proceedings that go on. so i appreciate c-span and regardless of whether or not it's popular with mainstream culture, i just want you to know there are young people, particularly me, i'm 18, and i watch c-span on a regular basis to make sure i understand what is going on in my country. >> i just watched that program in its entirety, it's priceless system of many peoples of the world do not understand their own selves but if they watch american history, they can see themselves in america and why we're such a great and wonderful nation of all the peoples of the world. thank you. >> and continue to let us know

what you think about the programs you're watching. call us at 202-626-3400 or email us at comments@c-span.org. @c-span. s a tweet at -- at @c-span. hillary clinton was interviewed on friday, topics included the middle east, and the fight against isis. this was hosted by the brookings institution center. >> do you want to say hello to all your friends? >> i'm kind of waving to everybody. ice to see all of you. >> before we start, on behalf of the whole team at brookings and myself, we would like to send our condolences to administrator

lieberman on the passing of his mother. >> i think we can all join in that. in addition to those whom you've named. >> thank you, hillary. madam secretary, we have had 11 forums so far. you participated in nine, traveled to jerusalem a few times. i have to share with you that this audience has one very important question on their mind. as a matter of fact, the united states has an important question, the whole of the united states, the world, has a question on their mind. and i hope and expect that you would give us a straight answer from this stage. how does it feel to be a grandmother? [laughter]

>> well, i was in the senate for eight years, and i would like to filibuster on this question. it feels fabulous. you and i talked about this with cheryl and other friends. it is an extraordinary, wonderful blessing. for our first thanksgiving with charlotte, it was just beyond words for both bill and i. and i am feeling particularly grateful that we are in the new stage of our lives together. >> good. try not to be too busy. save some time for the granddaughter. [laughter] in the middle east, outside of bringing palestinian and israelis together, it is about bringing communities together. have we succeeded in our country in bringing communities together?

when we look at ferguson and what happened in new york, or have we failed? >> i think we have made extraordinary progress over the course of our nation's history and for that, i am grateful and proud. but we still have work to do. it is most obvious when tragic incidents like those we have recently seen occur. we recognize, at root, there is a problem with our being able to put ourselveses in each other's places to recognize the challenges that our fellow citizens often face. so we have work to do. but our founders were extraordinarily psychologically smart.

because they talked about us trying to achieve a more perfect union, and that has been the impetus for all these years as we have taken on big problems like slavery, like war, like depression. ivil rights, womenâs -- women's rights, like so many of the other difficulties as a nation we have had to face. i support the efforts now to do what the president and attorney general have advocated, and that is to work with our law enforcement, work with our justice system, that everybody believes that they are equal under justice. and that the rule of law applies to all of us. that will take some retraining and some additional outreach, not just into our law enforcement and criminal justice systems, because i would argue

that by and large, the majority of people who work in both are honorable, are brave, are, you know, very committed to our values. but i also think it is about communities, it is not just about our institutions. it's about how we relate to each other as people. that is a task we have to be constantly focused on and doing better with. >> amen. i would like to ask you a very theoretical question. very theoretical. nothing to do with reality. what if you decided to run for president? and let's assume that you got elected. it is the 21st of january, 2017. you walk into the oval office. you are familiar with it, so you do not need to get acquainted ith the environment.

what is the first thing, what is the first order du jour, on that very first day, that you ackle? >> it will not surprise you that i have long learned not to answer hypothetical, theoretical questions. [laughter] >> next question, then. i was just joking. >> i am taking myself out of it. let's talk about whoever, whoever is our next president in 2017. it is going to be as it always is, and increasingly so in this complex world that we share. a long list, there is not going to be one thing. because we live in an interdependent, interconnected, networked world, where we see so much progress that is occurring around the globe. people making their way into

prosperity, into middle classes, advances in science and research that are saving and transforming lives. there is a lot to celebrate in the world today. and yet, partly because of this interconnected world of ours, we face new threats and challenges that we have to be prepared to take on. and it will continue to be a priority of whoever the president is to, in our own country, and through our own efforts at home, to grow our economy, to create more jobs with rising incomes, better standards of living, increasing the opportunities for americans, which in turn will have a ripple effect throughout the world. if the united states economy does not serve as the engine for

growth and prosperity, it is hard to imagine, at least in the foreseeable future who else could. and the job numbers today were very good news. we continue to make economic progress. but now we have to work on the challenge of inclusive growth, broadly shared prosperity. that economy is at the core, not only of our well being, but it's also at the core of our leadership. because unless the united states remains strong economically, unless we remain committed to our role in the world, then so many of these challenges that we confront, that i tried to write about in my book, "hard choices," those are not going to be as readily dealt with. because we will be rightly concerned with what happens here first and should be. i think as we look into the next couple of years, i anticipate the economy will continue to

grow. i think today was not an outlier. i think there is wind beneath our wings. but we have some tough decisions to make here at home about how we make sure our economic good news is broadly shared and how we think of our own leadership globally in a way that makes us more secure. helps our friends and allies, like israel, have as much security and stability as possible. grow the economy, and do the work that will sustain american leadership in the 21st entry. -- century. >> you are absolutely right. i agree 100%. if we were to take just foreign policy, what is the one most urgent issue that we are acing? >> i think it is very difficult to say there is one. let me just quickly mention. i think the continuing threat from terrorism, especially the

way we had seen it morph into a more sophisticated delivery system, in the form of isis but also the wannabes in other parts of the world. we have to remain vigilant. we have to take the coalition that the president and secretary kerry have constructed and make sure it is more than just a rhetorical debating society. that it is a commitment of nations of good will and commitment to deal with the threats that the new brand of more socially adept, more well-organized terrorism, particularly as we see with isis holding territories, trying to establish a state right in the heart of the middle east.

so that remains a high priority. certainly, i think we have to deal with. there are a lot of other issues. russia's agressgress -- aggressiveness, how far putin is intending to go, whether he'll be slowed down by his own economic problems at home, the drop in the ruble, the drop in the oil price. i think that will remain a challenge for him. whether he tries to deal with the challenge or instead just tries to be more nationalistic and more aggressive is going to have to be addressed and i don't think we'll be finished with our work in trying to deal with him in two years. i think it's going to be a onger term effort. the rise of china, such a consequential, historical event. we want china's rise to be peaceful. we want china to continue to lift people out of poverty. but we don't want to see aggressive behavior, we don't

want to see nationalism coming to the forefront. we don't want to see a war of words with japan or other neabs over the south china see or the -- sea or the east china sea or any other territorial dispute point. flash so you can go, but those are areas that i think you have to particularly pay attention to. the middle east, as always, russia, china, and try to do what we can to manage each of those. >> you mentioned isis. what do you think we can do differently than what we are doing now, because they continue gaining territory. and they continue expanding. is there anything more or different that we can do? >> i think we are in for long struggle. but i think we have, in the last month, put together the pieces of a strategy. starting first and foremost with

the removal of maliki as prime minister in iraq, something that was long overdue. he was unfortunately the instigator of a lot of the bad feelings and fears that the unnis and the kurds and others within iraq felt and were trying to deal with in their own way. with no positive outcome. i think getting him off the stage has led to a couple of positive changes. one that was just announced finally after years of effort, getting an oil deal with the kurds. being able to get the government in baghdad to recognize the importance of the kurds in the north and to permit the reequipping of peshmerga units. think you will see a more

oncerted effort on the part of the kurds with respect to isis and joining forces, to some extent, with kurds across the border in syria. we are still a long way from an iraqi army that can defend territory and take back territory. but we are doing more than we have been doing. and the president asked retired general john allen to take on that responsibility. and i have the highest regard for him. he is trying to help undo the damage that maliki did to the raqi army after we left. i think it is fair to say that, when the united states withdrew, the time, effort, money,

expertise that had been poured into training the iraqi army gave a fighting chance to the iraqis to defend their territory and to be in a position to use the army in a positive way to unite the country. what we saw instead, with mall key, unfortunately, he urged officers, used sectarian measures to try too make the rmy a personal militia for him instead of a national army. >> id did -- it did not serve him that well. >> it did not serve him well -- it served him well enough until isis posed a threat. >> they are still there. >> the iraqi army had been destroyed largely. it was not willing or able to defend territory. it was a shadow of its former self. and it was a very strong incentive for the sunnis to

either to sit on their hands or to join with a group like isis. you know, the enemy of my enemy kind of thinking. i do think that what the united states and our partners, ashe and european have done in the last several months has laid a stronger foundation for the potential of a union fid iraq able, eventually, to take back the territory that's been lost to -- lost, to drive isis out of iraq across the border, and as we keep air pressure on them across the border, to look for ways then to finally deliver the death blow to them. but this is not going to happen easily or quickly. >> as you said, it will be a long haul. would you like to take a sip of tea while i ask the same question, the next question?

