few. first, we will be forced to require some 75% to 80% of our men and women to come to work without pay. there are serious consequences for the working men and women of our department standing behind me if they are required to come to work and try to make ends meet without a paycheck, for themselves and their families. this includes the men and women of the united states coast guard. second, we must in the event of a shutdown furlough approximately 30,000 of our employees, including our headquarter's staffs. what does that mean? what are the consequences? an example. every day i press the staff at my headquarters to stay one step up ahead of groups such as isil, to closely monitor and to

stay one step ahead of illegal migration on the southern border and to stay one step ahead of our weather conditions, to closely monitor our weather conditions in a very harsh winter. if we shut down, that staff is cut back to a skeleton. third, approximately 80% of fema's permanent appropriated workforce, 80% is for load -- is for load -- furloughed. fourth our ability to grant money to state and local law enforcement which they rely upon for their own missions grinds to a halt, either because there is no money or the ability to process payment has been furloughed. fifth, service providers and suppliers of this department did

not get paid during the period of the shutdown. again, because there's no money or our ability to process payments have been furloughed. i could go on and on. overall, a shutdown of homeland security would have serious consequences and amount to a serious disruption in our ability to protect the homeland. to those in congress who may be contemplating hunting or kicking the can a feud weeks down the word, i must remind you that the consequences to this department, if we remain on a continuing resolution, are also severe. we are restricted to last year's funding levels if we are on a continuing resolution and must operate in a state of uncertainty about when the next infusion of funds will be. as i have said many times now it is like trying to drive

across country with no more than five gallons of gas in your tank, and you do not know where the next gas station will appear. we cannot pay for the enhancements to border security on the southern border that we have put their. week-- there. we cannot find new non-disaster assistant grants to state and local law enforcement. every governor, mayor, police chief, sheriff please commissioner should be concerned about this. we cannot pay for the things we need for the united states secret service in the coming presidential election cycle. this is no way to run a government. on behalf of the men and women up here on this stage and for homeland security and public safety we need a fully funded department of homeland security. we need the congress to pass a fiscal year 2015 appropriation

for the department of homeland security. free of amendments that attempt to defund our executive actions to fix the immigration system. the president has said he will veto a bill that comes to him with such language. as the president and i have said many times we welcome a debate in congress about immigration and immigration reform. we know there are strong views on the subject but do not tie that debate or an effort to defund our executive actions to the ability of our department of homeland security to function in its entirety. do not tie debate about immigration to the funding of homeland security for this nation. now at this point i would like you to hear from just two of our component heads. i will call upon the commissioner of customs and border patrol.

>> thank you all very much for being here. as the secretary said, there's a human face to this. have 60,000 employees. we're going to be asking them to go to work without a paycheck. when you are young and i remember as a young police officer, i do not think the mortgage holder would have been synthetic if i was working and was not getting paid. the hospital would not have been some pathetic to my plight either. that is significant. let the view another concrete example of the human face to this problem. the human face is that we have been actively hiring customs and border protection officers and border patrol agents, literally almost 500 that are in our training academy right now. we will give them a plane ticket home and send back home from those academies in georgia and new mexico, and we will not be

paying for them. when this happened before, some did not return. we spent a lot of money in training and hiring and making sure that they were properly screened and when they went back home, people said you are pretty attractive person for a job there. we cannot continue on this path. it is my pleasure to introduce the administrator of fema craig fugate. >> good afternoon. a continuing resolution is not the way to run the department. if some of the impacts occurring right now at state and local governments, we not initiating the grant programs. their week occurring programs that are considered -- these are reoccurring programs that are considered grant activities. these pay their salaries. those funds will be necessary to pay those salaries, and without

the grants, there will be impacts at the local community level and the state level for personnel, not equipment, not stuff, not training, but people that are currently serving at the local level whose grant dollars are dependent upon for their salaries. if we end up in a shutdown, i have heard this said, and i like to be factual. the impact will not be that great because most of the people at dhs will still be at work. and i have heard that said about fema. i want to be upfront and tell you what this means. in 2013, the last time we shut down the federal government, fema had to furlough 3360 full-time people. most people say fema has more people than that. not a big deal. until you recognize the fact that without that staff we cannot continue to make any payments on outstanding disaster recoveries from any open disaster. those funds for those disasters

will still be there, but the people required to actually make those payments to oversee that will not leave there. we will not be able to respond to governors' requests for disaster assistance unless it involves life-saving and property, and only under an emergency declaration. we will have to recall staff if an emergency occurs, which happened in 200013. we had to recall back permanent staff to staff up the operation centers and headquarters in the regions. not only are they not getting paid, they're not there when the country needs them, and they have to be called back. there are real consequences not only to the people that are not part of the 1% not getting paychecks, there are impacts our ability to support the recovery from sandy katrina the colorado floods, you name it, because our ability to continue to pay and the rebuilding of those disasters will be delayed

and it will not be made up. there's a lot of our emergency responders that are supposed to be traveling this weekend to our training centers. they are not going to be able to go without a budget, and we will not be able to make up that training. some of that training is so rare we are the only facility outside the military that does live agent training for first responders. it will not be easy to reschedule. what is of loss, most of those people will not be able to take it this year. it will delay them this year. there is a consequences of a crna shutdown on our ability to serve this country. thank you. >> lets take a few questions. >> you support democrats' strategy of filibustering this bill? >> i support a fully funded department of homeland security, free of any commitments to support our executive actions. that is what i have been urging congress to do. and i am urging in the four or

so working days they have this week to figure out a way to break the impasse so we get a fully funded budget for homeland security. yes, ma'am. >> you've expressed her concern about the threats against the mall of america. what concerns do you have of security at this point after hearing all the -- [indiscernible] >> i spoke about the situation with the al-shabaab video yesterday on the news shows, and we have issued to state and local law enforcement a bulletin about that earlier today. i think i will stand on that. i do not know if i have more at to add to that. yes, sir. >> what is the status of the -- >> sorry. >> what is the status of the implementation -

and providing political asylum to children from central america? >> when it comes to application for a silence, refugee status -- for a asylum, refugee status, that continues. the judge issued an injunction on our deferred action for parents, our new deferred action program, and on the expanded doca program. that injunction was issued late monday night last week. we are appealing that decision and filing a request for a stay of an injunction. i believe his actions will take place today. >> secretary, in light of the al-shabaab threats and other threats that have been made against the homeland, the time land, giving the funding running

out, what effect does that have on your ability to counteract those threats? >> we have tried to lay out here with specificity some of the few concrete examples of the consequences of letting our funding lapse or continuing us on a c.r. overall, the disruption to the department is definite the there and real. as i said a moment ago, at our headquarters that is cut that to a skeleton, that inhibits our ability to stay on top of a lot of the existing situations and challenges the homeland security right now. what i keep saying is that in these challenging times in particular, most unfortunate that there is in -- there is

even a shutdown of the department of homeland security. that is not good for the department of homeland security for the station. it is not good for public safety. is not in the public's best interest. i urge congress to for the end of the street to pass an appropriation bill for the entire fiscal year 2015 for the department, free and clear of amendments to defund our executive actions. the original house bill that was offered on the floor of the house several weeks ago was a good bill. it funded all of our or almost all of our key homeland security initiatives and would enable us to go forward with border security, aviation security, our counterterrorism mission, our maritime security mission of the coast guard and so forth. we need that built. without the amendments to defund our second actions. if congress with you have a debate about immigration, the president and i welcome that debate. we have been asking that debate for years, but do not tie that

debate to the funding of the men and women standing behind me you have multiple missions on behalf of homeland security. ok, thanks a lot, everybody. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> jeh johnson joined by other officials in his department pointing out the potential effects of the expiration of funding for dhs at the end of this week. "the hill" keeping track of the countdown until friday midnight when funding runs out. the senate will give it another whack after they gavel in today after a week off. at 4:30, lawmakers will debate homeland security for an hour. at 5:30, voting will begin. 60 votes will be needed to vote

on the bill it's self -- it self. a notice filed today with the u.s. supreme --with a court in texas. the senate gaveling in today at 3:00 p.m. eastern. the houses back tomorrow. this week they expect to debate the expansion of the college savings program also no child left hand -- no child left behind. see the house live right here on c-span. >> tonight, we spoke with industry executives at the consumer electronics show in las vegas.

