and people willing to say this only slightly off the record. caller.publican hi, howard. guest: good morning, mr. hawkings. --t i want to say today establishtried to --people solving problems economical issues and those suffering from economical problems. thanks to president obama ceesidential election, a chan for people suffering from the problem, economical or political issues -- [indiscernible] host: how is this tied to what we are talking about right here? going tohe thing i am talk about exactly is congress must solve the problems of the poor people and economical

issues. we have callers during the first 45 minutes saying, why are they focusing on jobs and the economy. concern think that is a that some republicans have. as i said a minute ago, many the basics see political rationale for these hearings as seen as -- how they can make -- make life difficult for secretary clinton. there are other republicans who think this is over doing it and it is a basic argument within the house republican conference over how they should be positioning themselves for the fall. wee say emphatically all need to do is tear down the president and make life difficult for the president, say no to everything the president is for. and others are saying the voters don't want just to vote against people, they want to vote for people, and the republicans should be standing for

something, should be promoting something, should be advocating things. john boehner, the speaker, does try -- when you see him go before the cameras -- which he does a couple of times a week generally after house republicans have the caucus meetings, he almost always talk about job creation and a progrowth agenda. but plenty of republicans think it should be more than just the speaker saying that but they should be out on the floor moving legislation and trying to at least lay out an agenda. it would not go anywhere, i hasten to add. that whatever ideas the republicans have for job creation in the current environment, the democrats almost always certainly spurn. so the argument goes, why should we be wasting our time on this agenda when it is going nowhere? our publicse relations time to do the kind of investigating we're doing. it's got a couple of tweets here -- host: a couple of tweets here --

host: david hawkings, what is next? what are you watching for? guest: as i said a minute ago, the way things were left when the house went away for the weekend and the current week was that ms. furloughs he was asking for a face-to-face meeting with john boehner to discuss ways to structure the committee in a way to get the democrats to participate fully. it is not likely to happen this week because ms. pelosi is out of town and so was mr. boehner. the bowler of several different minds on how they're going to participate. the three options are to dissipate fully, participate not at all or the middle ground which is to name a single person to the committee as a sign of protest but one that nonetheless allow was a human being who can receive all of the documents in

question witnesses. i think that was an interesting idea that gained a lot of credibility at the end of last week. it seems to be fading in terms of democratic support right now. it seems like it is all in or all out are the two options democrats are weighing. i've got to believe that in the end they are going to go all in, that they will not be able to resist the notion that they can go in there, and with the people they do have in the

>> on the next "washington journal" michael stratfort, a reporter looks at the cost of rising education and what options are available for financial aid. barmak nassirian will focus on the value of a college degree. discusses his ke book "drop the dropout." plus your phone calls, facebook comments, and tweets. "washington journal" live on c-span every day at 7:00 a.m. eastern. the u.s. chamber of commerce had

a forum on monday on america's aging infrastructure. the event began with chamber resident thomas donahue. >> good morning, and welcome to a discussion on infrastructure. i'm janet kavinoky. this morning on behalf of the organization for international investment and the chamber, we are pleased to kick off what we hope will become an annual week of spotlighting the nation's public infrastructure that serves as a physical platform for our economy. in the fall of last year, a man challenged two organizations, the chamber and the council, to work together to raise the profile of the nation's infrastructure issues to recruit new c.e.o.'s and top-level voices to the cause, and to generate more interest among the business community for addressing the challenges we

will discuss today and throughout the week. little did i know a year later we would be here today with a week packed full of events and national and regional media campaign involving a steering committee that unified business, labor, and think tanks. paul urassi is the president of hnt tv culls companies. paul, thank you to your dedication to modernizing our roads, railways, rivers, runways, and waterpipes, and your ability to put the chamber and the council together for that all important first meeting . for that, we are here today. paul, please accept my thanks and the steering committee's gratitude for h.n.t.'s generous sponsorship of the week. please join me in welcoming paul urassi. 6 [applause]

>> i have the honor today of introducing the first keynote speaker, donahue. a number of years ago the hntb to s courting join. we had a number of visits and were deciding what we were going to do. finally, i don't know who it was, said why don't you go visit tom. so after 4545 minutes with tom donahue i saw exactly wr to be s great for hntb part of the chamber of commerce. i saw everything that fit what h.n.t. needed.

more than that, i saw a man with a vision for what america could be, the passion to get it done, and backed by an organization that was working to implement his ideas. since becoming president, tom built the chamber into a powerhouse. during tom's tenure the chamber, lobbyists, legal experts, and under tom's erts

leadership the chamber has emerged as a major political force. a force that needs to be reckonned with. i would like to kick off the week by introducing tom donahue. [applause] >> well, thank you very much. good morning, ladies and gentlemen. i'm pleased to be here. i'm not sure how i feel. i got back from europe late yesterday. i'm ready willing and able because i'm absolutely committed to the subject that we're going to discuss today and this evening and tomorrow and the

next day, and that we're going to advance in every way we can to meet the challenges that we ll face. thank you for your support of what's going on in the infrastructure world. i would like to join janet in welcoming our co-host, and the organization for international investment, n.a.m., and the ouncil on competitiveness. i appreciate working together with these folks. the highway trust fund is going to run short of money. guaranteedwon't be

to get reinforced on time for money they have already spent and we will probably slow down their own commitments. beat tober, projects will interrupted, halted, or never launched in the first place because of the uncertainty over funding. this will weaken an already weak recovery. i am talking about the economic recovery that will contribute to the slow deterioration of our and undermine our global competitiveness and demonstrate to the world that america cannot even get the basic things done anymore. will also cost us a lot of jobs. while we are trying to create jobs, this will be taking the most important types of jobs away. several members of congress acting with plans that would

address our long-term funding issues and we applaud them for their efforts and another is going to be more discussion in town this week on those attempts. others are suggesting that the political reality is that it will have to settle for an infusion of cash into the highway trust fund as a stopgap measure. where are you going to get the cash? it used to be there were ways to do it and i think is tighter now than it was. it may be true that weekend yet an infusion but it is hardly the heart -- a long-term solution we need if we want to maintain a world-class infrastructure system. this is like the movie groundhog day. every few years we wake up and have the same conversation about over the gassame i tax and the same scramble for money. the only problem in recent years, we have not been doing really well. you do know and i think round numbers in 20 years, since we

increase the gas tax. don't get me wrong. money is important. you cannot make that -- if you do not have the cash. that that is all that we have to do to get the infrastructure issues working. if you look at everything that is being discussed in recent days and weeks around the environmental issues, any of somewhat in conflict, not because they are wrong but in what we are trying to do and where we are trying to spend our money. what everyone would agree to is that we need a comprehensive, forward-looking program that nate -- meets the needs of the competitive 21st-century and then embraces innovative approaches and instills honda benson earns support of the jaded citizenry. whoever built that bridge did not help us, it didn't go anywhere, that we certainly heard a lot about it.

today i would like to suggest a plan that might meet that objective, a plan that can get us past the stale and repetitive debates we have engaged in for too long, a plan that will appeal to the american people and our elected officials because it focuses on the benefits of a 21st-century infrastructure system, a plan that will emphasize transparency, accountability, technology, and innovation. it is a plan that relates to the lives of everyday americans and will help drive their enthusiasm for an increased public investment in infrastructure, a plan gold on five pillars. most plans are built on five something. we decided pillars. the first pillar is enhanced transparency and accountability. but in english, let's get the american people to be confident about what we are doing.

americans will never buy into a long-term funding plan until they are confident that their hard earned dollars are going to be spent wisely. for decades they have been fed stories of wasteful or barrel nowhere, bridges to and bringing home the proverbial bacon to win votes. are bad.f those things i told janet today, understand why we took away all of the efforts to build home -- to bring home a deal over a bridge, but maybe if we all got together and would make a professional list had to be done and after everything was done that and funded in permitted, then they could let the legislative committees and in order of seniority or hood looks, they could hit one of those projects and we would let them say it is bearish. but the bottom line is, we have got to get people to trust what we are going to do.