>> is a hypothetical? [laughter] >> you do not have to. but i do not want to get too cold. should we talk about the israelis and palestinians? >> sure. >> the oslo accord was signed about 21 years ago. a palestinian state was supposed to come to be five years after that. are the clinton parameters, or some version of that, still relevant? or do we need to live in a world where we manage the crisis versus solving it? >> i think they remain elevant. and i believe that there is a ecessary imperative to achieve -- to continue to try to achieve a revolution between israel and the palestinians.

the two-state solution, which has been the hallmark of not just the clinton parameters but the work under president bush, the work under president obama, remains an important, and i would argue, essential, concept to bring people together around. i am well aware of everything that is going on right now. and the increasing tensions that are existing in the region in israel, in the west bank, to say nothing of the continuing aggressive behavior by hamas coming out of gaza. but i am one who believes that the absence of negotiation leaves a vacuum that gets filled by problems, bad actors, threats. other kinds of behavior that is not good for israel and not good or the palestinians.

so i think that the efforts that were undertaken in the last several years from when i was secretary, now with secretary kerry, are very much in the interest of israel and the alestinians. >> i hope it happens. but we will see. as secretary of state, what is the one thing you wish you had done differently? >> oh, my goodness. >> is there a list? >> there were a number of things, and i write about a lot of them. i say in my book one thing that, looking back, i believe that we could have done differently or better was our reaction to the iranian unrest following the election in june 2009.

we consulted broadly, and a lot of experts on iran, sources from within iran, sources in other intelligence agencies. long list. the consensus was that it would not be productive for the united states to be vocally supportive of the demonstrations. and really speak out persistently against the abuses of the iranian regime. the reason for that is -- it did -- it was indigenous. it did spring up from the iranian people. the concern was that we would look as though we were directing it or supporting it, and giving an excuse, not just for the

iranian government but for people on the sidelines that might be worried about the outcome, to move away from the movement. and looking back at that now, i wish we had spoken out more. but it would have been against the advice of the majority of people with whom we consulted. obviously, for me, the work that we did around the world to try to bring people together, whether israel he or -- whether it was israelis or palestinians or after the revolutions in ashe countries, they were fraught with difficult, hard choices. trying to decide exactly what to do in uncharted territory, in rhett roe ro spect you could say, well, maybe we could have done that, maybe we could have done that. but again, we were feeling our way forward, trying to do the best we could under circumstances that were not

within our control, that were apidly changing, that had been predict bud nobody thought they would happen as they did in egypt and elsewhere. and of course i deeply regret the loss of life of any member of our state department family, whether it's an aid work for the iraq or an aid worker in afghanistan or foreign service officers in libya. that's always something you think, ok, what more, what more, what more could we have done? >> you mentioned -- speaking of iraq, you mentioned we could have spoken more. speaking more would have alienated the government, but -- how would it help the people who rised against? >> you never know. i mean, you never know what you might say that could give heart to people, could encourage them,

could get some off the fence they are sitting on and possibly take action. you never know, and that was why -- if these were easy choices, we could to them by computer, you know, if they did not require any kind of judgment, and in that case, we went with sort of the expert consensus, but it was such a fraught ime. we try to do what we could below the radar screen to help the demonstrators. one thing we did, they were communicating very much by twitter. and we learned that twitter was dwing to go down for a long-planned rebooting that had nothing to do with iran, it was just an internal technology issue, and we basically called and said don't shut down this weekend because we wanted people who were in the streets to be able to talk with each other. so we did a number of things overtly, covertly, to try to provide some support and encouragement to give heart to

people who were rising up against the obviously rigged, llegitimate elections. but i can't sit here today and say if we had done something different it would have had an impact. but at the same time, we were working hard to put together an international coalition to have international sanctions, we had unilateral sanctions the united states had adopted. i voted for them when i was in the senate and we were committed to that pathway. but it wasn't enough. unless we could get sanctions through the security council, sanctions from the european union, and create an environment in which other countries would feel compelled to abide by those sanctions, we were never going to be able to put the kind of economic pressure on the regime. and the turmoil following the elections actually aided us to a certain extent in making the case for getting those sanctions.

so a lot of 2009 and the first part of 2010, i spent my time trying to convince other countries to impose these tough sanctions and then we had to convince them to enforce them. it was a two-part effort. >> are those sanctions disintegrating in your view? >> you know, there's always been leakage. there's always been, you know, holes in them. but they have surprisingly and largely held. and they have held in part because we had a two-part strategy. the sanctions were not just to have sanctions. they were to try to force iran to the negotiating table, and i think the economic pressures and the conditions within iran was one of the reasons we were able to start these negotiations over

their nuclear program, so the sanctions have held up until now. the extension of the agreement until june i think will most likely be a period during which the sanctions will hold. there is nibbling around the edges. there are people trying to position in the event there is a deal, there is not a deal, but my assessment is that the sanctions, the international sanctions have had the effect that we hoped for on iran. >> they came to the negotiating table, so those sanctions did work. >> they did, they did. >> the concern is that we have shown some people would say too many carrots and not enough sticks. >> i don't agree with that. i guess my view on where we are,

bottom line is, a deal that verifyably closes all -- verifyably closes all of iran's nuclear pathways -- closes all of iran's pathways to a nuclear eapon, and the key is is is verifiably and all, including covert efforts, and that is what is at the center of this negotiation, and i think one might say remarkably, our partners have not jumped ship. they have stayed in the negotiation, and there has been both, as everybody now knows, a process with the so-called p5 plus one, and there has been a bilateral process between the united states and iran, and they converged, as they were intended to. i was involved in making the decision to send the first team to oman to begin talking about whether or not we could talk,

and just like churchill famously said, better to jaw, jaw, than war, war. we had to explore as carefully and thoroughly as possible whether there was such a verifiable deal that could be adopted. i remain strongly of the view that no deal is better than a bad deal. i'm also absolutely convinced that the nuclear weapon negotiations is not the only problem we have with iran. it may be the most important, and in many ways the most urgent, but iran's sponsorship of terrorism, iran's support for assad and the havoc that that has wreaked, iran's obvious support for hezbollah and the destabilization in part because of the spillover from syria, the

continuing pressure on providing arms to hamas and so much else that it engages in in the region that causes great concern to israel, our ashe partners in the gulf, that's all part of the ongoing challenge that iran poses. but with respect to the nuclear weapons negotiations, i think we made the correct decisions to get the sanctions imposed internationally, get our partners to the table, begin the negotiation, be willing enter into the interim agreement, which has, so far as we know, stopped their nuclear program, to be absolutely clear about the kind of intrusive constant inspections that would be required to reach the threshold -- verifiablity

that we would speak and to be very clear in any deal about what the consequences would be of any violation by iran. and that would include, as we say, keeping all options on the table. so how this is constructed, if, indeed, it can be achieved, will kinds of ve those requirements embedded within it. but i think it's a very important effort to continue to pursue and to try to see if we can reach an agreement that is in line with our requirements. >> let's hope that, indeed, we reach an agreement, and that none of our allies in the region are going to feel threatened, because then all hell will break loose. >> well, that is one of our biggest concerns.