they talk about their companies and the technology on which the internet and the cloud operate. >> we talk about something we call the network society which is a society where everything that can benefit from having a connection when actually have one. we put a vision forward in 2009 in barcelona in the trade show going on there over 50 billion connected devices by 2020, which has caught on very well in the world. that opened many people's minds that the mobile industry is not limited to the smartphone devices we carry around personally. it also is a great technology to connect so many other things and be able to build a better society waste on those kinds of devices. >> it started with this thing that people needed to get somewhere like garlic connections. we brought the internet from that being somewhere to your home. we brought that internet from

being in your home to be with every device you carry around. the next stage of the internet is taking it from all these mobile devices two things, information, and connecting not just people, but things with people, information with people, and processes with people and things so we can create a whole internet of everything. i think we are at the early state of building that internet of everything. >> tonight at 8:00 eastern on c-span2. >> the u.s. senate will gavel in today at 3:00 p.m. eastern. one of the items they will take up today's funding for the homeland security department. we have learned today that the federal government has filed a notice of appeal to temporary block the president's executive action on immigration. the appeal will be handled by the fifth circuit court in new orleans. court documents detail the legal

arguments. the judge issued a preliminary injunction last week, but put on hold the order that was issued in november that could spare from deportation as many as 5 million people who are in the united states illegally. against time to pursue a lawsuit game that permanently stopping those orders. part of the dhs department funny, you will be able to watch that debate when the senate gavels and today at 3:00 eastern today on c-span2. remarks now from the head of the epa as she appeared before the national governors association meeting over the weekend. >> good afternoon, everybody. thank you for being here. we are pleased to have this

opportunity. i am joined by governor dan malloy of connecticut, the chair of the committee not being able to make it, but we appreciate your filling in for him. to my left is alex whitaker. alex, we appreciate all of your work. as a reminder, the briefing materials in front of you were sent out in advance of the meeting, and i am hopeful you all had a chance to get through them. severe drought, expanding domestic energy production, and aging water infrastructure have all introduced cfids challenges for -- introduced challenges for the states. they have demonstrated the relationship between energy and water resources. limits on financial resources

and whether incidents strain water if researcher. developing state policies that address these challenges in collaboration with federal government can help ask my's the patient use of resources and better prepare states for energy and water challenges. today's work session will examine how states are responding to energy and water challenges while identifying opportunities for greater collaboration between states and the federal government on these issues. this session will help show why a state perspective is vital for successful federal regulatory action. governor malloy and i hope that today's discussion will integrate state perspective into the federal conversation. states are not weighing -- waiting for the government to develop solutions. states are moving forward with her own legislative and regulatory solutions. in wyoming, we have developed our own long-term energy and

water strategies. the energy strategy is called leading the charge. it was issued in may 2013. we are two years into implementing it. the wyoming water strategy released in january provides for the developer, management, conversation, retention, and restoration of our water resources. we are approaching these issues with the problem-solving mindset and increasing the coordination and efficiencies within and between agencies. for wyoming, this is a big issue. we are the number one energy supplier to the rest of the nation. we have vast energy resources -- coal oil, gas, uranium, and wind, for example -- can we believe all should be used. we believe it is not the government's role to pick winners and losers. businesses have to be able to make a profit, and when

regulatory actions prevent it, it is a problem. in wyoming, we're focused on regulations that alex the needs of industries. -- that balance the needs of industries. we lead the nation. we lead the nation in baseline testing. we are large the largest habitat bank in the united states and the largest planned wind energy project. we are leaders in the conversations of key species for example, sage grouse. we spend millions on wildlife and national resources -- natural resources efforts every year. you can have both development and conversation -- conservation. we do not accept it is an either or proposition. in wyoming we are striking the right balance. states recognize that agencies have an important role to play in ensuring the safe and responsible use of energy and water resources. this role should be fulfilled in

collaboration with the state. to that end, governor brown as chairman and i as vice-chairman send a letter to epa and the u.s. army corps of engineers that requested greater clarity on the development of the waters of the u.s. rule and encourage the agencies to continue consulting with the states as they go back and take a look at the proposed rule. the clean water act and the clean air act recognize that states have a statutory authority to manage water and air within their borders. those acts recognize that states should take the lead, and we do. states much have a strong voice in the development of any epa rule promulgated under these acts particularly in early stages of development and before significant momentum precludes state participation or renders it non-meaningful. opportunities to gain federal perspectives are important and informative. and so, administrator, we

appreciate you being here today, but the fact is that it does not take the place of the consultation process with the states. now i will pass it over to governor malloy. >> thank you, governor mead. it is great be with you again. i am not new to this committee. in the four years previous to being here today, eight or chaired or was vice-chairman of the committee three times. i'm happy to be back and was more than happy to comply with governor brown's request. when i took office this january connecticut faced a number of challenges demanding immediate attention. i focused on jumpstarting hard state's economic growth, helping the state. to do this i am determined to tackle the high cost of energy in connecticut. we cannot afford to wait for congress, or anyone else to solve our high energy costs. how connecticut uses energies

and the price of our energy needs to be addressed if we want to create jobs, lower costs, protect the air and water we consume. we need to preserve the environment for our children today connecticut is taking a leadership role in moving to cleaner and more reliable energy. connecticut is making this move by using limited government funds to leverage and engage private capital. connecticut's energy platform has benefits for the future of our state as well as for our environment. we can do two things at the same time. we are implementing a strategy that will not only reduce carbon pollution but bring down costs cleanup care by reducing levels of conventional pollutants, create jobs, and grow our economy. the key helmets of our plan are reducing demands through energy efficiency encouraging the deployment of more renewable and clean power sources through creative financing programs, and

the work of our first in the nation green banks. bringing private investors to the table, freeing ourselves from reliance of scarce taxpayer or rate or funds these investors have responded enthusiastically because of the opportunities we offer and because also they make good economic sense. promoting alternative vehicles and alternative fuels on our roads because the gasoline-powered cars we all drive are are a source of carbon emissions. reducing carbon pollution from power plants through involvement in the first in the nation nine state market-based initiative known as the regional greenhouse gas initiative. administrator credit was instrumental in launching this. regi is succeeding in reducing emissions and finally back millions of dollars for efficiency and renewable energy programs in connecticut and

participating states. in connecticut we applaud the fact that the clean power i've proposed by epa offers other states the opportunity to replicate regi and reduces their carbon emissions in an economically sound manner. this type of approach seeks to the healthy state of federal collaboration, and that will ensure our nation takes decisive action to address the reality of climate change. with that, i turn it back to you, governor mead. >> and we welcome administrator mccarthy. we appreciate you being here. she was appointed by president obama in 2009 as assistant administrator. administrator mccarthy has been a leading advocate for strategies to protect public health and the environment. during her for her she is worked up with the state and local levels on environmental issues and helped coordinating policies. she served as the commissioner

of the connecticut department of environment of protection. i would also note as a side note, the administrator met with some of us governors at 7:00 this morning. we appreciate so much you taking your sunday and you have taken time to meet with us individually as we have requested. you have made yourself available to us. we are pleased to have you here, 's i will turn it back to governor malloy for any other comments. >> thank you. it is an honor to introduce my friend gina mccarthy. i first got to know her not quite two decades ago when i was serving as mayor of stamford. she was involved in local issues in massachusetts. it was not long before connecticut had a good sense to import her as a commissioner. she did an extraordinary job in connecticut gives modernizing our agency and demonstrating that department for protections and economic growth are, entry

not at cross purposes. she was such a positive presence in our state that i tried to ignore her back when i became governor. she had already established herself as an extraordinary assistant administrator at the epa. however, and it was certainly understandable, she was reluctant to leave the administration, and she has stayed here in washington, d.c., bringing real change and international recognition to reverse -- to her efforts. there are a few people who can match her candor openness. if you get to know her, her humor, her capacity for hard work. as they say in boston, she is wicked smart, and her passion for leaving this planet in a better place than she founded in his only perhaps exceeded by her love of the red exceeded by her love of the red sox.