there's got to be a change. we need more transparency and accountability throughout the system especially to explain to people how objects are implemented and paid for. the public has a right to expect more business minded financial participation in infrastructure projects. all new construction and major upgrades should be the subject of a rigorous economic analysis that indicates a strong return on investment or a return of need that the community must take care of. the public has a right to expect once selected projects are subject to a strict management and are done in a timely fashion in a cost-effective way. often we put so much bureaucracy between the beginning and the conclusion we all forget what we started out to do in the first

place. the public has a right to expect that congress keeps the promise and does not diverge the money to some other project. implementing these reforms will not only improve the efficiency of our system, deliver better benefits and keep the costs lower, they will instill the confidence we need to do this on a long-term basis. the second pillar is that streamlining of the regulatory system. the public needs to know once they commit the money, it will be put to work quickly and efficiently for jobs, growth, and opportunity. lawsuits -- lawsuits are fine, not ones that go on for months and years and years. permitting delays and bureaucracy can not only slow projects, raise their costs, and outright kill them, but they can't discourage private-sector investment and prevent implementation of cost savings innovations.

permitting is a good example. a federal permit is almost always necessary to build or upgrade transmission lines, nuclear power plants, ports, airports, chemical facilities, and any other number of projects. the problem is after the permit is filed no one is in charge. there's no one timeline for approval, and parties have up to six years to sue after an agency makes his final decision. give me a break. so from the outset we have -- we are all looking at more of than decade -- have been -- just to break ground, as well as long delays and costs from legal challenges. we have seen exceptions and seen them work. remember back to the horrific earthquake in san francisco, and what we did there was we got together like this country can and made it work. what we have now? we have the rapid act, working

its way through congress. we put someone in charge of the permit and ensuring coordination among agencies and put limits on reviews and legal challenges. it will speed up the development of projects so we can create jobs and growth. efforts to streamline the regulatory process had been part of each of the last three major service transportation acts. some progress has been made, but change has been slow. additional efforts like streamlining that permit system are needed. the third pillar is a more strategic multimodal approach. we need a seamless national connected system that links all the physical assets and all the transportation modes together.

we need intermodal connectors that link railroads to ports, ports the highways, high waist airports, and so on and so forth him a touch of which can be done by the private sector if the public sector is involved in the way it should in a timely basis. this is where many of the greatest bottlenecks in freight transportation occur, on the last mile that connects one mode to another. our transportation and infrastructure planning system operates in silos across this nation and around this town. multiple levels of government and multiple industries that compete with one another. this lack of coordination raises costs and generates inefficiencies, which means the system remains fragmented and disjointed. if we are to maintain our world-class infrastructure system, we need to break down those silos, talk to one another, and consider the big which are. in short, we need a network, not a patchwork.

states have an important role to play, but we can all agree that the federal government must take a leading role in making sure that the infrastructure system introduced to a strong economy, national security, and works in a seamless way. devolving responsibilities to the states as some has suggested means we will lose national connectivity that is essential to moving american goods, economic growth, and global competitiveness. that is a big price to pay. we sure states are actively involved in raising their own money and aggressively going ahead and fixing their own infrastructure, but they know we need a national system. the fourth pillar is integrating technology into the surface transportation system. our lives revolve around gadgets these days, it seems to be. we expect that information at our fingertips to make decisions on the fly, to adapt to changing

situations, and the american people are going to expect that relationships with the infrastructure is no different. it is time to make sure that our concrete, asphalt, steel, air traffic control system, and other infrastructure are smart. they will tell us when they are wearing out and then we can worry about it. this is what americans do. we innovate, create them in caps on the rocks, make the absolute most out of the resources we have. there are some exceptions. one might look at the u.s. infrastructure system. the private sector know-how is already alleviating injection, congestion, -- helping travelers plan ahead,

unlocking good luck at airports, and improving safety. and if using more technology and infrastructure planning construction and maintenance has a potential to be a game changer for the infrastructure system in the 21st century. technology implemented across transportation modes and industries is uneven across governments and often much lower than the pace of technological evolution. the majority of the build system does not yet incorporate these elements. it might not be cost effective to add every new bell and whistle to the every structure, but business should decide on which technologies warrant support, where, how, and who pays for them. i've been talking about all that because i have been trying to warm up to the fifth pillar, because this is what is about. the fifth pillar is our business plan, is creating a predictable, stable, and growing funding mechanism for infrastructure. here is some old news free.

the simplest, most straightforward way to fix the highway trust fund and buy some time to develop a new funding system is to raise the federal gasoline tax, or the user fee. you do not want a user, you do not have to pay for. but if you want to use it, you have to pay for it. truckers are for it, the construction industry is for it, labor is for it, and the chamber is fort. that is one hell of a start. if congress were serious about ensuring money goes to the most essential projects, most motorists would be for it, too. a researcher found out that 58% of the public would support a gas tax increase if they knew it would be applied to building and maintaining roads, bridges, and transit systems. pretty good. he have watched in six states, three of each flavor, that state

taxes he raised with the support of the citizens. voters want to know where the money is going, and that it is going to be used well and not wasted. that is how you get the votes. increasing, the gas tax is going to require some coverage which seems in short supply in washington these days. last and as i said when those six states did it, they thought the current was there. -- they thought the current was there. courage was there. now we have got to get it here in the capital city. this guy did not fall. their economies did not collapse. both republican and democratic presidents have approved modest gas tax increases, and even

ronald reagan had a message on telling the people on the house side. increasing the gas tax is the right answer. it is the one thing we can do in the short order. we've got to do the same thing for our inland waterways. the barge guys support raising the barge diesel tax so that the locks and dams and levees can be replaced and upgraded. if we are going to export american energy and agriculture, which we are doing more and more, we have got to take care of that, as well as stop holding back the money already collected for the harbor maintenance to trust fund. let's keep in mind that public money is only part of the equation. we must increase private investment as well. the private sector is prepared to pump $250 billion in public-private partnerships if only certain barriers would be removed and if we could demonstrate we knew how to pay back what we acquired. although 33 states have passed legislation allowing p3's, only

a handful have taken advantage of it, and only a handful have established offices that can facilitate projects and help navigate legal, financial, and technical complexities. governors and mayors need to embrace p3's as a way of doing business. we need to seize every opportunity to tap every possible source of capital so that that difficult projects and get done and done quickly. this also includes expanding things like tifia private activity bonds and state infrastructure. i listen to that stuff up on the hill all the time and you can do it and it will work, but you cannot do it until you lay the foundation touches a highway trust fund. today best estimates put the total u.s. spending on p3's at nine percent of the global total, by taking some common sense steps we can drive that

number up. let me conclude because you have been patient listening to me. it is clear that the united states need a new path forward on transportation infrastructure. it is time we all push very hard to create a contemporary and innovative infrastructure strategy, one that embraces the private sector and its resources and invites the introduction of desperately needed ideas and drives prosperity rather than holding it back. jobs, opportunity, and growth -- we need them all. a successful plan would prove to the american people that our elected officials that infrastructure investment is a smart bet for our people, our companies, and our economy.

congress and the obama administration have their role to play. they need to own up to the responsibility of implementing a smart, forward-looking, transparent, and accountable infrastructure program with the necessary funding, please underline. the private sector has a role to play in a significant way as well. we need to come up with solutions, we need to craft a plan, and we need to sell it far and wide. today i am pleased to announce that the incoming chairman of the board will help us lead a national roundtable dialogue which will take place in five or six cities on each of the five pillars we discussed today. it might be more cities and five pillars. we will then transmit a report to the president, the congress, and everyone else that will listen with their principles and recommendations. some have accused me of being an

optimist. i cannot help myself. i am irish for the most part. some people think -- well -- [laughter] so i say it is time to start viewing this issue as an opportunity, not only as a challenge. if we are smart, we can set a path that will ensure adequate funding for years to come. we can create jobs and we really need them. we can spur economic growth the country needs. we can promote cooperation among all levels of government and private sector. we can ensure that money is spent wisely on projects with the greatest national and if it. and we can build trust and confidence in the american people and make clear all of the benefits this investment will bring. the chamber is committed. my colleagues supporting this effort are committed, and we look forward to working with you to get it done.

by the way, if you go to every event this week and then just go home and do not do anything, nothing is going to happen. so somebody, all of us have gotten go up and explain it to our representatives that we are so glad to have them and we need the money. or we might not keep them. thank you very much. [applause] >> thank you, tom. this is straight talk about our transportation problems which is one of the reasons i like to work at the chamber. please do not be shy. there is a whole other side of the room here. i was unable to construct a new entrance this morning, so you've got to help me out and walk all the way over there.