we have to intensify our cooperation with our partners and, obviously, most particularly with israel. you know, i think if you look at the close cooperation -- forget about the press coverage and the back and forth. if you look at the close cooperation and what this administration and the congress of the last six years has done with respect to israel's security, it's quite extraordinary. the funding of iron dome, the funding of other military needs and equipment, the continuing strategic consultations we have been consistently engaged in with israel. you know, it's hard to measure what administration did x and who did y, but nobody can argue with the commitment of this administration to israel's security. and that has to continue. it has to deepen. regardless of the political back

and forth, which we're both tuned to. >> the political back and forth -- >> we are two raucous democracies, and i have some experience in that, and you do et carried away from time to time, but similarly with our friends in the gulf, we have to have an intentionally serious, ongoing consultation with them too. i started something called the gulf cooperation council u.s. strategic dialogue. we need a forum where we bring them all together. that's not easy because they have their own differences with each other. but when it comes too to the iran, to iran's intentions vis-a-vis them, when it comes to terrorism and other threats to their stability, they need us, we need them, we hope we can, you know, continue to have not only a good dialogue but a lot of positive outcomes from our cooperation that will make them safer, will make the region

safer, and pave the way for many cooperation, strategically, between israel and the ashe states. >> speaking of israel and the arab states, is there enough of an alignment of interest, do you think, between israel and some arab states, gulf states, and is hat a path that may help promote israeli-palestinian peace, kind of an eaverl deal? do you have a view on this? >> well, i think that -- there are a lot of convergent interests. i just mentioned quickly a couple of them, iran, terrorism, instability, and the like. and i know that there has to be a lot of work done to create cooperation around those convergent interests, but i think that is something that's very much in israel's interests

and in the gulf nations' interests. now right now, the gulf and others in the region are very xated on syria, assad, isis, other immediate matters. but they remain obsessed, understandably so, with iran's intentions. and i think that is the particular point of convergence. the arab peace initiative, which held out a lot of promise back when it was first introduced, basically was the form of a deal where, if there were progress on the palestinian front there would be actions taken by the ashe nations. >> but is that not a chicken and an egg? >> yes, i agree. and now, with so much happening in the region, so many serious threats coming from every direction, i know the president just asked for a big increase in

aid to jordan, because jordan is on the front lines of so much of what is happening, not only the refugee flow from syria, but they are cooperating with us in the coalition against isis, they remain one of the bulwarks for cooperation on israeli security. so we have to pay a lot of attention to the entire region. and i think when you look at the chicken and the egg issue, that's why you can't give up on any of these channels. you have to keep working them all the time. you can't say, well, you know, let's throw up our hands and walk away from negotiations between the israelis and the palestinians, because you do leave a vacuum. or, you know, let's just forget trying to figure out ways for the israelis and the ashe states to work together. you know. israel is back into a working relationship on security with egypt that is very much in each of their interests.

so you have to keep pushing all of these rocks up the hill at the same time. >> i hope you continue coming to the forum and next time i interview you we'll be talking about peace that came to the region. i'm not holding my hopes high, but we still have to hope. in closing, i'd like to propose game of words with you. you'll have fun. i'll mention a name or a noun. you have to answer in one or two words. can we do that? >> i don't know. we'll see. >> let's start with an easy one. bill clinton. >> fab ulous. -- fabulous. >> i agree. shimon peres. > wonderful. >> charlotte, that's her

granddaughter, charlotte. >> over the moon. >> women's rights. >> essential. > writing books. >> writing books, hard. >> ok. love. >> inescapable. [laughter] >> and to end on a sweet note, dessert. >> dessert? trouble. >> trouble. [laughter] thank you very much, madam secretary. that was fabulous. to a going to open it couple of questions, not too any, please. wait for the microphone, please. nd introduce yourself.

>> tamar, israel. i'd like to ask you about two countries that could be very important building blocks for a more stable middle east. turkey and egypt. turkey is a nato member and will be very important for a stable middle east but does not behave as would be expected if you look at the games they play between isis, that's one illustration of a policy that's not always desirable, and egypt, where the contradiction between american values and american interests is very poignant. what would you do with regard to both turkey and egypt? >> well, i think, ambassador, the two countries that you ask about are two of the biggest challenges and the biggest opportunities.

with respect to turkey, i think turkey is facing an extraordinary period where they are trying to sort out how to deal with their internal contradictions and their external threats, as they see them, and i see no alternative but for the united states and other like-minded countries to do everything we can to work with, to stay with, to try to influence how turkey makes those decisions. there's nothing easy about that. they have a kurdish population, as you well know, that they were n the path to try to resolve decades long internal conflict. they are now worried about the kurdish fighters on their borders with syria. that has upended a lot of their

calculations, and it is difficult to get them to focus on isis until they have some sense of how they are going to handle what they view as a prior challenge from the kurds. i understand that. i think it is something that they need to resolve and get about the business of resolving, and i think we have to do more, and i would love to see the relationship that turkey and israel used to have slowly knit back together, if that is possible, so i think both united states, other members of nato, other partners in the region -- we cannot get discouraged or frustrated with some of the difficulties that turkey is dealing with. instead, we have to double down and try to work with them, and that means even through periods where they say and do things that i think many of us are not too happy about. they are too strategic, too big,

nd they can be a source of -- a force for positive change or a source of continuing difficulties, so let's try to work toward the former. egypt is, as you say, an example of the kind of difficult, hard choices that we faced following the revolution and the overthrow of mubarak, and i went to egypt shortly after mubarak fell, and i went to tahrir square, and i met with a large group of young people who has been at the forefront of the revolution. d they were incredibly relieved and feeling quite validated that their efforts had led to the overthrow of mubarak,

so when i asked them, so what do you do next? are you going to form a political party? are you going to run people for office in these elections you have demanded? oh, no, they said. e don't do politics. and i said, well, in a democracy, that's what you want, you've got to do politics. and they looked at me like i was a relic from some ancient civilization that had ended up in cairo. and i said, look, there are two organized forces in egypt, so far as i can tell. the muslim brotherhood and the army. if you don't form a political alternative, one of those will win. and indeed, what happened is they won in succession. and we're back to the status quo , almost, i would argue.

so it was hard to navigate through the competing interests and the values, and we were blamed, as some of you remember by all sides. we were not sufficiently supportive of the revolution because we were clinging to mubarak. we were jettisonning mubarak and turning our backs on our longtime partners. we were up ending the relationship we had. and it never got any better. no matter what we did, we were criticized for. and i think it is now, again, time to reboot the relationship, get back to trying to work where we can, and do whatever is possible to work with the current leadership to not make the same mistakes. they're an important partner for us on counterterrorism. they will be increasingly so because they will face more internal dissent and violence.

