questions this morning, so let me ask you to do this. we should have roving microphones in the room. raise your hand if you got the microphone in your hand. please flag down one of the people holding that microphone, and then when you stand up to ask your question, as tom

donahue would say, tell us who you are so we know what you really want. no one has a -- no one has a question for the secretary of transportation? all right, mr. secretary. i have a question for you. >> all right. >> d.o.t. has been doing a lot of work on connecting the economy with transportation, especially in the area of freight. tell us a little bit about what the department is doing and what your vision is for making sure we can move goods in, out and through this country efficiently. >> that's a great question. sounds like you thought about that one before. so one of the really smart parts of map-21 was the requirement that u.s. d.o.t. go out and pull stakeholders together to develop a national freight plan, and we've got a committee of 47 people from all walks of life, all parts of the

transportation ecosystem who are involved in helping us develop this plan. the vision for it is a multimodal plan, looking at how freight actually moves in this country, where some of the gaps are, what kinds of targeted investments would be useful in easing the flow of commerce across our country. and i would say that, you know, once we have done that analysis and it's in the works, it will probably be ready before the end of the year, once that work is done, we will have identified, you know, more or less where some of the gaps are in the system. from there, the challenge is, how do you get those gaps addressed? that's a place where i think a strong competitive program that

encourage not just one-off projects but ones that had real scale would be useful, and that may involve multiple states coming together to solve a particular problem, whether it's rail or highway or whatever, and i think that's what i'd like to see. so we'll continue conversing about this as we go through the development process on it, but that's my view. >> we do have a question here. stand up and introduce yourself, please. >> thank you, mr. secretary. garrett. one of the things you came across as a mayor and i know in north carolina, when you're trying to get these projects off the ground, is the issue of permitting and streamlining, and map-21 did some of that, but how would you, taking that mayoral experience and the business experience look at some of the issues we have with environmental and permitting and streamlining when we're trying to get some of the these high job-producing projects off the ground? >> no, it's a great question. you know, i had a similar situation as a mayor. we had a city that permitted

everything outside the building and a county that permitted everything inside the building. and the two groups of people that did that didn't sit next to each other, there was no common platform for those things to get resolved and a lot of the review processes were see sequential in nature and not concurrent in nature so they weren't doing the same work at the same time which meant it took longer. one of the things that i think is underemphasized in the media and the political world is how much president obama cares about, you know, making sure

government is working well and doing everything we can to ensure that on an interagency basis we're getting things done as effective and efficiently as possible. the truth is that on a given project, there will be a d.o.t. review, there will be an army corps review, sometimes a coast guard review and lots of different agencies involved and they don't all roll up to the same agency leader. and what i can tell you is that is a focus for the president. it is a focus that i have and we're looking at ways we can get things done even without congressional action to get things more streamlined. there is good news. the number of categorical exclusions, the nepa process has been increased under this president so more projects are

moving faster. i would like to see us cutting the time is close to half as we could get in terms of getting projects to move through our system. >> great. next question. >> mr. secretary, what is your personal take on the keystone pipeline. >> that's a very good question. i do have a view on that. secretary kerry is going to be a great figure to resolve that one for us. >> other questions. i see a couple of hands over there.

ladies a moment to get through the ground this morning. >> good morning, mr. secretary. thank you for participating. i am wondering, given the anylenges that administration has to get proposals through omb and given the fact that senator boxer has announced a very accelerated schedule for moving forward on that reauthorization, how does the department anticipate making its priorities known to the committee ono the the house and senate side? it seems unrealistic to think the department can put through a complete reauthorization or postal. how do you envision that going forward? >> in the past a lot of the policy frameworks the

administration has had on transportation has come through the budget ross s -- budget but i wouldn't count us out. will say right now. >> i know we have a question in the back corner. mr. secretary, you said the dot believes there is a different way to pay for infrastructure expansion besides a tax increase. can you elaborate on other ways you have in mind? is theresic outline has been fairly substantial work chairman camp of the house ways and means committee and chairman of the the former chair committee has been doing on tax

reform, and if you look at those aoposals, there is actually savings or dividends that comes that, andrough doing we believe some part of that dividend could be used to support infrastructure over a multiyear timeframe. there is paper on those ideas and concept that have been produced out of congress, and we think it is a good framework for getting past some of the gridlock that has been in place over this issue for a while. >> mr. secretary, i know your time with us is up. thank you so much for your generous time and your thoughtful comments. thankingin me in secretary foxx

>> the transportation summit said that there would be slow earnings for the industry. this is half an hour. hopedies and gentlemen, i that you are enjoying your lunch. but it is time to introduce our luncheon speaker. we are extremely honored today who is the moorman, ceo, chairman, and president. it was a very long title, so i just decided to call you the chairman and ceo of norfolk southern, to speak with us today. we heard about agriculture, manufacturing. rail has everything to do with those things.

norfolk southern connects with other modes of transportation. , it isorts our economy an investor in its own infrastructure, and whit moorman has the great fortune of running norfolk southern. it seems it is good he ended up in that position because as he told me before lunch, he is really just a big kid who loves trains. so how lucky can you get to be able to do exactly what you love? want to turn the podium over to you and thank you very much for being here with us today. [applause] >> thank you very much, janet. . am a very fortunate person it's not always a good idea and the railroad business to tell people that you like trains, but once i had the good fortune of reaching my current position, i thought, well, i really don't care what they think. i'll let it be known.

be herey happy to today, have a chance to talk with all of you today about norfolk southern and the railroad business. i had a long speech prepared. fortunately, i just rewrote it. it's a little longer, but i will try to zip through it and maybe leave just a few minutes for questions. see some old friends here and meet some new folks as well. it's a privilege actually for me to participate. at norfolk southern, we like to think of ourselves as simple country people. when i found out i was going to share the podium with secretary itx who spoke this morning, was a privilege and honor for me to be here. i also want to thank the chamber and janet for putting this on and recognizing what all of us recognize, which is the essential role that america's transportation infrastructure plays in the well-being of our

economy. interestingly enough, when you talk about infrastructure, as you know, railroads have been really at the heart of this nation's infrastructure for really almost a couple hundred years now. and it is interesting to note that we are still just as crucial as we ever have been in terms of moving our nations economy and the world's economy over that past 200 years. we are also clearly playing a big role in our recovery from the recession of 2009, and obviously as you heard today, a big role in helping foster what i think is the great stories of the united states for the past 25, 30 years, and that is this idea of the energy revolution we are going through. and i will talk about that for a minute as well. let me give you a couple