we wanted to start today hearing from tom, but also hearing from leaders of real top-notch business organizations, each with a slightly different mission and approach, but all of which emphasize the concept of competitiveness, which the world economic forum defined as the set of institutions, policies, and factors that determine a level of productivity of a country, which sounds very serious. that is a pretty big set of policies -- education, trade, tax policy, immigration, foreign policy. i could keep going on if it takes them longer to mike them up. what each of these association ceo's want is the best platform upon which businesses can succeed and the united states can compete him and to help us big into how infrastructure relates to competitiveness, today we are pleased to welcome cnbc's eamon javers.

did i say that right? yes. he has worked at businessweek and politico, appeared as an analyst on all the major broadcast networks, and if you watch "washington week," you'll will often see him on the panel. he is the author of a book you might want to pick up. so i will turn things over to you. thank you, and thank you to our panel. >> thank you very much, and thank you very much for the plug for the book. this is a fascinating time to have this conversation. i want to introduce the panel. we will have plenty of time for questions. i hope that your questions will be more insightful than mine. i want to get to that as quickly as we can. starting here, you all know tom. thank you for being here.

we also have jay timmons, deborah wince-smith, nancy mclernon. thank you all for being here. let me start out with a statistic that i read last week that i thought was fascinating. so much of this conversation focuses on big businesses and what their needs are. that is important, but this is also a conversation about american jobs and the overall economy. the s&p did a study by their chief economist last week and said that there estimates show that investing $1.3 billion in infrastructure creates 20,000 u.s. jobs and adds $2 billion to real gdp with potentially larger gains over the long term. if we could, starting with jay,

give us your thoughts on what infrastructure needs for jobs first and then the broader economy. >> thanks, and it is great to be here with such a diverse group of people. it is great to have tom kick this off as usual. tom gave us some good things to think about and has really presented a challenge as we all know it here. the fact that we are so diverse and that the sponsors are so diverse, is a testament to the fact that we can get something done here. eamon, it is about jobs and manufacturers. it is about competitiveness. if you look at our competitors around the world and what they are doing good infrastructure, you realize they are not stuck in the 20th century. they are moving forward to the 21st and planning for the 22nd century. that means if we are going to keep up with our competitors we

have got to do the same thing here. for manufacturers, it matters in every step of the process, whether it is receiving input for our goods or being able to deliver our products to our customers here in the united states or to customers abroad. you mentioned the statistic for every 1.3 billion invested in infrastructure spending it creates 22,000 jobs. that is a pretty basic figure, and that is borne out. for manufacturers, for every dollar invested in infrastructure spending, results in about 40 cents for manufacturers. when we look at all the different research products that have been done, studies that have been done, everybody agrees, we've got to do something. i brought with me a little hint here of the studies that have been done in the last five years. this is just five years' worth -- >> have you read all those? >> she has.

this is just a sample, not everything that is come out, but a lot of this is from the federal government, states, think tanks and our group here, and the conclusion is all the same. we have a problem and we have got to do something about it. we have partnered with building america's future, one of the sponsors today, and we surveyed manufacturers. john mclaughlin and another will give you more information on this poll. 70% of manufacturers, the people that his country relies on to generate the lifeblood of the economy, 70% of manufacturers think our infrastructure is in poor or fair shape. 2/3 of manufacturers believe that every single possible funding solution needs to be put on the table for discussion. it does not mean that we are all going to like what the outcome

of every one of those potential solutions, but at least we should be talking about it. and we do need a multi-year long-term strategy for transportation so that we are protecting america's mantle of economic leadership. >> this is about jobs, but also politics. i wonder if the politics of this infrastructure conversation have been damaged from your perspective by the obama stimulus, the question of whether or not government spending can create jobs, having become so controversial? does that make your job going out and selling infrastructure investment the congress harder? >> well, we have not increased the federal fuel tax in 20 years. and the president has been in town for five and change. so we still had a 15-year head start of not doing what we should have done.

i do think that you could say because of the crisis we had economically, because -- and the chamber supported the program he put in -- we disagree with a lot of the stuff in it, but america had to do something. the world was watching -- but what we have been saying the whole time, and we have the big sign on our building about jobs, by the way, 20 some thousand jobs worth $1 billion-plus, but i do not think the named names here. here is a chance to put people to work, save lives, because a lot of -- kills a lot of people,

and to our national security and which is why the roads were built in the first place, and run funds into state and federal coffers by people and institutions that are doing this work. and i think it is time to say, ok, enough is enough for my now do it. there may be and we get ready to run out of money halfway through this year it will be a little easier to get their attention. >> deborah, in your streets do you think people are more willing to hear that argument this year than in past years? what is the receptiveness? >> they're willing to hear the argument, but if you put into the broader context of u.s. global exports and leadership as well as jobs and economy, we could clearly make the case very easily, we have the data, and think group that has tinkered together and i am proud to be with them, has documented our work, not only do we have a

federal deficit, we have an infrastructure deficit. the amount we are under investing compared to our peers and competitors is staggering, and we are seeing the impact on that on the competitiveness of our firms. we need to relate this to what we would call at the u.s. council on competitiveness and innovation deficit, because so much of the opportunity and the costs and what we are going to do to really take america into this 21st century infrastructure journey is an innovation journey. when you think of the new material some of the i.t. systems, the sensors, the whole -- all the things that will enable our firms to be the leaders in the 21st century manufacturing -- just think of the infrastructure opportunities now that relate to the energy transformation.

and the discussion right now about the keystone pipeline and all that going on, you think of the old pipes in the ground, but get this one, hopefully it will get approved, is going to be the state-of-the-art. no country in the world will have that. then the high-skilled jobs. i would like to put on the table that the competitiveness agenda for this country is about talent, technology, investment, and infrastructure, but all of that takes us to an innovation economy where we are going to have high-skilled jobs him and this whole infrastructure rebuilding and what it means for america really is freeing all those things together. in many ways, the infrastructure challenge becomes the systems integrator for all the things we need to do as a nation, and he clearly needs to be bipartisan and it needs to have a book-private art ships. and i want to call out our friend and colleague of all of us at the table, paul, because a

lot of his leadership has gotten us here to this infrastructure week. it is a tremendous opportunity for america's future. >> nancy, talk a little bit about the perspective of those companies that are coming here to the united states, looking to do some of this work. what are they looking to do and what are the challenges that your group faces? >> thanks so much, and thank you all for having us on this panel. a distinguished group here. it is very diverse, but it is good to be here to talk about a topic that so many of us agree on, and my company's somewhat different perspective than those we've talked about today. they are not homegrown companies. they have made a deliberate decision to come to the u.s., invest here, insource jobs to the u.s. it is a good thing for our economy. we did a study that said in sourcing companies over a decade period raise their industry

average in almost every relevant economic indicator. they increased gdp by 25%. they pay a 22% premium in terms of wages and compensation to their u.s. workers, over 5.6 million americans. they invest heavily in u.s. r&d, buy locally, and they produce here not only to serve u.s. customers, but to serve the world as well. they produce about 20% of u.s. exports. infrastructure is very important. these companies are very diverse. i represent sony, siemens, basf, nestlé, so they are very diverse. but the cfo's of our companies in a recent survey said quality of infrastructure is one of the top factors in choosing a location for investment. it is not a coincidence that the quality of the u.s.

infrastructure has declined so has our share of cross-border investment. in 2000, the u.s. won 37% of all cross-border investment. in 2012, it is 17%. countries are improving their infrastructure. >> where are those companies going? who are our biggest competitors as a nation in terms of the infrastructure and resources? what are the other options if you're a big global company saying the united states crumbling, i'm going to go to x or y? >> i would jump in and say china is making huge investments. i have a long way to go. we did a study at the council with deloitte looking at what global ceo's around the world think about manufacturing competitiveness. in terms of infrastructure, the u.s. was ranked number 19 in

that. the good news for us in that overall study was talent-driven innovation and a lot of the intellectual assets are in huge places with customers and markets. start start they are having huge problems right now with the world cup. brazil has a very sophisticated strategy with their brazilian international economic development bank. it is being leveraged for infrastructure. obviously, i will let my colleagues speak. clearly, the emerging markets in asia, but also recently in the middle east, another part of the world that is ensuring that they will have a state of the art infrastructure, whether it is reports or goods. a lot of us have been to singapore and we see how these city states are also becoming magnets for a lot of the production, not necessarily the innovation work.