they are an essential partner in the sinai. they are absolutely critical to israel's security on that border. all of that is true. but we hope that they will pay more attention to fixing their economy, giving the egyptian people more opportunities, trying to extend literacy, particularly among women. a lot of the work that needs to be done if they're going to create a more stable society going forward. so i think again, it's not easy and there's a lot of problems in the u.s. trying to help, but we eed to do what we can. >> madame secretary, thank you for talking to us. in your book, you called benjamin netanyahu a complicated man, and i wonder how much of where we are right now, vis-a-vis the relationship between the u.s. and israel and the relationship between israel

and the palestinians, how much of it, in your opinion is due to benjamin netanyahu, his decisions, his persona, and his policies and how much would be different the prime minister of israel and the president of the united states would simply get along better? and also in your book, you go into very candid detail about the days after the 2008 election. and i know that you said in answer to haim's question that you don't answer hypothetical or theoretical. the pro-con list that you have, that's not hypothetical, could you share with us what is in the pro column and the con column? >> i will answer the first question. [laughter] think about the last few years. the rapidity of change in the region, and everything that all of us were dealing with, i

happened to believe that the states and israel is solid and repail -- and will remain solid and it will be part of our foreign policy and our domestic concerns, our values, our ideals, you know, forever. but that doesn't mean we have to agree on everything. that doesn't mean that not only our leaders, but people in our country who care deeply about israel, just like israelis who care deeply about the united states, are going to agree with us on everything we do and we on everything they do. that to me is the mark of a mature relationship and a deep, abiding friendship. so are there differences between leaders? absolutely. i think it would be foolish to ry to pretend otherwise.

but i think what is important is the continuing institutional support that the united states has given and will continue to give israel, regardless of leadership. the military and security support. and you know, i think a lot of the, you know, the reports of, you know, attitudes and the like, maybe it's because we live in an instantaneous world where everybody has an opinion and everybody can say it, you know, i've dealt with a lot of different leaders, obviously i've seen my husband deal with a lot of different leaders. israeli leaders as well as others. and at times there are going to be differences. and i don't think it's personal. i think it is a different perspective about sometime what is we think is best for our

friends may not be what our friends think is best for them. and when we say that, i don't believe that's disrespectful or rupturing the relationship. i think that's an honest relationship. that's the kind of friends i want. i want people who will say that to me and i want to be able to say it back. so i think that's a broader and more accurate way to look at the relationship right now. >> we have time more two more questions, or one. martin. >> madame secretary, thank you very much for gracing us with your presence and share your wisdom with us again this year. you referred to the anxiety of the gulf ashe states about iran, and that has certainly been heightened lately by the sense that they are surrounded by iran's dominance in beirut

bag gad -- and baghdad and now in yemen. given the negotiations with iran and their anxiety about that, as well, and as you said, shared anxiety with israel is it time for you to resurrect the idea that you raised, i think six years ago, in the presidential campaign, of some kind of regional security arrangement that would provide them with an umbrella, both conventional, nuclear, that would give them some greater sense of reassurance in this very anxious time for all of them? >> well, martin, i think it is one of the reasons i wanted to form the gulf cooperation council, to begin a much more regular, in-depth discussion about security issues, because, you are right, i did call for what i think i said a security umbrella that would include the

gulf states, obviously it would require them to have a nonaggression pact toward israel , if they were to be part of the security umbrella. and you know, we -- during the time i was there, explored a lot of different approaches. we never formally offered such a potential package, but we looked t how we could try to create a more effective security environment. and it takes a lot of time and effort, and it needs to be a priority, because, for example, without naming names, where you place certain radar is dependent on geography, but countries want it to be dependent upon their interests and needs. so when you say, as i said, but if you look at this map, the radar should be here, they say,

no, we want it here. and you say, but that doesn't help us do what we are trying to do. so it it's a lot of work. it goes back to the ambassador's question and your question, there's no substitute for consistent diplomacy in the face of persistent problems. and on the security umbrella, i think it is an idea, in whatever form it could take, worth being resurrected because of what you described. if you look at the circle around iranian, there are more outposts now than there were. and a lot of that is because the countries themselves, take yemen, take the huttis in the north, the countries themselves can't figure out how to defend themselves. we have tried, ewith -- tried, we continue to offer aid and

assistance there. the lebanese situation is so destabilized with hundreds of thousands of refugees, with hezbollah being basically a part f assad's army against the rebels, and the inability of various parts of the lebanese leadership to have a united front to protect their own country. we can't do that for them, nor can anybody else system of a lot of this is weakness that iran takes advantage of. and you know, in this world, you can be mad at somebody taking advantage of you, but at the end of the day, that's your fault, you haven't figured out how to defend yourself and how to protect yourself and how to fend off external interests, and thousand treat your own people in a way that they will not look outside your borders. and you know that is part of what's been going on, as you know. the iranians have been

incredibly focused on exploiting any openings. and i think that we have to do what we can to try to bolster the sense of security that the gulf has going forward in order to deal with the constellation f threats that iran poses. >> thank you. thank you, madam secretary, for your insight and wisdom. one of the good news of the last two months is the drop in the price of oil, basically to $70 a barrel or maybe below. this affects the whole international system. quarters,cern in some in iran, in russia.

how do you see the international community dealing with the drop in oil price, and is it affecting the idea of rebalancing to the pacific or ome other issues that move things to asia that you were part of the idea in the beginning of the obama administration. thank you. >> well, you're absolutely right that the increase in supply on the international market and the ecrease in price has the potential to dramatically reshape strategic and economic relationships. i believe that we don't yet know, however, how this will play out. it appears that the drop in oil prices is having an increasing

effect of pressure in iran, at h may, on the margins, least, give us more of an opportunity to get to the kind of deal i was talking about. we certainly believe that the decrease in price is having an impact inside russia. and some of the decisions that putin is going to have to make. and with the increase in production in the united states, it is predominantly a good news story. however, the cost of extracting oil and gas in the united states is more expensive than it is getting it out of the ground in saudi arabia and other producers. so some think that our good friends in the gulf are driving down and keeping the price down in order to begin the process of limiting production in the united states so that they don't have the u.s. surpassing

production levels in the gulf and they don't have the u.s. able to use oil and gas to a great extent as a tool of our diplomacy and our economic engagement. so i think it's too soon to tell but it certainly is a dramatic factor that we have to be constantly watching. now, having a low price and so much production does help us in this way. if china and india, in particular, other countries as antsier with ting the sanctions against iran some months ago, than they are right now because there's enough supply at the price that the saudis forced opec to accept, and it may go even lower. so i think we have to be smart about this. one of the areas that i

emphasized in my time in the state department was energy diplomacy. and i want to thank the former senator, dick lugar, who was the driver behind talking to me as i was preparing to become secretary of state to try to coalesce our energy diplomacy in one place with much more attention and resources behind it and we did so. and it makes a big difference because we have to see energy not just as a commodity, not just as affecting the economy, but as a tool in our diplomatic arsenal. so too soon to tell. i think it's having a big effect on our hemisphere on venezuela. they are having a lot of internal stress. so there's going to be many, many moves in the next year if the price stays down and it has the impact internally and externally it's predicted to

have. >> thank you very much, madam speaker. thank you for your -- madam secretary. thank you for your insightful comments and inspiring words. i'll see you next year on this stage, i hope. thank you. [applause] >> the house select committee on benghazi hears testimony wednesday on the 2012 attack. witnesses include assistant secretary of state for diplomatic security greg starr and state department inspector general steve leonard. our live coverage secretary of state john kerry testified tuesday about combating isis and possible new authorization for the use of military force. you can see his testimony before the senate foreign relations committee. "q&a," toek on

political reporters share stories about the campaign trail with senator mitch mcconnell. years forns for four this campaign. it started in 2010, right after what happened in the republican primary. rand paul b mcconnell's handpicked guy, and at that , int, mccullough realized have to recalibrate everything i know about republican primary politics in my own state. he started to make changes and higher key staff and abilities -- and build very sophisticated infrastructures. >> they knew they were going to spend a lot of money on technology. they watch the obama campaign in 2008 and 2012. they watched harry reid in 2010. they needed to go from his 2000 race where he beat by six

points. been -- we haven't been in an interview with him. there.ably got sunday night at 8:00 eastern. to mock years of "q&a," we are airing one interview from each year. the house oversight committee will hear testimony tuesday run economist jonathan gruber, who for thes an advisor program implemented in massachusetts. he was big to the committee regarding comments he made about how the health care law was written. recovered an event with him in 2012 where he talked about his work. hour.s on our -- and

