hired anyone who walked in wearing any head covering.

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1:20. let me echo joe leiberman's remarks and say it's an honeror to serve with them. so i think it's likely get a

deal. i think it's likely in the senate to get a significant level of skepticism. it will be difficult to verify their compliance and to have sanctions, quote, snap back, close quote, into place following their loosening. i think you'll even get interpretive differences.

this is really hard john. and so the presence of inspectors the ability to go anywhere any time i think is absolutely essential. >> even with all that how do you think about that one-year time that the administration has put so much focus on. not only the ability to detect but also the ability to mobilize an effective and quick response within the scope of a year. getting something that could include a military attack. based on your experience? >> all of you have written act this. we try to show how you can use

up a year pretty easily actually. first of all, you know the clock doesn't -- the clock doesn't start when you detect it. the one-year clock starts when they begin to violate the agreement. so there's a gap between the violation and the detection and then all that dynamic i suggest has to take place before you get to a meaningful political decision. so number one, i think our estimate that we have more than a year has an awful lot of kentucky windage in the estimate and even if it was provable it may prove insufficient. >> okay. senator -- >> is that a technical term, kentucky windage? >> yes.

>> the senator will define that for you. >> senator, one of the other big issues outstanding in the talks appears to be this issue of the pace and scope of sanctions that iran is going to get under this deal and there's also a related questions of how quickly you could revive these sanctions, snap back sanctions. you and senator leiberman watched how long it took to actually get in place the kind of effective sanctions architecture sanctions that we have now. so looking at this how realistic do you find this idea of snapback. >> as i indicated, i think, you know it would be very difficult to achieve a snap back once you've significantly reduced the sanctions regime. as you pointed out, it took time and effort to put it into

effect. we made them for stringent.

>> opportunities i've had in the last couple of years since i left the senate is i taught a course at columbia law school in one of the few legal subjects i know about, the role of congress in american foreign and defense policy. there's a quote from a political scientist, edward corewin, the constitution invites the president and congress to compete forever for the privilege of determining american foreign and defense policy. in this case first with the sanctions and then with this extraordinary requirement that this agreement come to congress for review and possible rejection, congress has done something really significant which is a measure of the broad bipartisan anxiety about the direction of these negotiations and i think what members of

congress and both parties are hearing which is also anxiety about what's happening in the negotiations with the iranians. so coming back to the rhythm of congress. it's the natural way in which congress will now step back and wait for the agreement to occur, i wish as a logical corollary or a follow onthat

any time anywhere inspections or inspections. >> you asked me about sanctions relief. i was going to say it should be a matter of some concern to us

if the french are being more hard nosed than we are in the course of negotiations. that should be a sign that something is amiss. >> senator leiberman, i want to come back to that in a second but first i want to probe you on this. kind of the anomaly we face is two of our rivals for power and influence, china and russia seem to like the deal and will sign on. on the other hand, some of our best allies in the region seem to hatedeal. how should we think about that that some of our allies in the gulf really feel threatened by

this deal. how do we weigh this in the balance. because they're in the neighborhood and they're the target of are iranian hatred, anger. we've all talked to them, talking about the israelis and the arabs. they can't believe that we're negotiating as whole somely as we are with the iranians because they say this regime since 1979 has given us no reason to trust them. you have to really have an agreement to really end the

iranian nuclear program for intoxilyzer rail and the so-called modern arabs to feel unthreatened by it. so it has -- the fact that we've gone forward has really diminished our credibility with our allies in the region and our influence with our allies in the region. and i think it will diminish our ability to keep the region peaceful. colleagues have talked about the fact that the saudis will definitely match every step that they know that the iranians are taking to develop nuclear weapons. the israelis still take the right to take military action because they think it is that much of an threat. also this is the age of global

communications. our allies in the rest of the world, beginning with asia, go to eastern europe particularly go to africa or latin america. they're watching this and part of what they're seeing is that we have not involved or listened to our closest allies in the middle east as witness-3 gone ahead with these negotiations. that makes them anxious that we will pay as little attention to them if the --