ways to look at our business and to think about it. the first is one that i use all the time. 200 years, that is a long time to be around. there are a lot of industries and businesses that have come and gone in that time. why is it that we are still around? , and i won'tasons give you the long story of how i came up with it other than to tell you i was trying to that of how to explain the railroad one day the high school kids, which was a somewhat daunting task, but one of the advantages that we have, have always had, and will always have falls under the terminology of friction. right? if you think about the contact area of the steel wheel on a steel rail, it is roughly the size of a dime. that means that we can move the equivalent of 300 truckloads worth of boxes or 10,000 tons of grain or 70,000 barrels of crude

rolling surface area, when you add it all up, that is approximately the size. and no one has yet figured out a more efficient and effective way to move goods. and i doubt that they will, unless a but he comes up with a way to the most all-around -- comes up with a way to beam us all around. i think that is the core of why we are here today. the other great economic advantage we have is if you think about our business in conceptual terms, i always like to say that we started in the ith century but in some way is the aversion of the concept of the internet. we are a common network, a common set of infrastructure assets upon which there are many businesses. minor business groups

that range from hauling aggregates for construction material to handling trailers and containers for ups and fedex, and they run the gamut of all kinds of customers with all kinds of service requirements, and the trick of the railroad business is to be able to handle all of those businesses together as efficiently and effectively as you can, using a common set of assets, a common set of locomotives, a common set of people. and if you can do that, there is enormous economic leverage in that as well. there is also another piece of leverage in that for us, in that it is rare -- it happens, but it's rare that all of our businesses are bad at the same time. it is equally rare they are all really good at the same time, but at any given time we usually have some set of businesses that are doing fairly well, even in 2009 for example one the world was coming to an end, we had a

very strong coal year. that sustained us through the ups and downs of the economy over a long time, and it will in the future. why the way, the fact we see so many businesses gives us a real insight into the u.s. economy and a lot of respects, and as some of you know a lot of people will look at railcar loads as a of where theator economy is going. i will talk a little more about all of that, but let me back up and talk a little bit about where the railroad industry is today. , from any good news infrastructure standpoint and from a business standpoint, is that unlike a lot of what you hear in terms of what you hear of the state of the highway, the state of our locks and dams, the state of the airports, the railroad industry is in as good a shape as it has been for a long, long time, from the standpoint of infrastructure and

from the standpoint of the health of the industry. and i will walk through the reasons for that, but recall something, if you will, that an hamburger said today. a lot of bright folks who are educated about a lot of things really don't remember, and that is that we own and maintain our own infrastructures. it is all private money, with a very few exceptions i will mention, that goes into running the railroad business. and that creates, as you might imagine, it helps in some ways create some big economic hurdles that we always have to overcome, because real words are not cheap to run. manyct, i read a quote years ago that i always remembered, railroads tend to eat cash. we have a big economic lump to deal with, but we have managed to do with it fairly well. that was not always the case, as many of you know. turn the clock back 40 years and

that was the time of the wreck of the penn central, which at that time was the largest group c in u.s. history. it was a time when the primary conversation around railroads in washington was, should they be nationalized? we had freight cars that fell off the tracks while they were not moving. it was just a bad time for our business. fortunately for all of us, in 1980 there was an act that passed which really removed at least part of what was a very of government regulation that had essentially forced the industry to the point where it was. what did it do? it exempted some intermodal traffic, anything that was pretty much how we competitive with the highway, it it executive from regulation. it allowed the railroads, who had never had this ability, to enter into contracts with customers, and those contracts were exempt from regulation.

it set the stage for the industry to right size itself in terms of getting rid of unproductive lines, in terms of downsizing, in terms of workforce, locomotive fleet, and assets. in all of this to pay while for us to get -- and all of this took a while to get to where we are today, but by 2000 we essentially had a right sized industry, and then we were able to really make the businesses hum. now, the good news is the railway started learning -- earning adequate returns as an industry, and that is good news. the better news for all of you, and really for us as well, as we took those returns and started to invest. plow money, all of it, norfolk southern had a history for a long time, but all of the industry started to plow money back into the properties. and that is a great news story for our customers, that is a great new story for the country and for us as well.

when i talk about money, how much do i mean? this year, 2014, norfolk southern's capital budget is 2.2 billion dollars. we had $11.2 billion in revenue last year. magnitude, 15%, 18% of magnitude is typically what we plow back into capital in terms of our businesses. investedthree years we 7.5 billion dollars of capital. how do we break that down? i talked about the fact we have to maintain all of our own infrastructure. by the way, this is a subject that is near and dear to my heart because my first 12 years and the company were spent in track maintenance. i was tell people it's the only thing i really understand about business. some people look cross site when i say that, but nonetheless, it is something i believe in very firmly is that we have to

maintain our infrastructure. that $2.2 billion, you get rid of $200 million of it for cost of train control, which i want to get depressed -- which if i want to get depressed i will tell you about later, but that is just maintaining infrastructure. ballard's, rail, new bridge rebuilding, and that is typical for us. 45% of our capital every year just goes back into the property. milliontop of that 900 dollars in capital, we probably spend close to that much and expense. $1.8 billion just to maintain the railroads. thethat all up, for all of railroads, and this year it is about $26 billion in private money that we will put into our properties to make sure they are maintained at a very high level. because of that investment, rail infrastructure bridges,the track, the

all of it, is in the best shape it has been in since at least world war ii. and that's a great story, as i say, for all of us. where else do we put money? locomotives, cars. we will buy 75 locomotives this year. locomotives are well over $2 million per clip right now. we spend an enormous amount of money on technology. our company has been a leader in technology for a long time. railroads, and this is not recognized widely, we are early and ardent adopters of i.t., because we had all these things moving around, all these people moving them, and it was tailor-made to bring technology into tracks and make sure that we knew where our assets were and where they were going. right now we are investing in leaders, alike system we developed in conjunction with the supplier that tells an engineer exactly how to run his train to get the

maximum fuel efficiency. a movement planner system we developed with ge which is increasing the velocity of our four miles pero hour, a big improvement for us, and the list goes on. invest inhing we d his business development. we are big promoters of state economic to the limit. we have an office that works with all of the states to bring in industry. we helped sponsor about $2.3 billion of investment in industry on our lines last year. on top of that we invest in business development as well in our court or projects, the crescent court or -- the ridor that will take 2 million-plus trucks off the highways between the southwest and new england and north jersey. it is a huge market. there is almost no rail

intermodal out there, and we have built new terminals, added capacity, and we have done that in a public-private partnership with not only the federal government -- you heard john walkabout the tiger grant. that theent corridor single biggest tiger grant, but also in cooperation with state of virginia, pennsylvania, tennessee. public-private partnerships have been a very effective way to use our dollars and public dollars to grow business and to relieve this nation's crowded highway infrastructure. and finally, people. if you look at our company, we have 30,000 employees. 10,000 of those people were not in our company seven years ago. turnover.ing enormous there are still people left to look like me, but fewer and fewer and fewer. it's getting lonely, actually.