[applause] >> i appreciate your being here at the town hall tonight. we have jonathan gruber to speak. he is an award-winning economist and director of the health care program. he was a key architect -- i heard of him alive when he was working in massachusetts helping the massachusetts people put together their reform. he has also worked with the administration and congress when they developed the health care reform legislation that was passed about two years ago. he is also the co editor of the journal of public economics, associate editor of the journal

of health economics. he has published more than 125 articles, has edited six research volumes, is author of public finance and public policy, which is a leading undergraduate text. which is why he probably speaks with great authority about the law. he has written a book called "health care reform: what it is, why it is necessary, and how it works." i think it is a very fast and very informative read. please give a warm town hall welcome to jonathan gruber. [applause] >> thank you very much, and thanks, bob, for the kind introduction. i have about 10 minutes to start and there's a lot to talk about with healthcare reform.

i will start with a little story. my sister lives here in seattle and the story involves her coming into the house and said, "dad, dad, i need help, where is mom?" and my father said, "i don't know where she is. but can i help?" she said, "no." he said, "what you need help with?" she said, "math." he said, "why can't i help you with it?" and she said, "i don't want to know that much about it." [laughter] in that spirit, i will try to tell you not more than what you want to know. i am eager to hear your questions. i want to start by setting a little bit of background, which is understanding the importance of where we are historically and in terms of the numbers. we have been trying to do, the

mental health care reform for about 100 years on an average of every 17 years. and we have always failed until 2010. and as we have failed, the problems have gotten worse. the number of uninsured in america continue to grow. we now have 15 million individuals. and the cost of health care continues to grow. health-care spending continued more slowly last year, but more slowly still means increasing health care to about 18% of our gross domestic product. if nothing is done, by 2018, will spend four out of every $10 on health care. that may be good for the doctors in the crowd, but not really for the rest of us. and that is not feasible. we have these twin crises. in my book i represent them as a twin headed alligator we are trying to deal with, and yet we have been unable to decide how to deal with them. the real breakthrough came with

governor mitt romney in massachusetts in 2006, when he signed into law a massachusetts health care reform, which took a new approach that has not been tried before the i like to call incrementalism. meaning, leave people alone if they like what they have, but help them if the system does not work. the universalists are from the left, meaning getting to universal coverage. this was not a bit up and start over approach. it was recognizing that we need to keep the things that people like, but that we can get to universal coverage. he set up a system that i like to say is a three-legged stool. the first leg was ending discrimination in insurance markets. to end discrimination we have a flawed system in america where people are just one bad gene away from bankruptcy. the second was to get away from

mandate so that insurance companies could price fairly. and a third step was subsidies, so health insurance could be affordable for individuals under this mandate. this system was put in place in 2006 in massachusetts and has been enormously successful. we have covered about two-thirds of the uninsured in the state and have lower the cost by about 50%. and this is the basis for the affordable care act. the same basic structure as the affordable care act, but the affordable care act is more ambitious in two fundamental ways. the first is, and candidate mitt romney may not tell you this, but his bill was paid for by the federal government. we get reform in massachusetts and we did not have to raise taxes, as he will tell you. but what he will not tell you is that we did not have to raise taxes because the federal

government paid for it. the federal government does not have that luxury. if we have to raise revenues. but that is one place we had to be more ambitious. the second is the bill in massachusetts is not really the second head of my two-headed alligator. it was not about cost control. it was not about dealing with this probably more important problem in the long run, honestly, which is controlling health care costs. and i'm here to tell you that is okay. that is a lot harder problem. ultimately more important problem, but a lot harder problem, but a problem we are moving forward toward solving. we are not there yet the affordable care act moves forward in a number of ways to try to control health-care costs. it will not be the last word on cost control, but it will move us toward ultimately controlling health-care costs and not ending

up spending 40% of our gdp on health care. i hope we will go through those details and answering questions that you have tonight. that is an overview for now. i would love to talk with bob and hear his questions and hear your questions. thank you. [applause] >> thank you very much, jonathan. i think this is an interesting topic you brought up. obviously, a lot of us here care about our health care system, what looks like and feels like. you mentioned one thing in the beginning that has to do with incrementalism verses a broader sweep. could you speak a little more about why incremental this time, why not a broader sweep? how can we meet our goals if we do not -- ?

>> the pattern is interesting. in every round of health care reform the approach has moved to the right. we have moved from a single pair to a somewhat less single payer to the clinton, which had these regionally cooperative, but would still configure the health care system. this time around there are two fundamental problems that would reconfigure the health care system. the first is, most americans are happy with what they have. they wish it was cheaper, but they have a variety of choices. there are employer picks up most of the cost and they are happy. in american politics you do not get far by ripping up what makes 250 million people happy to make 50 million people happy. we have bailed out industries much smaller than that. we are not going to wipe a $300 billion insurance industry. we had to bring them along to

make this feasible. it led to a realization by many of a single payer system that was not happening in the in the near term, but that we could move to a system that is feasible and get us to the goal of universal health-care coverage. >> that is very good. on a lot of us care about that. one of the issues i you brought up that is really important -- you said it was a two-headed alligator. you mentioned you were working on the access issues, but really, there's also the cost control. in massachusetts, you did not bite on that bullet, but you did in the national. what has to be done to make that successful? >> health control is really hard. i think the book is that it was like having to go over two hills.

the first hill is scientific, which are frankly, there are a lot of good ideas out there. we do not know how to bend the so-called cost curve in a way that would not put u.s. health at risk. if we just that we are not spending more than 18% of gdp on health care, that would do it, but that would not be the solution. how you distinguish what does it and what does not? the second is the politics. this is a very hard problem to solve. anytime you pose something that can help control costs, it is easy for the opponents to attack it. our political system is not prepared to deal with this. my favorite example is -- many of you may remember in november of 2009, an independent set of doctors who recommend when your kid is immunized recommended that mammograms no longer be

recommended for women in their 40's. this was not an economically this decision, but based on the false positives we were given early. the political system went haywire. the government wants to take away your mammograms was the headline. this is not a government agency and they are not taking away anyone's mammograms. it is bad enough if you read the affordable care act, which i recommend that you do not, but in their it actually says that preventive screening is not covered for free. every american with health insurance now has the right to get preventive done for free. they literally could not bite the bullet and they are agreeing with that because of the political blow back. it is a long winded way of saying, we have got a long way

to go before we're going to get to fundamental cost control. what this bill does is take a spaghetti approach to cost control. it throws a bunch of stuff against the wall to see what sticks. there are a number of different approaches, each of which is the best from experts. we're going to try them and see what works. >> how are we going to make sure we get there? >> there is a famous statement from a nobel prize-winning economist, herb stein, who said, if something must end, it will eventually, we will not spend 100% of gdp on health care. i do not know how we are going to get there. i can tell you that it is unlikely we are going to get there in the way that england did, for example, where they said that no one over 75 gets transplants. that is not the american solution. i see it moving to an explicit two-tier health care system. right now we have an implicit

two-tier health care system. all the bad statistics are driven by the people who are out of the health-care system. and right now, it is implicit. we need to move to an explicit two-tier health care system where everyone is guaranteed good, basic health care. we have to recognize that it is america and some people want to buy better health care, we need to let them in most european countries you can buy with your own dollars -- we need to let them. in most european countries you can buy with your own dollars better health care. >> you change topics quite a bit. you mentioned revenue, and how massachusetts was lucky. it had $350 million coming down the pike. the national bill does not have that. the national bill also raised a lot of revenue. and i think it is -- our deficit

is decrease because of it. can you tell us about that? who gets taxed? who pays for it? >> president obama laid out the number one principle in this bill, that there should not increase the deficit. to make this work, we had to spend about $1 trillion. we had to raise revenue to reduce spending. first, it cuts private health insurance that insured the medicare population. but we were paying $1.17 billion for medicare insurance. we raise about $300 billion by reducing reimbursement to hospitals that treat medicare patients. about half of it was costs and spending, but half of it was also increasing revenues.