>> physics enters in here quickly. the air force is small. the targets are numerous and many are hardened and frankly we nor the israelis are sure we know where everything is. and if the israelis get to do this, it's a raid, not a campaign. and because of the distances

some of the fighter aircraft would have to buddy refuel the weapons carriers in order to get into the weapons area and have enough time and maneuver and safely get home. this is a really hard do for them. i don't think there's anyone i know in intelligence who thinks this is a great idea. they'll do what they're told and well but then their strategic question then becomes, john would any israeli government put any relationship on which the survival of the israeli state depends at risk of rate that would set the program back if successful three to six months and my sense is the answer to that is no. >> there is quite a bit of discussion now as to the kinds of benefits in the aftermath of the deal that the united states might provide allies. talking about israel and -- are

incidentally -- and no one in israel is really talking actively about a military strike but for it to happen, the israelis would have to have -- seems to me -- intelligence that there was a breakout occurring. in other words, the israelis couldn't say they're going to get nuclear wes in ten years and we have to stop them now. i think there would have to be evidence at that point. and of course the general is right about the relative capacity of the israelis to do damage. i believe they could do some

damage. they might have some surprising allies along the distance from israel to iran who would help them refuel. but the iranians have been preparing for this for a long time. in other words they've been act defensively. this is really a disbursed operation and as somebody a great man who i respect greatly once said to me there's not been a time in if last 25 years where there has not been a part of if iranian nuclear program that we have not known about that. so you have to assume that's probably true today. >> one of the big i guess criticisms that the administration throws back at the skeptics of this deal is that while the deal is not perfect, it's good enough and

it's better than any alternative that the opponents of this particular deal have put guard, that nothing that has been put forward as an alternative is in fact realistics. it tends to be very idealistic. so is that ever true or true now or what's the alternative? what do you think are the outlines of that alternative. >> with regard to your last question john i would be all forgiving the state of israel any weapons they need to defend themselves. with regard to launching a preeffortive strike -- because i would -- i think it may be a distinction withouted a difference because if they attack airanians attack there's

no way they would not believe we were involved and would probably react the way -- so i think we just need to think through the whole idea of pre premption. peoplesreemption -- the down side would be significant. you would need to try the maximize the chances you would need to be effective. you would need to revisit the target for a minute from time to time. it's a bigger undertaking than we're presently situated to do.

you just haven't been willing to come far enough in terms of meaningful inspections a reasonable period where each side can verify the good faith of the other and to maintain the status quo and see how they behave. that's an alternative in a situation where there are no perfect or great ones. >> senator leiberman, one thing

you suggested -- will reject and

then really it is his agreement. then the question is he vetoes it presumably. is it possible to get two-thirds in both houses? it's difficult. but i think it's doable. i think you need a third of the democrats to join most of the republicans. i don't know that all the republicans will vote to override a veto and i believe at that point there will be a massive mobilization of people who feel we're at a turning point in history. if a bad deal goes forward and the iranians are on the road to nuclear weapons, it compromises the security of our

would be there. i do think this trade debate that is taking place and the internal dynamics within the democratic party do affect this to some extent. the other thing i would say is that the most effective argument made by the administration and their allies is something along the following lines. who are we kidding? the chinese and russians are about to head south anyway. they are just heading for the hills on this thing. you may try to get whatever we can even though we know it is not what any of us would like. the counterargument to that is

-- and that is why i get back to the status quo. the economy is not good in iran right now. my guess is you have a better chance of convincing those countries who are perhaps contemplating taking themselves out of the sanctions a better chance of getting them to remain in place for some period of time then you do at this moment of really hammering out an agreement that the majority of congress can look at and say that is a good agreement. i think your chances of maintaining what we have are better than getting at an acceptable agreement.

>> i am a portfolio manager with westshore funds. a question for general hayden. the effectiveness of sanctions depended upon u.s. control of the payment system and control of our allies of a swiss payment system. in addition to acquiring uranium, iran, along with russia and china, have acquired 6000 tons of gold and are building out an alternative payment system. the panel has talked about how snapback maybe problematic. if you did snap back, is it possible it will be an effective does iran will have extricated itself before that happened? gen. hayden: i will comment but not total much. -- too much. we take the point is a serious one. senator lieberman mentioned the banking system being the gold

standard. frankly, targeted sanctions and what we are able to do with regard to global finance, i would say become the precision guided munitions of the 20% three. that said, the more you use it the more you motivate people to build an alternative system. i would argue the chinese are doing that because of this. because of their own economic self-interest. but it does make our use of these kinds of tools more challenging in the future because our control is less exhausted. i do not know it is in place quickly enough to do what you said about this problem, but it is certainly something facing us. >> i just put in a quick blog for the center of finance and sanctions which is looking at this kind of threat and economic warfare. right here in the fourth row. >> rachel oswald.