where i draw the line. >> thank you. thank you for trying to entice me. it was a very kind gesture on your part, and i know you are doing just fine with the folks you have, because you have a great. thank you to all of the governors we have today, and more are joining all of the time. thank you for joining us or breakfast. again, it was a wonderful opportunity to establish a deeper relationship with one another, because i think we need that in times as difficult as. i do not know about you, but we worked really hard as someone who has worked at date level for 25 years, i know you are facing just as difficult challenges. i know what you bring to the table, and i will always respect

the time. i know i met separately with most of you, and i spent some time with the governor yesterday, but i also met with a governor on friday, so we are all caught up, i think. i am not sure what we will talk about that would be boring to all of you. >> we will find something. [laughter] >> i knew you would think of something, governor. it is my pleasure to be here, and i am really excited to talk about some of the things going on that i know we all care about, and some of the ways we can continue to further our partnership. in order to address the challenges that you are facing to protect public health and the environment, which is pa's mission, it has to be a partnership with date -- which is epa's mission. you will find epa willing and

able to be your partner and seeking to do that more and more and as much as he can because i really believe that the work that we are doing together in the area important for the future of the people we serve and to the current public health of the american emily, and i am excited to be forced upon you for sin and began working as i'm excited to be working with you. as we began working, i am excited. we have reduced air pollution by 70%. we have been successful in tackling just about half of our nation's polluted waterways, and at the same time, technology drive, job growth, and our economy has offered. it is a record we need to

continue, and we need to do this more and more, because i believe the challenges we are facing are even more complicated than those we haven't facing for the past 30 to 40 years so i went to start by talking a little bit about the clean power plan. we have had some tremendous conversation. governor mead, you are right. we need to converse with the state at every opportunity in particular before we start, and we are working hard to make sure that happens, i do not think there is any better example of that than the clean power plants. i know you know the president considers this to be not just an environmental problem but also a public health talent and economic challenge and national security challenge, and it is of utmost importance that epa move forward on the actions that the

president has asked us to take to address the challenge of climate change, and we did that with the clean power plan, but before we even put 10 to paper we had listening sessions across the country. they began 18 months before we even started drafting this world. that is because we knew this rule was going to be important. it is a room that will reduce carbon pollution from our power sector, -- it is a rule that will reduce carbon pollution from our power sector, and the reason the conversations have continued so fruitfully and with such energy is not necessarily because we all agree that the key -- that the clean power plan should happen or that climate change is real. i think we are working together because we respect one another and we do see that climate is changing, and we have to take

action, and the way in which we are working together has been successful because we have designed this rural -- rural -- rule to allow states to design their own pathway forward that is consistent with where they want to see their future in their stake and their economy, because i believe they will always be better in designing the plan than the federal government ever could be, so we are continuing with collaborating with the states, recognizing that the glue that holds us all together is the flexibility that we have offered here, because this -- we have the flexibility to do this. we are going to maximize that advantage so we can keep our opportunities for commission reductions as high as we can get them reasonably, but we also want to make sure that we are

keeping the costs of those reductions low, that we are not stressing individuals for additional costs associated with energy but are instead maintaining a reliable cost-effective energy supply system, and i think of we continue to work together, we will succeed. now, we have received 3.5 million comments on the proposal. there is a some interest broadly in the u.s. across on that. many have been from the energy sector, and many of them have been states, and i want to thank you for the many detailed comments you have provided. you can rest assured that we are listening to the comments. i think you know that because we have already through the process and having dialogue, and we put out notices to share more broadly comments that we have seen that come in that thematically joined together that we want everyone to be considering as we move forward

and we have heard that reliability cannot be threatened. frankly, nobody needed to tell us that, but i am glad that you did, because i know it and we will not do it, and we realize time is precious here. we need to give the state time to put together a plan of this complexity and a way to do this which allows them the opportunity to take a look at what they want their energy future to me. and concerns are concerns that we will continue to keep in mind as we actually continue the dialogue moving forward. i think you will still see us showing up at your door, talking to you folks, knocking on your window if we can't get in the front door, just so these discussions going, because it is important, and this rule will keep going with new sources and in the state model. we will be pulling this together in a package for final in

midsummer, so there is a lot of work to be done, but it is not too late to think about how to get this done well. now, the second thing i would like to talk about is something we talked about this morning with many of you, and this is one issue particularly in the west that we are all concerned about. we are especially happy that we have pulled together the national drought resilience initiative, and we have some funding together, and you will see it projected in the president's fiscal 2016 fiscal budget. we believe there are tools that state and local communities need to have available to them, and we are trying to work together to develop them, knowing what folks are concerned about and what their priorities are so that we can understand the changes that we are seeing and whether or not the projection is

they may be longer and more severe drought seasons moving forward than what we had has before, but what we see is already enough to bring us to the table together and make us realize we need to address the issue of climate adaptation resiliency more effectively together, and we continue to put out tools to allow people to plan together, and hopefullybefore, but what we see is already enough to bring us to the table together and make us realize we need to we will be providing technical assistance across the administration to continue the effort moving toward. governor mead, you mentioned water infrastructure water and wastewater infrastructure. i think that is a challenge for all of us. see this all across the united states, not just in terms of our aging infrastructure, which is a huge venture to try to catch up with infrastructure that is old but it is also to recognize that we are getting more intense storms, and we need to do that together, and it is not just a challenge for us, but for

sectors across the u.s. including in agriculture. i know in iowa, the governor and i were talking to farmers, and i that some time with some of the young farmers this last week, and we talked about the different technologies and ways you can keep the story on and -- keep the soil and storm water from running off, as well as continuing to provide viable agriculture moving forward. these, i think him are things that we have to be unafraid to talk about together, and the good news is you will see us starting some water investment this year in our fiscal year 2016 budget as a way to try to be helpful to bring public -private partnerships together to think of new ways we can fund these, and the president has been good enough to increase from his presidential budget request in 2015 to 2016 of over

half $1 billion, and we are shifting a little more resources into drinking water than our wastewater this year for the first time in a while recognizing that we have new drinking water challenges that we have to get on top of and faced together, but we do have opportunities. we have opportunities for water use and recycling and for storm water and rainwater capture. redesigning, making our communities even more beautiful than they were before, but using nature to address these issues more effectively. now, the clean water rule was mentioned. this led to address challenges we have been facing for the past few decades. working with the army corps to try to provide a lot more clarity on the jurisdiction of the clean water act. it is an enormously challenging task but one that is essential

if we are going to allow science to tell us what rivers and streams and water bodies really need to be protected so that we can make sure that if there are pollutants put in those, or if they are being filled in any way, that we can make sure that the protections are therefore our drinking water supplies. that is what this rule is all about, to provide clarity and certainty, and we have already received one million comments on that. apparently, only one in three who care about the other issue care about this. thank you. so we will be taking a look at those and make sure that when this is finalize that we have thoroughly considered the comments, it i think you know we have been out in your communities. we have been using our local advisory committee, and they have been great withholding