but we put a lot of focus on people and we put a lot of investment into our people. what are the results? they are great. you look at the industry safety record, that has been something there is a lot of conversation about, but the history in our industry over the past 20 years of safety improvements has been absolutely remarkable. if you look at employee injuries, one of the things that we track closely, it is safer to work for a railroad than it is for a hotel. and it is not an environment that is in and of itself a particularly safe place, but we put her next ordinary amount of focus on employee safety as well as community safety. if you look at train accident rates in this country, they have gone down dramatically. they can get better, we are focused on it, but there is a great news story in terms of safety. at the same time, service levels in our business have gone way up. and that is also a big positive

for a lot of folks. i mentioned earlier, and they are both with us today, ups and fedex, who i can tell you both care about service and are both great customers of norfolk southern. and that kind of investment, and i will talk about the intermodal business, is key to going forward and key in my opinion of solving this nation's turns per problems. how does this translate? let me finish by talking about business today. somebody asked me earlier, how is your business going? my response was, i really don't know. because of the weather. sport.ding is an outdoor we have a 20,000 mile assembly line that is, with the exception of a few tunnels, exposed to the elements, and this has been an extraordinarily difficult winter , not just for norfolk southern but for the nation possible system and a lot of other folks as well.

we quite frankly -- we are bracing. i think we get another front next week. we are optimistic that when we come out of it we will see our business levels rebound substantially, but i think all of you know these weather patterns are going to have a significant impact not only on our business but on gdp for the first quarter of the year. theet's look at last year, second half of 2013. we had a really good second half. i mentioned we had business sectors that do well and poorly. it was a case of that. business, i will not bemoan all of the things that happen to us, but suffice to say it is a big business, it is a profitable business. if you look at it in 2013 versus billion were down $1.2 in revenue. and remember we are an 11 billion dollar revenue company. so that was not good. we had other things that were weak.

ag was not great primarily because of the harvest in 2012. paper, forest products, we are seeing some resurgence in housing, but the base is still low. but we had some things that performed very well. automotive's. people continue to buy cars in this country. that is a great news story for the u.s. economy and a good news story for the railroads as well. 70% of the finished vehicles in this country moved by rail. at some point, between the assembly plant, port, and the dealer, and we move a lot of parts as well. people will continue to buy autos. we are bullish and the automakers are as well. intermodal. i mentioned the crescent corridor. we have the premium business that i mentioned with fedex, ups, and the other folks. that is a strong piece of our business, but from a volume

standpoint a little smaller. we handle a lot of 40 foot boxes that come in and go out through the ports. that is a business that took it on the chin almost as badly as anything that we hauled in 2009. it has rebounded some as trade has resumed, but to some extent that is a reflection of the retail economy, which is still not act where it was in 2006 and 2007. and finally the big growth story for us is the domestic business, taking 53 foot containers off the highways. that is a good news story for us. we work now with a lot of trucking company partners to do that. we provide some things they really need. the biggest issue most trucking companies face is driver shortage. if we take the long haul component of that trip, let the drivers to the short-haul, stay home, their business gets a lot

easier. we have some advantages in that business, besides driver shortages, that are here to stay . clearly, the state of the nation's highways in terms of not only the maintenance but congestion are a big issue. we offer a huge fuel advantage. we can transport, how many miles now? 500 miles we can all one ton of a gallon00 miles with of fuel, which is a huge, huge advantage for us. and finally we are viewed by a lot of customers as the sustainable way to haul goods because of our mission profile and are fuel burn profile. that is all a good news story. we expect intermodal to grow considerably in the future and we are banking on it, investing on it. and then finally, the other big growth story for us has been the energy business. as you might imagine. while cole has gone down, lots of other components of that business have really grown.

we serve pennsylvania and ohio, le, marsalis and utica sha we do and enormous business in fracturing sand. the good lord in her infinite wisdom decided to put most of sand in this country in wisconsin. the great thing about wisconsin, it is a great rail halt pennsylvania. when we see cars of sand go by, we look up to the heavens and say, thank you, have you got any more for us? for thea lot chemicals fracking business, a lot of pipe. we are hauling more and more andral gas liquid, then there is the crew to which is a remarkable growth story. we went from handling, i don't know, three cars or whatever it was, no cars, five years ago. last year norfolk southern alone hauled 75,000 carloads of crude.

and we expect that business to continue to grow as well. crude will take me to the last thing i wanted to talk about briefly, and that is regulation. i was in a meeting, along with most of the other class one ,eo's, about four weeks ago now along with representatives from foxx, withecretary the administrators of the fr .r.a., to talk about the issues of handling crude oil. you have heard them all. rail safety, what else we can do. we are working on making sure that we are routing it in the safest possible manner, looking denselys through populated areas, talking about additional inspections of our equipment and, more importantly, our right of way. we talked in that meeting a lot about what exactly we are hauling. there are issues around the

material coming out of the balkans that nobody is quite sure about in terms of volatility and what might be done to reduce it. and finally, tank car standards. it is very clear that the dot 111 tank car is a car that is not difficult to breach in the event -- in the highly unlikely event of a rail accident. thed mentioned earlier, industry in general reached a voluntary new standard in 2011. those cars are clearly better. now there is a process underway to come up with an even higher standard. as all of you know, i think were all roads don't own many tank cars. they are owned primarily by whichs and shippers, creates a certain amount of tension, but i am optimistic we will reach a voluntary standard

sooner rather than later about the next generation of tank cars. the conversation with the regulators, they have been doing their job, but in a thoughtful way and they have been listening to all of the facts, all of the concerns. and i do applaud them for that. regulation,side of but there are others. there is positive train control, a $10 billion mandate which was forced upon the industry. the government estimates for every $20 that we spend, we will get a dollar of benefits, which is not a good deal in my reckoning. we have other safety regulations that are out there that are erdogan some to us -- that are burdensome to us that do not do much in terms of safety but create additional cost. we are fortunate that the f.r.a. has recognize that in a couple of instances and relax in things like locomotive inspection standards that were quite frankly left over from steam locomotive days.