my question is a bit of a hypothetical. assuming there is a nuclear deal that broadly follows the preliminary framework of april 2 , and assuming congress is not able to overcome a veto of any resolution, what with the panel like to see happen in 2017 when there is a new president? >> anybody? mr. lieberman: when i was in the elective office, my staff told me to never answer a hypothetical. but now that i am born free again, that is a really interesting question. assuming there is an agreement it is rejected, the president vetoes and it is not overridden the first question is, does the new president in 2017 continue

to abide by the agreement? there's a real pressure on any administration not to break an agreement that a predecessor made. there will be pressure on that. the new president might -- i should say whoever he or she is -- might be tougher on the details and implementation of the agreement. the other thing that would happen up here on capitol hill is that there would be -- i hope there would be a very aggressive oversight of the sanctions and lifting of sanctions after the agreement is implemented. there would probably be -- particularly with regard to israel -- an attempt to mandate and provide weapons assistance to israel with which they could

defend themselves. or if the circumstance arose, be more effective against an iranian nuclear breakout. i am really blue skying their. i think it would be a bad situation. but the best move would be for a new president to say, this is a bad deal and find a way to get out of it. not easy. >> right here. right here. then we will go to the back. >> thank you. my question is for senator lieberman. conor wolf. lindsey graham has positioned himself with having a lot of experience with foreign policy as why he should be president.

in your personal view, does this experience -- with this experience be good with this type of deal in maintaining or helping future deals? is he the leader we need? [laughter] mr. lieberman: he is a great friend. i will answer quickly. lindsey is extraordinarily experienced and informed on matters of foreign and defense policy. he is capable of making tough decisions. i have a lot of respect and affection for him. he has been quite outspoken on the question of negotiations. probably as outspoken against the direction they are taking as anybody has been. so you can expect -- between now and then, his role in congress,

including as the chair of foreign operations appropriations committee, that he will be trying to use that leverage in various ways to either inhibit a bad agreement or strengthen our allies in the region. >> fred, in the back. >> i am with the center for security policy. senator lieberman it has been said that iran has yet to provide an explanation for why it is enriching uranium. prime minister netanyahu said the whole purpose is to make nuclear bombs. the center for security policy believes there is no possible reason for an agreement that allows iran tousands of centrifuges and develop advanced centrifuges during an agreement.

my question for you, do you think it is possible to have a meaningful nuclear agreement with iran that allows it to continue to enrich uranium? mr. lieberman: simply and clearly, no, i do not. the original purpose of these negotiations was to stop the iranian nuclear enrichment program. in return for the sequential elimination of economic sanctions, which is quite significant for iran and quite significant, when you think about it. that unfortunately has nothing to do with its terrible human rights record or expansionism. but to let that in richmond go on, to me, -- enrichment go on, to me shows -- as the ayatollah

said, the americans want this agreement more than me. that is never where you want to be on the issue. >> jessica schulberg with huffington post. general hayden, there is talk about how the deal put an incredible burden on the intelligence community to detect violation with enough time to give the president time to react. can you explain to me why a proposed deal would require iran to follow additional protocol which would expand sanctions? does that put the intelligence community in a better position to detect breakouts? gen. hayden: anything that adds to the ability to visit quickly where they are believed to have suspect activity would give me greater confidence in our ability to verify information. american intelligence is not without tools.

i am not betraying national secrets to say that we are open to suggestions from member states about the issues that raise concern they want to share with the international body. but there could be a cooperative relationship that gets it to a level of confidence that we need. if iran is not cheating and is truly serious about the agreement that sort of thing is precisely the sort of thing that should welcome in terms of -- the term we use is "confidence building measures." >> you will go to the back. >> thank you. federation of american scientists. thank you for a great presentation. i would like to follow up with something senator bayh talked about, going with the status quo. it means somebody probably walked away.

how significant is it for the continuations of sanctions policies that it is the iranians that walk away instead of the u.s., especially of the other members want to stay with the negotiation? mr. bayh: i think that would certainly be a relevant factor. certainly would affect public opinion about how other public perceives such a thing. it is conceivable we are going to get to a deadline. it is not unknown in these situations for deadlines to be extended again. we said june 30 was the final deadline. but it might be that we achieve the status quo by both sides realizing it was in either of their interest to be perceived as "walking away." so the talks went into a hiatus. it would give each side the ability to put their own spin on why an agreement was not reached. it would clearly benefit our

position if the iranians perceive it as being in transit and walked away. mr. lieberman: i agree. the status quo is better than a bad deal. unless we are all shocked by what comes out of the negotiations, it is going to be a very bad deal. in some ways, barring a really good deal, the best of all would be that the iranians walk away. their stubbornness stops a very good deal for them. then, i think you have the possibility of increasing economic sanctions on iran and having that be done by more than the united states. that would give us at least some small hope that sometime in the future, iran would return to the table for a better negotiation.