hearings all across the country. we know it is an era of uncertainty, and i do not want to raise more uncertainty. i want to provide clarity for people with the comments they have sent to us. now, the last issue i want to bring up is the issue of oil and gas, because i recently went to an industry meeting of a number of international oil and gas leaders, and i spoke to them about this challenge because ba does understand and respect the sensitivity of the oil and gas industry, and we know how valuable it has been to the united states. the president is committed to and all of the above approach to our future, and the epa actions when we look at how to reduce methane, and when we talk about the challenges we are seeing coming out of our research projects together, we have to do

that also in partnership. we have to make sure that the index of the natural gas and the increase in oil that this country is enjoying that is providing us more domestic stability, that is providing us opportunities for a low carbon future is protected and that they continue to move forward and that epa just works with the state to make sure it is done in a safe and responsible manner. this is all about sharing information, working with these companies moving forward, and assuring that states are the primary protector of their water systems, and we also have opportunities for reductions in methane that will actually save money, that will reduce the need for flaring, and that will hopefully get us moving forward to a sure that we can continue to enjoy these resources moving forward. i think i should probably leave it there, but i will tell you that we have lots of eggs going

on certainly beyond this, and i want an opportunity to be able to hear from you and to respond to those issues. again, i want to thank you for giving me the opportunity to be here to have what i believe have been very frank, honest, open dialogue, and i want to make sure that we continue, whether it is today or in the future. again, epa is only as successful as our engagement in this date in a cooperative way, and i think what i do i am honored to do it for this country, but frankly, mine is just a job where we are all on the same page together, and hopefully we are moving or were together to serve the people we serve. thanks. >> thank you for your opening comments. we appreciate the job you have to do. it is staggering to think about 3.5 million comments. that is staggering. a million comments is a lot.

at least you know you are working in a job that everyone cares about and everyone has an opinion. as you and i have discussed before, wyoming is the number one exporter of btu's we do believe in the all of the above approach. we are high in natural gas and oil, and we supply, for example, whole -- coal too many states and it keeps us competitive with low-cost energy, and it provides roughly 39% 40% in this country, when it comes to 111d and you have people talking to you about numbers, and i have people talking to me about numbers, there is one thing that caught my attention. everything is carried out by 2030, the would remove millions

of metric tons of carbon from the atmosphere, and that is the equivalent of about 13.5 days of what china puts in, so there is a cost associated with 111d, and with the cost-benefit analysis and we are not going to get into climate change and people's belief about climate change, but if we are going to go forward on this my question is are we getting the benefit for the cost including the costs associated not just with the heating and cooling costs going up, but because energy is tied to the cost of everything we do, what is the cost-benefit analysis, so that is part one and part two, i would just like to hear, because i have heard the administration say they believe in and all of the above approach, should they continue? >> i think it is important, and

thanks for your question. let me see if i can't tackle it. first of all, this is about reductions in carbon pollution but it is done in a way that recognizes that epa is not choosing between different energy sources. any plan that we do should accommodate the continued use of all energy sources and leave it up to the state and the market to determine in what quantity. when we took a look at what we expected of an impact from our rule i think this is reflective of much of the work we are doing. we still see cole --coal as being significant and we certainly see natural gas as a significant part. renewables, which we are seeing are ready, they have been significantly increasing over the last years since this administration came in, and we see that continuing.

we also see energy efficiency being the least cost sort of pathway to reach evening -- two achieving reduction. it is really great to be able to provide customers an opportunity to save money while you are also reducing our carbon pollution so the proposal does have a cost-benefit analysis, and i do think one of the things that i would like to sort of challenge is the idea that these are actually going to be analysis, and i do costs as opposed to investments in the future. i think a state that is willing to use the flexibility the optimum way that we have provided could find a way to make this enormously beneficial from it economic development perspective and from a job growth perspective, because i do believe that people should be recognizing that the climate is changing and that there are costs associated with that

already, and the best thing we can do is begin to protect our communities by taking action, and to do that, it is not about putting and of pipe controls like it is for many of our pollution. it is deciding what the energy supply should look like in the future and what is that for your states and because you are provided so much flexibility every day gets to dictate for themselves, and i do not think any state was asked more than what they can achieve in a very cost-effective way, also looking at regional programs come which even provide regional flexibility, and one of the questions you raise is one of the very good points that we sought comment on, and that is the idea that many states have built utilities and supply energy to other states, and the last thing in the world we want to do is to take all of the pollution from that facility to the host state without

recognizing that other states benefit and should be looking for a cooperative relationship on how you move forward and make investment that can reduce the carbon from those sources, and we have a number of strategies to do that, and we even put out additional information on how that may be looked at, so we know that this is an issue, and there are ways of handling that that we will make sure we put on the table. now, the last issue you raised is china. the president made it really clear when we put together the climate action plan, and each part of the administration look at where their place was and what they could do to help reduce carbon pollution that is fueling climate change, and the president was clear that we were moving forward with domestic action, that we were moving forward with climate resilience but we were also moving for to show that when the u.s. take strong domestic action, we can

get international action. the international joint agreement that the u.s. put out with china was a very significant step forward. the work that we are doing with india is a very significant step forward. we know we have to take action, but we know it also has to be an international solution that we are bringing to the table so there is no intention of moving us forward in a way that would significantly increase energy costs as opposed to let's look at what you really want to invest in that is consistent with your own energy mix, your own natural resources, your own job that you want to grow, and how do we work together to make those all part of the same package instead of thinking one is a burden, and the other isn't, because i think you can look at this as being an open opportunity for investment in things you may want to invest in. >> thank you administrator, and i also want to be respectful of your time.

i know you have to be out by 4:00, so i would just ask one more question right now. suggested it may not be a cost to the state. if 111d goes through, do you suspect it will raise energy costs for all taxpayers across the country? what we have an analysis, and when it shows is the average price increase over the course of the early stages of the rule would be about, i believe it is three dollars a month on average per household in terms of their energy bill, but it shows that over time, that will decrease, because a significant amount of the investment will be in how you decrease energy demand and how you bring more energy efficiency to the table, so that in 2030, it is actually going to be in a dollar per month savings

on average for families. >> thank you. governor, i will turn it over to other governors. >> thank you governor, and thank you, administrator. i just went to touch on one of the items that you happened to mention. the balance that the epa is trying to strike of those that generate power for others and the environmental implications for the hosting date, as you know, we do not burn coal in connecticut,, but we get pollution from coal-fired plants coming to us from illinois kentucky, western pennsylvania others, and it all kind of come by my neighborhood, and particularly, my neighborhood, actually, in my county, where i get to enjoy what is being generated in those states at a

profit for other people, and as a result, not only can we not burn coal, but my citizens during the summer months in joint anywhere from 20 to 65 days where our air is out of compliance with anders, so i understand the necessity of balancing those interest to just keep fairfield county and the rest of get in mind when you are trying to line the right balance. thank you. thanks, governor. let me just speak to that issue if it is ok, just for a few minutes. i think you probably all know that it is no secret that i come from boston. maybe that is why i like the red sox so much better than the yankees, but i think the issue of transported pollution is one we have been working really hard on, and i think you will see that there has been remarkable success in lowering the amount

of traditional air pollutants from upwind states to downwind states. clearly, there is more work that we need to do to make sure that everybody is working on this issue and taking care of their own pollution, but i think we have made tremendous success, and one of the things we would encourage in the carbon pollution plan that state developed is to look at the synergistic opportunities, to look at opportunities for developing a carbon pollution plan that is also consistent with what you need to do for other commitments that are either here or coming up, and one of the great things about moving forward with the standards lowering the sulfur content of gasoline, and all of those rules is that it is actually providing a national opportunity to reduce these emissions so that the burden is not left up to the state to

potentially go for more expensive reductions in their own state as opposed to providing a national framework for getting cost-effective reductions across the u.s., and so i think the dynamics are changing, but i do see the collaborating on these issues. i know that the northeast is continuing to work together. i know that there are groups in the midwest that are talking. i know that the governors in the pacific northwest have been talking and out on the west coast. i am just hoping that we can get -- continue those discussions and take a look at how we treat this issue fairly and how we also turn this into a continuing economic opportunity. we don't have all of the answers today, but the united states is wonderful and has always been wonderful in when it has faced a problem, it has run or written has turned into opportunities for economic growth.