worrisome, and most there are our attempts, as many of you know underway to change the economic regulatory framework under which we operate. either doing it through legislation, which is unlikely, or doing it through various regulatory agencies. now, i'm an optimist. at the end of the day, i am confident that these will not succeed in any meaningful way. quite friendly, i view them as a somewhat cynical attempt by a few shippers to seek lower , at the expense of the industry looking 10 years from now like it did 40 years ago. i think enough people understand what a great and remarkable success story the rail industry has been in the last 30 years, how good it has been for our country that that will not happen. will tell forward, i

you, i think we are in absolutely essential partner to government and businesses, to our customers, to position this country for a prosperous future. but we can only do that if we continue to grow and invest in our businesses and earn an adequate return. well, ourur job economy will grow. we will all be prosperous, and it will be good for all of us. thanks very much. [applause] did i take up all the time? i hope, no? all the timeke up that you want, but the question is, are there any questions for you? where are the roving microphones? >> you did not even have to ask the first one. >> i know. >> i'm from pittsburgh. will we see more high-speed

train tracks for passenger trains like you see them elsewhere in the world? apologize, i had it in my head and i did not write it down that i should have started my talk by talking about i am talking about freight role road. i is difficult sometimes think in a of people possible -- toot of people's perspective separate the difference between passenger and freight. obviously, europe has a very different model in which freight is not particularly import ant. opinion, andl remember i'm a kid who likes trains and i was happy riding trains, it is just not a model that works in this country, with a few possible exceptions. the corridor works. you can look at a few others, may be out of chicago, that

would work, but the investment is enormous. and it will require a judgment on the part of public policy leaders that they would rather put those dollars into intospeed rail than investing in highway infrastructure, which has been the pattern in this country. i just don't think you will see very much of it. i will say that i think there are places where conventional passenger rail works very well, even occasionally when it is on our railroads. but i just cannot see it ever happening in any meaningful way. other questions? ask you a question that came to mind while i was sitting here. you talked about the success that railroads have had because you own and operate your own and for structure. it is in the best shape since with a lot of

other infrastructure in the country not in that case. there is a difference between running a private railroad and having to keep available a public network. so keeping that in mind, what would your advice be to the government entities that have to make choices about operating, maintaining, and expanding the public infrastructure they have? >> we have been blessed with a infrastructure that is at a point that if we don't do serious investment, first in may want nance, we are going to lose it, we are going to lose significant parts of it. you look at the statistics of bridges on medicare and things like that. i'll ecowhat the secretary said and we talk about all the time.

just because our infrastructure is in great shape, and it is, doesn't mean that the rest of the infrastructure doesn't have huge impact on us -- impact on us because it has a huge impact on our customers. we go around and talk about the importance of this being a non-partisan issue in terms of finding the adequate funding for the highway trust fund, in terms of getting our hands around the maintenance of what we got. first and foremost, if you don't maintain what have you, there is no point in talking about adding additional capacity, it will be wasted. >> how about a final question? there is one in the back. >> i thought i had stunned all of you. >> i'm john body. how rapidly might the freight rail industry convert to natural

gas as a lock motive fuel? that's a really interesting question. we are all looking very hard at natural gas. and the two primary lock co-motive providers, e.m.d. which is the caterpillar division and general electric as well are doing a lot of research on it. it's not something where you can look at it automatically and say this is a no brainer and we need to do it. the reason i say that is if you look at a price on a b.t.u. difficult ferble between a gallon of diesel and a similar amount of natural gas, it is a no brainer. i forget what "the price is right" now and it moves

substantially but there is a lot of capital that is required in erms of new locomotives or modified. remember right now if we were to hall a tank of liquid natural gas around under the f.r.a. safety requirements it would have to be six cars behind the engine in what is called a key train. so there are regulatory issues involved. when you think about all of those things, what you are essentially making a bet on is at is the spread between oil and natural gas 10, 15, 20 years from now? so right now it looks fairly compelling if we can get the technology sorted out, which we will. get the regulatory issues sorted out which i think we will.

but you are making a particularly long term bet. so still a lot to be determined. i think anybody who is looking at this from the railroad side would give you the same answer. >> thank you very much for joining us today. >> at the agriculture department there was a forum on the year's out look, the public does not appreciate how productive farmers are in america. you can see the entire speech at cspan.org. here is a little of what he said. >> to me what has to happen in this country is there has to be a much greater appreciation for producers generally and for those who feed us. every single person in this audience who is not a farmer has the luxury not to be a farmer in this country. and the reason we have that luxury is that we don't have to produce the food for our

families. we don't have to grow it. we have transferred that responsibility to someone else. we are happy to do it because we have the most productive farmers in the world. but we don't appreciate that. we don't know and we don't appreciate the fact that i can be a lawyer or some could be a doctor or some could run a company or start an entrepreneurial activity because we don't have to spend the time and effort to raise the food as our forefathers and foremothers used to do. i think the dialogue in order to for messages to be received appropriately has to be couched in a way that is it is not a criticism, it is just an educational opportunity. and the one thing i want to note about this panel, if this panel had taken place five years ago or 10 years ago or 20 years ago, you wouldn't see the diversity

on this panel you see today. you just wouldn't. and that is something that agriculture needs to understand and embrace. that diversity whether it's in crop production or land use or producers is not a threat. it's something to be celebrated. it's something to be encouraged. especially if we are going to convince young people to get into this business. >> in in a few moments a columbia university forum about how journalism has been affected by edward snowden's release of classified information. and american pro file interviews with a democrat from north dakota followed by south dakota republican. >> a couple of live events to tell you about tomorrow here on c-span beginning with the forum on the syrian refugee crisis

which is affecting millions of people. nelists will include the ambassadors from lebanon and raq. >> he wanted me in that spot for two reasons. one, he thought i could handle it. and secondly, he wanted young -- [inaudible] and somebody said he's a negotiate grow. he wanted that image.