>> just to follow up -- i am expecting a deal. i am not expecting the situation you are positing. i would not expect us to announce, we have given up or are walking away. that would not be smart. we have not given up hope, have not gotten there by the deadline and both sides need a period of reflection to see if they can reach something along those lines and allow each side to avoid the stigma of being perceived as the cause of an agreement that having been reached. >> i think we had a question in front. >> former u.s. treasury. i wanted to get your comments on the efficacy of economic sanctions. whether in the context of status quo or snapback.

if you could comment on the impact to iran broadly if the goal of economic sanctions is to target behavior and change behavior and you are still having retail impacts. how do stronger sanctions achieve that goal? mr. bayh: my hats off to the people in the treasury who did a lot of work on this issue repeatedly coming up with more effective ways to put sanctions in place. the treasury department did a great job. the history of sanctions is that they are not perfect. there's a previous question about the iranians finding a way to work around them. but they are posing a real cost on the iranian economy of which the regime is not entirely impressed.

they are willing to see their public absorb economic pain to pursue broader objectives. but they are sensitive to unrest and a variety of other things. to the extent that the iranian economy is not growing as robustly as it might, by definition that means they have less resources with which to pursue other objectives including syria and yemen and elsewhere. it is not a perfect instrument. there are other countries that we have imposed sanctions on's and they are willing to see a fair amount of economic hardship. that doesn't mean they are oblivious to the tool. i do not think it would be at the table talking today if they were not feeling some urgency about getting sanctions removed. which is, in and of itself, an argument to maintain meaningful sanctions. mr. lieberman: there are billions of dollars being held. some has been let go since the

interim agreement. that will be a tremendous infusion of capital into iran. they have been hurting. while they are a totalitarian government in that sense, they are not a popular government, from everything we know, in their own country. to the extent that there is economic deprivation in the country, it creates the possibility of instability. and an uprising. so i think -- incidentally, i want to pack congress on the back. this was, going back to my teaching experience, this has been a case where congress inserted itself into one policy -- foreign policy.

it did not matter what the party of the administration in the white house was. they do not want congress getting involved. for a lot of reasons. they have a broader range of issues they are dealing with bilateral, multilateral. but congress was focused on it and i -- in a bipartisan way. the last two administrations did a great job of implementing. i agree that is the only reason the iranians came to the table. what agitates me as they are going to walk away from the table with sanctions being removed and they will have given us very little in terms of the elimination. there will not be elimination. they will dial down a little bit on nuclear weapons programs in richmond and all the rest. -- enrichment and all the rest. gen. hayden: there are multiple

purposes for sanctions. punishment, changing behavior, reducing capacity. you have got our view on whether there is a good, bad, or no deal. let's just assume for a minute that we get a good deal. you still have to live -- and i think this is what senator lieberman was suggesting -- you still have increased iranian capacity. you have lifted sanctions and allow them together resources -- together resources. mr. bayh: i was just going to add one final thing. there are no great alternatives. you are running risks no matter which course of action you take. one of the risks we could be taking under a "bad agreement" with the iranians is that they

will get their hands on billions of additional dollars held up and back against the do not have access to now. if you are allowed to fully export petroleum once again reduce the price of oil a little bit, but there will still be billions of dollars flowing into the iranian treasury. if we have not given ourselves a grace period to confirm they are complying with the agreement, if we do not have in place strict inspections, there will be huge additional resources for their ballistic missile program, for what they're doing in syria and yemen. or possible additional covert activities. we are really empowering them with the potential to do a lot of things. this is outside the subject of this conference and these negotiations but they are

clearly a state sponsor of terrorism. giving someone like that billions of dollars will lead to adverse consequences. >> i wonder if i can impose on the senators to give us a peek inside. july, let's say we have a deal. that is problematic, as you say. what is it like? we saw the administration earlier in the year call critics of the deal "warmongers." you saw them accuse certain members of being political opportunists paying more attention to a domestic constituency than u.s. national interests. but he is a lame-duck president. what are the calculations you face that make it so difficult to get 13 or 14 or 15 democratic senators to say this is not a good deal? mr. lieberman: this is about

what the democrats doing. i assume republican leadership will try to keep all the republican senators on the vote to override the veto. the president and that the democratic party, there are a lot of democrats who like him feel responsibility to him. the president would probably meet with people, call people. there has been a lot of personal outreach. democratic leadership will make it a test of loyalty. on the other side, there will be, i believe, a very substantial organization of people in the districts of swing democratic donors, the undecided