>> and deborah mentioned the p3's. my companies headquartered abroad are familiar with public-private partnerships. england went there about three decades ago. deborah mentioned brazil and chile. >> china. >> oh, china. i am also mentioning chile, who have built a really good private sector with public involvement. the u.s. is not set up as well to accept some of that investment. >> it is interesting. i am going to bring this up because i am an enormous nerd. you watch a company like elon musk's tesla. elon musk came out with the idea for the hyperloop, an entirely new type of transportation infrastructure that would lower the time between san francisco to l.a. to about 30 minutes. what was fascinating to me is

how people said that will never work, you cannot do that in this country, we cannot build anything this big. the politics would be too complicated. the reaction to that idea, whether you think it is crazy or not, was fascinating to me. there seems to be this attitude in the united states that we cannot do the big, new things. and this is the country that invented the big, new thing. as you look at all of this infrastructure investment, to what extent has the united states lost its ability to do those really large, important things? >> well, if you went out in the street and asked the american people who is the biggest manufacturer in the world, oh, china. really? no, we are. who is the most efficient manufacturer in the world with a few specific exceptions?

we are. where are people coming to do more manufacturing? us. there are all sorts of big, new things going on all the time. we have been fracking for 69 years. the ability to do horizontal fracking and all of that kind of stuff has made the cost of energy in the united states compared to europe -- which, by the way, is critical to the united states. europe is our largest import market. look at what we have done to drive the energy here down to a quarter of what it is. look at what we have done -- by the way, there is one bad thing. we have taken 45% of the jobs out of the manufacturing business. did we get rid of -- supply chain management, now we are a country with people without jobs and we have jobs without people because we need really skilled

folks to do this. we are a sophisticated -- we are the most reductive economy in the world. -- the most productive economy in the ruler -- world. a lot of our big ideas are going on right under our nose. but i do absolutely agree that people look at the united states and wonder now, can we do it or will we do it? that is a fundamental issue and that problem is not all about government or people around the world. it is all about our own citizens, who have gotten comfortable, do not like conflict. do not like risk. do not like to work too hard. i think we need to stop and think with our children and our grandchildren, what are their futures? >> talk about the energy side of

this. i read a rarities of good news that the united states could become one of if not the leading oil producer in the world in the coming decades. that is a conversation that i cannot imagine us having 20 years ago. it was very doom and gloom about energy in this country. now the energy picture is changing. how does that change the infrastructure piece and what you are going to do? >> five years ago, we would be hard-pressed to find that cover station, that the united states could become the world leader when it comes to energy production. that to your previous question. what we have been able to accomplish is an example of those big ideas that the private sector has been producing in this country. i happen to believe that there is no limit to what americans

are willing to try to achieve. i want to add one little note. i think it does factor into our ability to maintain this edge or this leadership position on energy production. it is the government role. when we look at complacency and conventional wisdom that america's best days are -- i should not say conventional wisdom, but some would say that america's best days are behind us. that is ridiculous. one of the reasons that that is ridiculous is because, at some point, the american people are going to rebel against the government that is taxing too much, regulating too much, that is saying that we cannot do things that we could not do in the past. i think energy is a perfect example of that.

so what we have been able to achieve on the energy front will allow us to maintain our economic leadership. but it is in doubt as well. you are starting to see new rules coming out on fracking or an effort to centralize the rule-making process. the states are doing a great job when it comes to maintaining public safety and health and ensuring that fracking is done in a responsible manner. we have politics at play when it comes to permitting lng exports. we have got to move past that. i think several people have indicated that this is not just a problem that has occurred, this competitiveness issue is not something that happened in the last five years. for manufacturers, we have been regulated to death over the last 30 years. that has been in administrations republican and democrat. that is why every one of us up here are talking about

regulatory reform, competitiveness. and the importance of regulatory reform when it comes to ensuring a 21st-century infrastructure program. energy is definitely a key. it can lead the way and show us the path forward to breaking through these political barriers in washington. >> i would jump in on that and say that we should be also thinking, and we do, of our regulatory capital cost system as an infrastructure. unfortunately, we have allowed ourselves to be competing globally with other competitors who do not want to compete on that. they want to compete on the higher value products and services they provide. we are being toppled by that. an example, we are talking about the energy and the potential of being energy weak and, for the first time, being energy strong, which has huge geopolitical security implications.

obviously, what is happening in russia and other parts of the world. for every study that has ever been done, says that our product liability laws are a huge, hostile set of behaviors for innovation. and talk about where a lot of the next generation asks us where we put -- we have known examples of companies who will not be put here because of our product. one thing i wanted to say in referencing the fracking and all of that, this gets back to the public-private partnerships and the appropriate role for the government. the actual research and development that enabled horizontal drilling and fracking really started 30 years ago. with investments in the department of energy. the exciting thing about that is if we look at the next iteration of that, there is work underway in our national laboratories to develop new processes to move

into this fracking area, not having to use as much water, not having to use chemicals that give concern to the environmentalists. also, related to energy and manufacturing, to begin to develop synthetic rare earth materials, which will have huge implications for everything we are talking about here, manufacturing, competitiveness, the whole industry. >> i want everyone to start thinking of questions because i know your questions are going to be better than mine. we will go to some q&a as well. >> one last point about energy. in the cfo survey we did of over 100 cfos of foreign-based companies in the united states, energy ranked as one of the most positive reasons that these companies are investing here, manufacturing here, using the u.s. as an export platform. what was interesting, if we did some cross tags and looked at the energy companies themselves, they are the most pessimistic

because they are worried about regulation. they are worried about standardization and rules coming down the road that might interrupt their business plan that they know that they can be successful. so energy is one of our top competitive advantages. the energy companies themselves within my membership are concerned about the future. >> tom, you had a point too. >> i think it is absolutely appropriate to get around to energy, but i want to make one point about energy. there is only one absolutely predictable major crisis facing the united states that we all know is there and nobody wants to talk about. it is the ugly elephant in the room and everybody turns their back to pretend it is not there. 10 years from now, we will be in a situation where the federal government will have grown its budget from $3.8 trillion to $6

trillion. 66% for entitlements. 15% for interest on the debt. when we get finished, like 22% or the military and everything else that our government does at home and abroad. >> including infrastructure. >> everything has got to be in that. basically, the number gets huge and most of the money goes to two things. that is entitlements, medicare, medicaid, social security, military entitlements and so on. we were walking around for a long time and the reason we would not look at the elephant is we did not know what to do. people living longer and longer. by the way, i like that. [laughter] people living longer and longer and the costs are getting greater and greater. what are we going to do? we found some things that we can do to help.

10 years from now, we will, if we do it right, if we do not let people stick their heads in the sand and pretend it is not something we have to deal with, we will develop the american energy system to the point where we can take a big bite out of that entitlement deal. and if we do not, we are really in trouble. >> i have to jump in and say that if you look at two sectors of our economy that do not have productivity, they are the education system and the health-care system. that tells you something right there. that we are not having systems that have productivity growth and all of that as well. the solution to the entitlements, you can look around the world. a country like israel, very innovative in what they are doing. they decided they were going to increase the age before people could get their social security. >> we are already doing that. >> but we are still working on