we're very lucky to have one of

the reporters who broke many of the stories through "the washington post" here tonight. i'll be going to him just to get a quick response to what he's heard. and then we'll be having some q&a from the audience as well. please be thinking of questions because i'm sure there are plenty i will not get to. so, to introduce the panel. on my immediate left is janine gibson who is the editor in chief of "guardian u.s." which broke the initial stories. and next to her we have is the editor of the "new york times on the west side. needs no introduction. but nevertheless we're delighted to have her here. she's a member of the board of visitors of the journalism school. and also i think it's fair to say that "the new york times" is still the voice, the editorial voice which is probably most listened to by the establishment in the u.s. i hope that's not too controversial. next we have david schultz. david is the leading first amendment lawyer. he's very kind to make time in his schedule to teach up here at

the law school. he's a partner at a law firm. he is "the guardian's" lawyer on the n.s.a. and before that he was external counsel to "the new york times" on wikileaks, i believe. so he has been inside two of the biggest stories of this time. and we're very, very pleased to have cass here. one of the things we have sought is to get members of the administration or the n.s.a. to come and talk to us. they're not quite ready for that yet. we hope they will. at some point. he's one of the country's leading scholars and constitutional law. he served in the obama administration as the administration of the white house office of information.

he's served many of my students,. he's married to the u.s. ambassador to the u.n.. but tonight he's here as a member of president obama's review committee on intelligence and communications technologies which is one of the panels convened in response to the revelations by snowden. so we are going to address what's the journalism after snowden, but first i want to go to janine first. i think some of us are familiar with this, some less familiar. can you tell us about actually breaking the story? tell us a little bit about how it came to you and then what it was like so you can set the scene of how -- what is it like to deliver a story of that size to the world? >> well, it starts very small, of course. like everything. it starts with a phone call from glen greenwald and i should say,

you know, the guardian is a 200-year-old news organizations with a storied history of breaking large stories, we are wikileaks, we're even accustomed to the megaleak. but in america we're 2 1/2 years old and we live in a small loft in soho and while we all have "guardian running through us and our combined work history might be eight years or so, in america we don't look like a 200-year-old news organization. we call ourselves "g" by the guardian. so i'm sitting in a soho loft and i got a call from glen and he said, i think i have the biggest intelligence leak in a generation. if not ever. >> i like it when reporters undersell stories. [laughter] >> well, obviously your first thought is, we might be the judge of that. oddly, because of wikileaks, and the various measures we'd had to take while working on it, i knew that skype was not a particularly safe form of technology. and i knew that glen had a skype

phone. so my first question was, are you calling me from your delightful rio residence on your skype phone me? said, yes. i said -- hm. so we didn't talk very much. in that conversation. it became very clear that the first thing he was going to have to do was get on a plane. he explained that he was going to see a sample of the material, that he'd had encrypted conversations with the source. it's funny to remember now. we did not know his name. we didn't know his name. he was the source. for a quite long time after we did know his name, we kept referring to him as the source because he'd been the source for so long. he was going to get this small sample of material and look at it and he would call me back and if he thought it was good, he would get on a plane to new york. so within five days he was in our loft. and there were five of us in the room then.

myself and glen and laura and a reporter. in the entire universe of "the guardian" staff, if you could pick someone you wanted to have outside your office when he walks in with the biggest intelligence leak in possibly ever, it is ewan. he's not here so i can say grizzled. he's done everything. he's been to every war-torn hot spot, he was the d.c. bureau chief. and he's the person you send to the fire, whatever the fire is. when it became clear that, you know, we're sitting there on the cheapest sofa in the world, on an air gap compute that are we've had to sent somebody out to best buy to buy, looking at what later turns out is the prison presentation and you've seen the slides. they don't look like the most top secret thing in the world. but quickly, very quickly realize, it's either an incredibly huge, sensitive, difficult story, or it's the hitler diaries. it's a great big hoax and the next job is verification. he was straight away into how do you verify it. >> how long was the verification process? >> it was really intense. we put people on a plane to hong kong and they went to a hotel and i think everybody knows a detail that was maddeningly reported first in "the new york times. they identified edward snowden by use of a rubix cube in a

hotel lobby. and couldn't believe he was 29. we assumed when we were looking at the material and the description of the rest of the material that this was going to be somebody very senior, this was going to be somebody really high in the ranks of n.s.a. we were expecting -- and they we couldn't work out the psychology of it. in new york waiting to hear from the people on the ground in hong kong, you spend a lot of time speculating. what would cause somebody who is career n.s.a. to walk out with the crown jewels? they saw this kid walking through a lobby and they thought, that's not him. then of course you're right into the hitler diaries. we had him briefed on the standards of verification that

we'd want and he spent three days locked in a room interviewing him, show me this i.d., show me this car parking pass. they were very convinced by him. and his motives. and of course the material that he had. and then you move straight into, what of the story? what can we do? and the first one was clearly, the fisa court order. >> it should be made clear there are 56,000 documents, is that right? >> no, there are many more than that. many more than that. there are 56,000 in one cache alone. which was the cache that edward snowden gave to ewan. >> does anyone actually know -- can anyone quantify what the size of the leak is? >> i don't think anybody knows. the n.s.a. said for a while that they did know and then they said they didn't. >> so, just on the launch of the story. it's june 5. >> yes. we're working in huge amounts of secrecy at this point.

we have realized that communications at hong kong are necessarily going to be sparse and very highly encoded. the first thing we did was fly james bowl to new york. he's a veteran of wikileaks. sitting in the second row. and freakishly young. really annoyingly young. but brilliant at all things involving cryptology and technology. he can also fix a printer. >> very important. [laughter] i didn't know that. we must call him. >> without putting it on the network. but he came and introduced us to disposable chat rooms and properly secure technology. then we had to teach glen and ewan how to use it from london. fortunately again they were being taught how to do it.