>> administrator, let me open it up to the other governors. what thank you. i want to thank you. i want to thank you, administrator, for meeting with me and my secretary of agriculture on friday. we really appreciate the opportunity to visit with you. as you know, renewable fuel standards is something very important to us in the midwest and the epa has been a great partner since that ball was passed in 2000, strengthened in 2000 and. we had is something very important to us in the midwest and the some of our best farm years ever until the recommendation came out in 2013 to reduce the renewable fuel standard, and we have seen a perspective's decline in the value of corn since that time. 2014, we had reduction in farm income. usda is estimating we will see a 32% reduction in farm income some of our best in 2015. in my state farmland values

and i was governor in the 80's when they dropped precipitously, i was there when we closed 38 banks, and land values dropped 63%, and i do not want to go back to those days. that is why i am so strong on this issue but we are concerned, and we have even seen some layoffs with john deere and some of the other farming manufacturers. we are appreciative that you did not go farther with that proposed rule, but the uncertainty of not having a rule in place for 2018, and now we are nearly two months into 2015, it has meant that a lot of the renewable fuel makers, and we have 43 ethanol plants in iowa, 12 biodiesel plants, and we are getting into the next generation of cellulose ethanol, and yet because of the uncertainty people are very fearful about

making huge investment in that area and so, obviously, we would like to see as soon as possible and hopefully a restoration of the robust renewable fuel standard. i would point out that oil companies have always been against this, but the reason we have these is because they use something that polluted the groundwater in this we, the nation, the consumers on the east coast and west coast, the midwest you use ethanol that people had to face the pollution of the groundwater and they really turned against the oil companies, which is the reason they did not set and they continued to try to find a way to put up barriers and prevent it from really working. we think it has really been not only great for farm income and getting the jobs, but it has

also helped us to reduce our dependency on foreign oil and reducing pollution, be it care of the groundwater. i want to encourage you to do whatever you can. we will do whatever we can to support the epa, as we always have, in restoring this robust renewable fuel standard. >> thank you, governor. it was a conversation that we had the other day and you can bet that i would like nothing better to move the renewable fuel standards forward to provide the kind of certainty that will bring investments in in advance, because that really is the gold star for what we're looking for. we will do what we can to keep this moving as quickly as we can. i appreciate all the work you have done some universities and others to help the advanced science around this.

and the commitment to renewable fuels it has been important as part of the overall strategy. we are just going to be very careful to follow the law and make sure that advanced fuels get the kind of certainty that they need moving forward. it was a challenging year for all of us. >> thank you. >> thank you very thank you very much, administrator might be -- administrator mccarthy for meeting with us. when i returned to north dakota people will ask me if i had a chance to meet with the president, they will ask me if i set down with the administrator of the epa. not only did i meet with her three times, and even on a

sunday, so that says a lot about your accessibility. thank you very much. i do not write to you every month by governor mead it, but that does not mean -- >> just as a point, we are just penpals, that's all. >> only 11 out of 12 months. [laughter] >> almost 12 -- every month. it does not mean i have any less interest in our relationship and the things we have to work on together. i just want to emphasize, as i did earlier today, that i really think that we need to form true partnerships with the epa. we have a lot of confidence in the environmental scientist and administrators in the state of north dakota. we think that they do an outstanding job and are true professionals who worked very hard at what they do. we think that we can do a good

job, we want to do a great job. we appreciate that you can help us. and we hope that we can continue that spirit of partnership in everything that we are doing. i am not going to point out any individual complaints or anything like that today. one thing that i will mention that i think is peculiar to north dakota, as really the heart of the prairie pothole region, i have to mention the proposed rule on defining the waters of the united states. the state of north dakota is covered with small wet areas. on every farm in north dakota there are spots about the size of this horseshoe right here that might be considered a wetland i usda. but 95% of the time they are bone dry.

we have a road ditch along the edge of every square mile in north dakota. we have areas that will always flood for a couple of days in spring time, but after that they are farmed or used in a very normal way. i think that this notion that somehow you as epa would need to be in charge of every little spot, that really is just not common sense. the people of north dakota especially the farmers, when they hear that this is what is being proposed, they really react to that. they really just sort of feel that it makes no sense what so ever. i hope that we can keep that

dialogue going. you have been good enough to come to north dakota couple of times. i hope that you will come again. i will show you some road ditches. i will show you some from the map so that you are sure of what we are talking about. thanks, thanks again for being here. >> thank you. you know how to show a gallagher -- show a gal a good time. [laughter] if i never hear the word ditch again, it will be such a happy day, it is an issue that we really need to resolve in this final role. you have been a great help thank you. >> other questions? >> i want to express my appreciation for your work, my state is just getting hammered by carbon pollution. we had our largest forest fire burn out half the town this year

and they are sticking to three times the concurrency of these because of carbon pollution. what we have more frequently is no snow. i know it sounds like a non-problem here today, but half of the areas are shut down in the state of washington today. you cannot go skiing. the base of the food chain, the little critters in our western waters are melting because of the acidity caused by carbon pollution. it comes out of our stacks and creates acidic conditions, melting the small critters of the base of the food chain. we are seeing this now firsthand and we are getting big costs in the industry. the cost of want to ask you about our the health costs.

this was really brought to bear -- i was talking to some students along the river in south seattle, and industrial area. they found that the rates of asthma were incredibly intense along these highways and in the strip areas. a 14-year-old student call me that she was 11 until she found out that some kids did not have asthma. her neighborhood, it was just chronic. i think that you said that this would be like three dollars per month in the beginning and then go down to an eight dollars savings over time as we become more efficient. how does the administration look at the health costs associated with this? when i talk to people they think that the health problems are as big as the climate issues. >> well, the cost benefits i was eking out were narrowly related to energy and cost impact.

the benefits would be tremendous. one of the benefits would be to co-benefit of reducing traditional pollutants. the impact with climate change is real. it is not only a matter of seeing some of the pests and the disease carrying insect, seeing those impacting fresh populations. it is also about more ozone. with those higher temperatures comes sunnier skies and he. right now we are seeing one out of 10 kids having ads much in the united states. if you look at the puerto rican population, it is to out of 10 kids. we have a serious problem that will be exacerbated in a warming climate. we know that the costs

associated with that are very large. it is a cost that every family now pays. not one that you can avoid. someone is paying it in terms of lost jobs, lost days at school more emergency visits with higher health care costs. just the cost of knowing that you are not able to take care of your own child. it is a difficult situation and the more the learn about air pollution, the more that you don't like it. carbon pollution is one of those that we need to fight the most to make some really concerted efforts. that is why we are trying to do this. >> questions? >> just a few follow-ups. on the 111 d rule? outside the question of whether we agree with it or not, there

is an opportunity for the states to develop a plan. we have a few agencies that weighed in on a few different plans that were very complex. added on top of those 3 million comments for the states to develop a plan, particularly when you talk about regionalization and how it works with the credit, it is very complex and i wonder about the timeframe. >> it is complex. there are simple solutions, but depending on how you want to design your own unique situation, it can be complicated. i think it is important, what you are suggesting, having a lot of people at the table talking about this. the energy folks are just as

engaged in the rulemaking as our environmental colleagues at the state level. the most important thing to keep in mind is that in the proposed rule we understood that this would be a challenge for the states. we actually put in a whole section that talked about implementation. it talked about the fact that if you are going to join a regional group, you need longer periods of time in order to develop a plan and we provided for that. we also talked about how to make the process more adaptive so that if the states are doing