1930 models of actuary tables, for the most part. that could immediately have a huge impact if we could get bipartisan agreement to increase that. >> i want to ask you all about congress, bipartisan agreements, and what this particular congress is capable of. i also want to make sure that we have a chance for people to ask westerns. i know we have some folks roaming the halls with microphones. i cannot see all of the folks over there, so if anybody is raising their hand, let me know if there are questions in the back. i do want to get everybody involved here as well. talk a little bit about this congress. everyone seems to be completely pessimistic about it. it is the ability to do anything, even the must-pass bills, because of the gridlock on capitol hill. listening to you all, or you get the sense that this is a pressing problem, has to be dealt with, crucial for the future of the u.s. economy? what faith do you have that congress can rise to the occasion and do something this year even the gridlock and the

political mess that we have seen and given the fact that there is an election coming up? i will put you on the hot seat. >> no problem. the perfect issue for the election coming up, because the public supports modernizing our infrastructure. i am an optimist. i know a lot of people are betting against congress taking any action this year. but the timing of the highway bill running out for right now, these are great issues that i think the public can get behind with strong leadership. >> what is your sense of this congress? is this a congress that can do stuff or is this a congress that will want to get home and campaign and stay in the trenches? >> on that particular point, i am not as optimistic that they are going to do anything big. i think they will do some incremental things around the margin. i do think that we have a huge opportunity to be setting the

stage for the next election. and to make the case that, ultimately, and tom alluded to this and i think jay did as well, we are talking about fundamental security issues as well. you talk about homeland security challenge. something happen, we know this, our transportation, our water. if we do not have water, we are going to have a week before people start dying without water. also presenting this is much more core to national security is very critical. i am not as optimistic. my colleagues are. >> are you still optimistic? >> i am optimistic. if you look at eight period of time from now until the elections, there are some things we have to do or are getting set to do. everybody talks about lame-duck deals. every now and then, every three decades or something, we will

have one that does a lot of stuff. but i really believe that there are three or four things that we will have a shot before they are finished. one is we will get a tax deal done. taking those away would be another huge tax increase on american industry, which would affect jobs. i do believe that we are absolutely crazy if we do not take advantage of having passed an immigration bill out of the senate. going back to do it again might be harder. and do something rational in the house and put it together. let's get the three or four things we really need there. and we have a lot of heat on that. and we are going to put a lot more. >> you think immigration is doable this year?

>> yes. >> really? >> yes. >> you are more optimistic than i am. lex i will give you three reasons. if the republicans do not do it, they should not bother to run a candidate in 2016. i mean, think about that. think about who the voters are. i just did that to get everybody's attention. >> everybody should immediately tweak that, -- tweet that, by the way. i want that to get out there. >> we are a nation without jobs and jobs without people. you need all of these people that we are training in the universities. the best universities in the world and we tell them to go home. when you do that, you send the work to where the people are. the third reason we need to do this, and i will have another one, the bottom level of work is people who are seasoned workers. people in agriculture, you talked about health care. i will tell you a line of

business we know something about. we just did a big thing last week and that is the retired people in nursing homes and retirement homes and all of that. i have been giving a lot of speeches and saying, if you do not want to do this immigration thing, you are going to go to the nursing home and pick up your mother in law and bring her home. >> right. if you do not have a labor force working and generating these entitlements, you do not have the ability to take care of -- >> america could sit down for a minute, put a chalkboard up and say, look, we have five or six things that are really a challenge. he have immigration because we have all of the issues we just talked about. we talked about entitlements, energy, infrastructure. four or five of those things and put them together and reasonable people can look at it and say, you know, we can do that. all we have to do is decide to do it. if you look at what has gone on in the primaries, where people

are now getting focused on trying to elect people of both parties that are going to go to washington and get something done. >> jay, where do you stand? >> for those in the audience who think tom is committed to this, this is a unified position in the business community. i do think that immigration reform does give you an idea of what can be accomplished. i, too, think it will get done this year. i think it will happen in the lame-duck session, the final piece of legislation. >> maybe i think that, too, but i am not -- >> what you think and what you say -- >> that would be the fallback. >> for manufacturers, immigration reform is imperative. tom mentioned the workforce issue that we are all

experiencing. there are 600,000 jobs in manufacturing today. this immigration bill can go a long way towards helping us fill those positions. more importantly than that, the pathway is essential to manufacturers because we work very hard to build communities. if you take our present law that is current to its natural conclusion, we would be ripping apart communities and the fabric of this nation. manufacturers are committed to that. you are also committed to getting things done. we need to see some movement forward on trade. something every president since franklin roosevelt has had. it is essential to increasing our economic footprint on the world. get to infrastructure and you have a different issue. the issue is if this thing goes belly up in july, even before the september expiration of the current bill -- i used to work

for a governor. george allen in virginia. that governor was effective when it came to talking to members of congress about how structured funding was impacting our ability, as a state, to do our jobs. there were 50 governors, but the republicans and democrats were pounding on the doors of congress. when the american people are saying, look, you cannot hold up our state's ability to fix roads, to build new roads, to provide easier ways for us to get to work and back and, by the way, we really do care because we work for a living. we care about getting the goods that we are producing to our customers. the american people want to send a strong message and i never doubt the ability of congress -- of governors to force congress to get things done. >> let me open it up to questions. we have a lot of people who want to jump in here.

let me start to my left and then we will go to my right. right here in the middle. go ahead. if you could give us your name and organization as well. >> i am bob hirschi. i am a consultant. to what extent can you use the internet to try to get people together and get an economic consensus and get the money together to get things done? >> can you use the internet? i also throw into that social media in terms of mobilizing support for what it is you want to do. does that give you an added tool and how do you use that? why don't we start with nancy and work our way down? >> social media, without a doubt, is a very powerful tool. i think that you can absolutely build up -- and we have seen what has happened around the world -- build up some nice political support for that. we also need political leaders willing to take some risk. we need the ability to -- you know, i raised the issue of public-private partnerships earlier because it is something

that foreign-based companies are used to doing. getting more acceptance of that through social media as well. often times, politically, the fact that a foreign company is going to lease the toll road and operate the toll road is used as the reason to defeat the project itself. you know, a spanish company is going to come in and do it. not sure where that spanish company will take the road. >> they are not going to move it home. >> no, but we have seen the success of that before. anyone traveling during their commute on the hot lanes can thank an australian company for partnering with the commonwealth of virginia to do so. total media is a way to get people to understand it better. we also need government willing to show some better leadership and not just look at what the polls are showing, not just look at what twitter is following. >> think about how fast those hot lanes go in virginia. that partnership works very well.

>> we have another question over here. >> i am patrick sable with brookings. just a quick question. this berkeley -- historically, about 27% of infrastructure spending comes from the federal government. what can the federal government do to support those innovations, whether it is public-private partnerships, gas tax increases that we are seeing across the country? what can the state and local leaders do and what can your organizations do to help them push the ball forward? >> look at a project. the federal government can actually put as much as 50% in it. the state and the local communities would divide up the other 50%. if you are the governor today, then you are the mayor and others in the community involved, you will be nervous on putting your money up on projects that you are not sure

that the federal government is going to bring their money. they probably feel, we will get paid sooner or later. in the meantime, we are holding the bag. what are people doing? they are having their own meetings with the governors and local officials and they are saying, we are going to hold up on that. we will fix that bridge next year. it is already starting to happen. when that happens, people are laid off. poor people are not hired. -- or people are not hired. we have to understand that this is a partnership. not only a public-private partnership, but a partnership between levels of government. if one of us, one of the major players takes a walk, something tells me you are not going to be able to finish the equation. you know more about that than i do. >> i was just going to jump in and add that i do think it goes both ways.

we also see a lot of gridlock at the local and state level. for major infrastructure initiatives that would add value not only to these regions, but to the country at large. i was thinking of the example, we hear so much about the new court in charleston, that it is just gridlock over the permitting and things. i do not know if it is an anecdote or true, but if it is true, it is shocking. it is taking longer to get these permits to do the digging and things than it took to build the entire panama canal. we did have a situation where every locality and state could block the national highway system that enables us to go from coast-to-coast in our transportation. i agree 100% with tom on the investment issue. also, this hermit inc. and this -- permitting and regulation that gets us so far down, that is something that we need.

it is really dangerous when you look at the electric grid. that is a case where a country like brazil, again, they have a national grid. of course, we do not and we saw the consequences of that with the devastating storms and things in new york. i think that this is where the governors can also come together and step up and do some big things that would impact the overall nation as well as their state and local issues as well. rex jay, you wanted to jump in? >> one of the things the states can continue to do is innovate. let's assume that we get a bill done before the money runs out this summer. we are going to be using the old system, the old model. whether we increase the gas tax or not, it is not a long-term, sustainable solution to our problem. you look at virginia. whether you like what they did

or you do not like what they did, they were willing to think outside the box. other states are doing the same thing. those ideas need to come to washington to be considered whenever the next bill is accomplished. i am looking forward to camera -- tamara's leadership on this issue. there are a lot of other associations that are part of the dialogue for the future. we need to get over the hump right now and put everything on the able for future years. >> we have a question over here in the back. >> i am covering free transportation, supply chain, trade. i will see if i can wrap three things into one question. >> you are starting to sound like a white house correspondent. [laughter] >> everyone talks about educating congress about the need for infrastructure. more and more, it seems like most lawmakers get it to -- get it.