if you're going to learn how to do encrypted technology, be taught by the person who works at the n.s.a. doing encrypted technology. they came back really knowing how to move documents around securely. but we're trying to edit the report and stand up and verify a story about a document that nobody's ever seen, nobody -- you can't google secret fisa court orders if it looks like one that's in the public -- nothing. that's not funny. that's a genuine problem when you're trying to work out what it is. but we realize they have been referred to in reporting and that one of the crucial factors around this document is that, if you are the subject of a fisa court order, there's a gagging order. and you can't refer to it. so we knew the first call we had to make was to verizon and if the spokesman said there was no such thing, then we were not allowed to do that. but actually, they said, we'll call you back. then they called back very quickly and said, sorry, can i just check, what's the name of

the agency on the gag order? on the fisa court order? and what is the date? which we were listening to this and thinking, it's a bit like -- is it the pink one or the yellow one? so we started to think -- but up until that point you've got a huge amount of work in it. enormous amount of money already. barely even started paying david's bills and you're still thinking, this could be nothing. this could be a massive, massive hoax. but when the verizon called -- so the verizon call was tremendously important. we were working to script at that point but we knew that was a really big step in verifying the story. then we spoke to the administration and then it became very clear that it was in fact a genuine document. at which point, week of been incredibly lucky. there's only two questions you

need to ask yourself and they are, is this story true and is it in the public interest? and before we went down this road, we spent a lot of time with several lawyers making sure that our ethical, moral journalistic interpretation of the public interest matched up with the legal interpretation of public interest, both here and globally. so then it really did come down to verification and is it true? and we have basically tried to hold on to those two twin pillars ever since. if you're really holding onto, is it in the public interest, and line by line, that's what we worry about, it sort of takes away from the enormous thing that you're, doing, by starting to publish these stories. >> i want to bring jill in. at what point did "the new york times" get involved? were you approached by "the guardian" with the documents or did you solicit them? >> i would say it was a delicate combination of those two things. we did not break the story, the guardian and "the washington post" did. that caused me a high degree of worry. >> what did it cause the news

room? >> i think the news room was resolute. i think disappointed, as was i, that we didn't break the story. but it was not at the forefront of the psyche of my colleagues. but it was, you know, a concern of mine and i felt that we had had the very productive collaboration with "the guardian" on wikileaks. obviously "the new york times" broke the pentagon papers story, which president bullinger eloquently evoked in his opening remarks. and in 2005 we had published the first story about warrantless eavesdropping by the n.s.a.. so, i felt all of that provided a very firm base, you know, that made a powerful argument that

"the times" had a constructive role to play in these stories. actually, i've heard from allen the first weekend after the stories were published. the editor of "the guardian. and we had a chat in my office the following week and sort of -- it was a somewhat vague conversation about collaborating and maybe we could and as any aggressive journalist would do, the door was a little bit open and i tried to stick my foot in it and keep, you know, keep it opening a little wider. from time to time i would call allen and just say, you know, we'd love to work with you and nothing happened for a while and then he did get in touch with me and the catalyst, i believe, for him reaching out to me was that he definitely had the sense that the british government was about to come down very hard on "the guardian" and probably demand

the return of the materials and he was deathly worried that the public interest role that janine spoke so powerfully about the plug would be yanked. >> of course that was proved to be the case. >> exactly. sometime before the authorities actually came to the guard -- came to "the guardian" and they had to literally destroy their drives and what not, "the times" did obtain some but not all of the snowden materials from "the guardian" and we agreed to abide by all of the protocols that "the guardian" had established for keeping these materials as safe as possible. i think that's a really important point.

it's not the sexiest opponent but you were asking janine about the process by which they verified the story. i would say the process by which the guardian sort of schooled us in exactly how we needed to handle the documents, safe keep them, communicate in a very secure manner, that that is probably, you know, took up days of janine and me talking before we got a lick of actual work done. i just think that that point is somewhat lost on the public. sometimes they think, oh, a leak, it's just a bunch of stuff that's thrown at us and we just rush to publish it. and that is never the case and could be the least true in this situation. >> this touches on something that i want to come back to just

before i move on. the two of you, the surprise of these stories, the unknowable end, you know, even with the pentagon papers, you could fit them into a shopping cart. and wheel them across the news room. and part of that was actually, you know, ellsberg had to make selection choices partly on the basis of what he could actually get out. now we have these unknowably large stories that technically are incredibly difficult. but also isn't the difficulty of them an enormous journalistic challenge? you talked a little bit about the difficulty of that. there must have been times when both of you thought, are we

actually capable of reporting this story? >> i think from the beginning we realized we couldn't do it alone in different ways. there was a very obvious point, we were running this as a new baby foreign addition of "the guardian. the first thing we had to do was crawl back to the parent company and put in some help. but the second thing you realize is you're going to need outside experts. we talk a lot about being open at "the guardian. it's up with of our philosophies of how we work. thanks story that is the most

secret thing you could ever do but at the same time you have to accept you can't do alone. you're going to need security experts, you're going to need to consult with experts. other news organizations, because your material could get destroyed or because there's a chill in the u.k. and we have brought in partners to work on an enormous number of the stories. on top of that, you have to make up how you're going to assess the material. we almost had a contract about how we were going to search it. we were really keen that we weren't going to use these documents as a fisher exercise. there wasn't going to be a team -- with the wikileaks documents, which are much less sensitive,

much lower level, we would bring in, you know, subject specialist journalists and they could have a search and -- and country specialists. >> country specialists. this is a very different sort of thing. you don't want to be using national security material to -- you want to use it to confine to the scope of the nature of the surveillance in front of you. we have had all sorts of conversations about how to build boundaries about what we were -- we would report and then conversations about how best to do that practically. do you put a small team in for two weeks, get them to whittle down a short list of stories. >> that is what we did. and that's what we did in wikileaks too. in both cases, we worked closely with "the guardian", a very small group of editors and reporters who worked together, not in the middle of the news room. but on a floor, remote from anybody else. exclusively went through the documents. and after that long process,

then moved to the next phase which is trying to put them in some kind of context, to start reporting. in our case i thought, some of what we brought to the table, you know, were our reporters in silicon valley who had very good sources on all the companies that "the guardian" could see, this was a source of controversy within the companies themselves. they had been required to cooperate with the government but whether it was right to or not became a very live debate. we could add reporting fire power on that type of thing as well as inside the u.s. government and in the intelligence community. >> that's a terrific, i think almost sort of textual kind of background.