projections for how successful they will be in an efficiency program and if it does not quite work out there is an opportunity to replace it with something else. there is a whole section in there where we are getting significant comment on how we can do as you suggest, which is to allow the states sufficient time to access any opportunities that they see here. we have tried very hard to do it in the rule itself as opposed to a secondary plan that we might do after the fact, talking about what needs to be on the table and when, providing opportunities for the additional states that need it. we have been getting a lot of comment on that and hopefully we will come up within a data strategy that allows states time to try new ideas and whether this works for them. >> one of the things, as you and i have discussed before, we have in talking about the leading exporters of coal, trying to develop science and innovation using slipstream off the plan for chemicals, for the auto -- artificial food sweetener. we have been putting state money forward to find the solutions. i guess as we look at some of

these rules, as you have heard there is a target on coal. i know that you disagree with that, but my question is that as the federal government looks at this on the whole if there is a problem that you want to address there is the environmental side of it but also innovation and technology. we have moved from the panel to the lightbulb because of the regulations. we had innovation, technology, and an atmosphere where people wanted to invest money because they saw a future for it. your agency and others, looking at it from both sides, how do we find scientific solutions for some of this and turn it into something more useful rather than a liability? >> let me mention a couple of

things. doe in the president's budget as you will see, has significant investment in carbon capture and sequestration. in understanding how we can provide the coal industry with the opportunity to move forward with this technology in ways that allow you to take the carbon in and make it useful, if you sequester it, maybe you don't, there are actually facilities in the u.s. doing just that. that is at low concentrations with low amounts of slipstream. when we went and designed our rule for what we call 111 be that is the rule for new facilities, we did look at what they were projecting for investments in coal. there was no anticipation of significant investment moving

forward. our interest was to try to put a moderate level of carbon capture as a goal for new facilities moving forward so that we could provide emphasis and supported boe to try to get interest in new coal facilities that could be retrofitted over time to be part of a lower carbon strategy. because it simply was not there in the market when we were designing it. we have received comments about whether it is too much, but we believe it is not working alone. we are working in concert with boe to make sure that we are providing support and incentive for exactly what you are talking about, the technologies of the

future. coal will be around, not just the future, but elsewhere. certainly for opportunities in other countries as well. for other countries in this fiscal year proposal, it also put together an incentive for the states that is a $4 billion fund for the states that want to move faster or further than a clean power plant might require. right now that is a wide-open opportunity that we will be talking to the states about, it could be used for infrastructure or to support these efforts. we just need to figure out how to be continually reasonable for every state target so that there is an opportunity for more to be done, providing you the opportunity to access significant resources that advance the technologies moving forward. but there will be nothing better

than to use a rule that provides a signal to the market between now and 2030 about the direction in which the country is heading towards a low carbon future. that is the signal that we want to send. >> thank you. i think that coal is the fastest-growing global energy source. it is not just a question for the united states, it is a question for around the globe. i know that you have about two minutes -- i'm sorry. >> i just want to say that market competition with respect to the use of fuels in the united states is vitally important. as is the ability to use any fuel safely. particularly with respect to the residents of my state. universally, across the country, the right way to look at it is producing energy using any fuel generally is as safe as any other fuel, you should be able to do that and the portion -- the market will account for

that. it has in fact already accounted for that and they've certainly provided you with the road not to do that i want to compliment you for the hard work you are doing but also the team that has been and in some the cases you assembled to do that. >> do you have any closing comments, administrator? >> thank you for letting me come today and talk to you.

for all of the work we're doing at epa, we will work hand in hand with the state moving forward. even if we disagree, we will certainly listen and take everyone's interest into consideration, doing the best job we can. we will be out there when this is done to make sure we can do it together. >> you are accessible. wyoming is on the other side of the fence about these things but we appreciate you very much attending the national governors association and for making your staff and yourself available. thank you so much for being here. >> thank you, governor. [applause] >> before all of you governors get out of here, we have votes to do. it will only take a minute here you do don't want me in here by myself voting. it may not turn out the way you want. ok.

the committee not has considered policy proposal located under tab g which you should have received in february 2013 when they were last approved. we have slight modifications national resources -- natural resources 1, 2, 3. your staff has looked at these. i think you have had a chance to look at them. quickly, we need to renew these. can i have a motion to move the policies and long -- en bloc? the motion has been made and seconded. further discussion? all those approved signify by saying aye. the ayes have it. that concludes business. thank you, governors so much for attending today. i appreciate it. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute,

which is responsible for its caption content and accuracy. visit ncicap.org] >> the obama administration is taking the next step in the fight of the president actions over immigration filing a notice of appeal to temporarily block the president's action. it shields for deportation as many as 5 million people in the country illegally. the judges ruling is a coalition of 26 states signed to pursue a lawsuit aimed at permanently stopping the orders. the senate is considering a bill today to block the president orders on immigration. dhs secretary jeh johnson spoke to department employees about the situation today. president obama warned the nation's governors that shutdown would have a direct impact on their states economies. >> we are urging congress to

keep moving past some of the habits of manufactured crises and self-inflicted wounds that have so often bogged us down over the last five years. we have one example of that right now. unless congress acts, one week now more than 100,000 dhs employees, order patrol, port inspectors, tsa agents will show up work without getting paid. if they don't have a paycheck, they will not be able to spend that money in your state. it will have a direct impact on your economy. it will have a direct impact on america's national security because they work to keep us safe. as governors, you know we can't afford to play politics with our national security. >> the president earlier today out the white house. most of the 230 thousand

employees would have to keep working after the deadline but would not deceive pay -- most of the 230,000 employees would not receive pay. senators will hold vote four at 5:30 p.m. eastern. you can see that debate beginning at 4:30 p.m. eastern on c-span2. the president says he will already be too. homeland security spending runs out on friday. keep track of the republican-led congress and follow its members through the new session. new congress access on c-span, c-span 2, c-span.org, c-span radio. >> tonight on "the communicators," we spoke with the senior vice president of ericsson and cisco's senior vice president kelly ahuja in which

the cloud operates. >> we talk about the network society. it is a society where everything that can benefit from having a convection dutch connection would actually have one. we put forward a vision in barcelona in 2009 at the trade show going on there, 50 billion connected devices in 2020 which has caught on very well in the world. i think that opened many people's minds that the mobile industry is not limited to smart phones and devices we carry around personally. it's great technology to connect so many other things and be able to build a better society. >> the internet started with this thing that people needed to get to somehow. we brought the internet from that thing somewhere to your home. we brought that internet from your home to every device you carry around, the mobile internet.

the next move is taking it from these mobile devices to things information, and connecting not just people but ends with people, information with people, processes with people and things to create what we call the internet of everything. we are at the early stage of creating the internet of everything. >> tonight on c-span 2 on "the communicators." >> this past september, the "wall street journal" hosted an event with john chambers with dennis berman about the digital transformation of cities and countries around the world, cloud computing, and internet security threats. he took questions from an audience of ceos and is this leaders. this is about one hour. >> ladies and gentlemen, good

morning. we are about to begin. please find your seats. switch off all electronic devices, thank you. >> good morning, ladies and gentlemen. thank you very much indeed for being with us this morning. i'm the editor-in-chief of "the wall street journal." it's a pleasure to welcome you all to the latest viewpoints breakfast in our series where we quiz some of the latest ceos in the u.s. and the world on their plans for the future. hank you particularly for coming out this morning, a very busy morning in new york. the president is here. if you fight your way through traffic lines, police blockades and detours. this is united nations week in new york when we play host to some of the most powerful people of the world, many of whom have

been in their positions of office for a very long time. they come and give us their advice and views on what's happening in the world. it's appropriate this morning we have with us john chambers chairman and ceo of cisco celebrating his 20th anniversary of chairman and ceo. congratulations. we are looking very much -- looking forward very much to hearing from john chambers. he is joined by dennis berman. in addition to his many talents, he recently became a father for the second time. [applause] john, if you notice in nodding off during any point during the proceedings, don't take it personally. it's more to do with the quality of the sleep is probably getting up the moment. thank you all for being here. you can follow this event