, and members will have to put it together. in some sense, it may be loyalty to the president. the ones that agree it is not a bad deal will be in the category of those who vote not to override the veto. the group in the middle will be affected. egv -- evan said something important to remember is that democrats in the house are going to be squeezed in the coming days about the trade authority. they are going to come to this vote with that kind of feeling in their minds. this is old war stories. it took me back to a point -- i guess it was 1997 -- the clinton administration. we had been through the balanced budget act. the clinton white house had to really work on democrats to

support it. this was bill clinton and newt gingrich coming to an agreement and it had stuff in it that a lot of democrats did not like. they created a surplus in the federal government. a short time after that, by historic irony, comes the trade promotion authority bill. it passes the senate and goes to the house. i get a call from the white house. john and i were both active in the democratic leadership council. there were more moderate democrats in those days. they said, the president is inviting about 30 moderate democrats who are undecided on trade promotion authority to come down to the white house tomorrow. maybe you were there. to join us in the pits.

we spoke from our guts. i thought it was going well. john podesta was the chief of staff to the president. as they left, i waited and said, john what do you think? he said, a lot of these people are not happy with us about the balanced budget bill we just passed. he said you were really fantastic today. here is my prediction. tomorrow, they will feel really badly when they vote against us. long story, but it shows a human dimension to a really indoor miss -- really enormous issues. evan had a really good point today. many good points, but that really struck me. >> first time for everything. >> any other questions?

>> thank you. my question is to senator lieberman. you suggested it might be a good deal for legislators to layout the criteria for an acceptable deal. what would be the list of minimal criteria? mr. lieberman: i think this is a really critical interim period. it will be hard to get time on the floor for this. i suppose it is possible somebody could put it on the national defense authorization but probably not. it may be expressed in a letter. congress does this all the time. a letter to the presiden state. basically saying, here we are. legislation passed. and this will presumably

preserve the agreement. we want you to know, mr. president, we will have a vote. these are our minimum terms to accept the agreement. it is up to congress what they want to say. i would certainly say first anytime-anywhere inspections. to the extent that you can state it, that sanctions not be removed until there is some real proof, evidence, that the iranians are keeping their part of the bargain. others in congress may have other points of view. i think it is an important preface to the ultimate votes. congress has set up a procedure -- they ought to express themselves in a bipartisan basis -- about what standards they

will bring to the vote they will cast on the agreement. >> anybody else in the audience? one more right here. >> thank you very much. i want to ask a question that has not been touched upon. two dimensions of the nuclear program that are of concern, the sunset provision. i think you have alluded to this nuclear deal, many of the restrictions will be sunsetting in 10 years. post will be gone in 15 years. iran will emerge with an industrial nuclear infrastructure with zero breakout, undetectable breakout. that may happen earlier according to president obama.

so the issue of the sunset provision, the temporary nature of nuclear restrictions in exchange for permanent sanctions. the second key element verification inspections, the iranians have been stonewalling the iaea about pmd's. can you have a proper inspection regime without full disclosure on pmd's? do they have to talk to the scientists and get verification to determine what iran may be doing? gen. hayden: all of us will have comments, but i will jump in quickly. i want to talk to the president oppenheimer of the nuclear program. i want to talk to him at a

facility they have been trying to get to for decades. i do not know if they will find anything. it has been destroyed and paved over. they still cannot get there. if you look at the four-page paper about what it was we think was agreed pmd's are something that our hope to be resolved at some point in the future. they are not a prerequisite to signing an agreement. just going back to my narrow intelligence, it creates an increased burden on verification if i do not have high confidence in where the iranians actually are. not just in material development but in their weapons program. we have intelligence estimates that remain estimates. for a country that says that is

not our objective, they refused to come clean on their past. i realize that if we insist on that, it is a dealbreaker for the iranians. but i do not know why we have to accept that premise. how can we know their intent how can we know their capacity without high confidence in where they are now? mr. lieberman: absolutely. i could not agree more. i would add that is another element in whatever expression by members of congress. it is a dealbreaker. but how can you make a deal with a country that will not agree to that kind of reasonable term and has strong-armed iaea, which is not a branch of the u.s. government, but the united nations.