those come from two sources. one is the sectors that operate on this bill. there's the pharmaceutical sector, the medical device sector, the insurance sector, they will all pay new excise tax. the second is the new tax on the wealthiest americans, an increase in the medicare payroll tax for families above $250,000. >> you mentioned the pharmaceutical industry, the health insurance industry -- does this help them become better citizens? >> i think it does. the trade off with the political feasibility argument is that we had to bring private insurers along. i know that upsets a lot of people. the bill tries to keep them as good citizens in two important ways. the first is the so-called health insurance exchanges. right now, if you want to buy

health insurance in the so-called non-employer market, it is hard to shop effectively. it is confusing, prices are high. this sets up an exchange for all non-employer insurers will come to one place that will be competitive and easy to shop. we have done it in massachusetts. i think it beats the pants off orbitz. it is a terrific shopping experience. that is when competition can work its best. there will be new competitive pressure on insurers. blue cross and charges more than other insurers because they are blue cross. that is because people know them. and when they are on the shelf, they will say, why am i paying more? those benefits are the same. the second is the medical law regulation, which regulates and limits the amount of money they

can have in profits and overhead. >> i want to get to a couple of parts of the bill but i think are important. one of them is the protections. many people do not trust the insurance companies and that is not just because of transparency, but how do we know that people do not have limits to keep them from getting pushed into bankruptcy or something else? can you talk about the protections that are there? >> it is a great question. i think this is the most important part of the bill, and the least appreciated. most people in this room will have insurance on they -- from their employers or the government. we have to recognize that with 50 million uninsured americans, and in many individuals better in the non-employer market, they are facing enormous risk to their financial security. we are in a system in america in most states, such as this one,

where you can buy insurance and the minute you get sick, you can be dropped. or in some states they cannot do that, but they will say, up to $1 million per month. it is totally legal. we do not have real interest. that is a fundamental failure of an economy as wealthy as ours. it is crazy to put that much uncertainty on the public. no longer will you be kicked off because you are sick and blogger will be charged -- and no longer will you be dropped if you're healthy. >> we have community-based intervention, which i think are really important. if you look at the health of the committee, it is often times driven much more by what we do in our community as opposed to political intervention. what does the bill do to make a difference in those areas?

>> the bill is trying to make a difference in those areas. it puts a lot of money and resources into community health centers to try to improve those centers to meet the needs of their communities. as i said, a lot of money for individual-based prevention. there is a lot of money for wellness and initiatives. what the bill tries to do is not just to ensure people, but to built on the resources to improve people's health beyond medical care. >> i have spoken to a lot of people who are very upset about people getting a entitlements or a gift given to them. the issue of personal responsibility rises with the population of the time. how does this bill address personal responsibility? >> it is fascinating, because what is more personal about personal responsibility than an individual mandate? the genesis was in a conservative think tank.

when mitt romney signed the bill in 2006 from on the podium with him was a spokesman for the heritage foundation saying how wonderful the bill was. because that is about personal responsibility. it is about ending the free ride for individuals when they are sick and to jump back out when they are healthy. this bill is trying to thread the needle of using the individual responsibility, but not putting such a burden on people or for the affordable for example, an individual mandate, but we offer low tax credit. and we have an affordability extension so no one has to pay more than 8% of their income for insurance. if it costs more than 8%, you are no longer subject to the mandate. as you said to me in the greenroom, is as if you shot a bullet with are hitting somebody. we are trying to do this amazing balancing act.

>> you wrote a book that is a graphic novel. why? >> a couple of reasons. the publisher approached me and said it would be a great way to learn about the health care bill. i was very eager for people to learn about the health care bill you read the polls and you ask people what they think about the affordable care act and they would say they like it. you ask them what they think about ending discrimination in the insurance market and 70% like that. what you make about making it more affordable to get insurance. 70% like it. they just did not understand. i thought a comic book was a great way to learn. my son was a great reader of the graphic novel format. he convinced me to do it.

>> but you did not have batman. >> i did not. >> i read it and i really enjoyed it. next step, who is the audience for this book? who you think is more to read it? what difference does it make? >> i have in mind the audience being anyone who has an open mind about this bill. i do not think is going to change anyone's mind if their mind is made up. but this is a really radical transformation of our system. it is complicated. and i think there's a lot of misinformation and disinformation about this bill. i think this is appealing to two groups. one is the cautiously skeptical to cautiously supportive, but just unsure. they want to read it and learn and decide for themselves. i also have a particular

audience in mind, which is the people who are inclined to like universal coverage, to like what a democratic president does, but feel like this bill did not get there. it did not meet their needs. they are just not satisfied. i am stunned with the number of self-described liberals who do not support the bill. i think a lot of that is the people not understanding what the bill does and what is in it. that is another audience i would like to reach with this book. >> i will do one more question, but i would like to open this up to the general audience. we have to devote microphones, one there and when there. if people want to start asking questions, feel free to line up. i want to go back to your area of rationing. and i will not call it rationing, but that is what the opponents of this bill call it. they are comparing what we're doing, whether it works or not.

and you mentioned the two-tiered system. how are we going to approach health care in the long run in this country? there are limits to what you are going to do. is the different mechanisms are built in, are they going to take care of that? how are we going to make those hard decisions and how will we inform ourselves of the best way to do it? >> basically, if we think about the coverage problem and the cost problem, the coverage problem, we sort of knew what to do. it was a matter of crafting it in a way that it would get through tough politically. the cost problem is much harder. it's because we just do not know. we do not know what will work scientifically and what will pass politically. health care is the single largest and single fastest-growing sector of the economy and we have no idea what works.

it is crazy, right? what do you do in that situation? if you need to learn and research on what makes health care work. however, once you mention this bill, then that -- then people say, that means the government is going to ration my care. there is $1 billion to be prepared this institute to study what works and what does not. but the results of that are not allowed to be setting insurance decisions. that is crazy. but that was the political compromise. the bill has in its dozens of pilots of alternative ways of organizing care. we have the so-called fee-for-service medical system where doctors essentially get paid more than they do. there is a famous quote about having a doctor decide how much medicine you take is like having a butcher decide how much red meat. we need a system where doctors are paid based on how healthy

work, not on how they treat you. but that is hard to do. anytime you're going to control health-care costs you will be cutting someone's income. that is hard to do. what the bill does is to set up dozens of pilots to get us to around two. now we deal with the cost. >> here is the first question. >> i am definitely one of the liberals who does not understand the bill, so i am delighted about your graphic novel format. i pay out of pocket for my own health insurance because i am a self-employed. i recently became pregnant and i was delighted with group health

until i became pregnant. once there was a series of tests that became recommended, i became mired in the quagmire of of trying to estimate costs upfront. why is it legal for the health-care industry, for health care providers to not actually tell you up front exactly what you will be paying for a given service prior to getting the service? what ended up happening is that i pay double for what i was quoted initially. now i am fighting it. it is a quagmire. i would love your answer. >> that is a great question and this is a great example of the -- first, congratulations. it is a great example of the type of problem we will be solving with health care reform. i mentioned these exchanges. i urge you to go to health careconnector.org, not to make you jealous of massachusetts. we show you exactly what you