you almost file like it was like to be in those rooms. i want to bring in david and then caas on these legal issues and the response, if you like, with the legal minds in the government. david, to you first. you've been on the inside of these stories. is something changing? obviously the scales of stories have changed. what are the challenges legally and where does the first amendment fit into this? >> it is a bit of a conundrum because in this country, as was mentioned in the opening segments, we don't have an official secrets act. we don't have clear laws about -- and you can argue it's a very good thing we don't. but on one hand, the criminal liability, what we have primarily is an espionage act that was written during world war ii. >> 1917. >> 1917. it wasn't intended to cover the kind of disclosures that we're

talking about, through the press, to the public. it was to get spies. and for a long time it was thought that that's all it dealt with. that started to change. and in the 1980's, for the first time a source, not a reporter, but a source was prosecuted for leaking information to the press. it was a navy employee who was working as kind of a freelancer for a magazine in london, a defense magazine, with the knowledge of the navy. and the condition was that he could write for them as long as he didn't disclose classified information. and then at some point, as he was negotiating full-time job to go work there, he secretly provided to the editor some highly classified spy photos that were considered very sensitive at the time because it disclosed to the soviet union the capabilities of our satellite cameras or our aerial cameras. and so he was prosecuted criminally. and there was a big debate at the time about whether the

espionage act was intended to apply to this type of disclosure, not to a foreign government, but to a news organization. and he attempted to defend the claim that the law doesn't apply to this kind of disclosure. and his conviction was upheld. but in a kind of interesting opinion, he was raising a essentially a public interest, his first amendment defense, in part, he said, i did this to a journalist, not to a foreign government. there's a public interest here. that was rejected but it was tied to the facts of the case. the court said, he was being paid for. this he knew what he was doing was wrong. he took off the classification before he turned it over. he provided it to them secretly. the way they linked him up was through fingerprints, the old-fashioned way. so they said because of the bad intent and the knowledge of the arm that it would cause, it was not a problem under the first amendment to apply the espionage

act to him. but two of the judges who decided that, two out of the three, said, if you make the same arguments against the press, we think there would be real first amendment questions here and it would raise different concerns. so on the one hand we have this very vague law and on the other hand we have this notion that the press is different, that there are first amendment rights. a long line of cases that say that you can't prosecute the press, you can't punish them for publishing true newsworthy information. that's kind of a settled principle in many areas. but it's not an absolute right, as we learned in a case a few years ago. there's a balance that has to be done, even with truly newsworthy information. and we don't know how the court will deal with that when the balance is the public's right to know something versus a national security interest. never been decided. so we don't know what the risks are. there is a real risk.

because what the espionage act says is that it is a violation, a criminal violation of the law for a person who has unauthorized access, a reporter, if you get national defense information, it's not even classified information, if you have possession of it, the mere possession, the failure to return it to the government, or the disclosure of that can lead to criminal violation, if it is reasonable to believe that the disclosure could harm the united states. so it's a very broad law. the government takes the position it doesn't require an intent to harm, it doesn't even require actual harm. if the document on its face could reasonably be understood to possibly provide harm, and in fact, a document shouldn't be classified unless it meets that standard, so you know that if you have a classified document, at least in theory, the mere possession of it is a violation of the law. so it becomes sort of a tricky situation to advise a reporter or a journalist how to handle that. but on the other hand, that's the bad news. the good news is, since 1917 there has never been, almost 100 years, there has never been a

prosecution of a journalist. we have a very strong tradition in this country of protecting the press. and so there is this uncertainty that that's the little dance we do. so dealing with the situation like this of course, you want to limit the number of people who have access to this so you're not putting people at risk and the basic advice is, if you're going to publish this information, it should be so important that the american people have a right to know and that could you convince a judge, if you had to, that this was something the public needed to know. but it's still an unresolved question whether that even is defense. the government has taken the position there's no first amendment defense to this law and no public interest defense. it's a gray area. >> i want to come back to that in a minute.

first of all, let's bring cass in. in august, your approach of having to review this for one of the review panels, can you talk a little bit about how you set out to do that and what you looked at before we get into this? >> great. so, we were constituted in late august and it was a diverse group with one of the leading first amendment scholars, he's associated with the american civil liberties union, jeff stone. a prize-winning book on free speech, of which he's one of the nation's strongest advocates. we also have one of the leading, maybe the leading privacy expert in the united states, a guy named peter swyer, who was the privacy person in the clinton administration. a long standing person in the c.i.a. who had been acting director in the c.i.a. with three decades of experience there. he also is strongly committed to a free press and civil liberty. and richard clark, who is counterterrorism specialist, who has very strong convictions

about freedom of speech and privacy as well. and then a regulatory guy with some constitutional background, yours truly. so the first thing we really decided to do was to try to learn as much as we could from people in the country. so we did something quite unusual which is we asked for a public comment process in which we asked people, basically all over the world, made a global request for comments, and we got hundreds. and while some of them, as i recall, had to do with people wanting to sell us pencils and paper, which we already had pencils and paper, but most of them were substantive and about the issues at hand. every word was read and they

were incredibly valuable. we also had meetings, extensive meetings, with people all over, including people who are specialists in privacy and civil liberties, the rights of journalists, got a lot of information from that. it made an impact on our report. we ended up endorsing four principles and i won't do them in exact order because i think the first one i'm going to mention is maybe one that's most salient today. which is, there's a lot of talk about balancing, about balancing national security against privacy. we think in important respects that's misleading and actually harmful. there are some things that just don't count in the balance. so if there's an effort to suppress dissent, to go after people because of their religious convictions, to target people because of their political beliefs, to go after people because of their gender or ethnicity, that's not part of legitimate balance, that's just off limits. very important to identify a set of impermissible reasons for

surveillance or anything like surveillance. and we say in the report that that is a foundational principle that applies inside and outside our territorial boundaries. so the first idea is the limits of the balances metaphors, a way of approaching these issues. the second is by i think a happy coincidence of language. the word security actually has at least two meanings. two which are crucial here. and they both have a latin root which means free from danger, safe. and that entails both not being blown up or at risk of being blown up and also feeling that your persons, papers, affects, etc., are safe from government intrusion. our view is that these two forms of security, which have the same linguistic root, can both be safeguarded and it's a big mistake to think that in a free society one can be pursued at the expense of another. one thing we're fighting for when we protect the national security is the other form of security and it shouldn't be relegated to second-class citizenship. the third idea is that there are multiple risks involved that surveillance calls up. and it's a big error to think about only one. so national security risks are one. and they're very important to consider and they're part of the mix. but risk to journalistic freedom are also one.

and that has to be considered. risks to our relations with foreign countries, including those who are friendly with us or we're trying to cooperate, that's another. economic and democratic risks that cut across territorial boundaries, that's another set of risks that might cut in a different direction from the national security risk in terms of what policies to adopt. and of course risks to privacy which are a central feature of the overall calculus. the ideas we're dealing with, risk management and the risks that involve operate along a number of different dimensions. the fourth and final principle has to do with the need consistently to focus on the consequences of what government policies are.