at the end of the day, it is these other outside political factors that influence things. whether it is a gas tax increase or other funding, how do you get beyond that when you have a lot of movement for smaller government and no tax increases, how do you get to some funding mechanism when the ideologies are set in stone? and then some states are taking on more investment on their own. they do not want to wait for the federal government. some states are advancing some money for port deepening. i guess the whole question of devolution -- is that a catch-22? the forward-thinking states, they start investing, and that is a good thing.

on the other hand, are they sending a message to congress, they are going to do it so they do not have to? >> let's start with the ideology question. how do you deal with the rise of a very anti-spending political ideology on capitol hill? give us some hints on how you tackle that. >> this is all about education, educating the american people to register, to follow their votes with their members of congress, and we do that at the nam. we not only work to educate our 12,000 members and the millions of employees that work for them, but also the general public on these issues. we have an obligation as a business community, as well as labor and others, to let folks know what is at stake here. it gets very frustrating for manufacturers to have this skepticism coming from certain quarters of congress about a basic function of the united

states government, in the way to overcome that is through elections. we have seen some of these primaries take place where more reasonable heads are prevailing. i think there is an awareness now among the american people that extremism is not going to create solutions, that there needs to be two sides working together to get the job done. we are going to continue to work on that, we will continue to register people, to work with other associations like the chamber and our 240 council of manufacturing associations to get the word out. >> the question on states, and whether or not the state picking up some of the slack from the federal government, what message is that sending to people in washington? >> it is an encouraging message that the american system still works.

and i believe that the comments that were made before is that the most powerful politicians in our system are mayors of challenging cities and governors. we will see a lot more of that over time. that simply sends a message to the politicians in washington, if you want to stay as relevant as you want to be, you better work really hard on the part of the system that you have control of. the commerce clause is argued both ways all the time, and i have a few comments on it, depending on what the issues. >> this is not the only issue where we will see action at the state and local level, and to teach lessons to washington. it can be one among many. i see that happening across the

board. if somebody mentions that one of the characteristics of the public is looking for, for those that will vote in 2014 is, will the candidate work with the other side to get past this gridlock? what is disappointing to me is when you go past that topline question in the poll, people want their candidate to work to get to their position, not necessarily just worked actually compromise. definitely from the ground up, which is why we need leadership, to go beyond what people are thinking as a knee-jerk reaction and talking about and show action in trying to get consensus on important things like infrastructure. >> we are just about out of time, but, deborah, i will give you the last word on this. also on some of these questions that we've been talking about today. where do you think this conversation goes from here? >> i would add on the states, in

addition to governors and mayors, it is exciting to think what some of the regional associations of governors are doing, cause increasingly you really cannot talking about states as much as economic regions, and so they how they come together, that is usually cross party lines. in terms of where we should go from here, we have a great coalition that has come together here. we know we have to move out in both the educational arena as well as building this business case for why infrastructure is at the heart of our nation's future competitiveness, job creation, innovation. and i think again the opportunity is now. it is not later. the extent to which we can begin to put together an agenda of the near term, medium term, and long-term things we can do will be very powerful, and national infrastructure week, i hope it is the first of many. >> terrific. we have now reached a part of it where a producer will be screaming "wrap, wrap" in my ear. thank you very much for talking about this. a fascinating conversation. and thank you all so much for listening to it. [applause]

>> all right, ladies and gentlemen. we will take a 15-minute break so you can refill your coffee, water, juice, whatever it is you're doing. these keep an eye on the monitors. we will call you back in 15 minutes to hear from a great panel on international competitiveness. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] c-span wrote a 35 years, rings public affairs from washington directly to you, putting you in the room with congressional events, readings, and conference in offering complete dabbled a gavel coverage of the u.s. house all as a public service to private industry. we are c-span, created by the

cable tv industry 35 years ago, and brought to you by your local cable provider. like us on facebook and follow us on twitter. >> in a few moments, a form on terrorism,g face of including remarks by the former head of the department of homeland security, a cultured off. securityation administrator. in two hours, we will look at the history of select committees in congress, similar to the one established last week to investigate the 2012 terrorist attack in this ghazi, liberate -- in benghazi, libya. and then we will look at the effects on america's aging infrastructure. several live the vents to take you about tomorrow. the senate judiciary committee considers several judicial nominees in clued in to to the 11th circuit court of appeals. that is on c-span three and then

here on c-span, at 1030, the senate homeland security and governmental affairs committee will examine plans for improving the defense department's an intro management systems so that is ready to be audited in 2017. marco rubio speaks at the national press club about retirement security. you can see that at 1 p.m. eastern on c-span two. >> philip ewing is senior defense reporter for politico. his recent article in politico has the state department, terrorism up worldwide, attacks increasing 40 %. why such a large increase in one year? ask the state department officials say that there are many more smaller terrorist attacks, so that although there are fewer big what terrorism attackspectacular up

like a spanish subway bombing, there were smaller scale bombings or shootings or terrorist attacks that took fewer lives individually, but collectively round the -- wound up with an increase over the year. >> what does that say about the state about cato worldwide with my >> the organization that septemberhe u.s. on 2011 is pretty well on it's heels. it has succeeded in killing a lot of its leadership, destroying its ability to but theate, and control franchise of our qaeda moving yemen, toouth to africa, to north africa, are as dangerous as they have ever been and the state department official said that they are worried about a large number of foreign fighters who are taking part in the civil war in syria coming from all across the

place, including the u.s. and europe, and learning terrorist attack skills and radicalizing and could pose an threat to europe and the u.s. as they slip back in the conflicts in their own countries. fewer americans were killed and 2013. how does that square with the increase in terrorist attacks overall worldwide? american counterterrorism agencies including the fbi and the other parts of the intelligence community have gotten a lot better at disrupting and intercepting attacks inside the u.s. and they are always cautious about claiming victory but they do say that in terms of organized events that could attack someplace like a sports stadium or a shopping mall, they are effective at stopping those before they start. where americans have been targeted are places that already hot blades for terrorism like pakistan and afghanistan. >> you mention smaller terrorist

groups. in terms of the one in nigeria, what are you hearing from state department or homeland security officials? u.s.he consensus in the counterterrorism atkins is that other african and they -- african groups are dangerous locally and regionally. they have the ability to attack the western europe. but one of the reason why they want to get involved with combating those terrorist networks in africa is to keep them from going into the type of organization that the old al qaeda became and 2000 one that had the ability to reach out and touch the united states and a very constructive way almost nine/11 attacks and the ones against the u.s. embassies in east africa, destroying the uss cole in ecm in, and attacks on a scale. stopping them today they hope will offer -- prevent large-scale attacks in the future. termst does this mean in

of that's organizations future? are they pretty much done and we should be more concerned about these so-called franchises? but i do not know if they were ever coined to snuff out the core al qaeda altogether, but if you get to the point would you can keep it from organizing and communicating with terrorists and becoming dangerous, that meant not make much of a difference. arechallenge is that they located in pakistan and some pakistani insurgents have ties to the pakistani government, particularly the intelligence he -- the intelligence agency. to go after al qaeda and extremist but also to keep what has become a very strained partnership with the pakistanis and the counterterrorism efforts. i am not sure if they will ever get to 100% success although the they would continue to lie to try and press the pakistanis to go after terrorist as much as they can. >> lastly, this is a state department report.