will pay under each plan. not just deductibles, but service cost. what we need is an explicit description. you need to be able to go on to the website and say, i want these services, what will each insurer charge me for them? there is a great model for that. if you have got medicare part d coverage, you can go on the web site and enter the medicine you would be taking. that will help consumers become more informed and shot more effectively. more effective shopping will bring prices down. >> how is it legal, though? the up-front costs are not

stated overtly? >> i am not an expert on health care law. it would be illegal to state them incorrectly. >> well, they get around them by saying it is an estimate. >> i do not know how to answer that. >> nobody knows. really, how much it is going to cost until they see the experience. i was on the public employees' plan. we had about 10 plans. i did not know how to compare one versus the other. until you have some way to compare apple to apple, you are stopped. >> professor gruber, i think the substance of this conversation is way more interesting than the politics. but i will wallow in the politics for a moment. as someone who was behind closed doors with mitt romney on this, i am very interested to understand if he was engaged ceo

participating in these conversations in a thoughtful way? or did he do this kicking and screaming and over his life body? [laughter] >> low was actually writing speeches for our previous commander-in-chief, president clinton. he knows about this well. basically, mitt romney was a real believer in this. i really only had one meeting with the team. and in that meeting, it was basically mitt romney defending this against his political advisers. they said, this is a terrible idea for you. and he said, no, this is really cool and we can do this. because in his heart he is a management consultant. he is an engineer. and massachusetts was getting money from the federal government.

we can put this together without raising taxes. as a republican, he thought this was pretty neat. we will have personal responsibility for the mandate and we will cover it without raising taxes. he was excited to put the puzzle together. he was a human shield in this. i'm not saying that because i'm a democrat. he was really for this. it is really true. i am as disappointed as anyone that he has walked away from it the way he has. >> thank you very much for your clear presentation. your answers are terrific. my question is about the public option, which died a sad death. and whether genuine cost control is even possible without a

public option to drive it. you discussed these various experiments that we will be doing, but meanwhile my understanding is that in massachusetts, the costs, particularly for employers, are skyrocketing at an unsustainable rate. it has to be sustainable for it to work. can you have cost control without a public option? >> a great question. at first, in massachusetts, it has risen fast, but no more than in the regular market. the public option is a great issue. i am a big fan of public option, partly because it is the brainchild of an academic like myself. he had a great idea. the left wants a single payer, the right wants a competitive exchange. let's put them together. both sides hated it and basically, both sides hated it

because the left did not want it unless there was a huge advantage for the single payer in the exchange. the right did not want that if it was there at all because they were worried it would be too successful. do not get too upset about that. here is why. the public option was never as big a deal as it was made out to be. let's say, there are three sellers of the apples, and they are each 20 minutes away from each other. each of those sellers of apples do not have to worry about competition because there is no way to compare prices effectively. now you set up a fourth apple that is 20 minutes away and it is cheaper. that will help some, but a lot people will not know about it. it will not help much. now let's say you have introduced a website to compare all of them. that will help a lot.

the website puts them on a level playing field. that is the big difference. it is putting their feet to the fires and, lo, show us what you've got an show was on a level playing field. if that does not work, then we will have to revisit single pair. in the meantime, states have the ability to have the public option. which is great, because then we will experiment and see if it is good and useful, as some like to think. the message is not nearly as big a deal as it got made out to be. we have done it in a way to make them competitive and make it easy to do comparative shopping. if that does not work, then we will have to do some kind of

single payer system. this is the last effort for private insurance. if we cannot control costs under the structure, then we have to rip it up and start over. >> is there anything in this that addresses preventive care of? and not just things like mammograms and screenings, but as far as nutrition, chemicals in food, sugar, incentives to dissolve these things by companies? it seems like you will have good incentives on one side, but on the other you will always have somebody pulling, and you've already got subsidies in place. without getting rid of these, how do you later more on top? >> it is difficult. with a bill like this, in principle, it will address all of that. but it would never get past. the biggest frustration from the critics is that they say it did

not go far enough. it went as far as it could go. insurance will depend on the efforts people will make to take care of themselves. if you take care of yourself, you can pay a lower price. on the other hand, it could become discrimination on health. the bill tries to strike a balance between the two. what it does not take on is things like food systems and other kinds of production problems in the food systems. other issues of sugary soda available in our schools and nutrition, these are larger, systemic issues that we need to deal with in additional legislation. the bill does not get into them.

>> my question is, why is health care spending in the united states two or three times that of other countries with no better results? [applause] >> that is a great question. our health care spending is about twice the developed country average. part of that is because we are richer and bigger, but even if you control those factors, our health care spending is on an order of one-third higher than it needs to be. we do not exactly know why. it is partly prices. we pay a lot more for things like prescription drugs. we pay a lot more for our cat scans and mri is. we pay our doctors more. not our primary care doctors, but our specialists. they make a lot more. part of it is utilization, but that is not all of it. in many european countries they go to the doctor more than we

do. in japan, the use twice as many prescription drugs as we do. what is unique about the messed up system in the u.s. is that it gets all of you and does not let you go. it's a test you, keeps you in the hospital longer end does more procedures. it is about the intensity of the treatment once you are in the system. that is hard to know what to do with. many of you have seen the 2009 new yorker article written about health care. it was written about maccallum in el paso, texas. they're very different demographic regions, and very different outcomes. in mcallen, texas, all of the extra stuff they do, the problem is, if you go to those doctors

they will say to you in case by case, this person showed this symptom. they make a compelling case forge each example. are we going to tell the doctor they cannot do that? that is the problem going forward. in european countries, part of it is because they control to regulation and part of it is because they do not have the history of excessive treatment that we do. they have not run into this problem. >> it seems to be one of the big benefits of these changes is the ability to change jobs, that they will not get shut out either from employer to employer, or even the ability to go off and start a business of their own and move away from an employer-based health care to an exchange base. does the bill put anything toward that?

>> a question after my own heart. that is what much of my academic research was on when i was getting started, the so-called job lock. the notion that people will be afraid to change jobs. but among people who have health insurance, there is about a 25% reduction in changing a job because they are afraid of losing health insurance. that is an enormous problem. a positive of u.s. exceptional as some is how fluid our labour market is. health insurance tied to employers blocked about. this will end that. i think it will be a major boon to our economy. to answer a question, no, we do not have a great estimate. we do know it will greatly improve mobility.

>> t.r. reid noted in his book that we are the only country in the world that has for-profit insurance companies. is the relevant here? >> in massachusetts, our health care costs is as high as anywhere else. we have no for-profit insurance companies. the problem is mostly not even insurers. not all, there are some bad actors. some of those bad actors will go away because we will get rid of the kind of insurance they sell. that is the insurance that says they will pay $500 a day for a stay in hospital. the people the insurer, do not realize it costs $3,000 a day. with the regulations in place, there is not really evidence

that for-profit vs not-for-profit insurers behave very differently on the key elements of health care costs. it is bad products and excessive margins, and that will go away. >> he is right. >> when this was set up, we were looking at a static system, but health care is not a static system. there is comparable effectiveness, but again, that is a static system. health care is also driving forward because we have not cured most diseases. very few.