afterwards. you can see the video streaming on wsj.com/viewpoints. issue get a chance come you can watch it all again. if it's that exciting, you can watch it again and again on a permanent loop. this is very much a participatory event and we very much appreciate your participation. we will have lunch of time for questions and answers afterwards. please be ready for that. once again, thank you all for being here and without further ado, i will hand it over to dennis. >> it's an incomparable morning. you recently predicted that perhaps over the next 10 years some of the biggest technology companies will not be around. tell us about who they are, when they will go down, and who

should we short? go right to it [laughter] . --go right to it. [laughter] >> if you look at high-tech industry, if i were to take a step back, my competitors -- >> such as? >> synoptics, cabletron, they have pulled out. 10-15 years ago, it was much bigger than that. alcatel, lucent, ericsson, etc. we are the size of market cap and growth and people were read about us with juniper and others and yet we've pulled away from them as well. it isn't that cisco i am talking about is how fast his industry is changing. out of the big six ip players, three of us will not be relevant to our customers. you can say that as the silicon

valley stuff where you move fast. if you look in this role, only 1/3 of you will be relevant in 20 years. when you look at uber and what they did to the taxi industry and amazon with the challenges of walmart. you will see those types of transformation coming everywhere in the world. the nice thing about cisco, if we lead the transformation, we will be in the center of it. connecting what would be 500 billion devices. >> people get excited and they feel threatened about it. buy some equipment. some businesses today, our technology businesses.

the decisions about what the business is largely the coming technology decisions. we have a lot of ceo's, tell us about that. technology and business decisions are merging into one. how do you see it? >> all of high-tech industry has for decades, i.t. should enable your business. in some ways, we did and in some ways do not achieve many of the business objectives. in the last 18 months, you have seen the attitude change. if you were to talk to the new ceo of walmart and describe some stuff as a technology company first and then retail. you are beginning to see american express suddenly thinking entirely different in

terms of the image and how technology will get a different interface and allow to move. but it is not just in this country. you are seeing countries around the world change at tremendous speed. angela merkel talks about her country being a digital country. as with the key leaders in germany this past week and in france and that -- the prime minister of france and looking at how to digitize the country to make a competitive for the future. israel is probably the top high-tech country in the world with a digital first, gdp growth, job creation, inclusion

of minorities, health-care education, movement of other cities. what it says is tied this together and these number of devices connected to the internet to 500 billion, you will be in a good spot. >> how does a business person make decisions on when aims are moving at that pace and in that way? >> traditionally, you turn to the cio and say educate me on this and make the decisions. that is not an option anymore. if i talk to cio's around the world, most believe they have to understand that technology is self. a key advisers a business leader to understand the technology opposed to the cio. if we and he or her does not make the transition, -- this is one where the cio has to change in the business leaders but the cio. >> the ceo will be irrelevant in five years? is that important? there you go. >> if the ceo doesn't change, he or she will take the company down with him.

>> the people hiring in this room today, should they be left hiring for technological proficiency? >> first, our education group does not do a good job of repairing the skills we need. >> go on. >> you have to think about how the newly young people in? if you cannot communicate with the social capabilities and do not understand collaboration you will not get the talent you need. what do i tried to do? i try to get people who understand the business we are after in understand the implications for it. >> let's talk about the sales culture. traditionally, cisco seems to be changing quite a bit. can you give me an example or two of how you reach your customers? >> one of the hardest transitions, we have to transform our organization service and sales. we are a tough sales team.

we can sell routers well. i get excited. most of you go [yawn] we have 18 product families where we are number one. producing solutions and outcomes. easy to say, hard to do. how to sit across the table from a leader of a large company and say your gdp can grow 1%-3%? >> do they say they do not believe it? >> i will bet you money on it. >> in no productivity from -- you can say productivity grew quite rapidly because i see and the missing productivity

quotient. all of the spending from 1996-2014, we have not seen the productivity close to 1%-3%, why should we believe it now? that it will really change? >> you have to catch the market transition is true. during the 1990's, you moved in connectivity and the internet came, directly and indirectly and went from 1000 devices connected to 6 billion. we did very good on collaboration at the top. we changed the supply chain. what you are back to see, you'll connect the devices and think about right hundred billion devices squared where this will go.

the challenge is how do you get the right information at the right point in time to the right device to the right person to make the right decision? that is about architecture and transform your business prospects. you will have to change, education, the same thing. how countries are run is about to change. when you see the industry leaders and wanting as a ceo and government leader, you have to have the instincts of was something fundamentally changes. probably unfair because she is an engineer and talk in mexico and how does he achieve socially quality and the role's next-generation of the internet of everything, how does it transform the business? you do the same thing in germany and france and the u.k. and they get it, these are smart people. can we fill a void where we can get people excited? >> there's been a lot of money spent and people in this room have spent billions of dollars and maybe that will be the case they can get those sorts of results.

a good way to sell stuff, people are looking at specific examples of why that should be the case. >> let's go to a city transformation, barcelona. it is the top innovation city in europe. basically, the mayor and vice mayor, interfacing the city. they outlined the goal of transforming their city. they are the only balanced budget in southern europe. they operate with a surplus and have $3 billion in savings over 10 years and networking. that would change how public transfer patient -- transportation works and while smart buildings and will do paid parking. >> how long does it take? >> another three years.

and in terms of implementation. [indiscernible] let's go from there to hamburg. >> $25 billion a year. >> not bad. >> everything will get connected. you only pick up your garbage when it needs to be picked up. you cannot do these in silos. you combine all of the functions which is where people make mistakes and they try to get excited about one area. the way you get people comfortable is say you have references. you go to hamburg in germany. it has 83 different train stations coming into it and 1200 ships a year and tens of thousands of trucks, completely traffic jams. they took technology and change the system on its head and has a 75% improvement in productivity

and they will double their capacity in the next 5-10 years without increase in revenue at all in terms of implementation. in their transportation company and you think, that's a railroad company. you talk to the ceo and he says he is an internet of everything company. they are going to move into bicycles and cars and transportation and different customer experience. you see a country like germany and the industrial revolution where the government leaders say i will transform myself. you see in a france, the president of france is in a tough situation. he is thinking about what he can change. if he watches what he is doing and he has an unbelievably good prime minister with him and it was a pleasant surprise.

he understands have to transform his company. and willing to say how do we do these with companies and how do we partner with the chamber of commerce? 700,000 members and how do they put technology in each of the companies and how to the companies and how to the company's guaranty a million jobs and growth? at cisco this concept -- >> back to sales. you are ahead of state level at this point. tell us what this is. mrs. merkel, you have a few things on your plate and i will like to sell you a connected port. and then what happens? where do i cut the check? what is that sell like? >> let's use israel because we made the sale. you identify the country you want. second thing they want is jobs. they have to include 2 million arabs in israel and the working force which they do not do at the present time. you have to include coming back into the workforce. and economic and defense and

connectivity and education and health care. you line up with all three critical partners. >> there -- you are bringing political unity to israel, is that what you are saying? [laughter] >> no, the key leaders understand how to work on a common goal. if you speak to prime minister netanyahu, he will say cisco is my partner. you talk to -- cisco is my partner. you talk to a third political party, head of finance and they say cisco is our partner. you make it known. you are talk to republicans and that support democrats sometimes. it does not matter which party it is. people grasp what can occur. once you get the references, it gets exciting. you are able to say this was general motors does or what was

done in israel. and then you have trust. we have a lot of weaknesses. >> let's talk about the weaknesses. everything sounds exciting. the world is changing probably for the better. and the s&p at the large trades at 17. the market has spoken. it is given a referendum on the vision for cisco's sake of what you want to do with the company. why is there so little multiple happiness for the company? >> i will address it that way. [laughter] let's go with it. we outperformed the market dramatically this year. we're up about 10% and as dramatically better than the dow. secondly, if you watch our earnings, they are up threefold over the last decade.