apologies, i have to go. it has been a wonderful discussion. [applause] >> with that, we will close out. a few final comments. >> thank you very much. i want to especially thank the council of foreign relations the originator of the idea behind iran task force. thank you for inviting me to be your partner in this. the task force has 10 memos we put out and 11th will be coming out next week. ali is one of the few people in washington that has had to negotiate with iranian nuclear scientists and has a lot of war stories about that experience. the task force on iran.org will

-- is where you will find the materials. we welcome vigorous debate on this issue in the coming months. again, we look forward to seeing all of you a future events. thank you again. [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] >> coming up on c-span, former treasury secretary's discuss the global economic outlook. that is followed by a panel of financial investors on the world economy and market volatility. later, another chance to see senator lindsey graham's presidential campaign announcement.

this weekend, the u.s. senate failed to extend certain provisions of the patriot act that allowed for the nsa's bulk collection of telephone data as well as roving wiretaps that allow surveillance to follow a suspect from one communication device to another. the senate returns at 9:30 a.m. eastern. at 10:30, members will hold a procedural vote on the usa freedom act, which limits certain surveillance powers. the vote will decided members move forward with legislation. you can see live coverage of the u.s. senate when members return on c-span2. >> the new congressional directory is a handy guide to the 114th congress with photos of every house member and twitter handles.

also district maps, amount of capitol hill, and a look at congressional committees, the president's cabinet, federal agencies, and state government. it is $13.95 plus shipping and handling through www.c-span.org. >> on the next "washington journal," congressman gerry connolly, a member of the foreign affairs committee. he is here to talk about the debate over nsa surveillance programs, the fight against isis , and other foreign-policy issues in congress. then representatives steve king of iowa, a member of the agriculture and judiciary communities, will discuss the future of the nsa information gathering program the work on immigration, and the role of iowa in the 2016 rest. -- race. join the conversation with your calls and comments on facebook

and twitter. coming up tuesday, a house energy committee holds a hearing on the status of the takata airbag recall. live coverage starts at 2:00 p.m. eastern on c-span3. >> next, three former treasury secretary's discuss the economic outlook and global economy. robert rubin, henry paulson, and timothy geithner participate in the milliken institute forum in beverly hills. sheryl sandberg, who served under president clinton moderates the event held in april. >> let's start our luncheon panel on the global economy. we are delighted and honored to have a truly exceptional

moderator for this wonderful group of former u.s. treasury secretaries. sheryl sandberg, ceo of facebook, founder of leanin.org, which empowers women to achieve their ambitions, the author of "lean in," and before her role at facebook, she was vice president of global online sales at google. we are delighted to have her and our panelists. you are in for an enjoyable hour. your they are. it is all yours. ms. sandberg: thank you. i am delighted to be here. great to have a chance to moderate the panel of three extraordinary men. there are so many wonderful things to say about all three of them both professionally and personally.

but there is one really surprising thing about them, which is they are not on facebook. [laughter] ms. sandberg: so i have taken the liberty of helping them today. that is my way of introduction. >> no product placement. ms. sandberg: our first panelist is bob ruben the 70th secretary of the treasury under president clinton. before that, he was cochairman of goldman sachs. he now serves as cochairman of the council on foreign relations. join me in welcoming bob. [applause] ms. sandberg: hank paulson, you can see how great this would be for them?

74th secretary of the treasury under president bush and ceo of goldman sachs. now chairs the paulson institute at the university of chicago eight think and do tank. and he has a book which just hit number three on the new york times bestseller list. [applause] ms. sandberg: tim geithner, 75th secretary of the treasury under president obama. you heard it here -- he never worked at goldman sachs. people think you did, but he never actually did that. bob has some views on why that he may choose to share later. he was ceo of the new york federal reserve bank. before that, he was a civil servant at treasury. please welcome our panel. [applause]