there is also an industry, if you will, be it at the university or private industry. how will the bill address the ability to go forward, and how will it be flexible enough to allow the appropriate changes to occur? >> that is a great question. there are two facts that combined to explain the difficulty in controlling health care prospered from 1950 to today, health care costs have almost quadrupled to gdp. and yet, it has been worth it. there's a great article written by my colleagues at harvard university where he documents health care. in the 1950's, you were twice as likely to die of a heart attack. babies were likelier to die. if you had a ski accident, you have arthritis rest of your life. if you look up the way people

are treated in hospital and you look at what is necessary and what was not, we waste. how can the health care spending be worth it? and yet, we waste 1/3. the other 2/3 are awesome. [laughter] basically, the other two-thirds have carried the other waisted one-third along. so the answer is not to say we will no more than 18% of gdp on health care. some great innovation has come along since the 1950's, and new ones will come along in the future years. how do we separate the fat from the muscle? how do we keep what is good and get rid of the copycat drugs that cost a lot to develop and are not doing any good? the key will be effective research and more competitive market. but that is why costs are so

hard to control. >> one of the economic arguments i have heard against the affordable care act is that healthy people will simply pay the penalty until they become catastrophically ill, at which point they will jump back into the system and cannot be denied coverage and they will drive up costs for everyone. is that a valid objection in your mind? >> there is a balance on the mandate. on the one hand, if you have a mandate that says if you do not have health insurance, we will kill you. it would be effective. if you have health insurance because it is a good idea, that will not work so well. you have a mandate that it is the larger of 2.5% of your income. there is a balancing act there. in massachusetts, it is comparable to our penalty in massachusetts.

and in massachusetts, almost everybody works with the mandate. we're pretty law-abiding people. we massively under cheat on our taxes. [laughter] if you have a mandate in place with a penalty that is real, which this does, by and large, people will comply. this bill will cover 60% of the uninsured in america. there are three groups that are left out. unfortunately, undocumented immigrants are left out. that was a political decision and there's nothing to be done about it. second, there will be people exempt from the mandate. if you have to pay more than 8% of your income, you are exempt. and there will be those who do not comply. if you get enough people in the system where we are healthy and can keep costs down, then that will work.

this will be a constantly evolving scenario. the biggest change ever made to the medicare program was the prescription drugs act added 40 years after the program was introduced. we are far from done with health care reform. but this is our best estimate that will work to balance and have a mandate that is humane, but will really work. >> i have a question regarding the ending of reimbursement for readmission in hospitals. i will start by saying i am very much -- i do support universal health care. i'm very liberal in that aspect. but i am a cardiac nurse and congestive heart failure is one of the top reasons for readmission into hospitals. and knowing that is a degenerative disease, and especially in these economic times it is very hard to prevent

readmission, just due to lack of insurance, lack of being able to afford the medications needed to control congestive heart failure, and at a certain point, you cannot. you need to be readmitted, and eventually, you end up not getting out. i have seen this bill do in that aspect, the closest thing i can correlate it to with teachers in the passing of no child left behind. it has put tons of pressure on nurses, the amount of charting, the discharge instructions and the people work and we have to do. that is where the hospital has put the pressure, and we are already spread so thin. i wanted to get your opinion and if you could expand on the decision behind that and the logic behind that.

>> economics is called the dismal science and, and the reason is because a lot of times we just point out problems without solving them. you are pointing out a problem. it is a balancing act. on the one hand, the key cost of high health care costs is excessive hospital readmission. hospitals rush you out when you are not ready to and leave and you have to be readmitted. on the other hand, there are genuinely people who have to be readmitted. how you balance those? you get health care that lowers the hospital we admissions to try to penalize hospital readmission, but not get rid of them completely so that hospitals are not left without any reimbursement for readmission spirit of the bill may go too far. it may be that cutting -- for readmission. the bill may go too far. it may be that cutting readmission is difficult to measure. but what we have now is too much readmission.

in 1983, medicare went to a brand new payment system called the de rg. we used to pay fee-for-service. it went to a new system where it was a fixed amount regardless of what was done to the patient. there was an enormous reduction in how the elderly was treated in hospital. enormous reduction with no reduction in older health. there were no less healthy as a result. we were just reading them to excessively. we have to try these things and see if they're going to work. we hope we will get the same kind of outcome. >> stage left. >> there was a piece in the new england journal today or recently about one of the challenges in the supreme court, not in the individual mandate, but that the federal government could not force the states to

raise the number of people who were covered by medicaid. it was rejected at the lower level, but the supreme court reached out and decided they wanted to hear it again. what are the chances that none of this matters, that the supreme court is just going to pull a citizens united and get rid of the lot? >> the supreme court decision has four elements. one of them is the mandate. another one is this, quite frankly, much scarier one, which is the question of whether the federal government can compel states to offer medicaid coverage that the federal government is paying for. the federal government reimburses 100% for the first several years and 90% after several years. the state barely have to pay anything. that is a hugely broad implications for many programs for a large part of how we do our social insurance in the u.s.

i was very distressed to see this. only one decision support of this. it was the most radical decision of all. this was a judge who went out of his way to cite the boston tea party. i'm very confident they will not sign is as unconstitutional. it will cause a radical rethinking of our entire social insurance system. >> stage right. >> you spoke a bit about the question from a woman who was trying to compare the cost. you spoke about how massachusetts was trying for greater transparency in insurance. i am a practicing physician and the one the istore what is the lack of transparency i have in terms of understanding the things i do that will cost patients, and for that matter, what the outcomes of my choices are. i'm still unclear how this bill, if it does, short of the acl

model and other things, however increases the feedback of providers to health care so they understand the consequences of their requisitions and can make better decisions for patients. >> the bill does not do enough to explicitly on that. it does basically implicitly, through the notion of setting up structures for insurers to provide feedback to physicians. once again, it hit a political barrier. there were discussions about end of life care. we know what sarah palin did about that and it got pulled from the bill. physician support got labeled as rationing and got pulled from the bill. we hope that this will bring physician interest in having that information and using it more effectively.

we are seeing it in some of these organizations that are being set up. i work with one in maryland that a setting up a very cool model where primary care physicians will see the cost of all of the things that specialists are recommending and bear some of the risk of those costs. they will say, you should care about that because we will take some from your pocket if you send people to expensive specialists. we will give you some if you send them to more effective and less expensive specialists. the government is politically unable to set these things up itself. it is up to insurers to set this up. >> there are a fair amount of us who are residents and i think in training we hear a lot about ordering this test to cover yourself, make sure you document is to cover yourself. is there anything in the bill that will have changes in medical legal, so you change

your reasoning of a bit about what you are ordering so that it is not always about covering yourself, which inevitably raises the cost of health care? >> thank god, because i have never talked to crowds were there are doctors and we have not talked about malpractice. i was getting worried. [laughter] in all seriousness, it is a tough problem. you add up all of the costs of malpractice and is a 0.3% of health-care spending. the best evidence comes from the kennedy school. one leader their estimates is about 3% of health-care spending but the truth is, he just pulled out of a hat.

we just do not know how much is defensive medicine. that is why the bill includes the ability of states to set up pilot for alternative ways to adjudicate malpractice, legal panels and other things. if you have a relative killed by a doctor, you would be hacked about only getting $100,000. it is not clear that a damaged cap would be the answer. we need to move to a more rational system. cases are handled in a way where compensation is appropriate to the damages. we do not know how to get there yet. my instinct is that they still worry about doing the right thing. >> there have been some

editorials in the medical community about the success of medicine is that more people are living into old age and then we will actually have more dementia. is that with managing those costs? >> is an important issue that is dealt with partially in the bill. one major feature was insurance. they decided it was not written appropriately. there are other features of the bill which tried to improve community-based care.

it is cheaper and makes it happier than being in a nursing home. to be honest, it is not a major focus of the bill. that is something we need to keep working on. and the hard decisions have to i think it's going to be a challenge. >> i would like to ask about a potential access issue. somebody who works in primary care, i hear every day about the shortage of primary care physicians. in the billthing that addresses that, and how are we going to head that off? >> that's a concern about a lot of people. we