not only before the fact, but in an ongoing way. so if it's the case that you have some policies that were adopted, let's suppose, in the aftermath of 9/11, or a year or two before 9/11, to decide in a way that reflects -- the best practices of newspapers and businesses, which is to re-investigate your practices to see what actually are they doing to people? so you may have practices that at one point were thought necessary to protect national security, but it turns out they're really not doing much on that, but they are scaring people or they are chilling system of free expression. that has to be known and subject to continuing scrutiny, not just

by the intelligence community, as important as it is to the scrutiny, but by a range of actors who include people who aren't maybe principally concerned with national security but who have privacy or civil liberties as their mission or internet freedom as their mission. that last principle, that is balancing the human consequences, keeping your eye insistently on that ball, not only when you adopt the policies, but while you reassess them, has institutional implications. we suggest important changes in the foreign intelligence surveillance court and also important changes in the structure of the executive branch where just to give one example we say there should be a designated official in the white house who has privacy and civil liberties as his charge. to have that person in the room, having a convening function and having a presence, can help ensure both that risk management operates along the full range of dimensions, and can also ensure

the kind of continuing scrutiny that a free society needs. >> i can just ask at that point, though, the recommendations i think probably went further than some people were expecting you to go. certainly not as far as other people wanted you to go. so, for instance, on metadata storage. you said it should go to third party or private kind of companies. it shouldn't be kept by the government. one of the other review panels had a slight different review which is that it couldn't be kept full-stop. i wonder why you'd stop short on that? >> to state our recommendation, we believe that the meta data, that is who the phone numbers are from, and -- who's calling

whom and when, the government shouldn't be holding that data. in a free society, if we're engaged in a risk management exercise, there are undue risks to privacy and civil liberty with the government holding that data. we think that the information should be held privately, which has a safeguard against the risks of abuse which in american history have not been absent. not in the recent past, not in the last years, but under president nixon and president johnson there were risks from surveillance. and before. so we don't urge that the information should suddenly be held by the phone companies. that's not what we urge. the phone companies have that information. they hold it for consumer protection reasons, in large part. they hold it because they don't want to be billing you for stuff that you're not responsible for. in fact, the federal communications commission, whose mission is not surveillance, requires that landlines at least, the phone records be kept for 18 months. they hold it either voluntarily

or by f.c.c. mandate. like your bank has your bank accounts. we don't recommend, in fact we recommend the opposite, that the government should be holding bank account records. we are big against storage of all people's metadata. in a free society that's not what we're for. we're against that. but banks have the stuff. they just do. the government can get access to it through a warrant. that's the system of free society designs. we don't urge that the banks should disassemble people's bank accounts because it's dangerous for them to have it. we urge that the government should not get access to that information except in accordance with the standard legal forms. what we urge here is precisely parallel to what's always been

the case in a fourth amendment-respecting situation. materials held in private hands and the government has access to it on the basis of an appropriate showing. >> there are many more recommendations. i wanted to bring back the whole panel. we're here to talk about journalism after snowden. actually, there's a very important legal point. you touched on it, dave. which is, you know, we have the director of national intelligence yesterday saying, well, first of all, two things. he said, people with material should give it back. so, jill and janine. [laughter] do you have a response? >> now that you say that. >> the other thing that he said

was, he talked about edward snowden and his accomplices. and after a couple of calls, the clarification from his office was, accomplices could potentially mean journalists. now, given what they were saying about the espionage act, do we even know what the policy is for the obama administration? the attorney general in the summer said that in the james rosen case, who is the fox reporter who was -- had his phone calls -- sorry, his email taken, he was actually described as a co-conspirator in leaks. the attorney general stepped back from that. but there's a great deal of -- there's a lack of clarity, isn't there, here, about what the actual -- whether we even have a policy around this? i don't know whether you canwe a policy around this? i don't know whether you can respond to that. >> i can tell you a lot with the obama administration's policy with the paperwork reduction act which i was helping to oversee. i can tell you a good deal about our policies with respect to cost-benefit analysis and

environmental stuff. apologies. the other i wasn't involved in so i don't have a view of the policy. >> let me maybe tie a couple of points and throw some issues out. one of the points you're raising is that if you have a system of free expression, there has to be a basis for confidential communications between reporters and sources. that's one of the things that the privacy and civil liberties oversight board underscored in their report that came out last week or the beginning of this weir . and i think the concern, which is evidenced by all the interest in this, is that the snowden revelations kind of were a wake-up call. i mean, jill is right. we knew a lot of this was going on in 2005. and people have reported on it. but seeing that fisa order that said, give us everything -- >> it was the scale, that's what's different. >> and what we're realizing now is that it's not just the phone records and all the goe.

we can say about the recommendations on metadata, which they are very helpful and very strong and good ways, it's a piecemeal approach. because we also know they're getting not just your phone records but they're gepieing email in various situations, they're getting geolocation data. they're gepieing your contact lists and your buddy lists and all sorts of other information that they get in various ways from your cell phone from various websites. so part of the problem is, it seems to me what we need as a society, we really need to understand what we mean by privacy. we talk about protecting privacy. two years ago the president and the white house got behind an initiative that was geared at private industry. said, we need a consumers' privacy bill of rights because all these corporations are collecting your data. well, we need a privacy bill of rights. we need to know what it is that the government can and cannot do, what corporations can and came oot do and we don't have a

consensus on that. europe has a whole different ãon ie priof privacy than we hae here. and in many ways it's more refined and more fos pard-lookig when it comes to data protection. and it's going to affect things like reporting. what the attorney general said this summer in reaction, and just, if you weren't following it, what happened is the department of justice wanted to get the email of a fox reporter because they were doing a leak investigation. and because of an anomaly in the law that sa her you can't get -- there's two laws that were relevant. one sa her that you can't get email unless you get a search warrant. they wanted alloudge -but sso y can't just do it with a subpoena without having a juss e approve it. that is one law. there's another l. a that sa her you can't use a search warrant against a reporter because you want to give the reporter notice witget in any event, they wanted the email so they had to get a seammuh warrant, but they couldn't get a search warrant against the reporter, the exception of that is if the

reporter is suspected of a crime. ? io they actually filled out an affidavit and got a seammuh warrant where they said there was reason to believe the fox reporter hadttiolated the espionage act or was a co-conspirator because he was asking questions of someone who had access to classified information. the apieorney general said at te time, we will not prosecute journalists for doing journalism. what d you