ms. sandberg: we are sitting here with three of the most experienced economic decision-makers. a great honor for all of us. we might as well start with the economic outlook. it is fair to say that, so far 2015 may not be as promising as we might have hoped for growth. certainly the outlook at the end of 2014 looked like it might be a little more optimistic. are we slowing down? or do we not yet know? let's start. bob. mr. rubin: if you go back four or five months ago, the consensus was something like 3% growth. in the last couple of months, most businesses have seen some softening. i think what we have is a continuation of a gradual, slow, and steady recovery. the unemployment rate is

substantially in excess of the official unemployment rate. we have stagnant wages. it will go up and down of it within that range. i think there is a substantial tail risk. at the council for foreign relations, people were talking about geopolitical risk. secondly, we know there has been a tremendous issue with excess. it is certainly a possibility. that would be another tail risk. the most likely outcome is a continuation of a gradual recovery. ms. sandberg: hank, are we continuing a gradual, slow recovery? mr. paulson: i agree. it has been more or less bumping around 2%, plus or minus. i happen to think the global slowdown, the strengthening dollar, probably provide more of a head wind then we get from a

boost in oil prices. . i would echo what bob says. there is a significant risk. the good news is we have been more or less growing 2% since the third quarter of 2009. we are a bright spot in the global economy. housing prices are rising. but too many people are being left behind. ms. sandberg: tim, economic outlook? mr. geithner: it is worth noting that none of us know anything about the future. we certainly don't know anything about how the economy performs in the short term. we live in a dark, scary uncertain world. but i think the economy -- [laughter] ms. sandberg: that said -- mr. geithner: that is the normal state of mankind.

sad to admit, but true. in that context, i think the u.s. is getting -- ms. sandberg: less dark, less scary. mr. geithner: we are a resilient country. and a much stronger country than any other major economy. if you look at the challenges we face, they are stark challenges. our politics are terrible. but i think you would rather have our challenges than the challenges of any developed economy or emerging market economy in the world. ms. sandberg: when you think about where we are -- where was it? dark, scary, messy, or a slow growth continuing since 2009, how do you feel about job creation? does our economy continue to create jobs at this rate? is there something we can do to jumpstart it?

mr. geithner: we are not at the point where we are using the human capital of this country, but we are getting closer. we just need a longer period of growth potential for that to happen. we are still growing fast enough even at a moderate pace, to gradually bring all those people back in the labor force. ms. sandberg: you say that we are on the right path? mr. geithner: i do not ever want to say that. you never want to look too optimistic. ms. sandberg: do not worry. [laughter] ms. sandberg: raise your hand if you are worried tim is too optimistic. keep going. we have pessimism covered. mr. geithner: there's a lot of things we could be doing. you could look at the american political system and say we are operating at the front tier of what is possible.

no one believes you can say that. we are so far short of the frontier. marginal improvements would have high returns. ms. sandberg: job creation -- are we doing enough? mr. paulson: it will not. i feel we are not growing fast enough. income disparity is a huge issue. i think the only solution -- there is no easy solution -- our fundamental changes. the world is changing with her than policies can change. we need policies that will let us have a competitive economy going forward. i agree with tim that we are a bright spot and have less challenges than any other country. but as i look at the secular changes i see and look at what

is happening as a result of the revolution in technology globalization, i think we need fundamentally different policies to grow quicker. we need a new taxes to him entitlement reform, immigration reform. these are not easy things. but it will get the political system working better. on the one hand, i am pleased with where we are relative to where we were. the kinds of changes to drive us forward are going to take fundamental reform. ms. sandberg: job creation? mr. rubin: i would say two or three things. i think the unemployment rate may be in excess of the official rate. i agree with what hank said. if we had effective policy, we could make a substantial difference in the short run and the long run.

this is the fundamental challenge of our country -- reestablishing effective government. it is totally dysfunctional. congress's unwillingness to work across divides. one more thing if i may. over time, the world you are part of, a world of new technologies and artificial intelligence, creates real questions about pressures on wages. and the one hand, it is a constructive force for growth. on the other hand, it may turn out to be highly labor-displacing. we could have a whole session on how one responds. but i think it is a very serious long-term issue. ms. sandberg: let's follow up on different themes. income inequality. mr. paulson: income inequality is something we have all thought about. i was working on that topic when i was still at goldman sachs.

mr. geithner: in which direction? [laughter] [applause] ms. sandberg: i think tim just made up for his prior pessimism with humor. mr. paulson: in all seriousness -- mr. geithner: i was serious. mr. paulson: it is a huge issue. we talked with economic advisers. my first speech as treasury secretary was on the topic. i will come back to what bob said. when i looked at it -- and of course, there is big debate that comes with drivers, and globalization is a force -- but i think what is going on with technology and the digital revolution huge.