how to the pentagon and homeland security use this report in their planning? of whatving a baseline constitutes a terrorist >> also for having a baseline about how many to place and what region is the most dangerous for terrorism. they can apply their own policy thatractices based on baseline. the dhs focuses mostly on the united states and its borders. >> philip ewing is the defense correspondent for political. -- four politico. they spoke at the national center for risk and economic analysis of terrorism events. started in 2004 at university of southern

california and was partly funded by the homeland security department. >> thank you for those kind words of introduction. under-secretary gersten, thank you for your comments about what .as been achieved a very powerful testament to the is beenhat accomplished. the promise of this has been borne out. of course, it is been 10 years since september 11 and it is now the 10th anniversary of the -- in 2007, some of you will remember, i have a greatpool of rich -- the privilege of speaking here. early in the life of his organization, even then i was very impressed by what was being done but even more by what was being contemplated. what i would like to try to do with my remarks today is talk

about the value that you bring to the homeland security enterprise, which is not just the department of homeland security, but all the organizations that are part of what protect us in the united states. then, to put that in the context of what i think our emerging threats and challenges for the next 10 years. if one thing is clear, the threats are not static. our ability to anticipate them cannot be static either. there will continue to be areas of research development and analysis that will require cutting edge innovation in order to keep the country safe in what is increasingly dangerous world. i think this institution is going to be at the forefront. i want to acknowledge the dignitaries who are here. i think it is a great reflection of the esteem in which his organization is held that you have john pistole coming, and

ther senior leaders of department of homeland security. of course, you have a great collection of academics as well. values and the core the core mission of an organization like this, a school like this? i think it really has four elements that make it a critical part of the homeland security enterprise. first is risk-based thinking. that sounds really easy to say. i will tell you, though, that both and i was in public and private life, many people don't understand risk. is aboute think risk elimination of risk. someone ought to guarantee you that nothing bad will ever happen. that kind of thinking often leads to either very disappointed expectations or foolish and misplaced investment in things that promise to solve all problems. having a risk-based methodology

that manages risk, that is able to understand, analyze and explain how to manage risk, and also to allow you to make the trade-offs necessary to achieve risk within a reasonable cost framework, that is essential if decision makers and the public at large are to have a firmer appreciation of what can be accomplished in the area of homeland security, but also no illusions about what to expect. a second key element of what i similar excellent organizations provide. bee of the intuitions may right and some may be wrong. if you're not backed up by data and research, you're not making good decisions. the ability to collect, analyze , it isrationalize data

critical to intelligent decision-making and wise allocation of resources. a third art of what i think is unique and important about this institution is the ability to put the decision-making about homeland security in the context of economic taste thinking. to put it another way, how do we get the maximum return in reduction of risk for a reasonable investment? it is always about cost-benefit. if you had a limitless amount of resources, you probably could create about as risk-free an environment as possible. nobody lives in that world. in fact, now more than ever, with budget constraints at the federal level, at the state level, with an economy that is perhaps not in the full swing of recovery, people more and more ask themselves, can we afford to protect ourselves? the trade-offs, the cost-benefit analysis that you provide, becomes critical in making sure

that with constrained resources we can get the maximum value in terms of security. finally, it is important to have an interdisciplinary approach as you have here. the school ofth engineering and a school of public policy sponsoring this. there is no one scientific theory or one discipline that covers all of the issues you deal with at homeland security. there are critical engineering issues, there are mathematical issues involving predictive analytics. there also psychological issues that have to be studied to understand how things work. one of interesting things about homeland security as a government function is, unlike the defense department or the military, where you either command everybody that you're you arewith or controlling them in some fashion or you're killing them, in order for homeland security to work, you have to enlist civilians.

most of the major muscle parts of homeland security involve people who voluntarily are willing to submit to the rules and get sufficiently educated in what is required to be able to comply. that is a very different kind of a skill than just controlling a domain and mastering it. it is about persuasion and understanding human psychology and sociology. those are important elements of what you bring to this. we have seen a lot of value. we tenure inboth in my the tenure of my successors, some of your studies and works as a said previously in the area of demonstrating the economic value of immigration reform and how it has a real impact in a positive way on our economy. theow here in california army algorithms have been used in fact, checkpoint -- in terms of the allocation of

grant funding, we relied upon some of the work done here in terms of maximizing value of how grants are distributed, so that it done based on what manages risk and not what is politically expedient or looks good to the layperson or seems to satisfy some kind of intuition. efficient usehe of resources is in fact one of the pillars of homeland security. back in 2007, when i spoke here, i made reference to the fact ,hat at the time of 9/11 shortly thereafter, osama bin laden himself argued to his ts that by causing --nomic damage and forcing he was really leveraging economic power to damage and destroy the west. that was a clear message, that

if we didn't constructive homeland security enterprise that was rigorous and economically based in a way that would not actually destroy our economy, we would be conceding to bin laden and his followers a victory. that was very much in our mind in 2007 when i came here to speak. i know that your leadership role in pursuing this philosophy is still a very important part of what the department of homeland security hopes for and expects from the centers of excellence. now i would argue that we need to -- more than ever. we are in tough budget times. pool fors that the money that is available becomes moneyore -- to pull for becomes even more stronger and more urgent. that becomes the second part we have an important role to play.

the reality is that the public needs to understand that we in fact are not wasting money on homeland security phantoms, but there is rigor and logic and data to support what we do. i'll be honest with you, we live it. now 10 years after 9/11 were some of the public support for homeland security has diminished . in some ways, that is to be expected if you think about it, there's not a generation of people, who are going to school here for whom 9/11 is really not a vivid memory. there were children when it happened. it don't remember, as many of us do, with quite an acute recollection, what it was like that they is it an folded. that means the natural emotional support of preventing it from happening again is not there. greaterhat is a skepticism of government. we are still struggling with the legacy of a difficult economic crisis.

all of which suggested there other problems and concerns that have to be addressed. any is why, more than ever, world in which we do have increasing danger, the ability not only to conduct research and analysis but to explain it in a way that is clear becomes a foundation of being able to continue to build on the homeland security successes we have had. in fact, the successes themselves are part of the challenge we face. in thewould've believed weeks and months after 9/11, that we would not have another major attack on the united states. we have had some close calls. -- i was talking to a reporter recently and i mention the august 2006 airline bomb plot where the al qaeda adherents in britain had a plan to blow up about a dozen airliners going from heathrow airport to north america. the reporter does not know what i was talking about.

that told me that a lot of time has passed and people have forgotten a lot, and we need to explain to them that we have not had an attack does not mean that we have no threat, it means that we have used the kind of innovation and knowledge that you brought to the table in order to prevent attacks. that becomes a little bit of a problem in terms of sustaining support. what do we face going forward and where do we need to be looking for solutions and innovation in the next 10 years? well, i will point to three things. no doubt you could find 30 more. we have the eve falling -- we have evolving challenges that we need to consider. the first is what i call al qaeda 2.0. you might call it 3.0, the next evolution of al qaeda as a terrorist organization. it is quite true that the core of al qaeda, the original cadre that was responsible for 9/11, has largely been eliminated.

either they have been killed as in the case of bin laden or have been captured. that does not mean al qaeda has gone away. what we are seeing is a new generation that has now passed , become more of a franchise operation, and has spread around the world. their strategies may be different. they may no longer look for the big bang event like in 9/11 or something like the august 2006 airline plot. they may be looking for multiple smaller events against softer targets. we saw that in mumbai in 2008. we saw attempts to carry out attacks like that in times square and in the new york subway over the last several years. we have seen a couple of successful attacks, including an attack by a lone wolf at fort

hood. we may be doing with a much more difficult strategy to deal with, perhaps with lower body count, but with lower signatures and therefore different kind of thought processes. frankly, terrorism that is much more community based and requires much more state and local intelligence and awareness to identify incipient threats that are not going to be revealed because of spies and satellites that are somewhere over waziristan. in addition to that change in strategy, we are seeing new platforms from which terrorists can mount attacks. we have known for some time that yemen now is a center of bomb making. we have had some sophisticated efforts to try to get bombs into the united states. there was the underwear bomber, and then there was the effort to put bombs in printers ever going -- printers that were going to be placed on cargo planes. that suggests that technological ability of the terrorists refined through years of creating improvised expose of -- explosive devices will

continue to remain a threat, and not only do we see this problem in yemen, but we have seen a spread of al qaeda into mali, niger, similar affiliated groups in nigeria. these pose a threat to american interests overseas, but also create possible launching point s for attacks against us here in the united states. and two other areas we need to be thinking about as we go forward. first, we look at pakistan. pakistan itself struggles with the taliban, and there are certainly forces within pakistan that have sometimes aided and abetted and supported terrorist groups. we saw that with respect to the mumbai attack in 2008. what is particularly concerning as pakistan's struggles in some -- as pakistan struggles in some ways as a state with weak governments is the fact that it is a nuclear state.