our revenue is up to hundred 50%. our ratio has gone from 205. not are we a great company, not do we have the number one market share of almost every private area. we out execute our partners. can we grow? there are a lot of new challenges, concepts like cloud and software design network. we have the same challenges a decade ago. our ability to produce results against the growth in earnings. we are close to where we are. if we grow in the mid-single digits -- >> ibm is about 12. that is you of the channels. all of the new change.

the challenge is do we get the markets right and what the markets are were read about, we are good on transition. the question is, can we get revenue growth in this area? a small company of 20 people can come right at us. on the other hand, every time, we get a 40% market share and combine these products together and take expenses out and moved. if we do it right, we will have good software. >> everybody has seen the ad and the hype about the cloud. tell us three things that are b.s. about the cloud and three things that are real. >> i will get in trouble. >> go for it. >> the i.t. is sweating. b.s. on the cloud is it is secure. it is not there yet and it has to be with certain applications on it. how easy it is to get some work load balances. if you're just offloading, it

works very well. the positives -- it will be the future. we would use it for 25% of consumption of i.t. or 50%. it will be somewhere within that. if you talk to pass customers, we are the number one player in terms of private cloud. do you see it coming and can you use this market transition to become the number one player? we entered the market in cloud and combine technology with storage with the network and everybody said cisco is not a good server. we are the number one in the u.s.

we want to the state market share. in our industry, do you get the market transitions right? market transitions and then are you able to economically get to the bottom line? some have huge pressures on your earnings. and if you have the courage to go after it. we do acquisitions uniquely. out of 18 months, all of to have been in the cloud. >> people have got a lot going on and may not remember much from the conversation but to give one thing they need to know about the cloud. maybe take off your cisco hacked and as a technology advisor to people in the room, one thing about the cloud. >> i think it allows for destruction of business. many people have private clouds and other use public clouds and

combine with our partners for a cisco cloud image. understanding were cloud comes together with mobility and social insecurity is going to be a large part of where this industry goes. as a business leader, you should not care about clouds you need to know how technology enables your goals and how it can enable your goals for connectivity and get it back like we did in the 1990's over the next decade. you want to know how it enables a new set of competitors to come at you. they would not be the same and they will be dramatically different in 5-10 years and regardless of industry. it is not an end goal in its self. have people on your team who understand, the implications on it.

>> let's move from clouds to bubbles. we had a piece of public weight the wall street journal that said these silicon valley is in a bubble territory. his line was there are more companies losing more money than ever before. valley in the bubble? which segments? >> just watch -- [indiscernible] >> they do not have -- >> that's my point. what you have to watch and john, a wonderful man on my board, he would be the first to say and this is not about overconfidence, 75 percent-80% of the major transitions in the technology world today expertise is within 25 miles of silicon valley. it is hard to describe how

unique it is. people were willing to take the risk, unlimited venture capital. companies are getting funded way too early and the ceo's know it. they say if i can raise 200 million now a gift 10%, i will have it for a long time. there is a real worry. dr. wang trained me well and the smartest man i know. he said if you think you will go to countries like china and sell one coke, that's not the case. cisco is more profitable since day one on one of the most profitable around. so, i personally think a mistake not focusing more on profits. your numbers are right and you can argue the company is going public today has no earnings.

in 2001, we remember -- 83%. if you get caught in an economic downturn or in a social media segment of that, you will see some type of breakage to occur. however, if these trends continue, growth covers up the mistakes, the companies will figure out how to make profits out of them. if there is not a major industry disruption were economic downturn, you will probably have a gradual landing for part of those companies. will the majority of my competitors be in existence 10 years from now? no. the majority of the social networking companies be in existence 10 years from now? probably not.

if there is not a major disruption, if there is a major disruption -- >> do you see race having any impact on silicon valley? do you see that? >> absolutely do. if you watch what most of my customers view and concerned about, it is the emerging markets. a data point, the emerging markets are in the mid-teens. mexico went for 15% growth to flat and one quarter, year over year and the next year -12%. it was a good forerunner. if rates are raised dramatically, you would choke growth in emerging markets. there's only one engine going well and that is the u.s. 3% growth, not bad. if rates and get raised, it. the world. our central breaks have to be concerned. yes, it really could. >> china, speaking of emergening.

not so emerging anymore. describe how you feel about the complicated relationship between the national government of china and the united states, the privilege of cisco, a representative of the tech industry. where does that stand and how do you feel and where is it going? >> both of my parents were doctors and they taught me to deal with the world the way this and not the way you wish it were. the complexities is the most complex it has ever been and mexicans out of the state department and a great

undersecretary of traded their. we are not effectively communicating between our countries. when you do not communicate well whether it is us and russia were us and china, then you have a lot of fallout occur in the process. my view is china ought to be a great economic partner with us and we ought to the able to artistic -- articulate the win-win to get there. that is what the chinese would like. >> what is wrong? >> we are not communicating effectively. i am not just talking five years experience in china, i have been there 30 years. i've seen it on charts. what the future leaders, the majority before they got appointed. i wish i could tell you i

control my own destiny there but i do not. the chinese are pretty smart and usually pretty predictable. if our countries were able to work out issues, there has to the rules of the road that we are going to do versus germany or versus china. we have to agree upon it does. it is an industry issue. china could go either way as the wildcard on it. i like india. if you are bidding on emerging markets, modi has the imagination of his country and business leaders. he has the equivalent of both the house and senate in his terms with his political party. if i were betting, i would bet big-time on india. china? a little tougher. >> you view them as -- how would you rank them on the scale of free and open trade with cisco right now? >> it is 30%. having said that, we achieved one of their top social awards

given out in beijing for what we did during the earthquake. 85,000 people died. we change health care and education. the chinese know we have brought transformation and innovation. >> foreign markets often view you as espionage and cisco as related. whether fairly or not. that incredible picture of nsa personnel having basically stolen cisco gear, put their software on it, and put it in the sales. rather incredible photo. >> first of all, none of us know the facts for sure. if businesses and governments, 30% come out of china, if we do

not work with trust in our governments do not come together, we have a big problem. secondly, you have no idea what a government does. all espionage is done in different ways. the easiest way to get into a network is a systems administrator. they are the ones who have the key. they use the same password on a system that they do on facebook. the vast majority of espionage issues will be done by employees, rogue nationstates, and candidly, organized crime. we are going to try to transition to a security company. today, the people in this room have 70 security companies in their environment. that means you have none. the bad guys while to get

around. you take a problem and say how do you solve it? there are no backdoors that we are aware of. we find any government in any customer's network, we give them up immediately. it doesn't matter if it's china, u.s., or europe. >> germany has been vocal about u.s. interests innovating german >> germany has been particularly vocal about u.s. interests invading german space for lack of a period of time term -- lack of a better term. what do you tell miss merkel? >> if you share what you have conversations with any government leader, you don't have them very long. three american presidents reminded me of that one. >> generically speaking. >> i think the first thing you say is, if you're not part of this technology transition, you're going to be left behind. the second thing is, we can

bring that to you better than anyone else. third, watch our track record. there is no facts behind what people have said. there are facts with other companies around the world, and people know it, in terms of direction. so you've got to earn their trust and confidence and say how do you achieve your goals in this country and how do you perhaps partner with them, with an sap to bring that to life? let me use an example of the same conversation in france, because i don't think that president would have a problem with it. when i met with him on friday, and it was a tough week. that would be an understatement. yet he was remarkably effective. spent an hour 15 minutes. we talked. we went through the issues, et cetera. then i did exactly what i did here. two of the heads of state, they visited the day before or the day of. we knew very well. and in palestine, we worked to take the economy from one half of one percent to 6.4% in four years.