and therefore, one has to consider that at least a possibility at some point that nuclear capability could get in the hands of either a government that was hostile to the united states for some segment or part of the government that wanted to use those weapons in a destructive way against the united states. that means we cannot simply rest on what we have done so far in dealing with a nuclear threat detection, a dndo capability. we need to think about a threat that could become quite real in the next 10 years. another area we have to watch closely is syria. some of you will remember in the 1990's, chechnya was a recruiting and training ground for extremist radicals who came from europe, learned how to fight, and then went back to france and germany and other places and carried on the terrorist struggle over there. more recently, we saw some somali-americans go to somalia.

we made cases against them because they were plenty to -- were planning to carry the fight into the united states. there is now a fairly significant number of westerners who are going to syria to fight. some of those will come back to the west. they will come back to europe or the united states. they will have learned new techniques, tactics. perhaps some of them will have developed some experience with typical weapons. the ability to deal with these kinds of threats and these kinds of weapons of mass a structured -- of mass destruction and how do we identify these people and how do we track them -- these are going to be the analytic challenges for the next 10 years. but two other areas besides al qaeda i would like to at least put on the horizon for you to think about. one is the issue of what i call the insider threat or violence from within. i do not know if i am imagining this, but it seems there is a significant uptick in the number of instances where individuals,

not affiliated with an international terrorist group, but motivated either by some kind of idiosyncratic ideology or by some grievance had quickly resorted to weapons or bombs to try to kill innocent civilians and tragically not in frugally -- not infrequently in schools. we have seen that time and again. we've also seen efforts to attack our critical infrastructure a few months ago. there was an attack i power -- on the power station in metcalf, california. there is not a public examination of the cause of that. it shows a sophisticated level of violence and a threat from within against a major part of critical infrastructure. moreover, the episode of edward snowden, which is not a violent episode, but reflects a very substantial betrayal by an insider suggests that we are now

facing what is increasingly being described as the insider threat. people who do not have a record of criminal activity, you cannot necessarily connect them up to a terrorist cell overseas, but they are dedicating themselves within either a government enterprise or a private enterprise to actually do damage and betray their obligations, either by revealing information or should not be revealed or committing acts of violence from within or sabotage critical infrastructure or cyber systems. how do we determine which insiders are a threat? how do we reconfigure our system for clearing people so that we are not simply replaying what we did in the cold war, but we are looking at how we detect the kind of insider threats that we face in the 21st century? how do we manage to monitor what

goes on in an increasingly collocated world where data -- complicated world where data moves and all different places so we can allow people to exchange information, but not it where itand send should not be? i would suggest the insider threat, whether it results in violence or simply in a compromise of sensitive information, is going to be an area of homeland security that is going to require increasing research, not just for the government him up but for -- for the government, but for commercial and private enterprises as well. they're going to be interested in knowing how they can balance protecting against the threatening insider with continuing respect for civil liberties and civil rights. i think in the area of cyber, you have seen the news if you've opened the paper, now finally i think the clear recognition that cyber threats may be the number one threat we face here in the homeland.

some of these are criminal activities that cause serious damage to our economic institutions and to people's financial lives and reputations. some of them are the theft of intellectual property. increasingly, we may see the use of cyber as a way actually to commit acts of violence. we know for example that a couple years ago saudi aramco was attacked by a group that was publicly associated as supporters of iran. we know that industrial control systems and other physical infrastructure that operates based on the internet is increasingly vulnerable to attacks that could cause not only disruption of service, but a corruption or a lasting damage to that critical infrastructure. it is about to get more complicated. we are entering what is now being described as the internet of things them

-- of things which is the , ability to connect smart devices over wireless connections into the internet and control them or monitor them from remote positions. the problem is that creates vulnerability's through which bad people can hack in. if you pay attention to what goes on at the black hat conference in las vegas, there been presentations about for example the ability to hack into pacemakers, remotely, when his medical devices are connected wirelessly to a monitoring station. they have demonstrated your automobile can remotely he interfered with through some of the gps and onstar capabilities that they build into modern automobiles. this is going to become a more serious issue as more and more devices in the home, linked up to smart grids, whether it is your thermostat smoke detector or your or your television. all these things will be things that can be remotely monitored

, penetrated, and in some ways compromised. think we think -- how we architecture and the trade-offs about the architecture and the trade-offs involved in an internet of things is exactly the kind of challenge i think that an institution like this ought to be looking at. there is a technical dimension about the way the internet works from an engineering standpoint, but also a social logical -- a sociological dimension. there is an economic dimension. this is an interdisciplinary approach that allows us to look at how we might build an architecture of the internet of things in a way that allows us to get the value and efficiency, but without creating serious amounts of damage that would not only cause a loss of life and economic impact, but would wind up ultimately undercutting the whole value proposition by the internet. so bringing together these disciplines to look at that, and dare i say, as a lawyer, i think present towhat you

the department of homeland security in the united states over the next 10 years. a want to congratulate you warmly on a traffic 10 year anniversary. a lot of great work. the work is far from over, and i know you will continue to be major contributors to the security of this country, to the economic health is country, and to the values that all of us hold dear as americans. congratulations, and thank you very much. [applause] [captioning performed by national captioning institute] >> more now on a recent forum on their changing face of terrorism. a panel of exrts on threats to the power grid, nuclear programs in iran and korea, and information available online can be used by terrorists. [inaudible] [applause]

>> good morning. i want to ask, are there any foe's in here? friends of erroll. there you go. i understand you had to be an foe to get in here. the men we are about to meet on the panel today -- i will be brief in terms of explaining who they are. it allows me more time for questions. first up we have the research director for international security studies at uc san diego.

he earned his phd in economics from harvard. he has way too many publications to list, but i trust you will read along. brian jenkins, rand senior adviser and the author of several books and reports and articles on terrorism. if that does not keep you up at night, i do not know what will. on the 10th anniversary of 9/11, brian was involved in an effort to take stock of where we are and where we should be going. he was a paratrooper and a captain in the green berets. he says he cannot prove any of that. john miller is deputy director of intelligence with the new york police department and worked for the fbi as a national spokesperson. as a reporter and anchor for abc news, somehow he managed to connect and get an interview

with osama bin laden in afghanistan. he worked for cbs news across the board, including "60 minutes." dr. erroll sothers is the associate director of research transition at the department of homeland security's create. he is also a friend of erroll. he is an adjunct professor and has been here for 10 years. he is involved with security at all levels. formerly served as the assistant chief of homeland security at l.a. world airport. he was an fbi special agent. swat team member and the santa monica police department officer. if you see these gentlemen on television talking about terrorism, you know you are getting the real deal. the experts who know what they are talking about, not like all the experts we are seeing pontificating about malaysian

flight 370. welcome. the first question i really thought about when i was asked to moderate the panel is, what keeps you guys awake at night? what do you worry about? >> uc san diego does not have a football team. that is because we do a risk-based analysis. we are happy to watch you guys at ucla beat up on each other. that is fine. what keeps me up at night, this might not be the correct thing to say here, that mostly is not terrorism. we are all going to die at some point.

10,000 times more likely to die of heart disease or cancer than we are to die because of terrorism. i think it is important to put things in context and not be sucked into what the secretary was talking about when he spoke of osama bin laden's plot to trap us into doing something which was not cost effective. we respond way more to terrorism than we do to deaths by other means. it is a psychological flaw on our part. you want to be a little careful about it. in the category of terrorism, there are things that keep me up at night. let me be clear about that. i worry about iran, a scenario in which iran is allowed to get nuclear weapons and starts

carrying out terrorist attacks with impunity because there is nothing we could do about it. this would be harkening back to the cold war era in which the soviet union was sponsoring terrorism abroad. there was nothing we could do because with nuclear weapons in place, regime change was not on the table. the iranians involved in the killing of civilians in syria. they have been involved in the killing of civilians and threatening our national interests, including our soldiers in afghanistan. and the other persian gulf countries are worried about this. that is my number one thing. we would have an order of magnitude bigger problem if the iranians were allowed to continue. >> you are going to get a string of contrarian answers here. look, having been a member of a number of these workshops, red