i think it is the biggest economic trend in the world today, by far. i think it brings with it huge advantages for society overall. but the pace of change is so fast. as i look at industry after industry, whether it is engineering, architecture, business, you see the middle being carved out. anything that can be routinized is being routinized. it is winner take all. you have to ask yourself and say, i have a believe this is progress. i cannot turn back the clock. most of the new technologies i see are really much more about productivity. and i do not see them creating more new jobs. but i'm sure there will be some. the key question is not if this

is happening. the key question is what you do about it. i'm not going to practice without a license and talk about training and education and so on but i believe the kind of economic reforms i was talking about earlier will make a difference. and help deal with the problem. and this is not just a u.s. problem. it is hard to think of a country that does not have it. it is a global problem. i do not think our democracies are going to work the way we need them to work if we do not deal with it. it is too easy for politicians to be populous and look for scapegoats. ms. sandberg: so the issues come together, the dysfunction in the ability to create policy, not possible to look at a situation and say we are well-placed to handle serious economic challenges. technological changes.

what is possible to do? if you could pass the right policies, what would they be? and what can we do -- this is an amazing group of people and influence -- what can people do to create the political environment which would get us to the right policies? tim, right -- what are the right policies and how do you? -- get there? mr. geithner: there is no simple compelling fix to these things. these are challenges for a generation. it will be like the forever war in economic policies. i think you need to have stronger economic growth relative to potential. it is hard to do much on these things without growth. it is very important to recognize from the beginning that fundamentally, these outcomes for the low income worker or median worker are

hugely dependent on how fast we are willing to go. part of it depends on our ability to do a better job as a country in delivering the kind of policies only government can deliver. education will be fundamental to that. that is a hard thing to do. i would say at the start, you have to recognize that designing policy to create rapid and infrastructure is a good example with high returns in terms of growth, just trying to focus on basic things that improve our capacity to equip people with the skills they need. that is a hard thing to do. that is something i would focus on. ms. sandberg: bob? mr. rubin: i will give you two answers. the fundamental challenge for our countries having effective

government. i think social media plays and a norman in public opinion. i think it has become, to some extent, a conductor of ideology. an echo chamber. the converse would be if social media, whoever has responsibility, could find a way to engage the american people in recognizing that we must have effective government. and that we should insist our elected leaders be committed to governments and printable compromise to find common ground. i do not know much about social media. i do not want to facebook, as you pointed out. i think properly the -- used, it could play a major role. in terms of policy itself, i think the most important thing we could do is well constructed

fiscal policy. and simultaneously enacted retirement reform. in addition to that, immigration reform and education. we need to increase the minimum wage. we need to give workers and even playing field in terms of the right to decide on collective bargaining. there is a whole lot we could do , but you cannot do it without a political system that works. mr. paulson: in terms of the political system, the political system reflects the people. the people are very divided. our country is polarized. part of it is not just social media. we get our facts from different places. people self select from cable channels, so many different sources. i think that is a huge problem. but in addition to the policy moves that we need to make, and

i think we pretty much agree on the kind of things, i think there are two other things that need to be done. people need to understand the facts and changes. i think even if we take all the policy steps anyone could deem appropriate, the world is changing and the sorts of jobs that used to be available are not going to be available in the future. i think that really means people changing some of their expectations, getting different types of training. i think one of the most disturbing things are the number of young people that are not working or not happy with their jobs today. ms. sandberg: globally? the unemployment numbers globally are striking. mr. paulson: it really is. i think this is a global problem. i do not think we are thinking big enough about it. people have done more work. the reason i said i do not want

to practice without a license, i have not done work on what kind of units -- universal service would be in the united states, what we could do so that every young person has some kind of training and follow-up training afterwards. but it is a huge problem. and i think it goes beyond just policy. the world is changing so fast, i think people's expectations need to change. politicians who are just looking for scapegoats are saying, it is the republicans'fault, or the democrats or wall street. it is an easy issue to demagogue and hard to solve. mr. geithner: there's one thing that they both said. this is not a challenge of ideas. it is not as if we are short of good ideas. this is all about the craft of governing and how to help the american political system rediscover compromise and the

ability to do things. in our political system, it is worth remembering that all power goes through the congress. we did not vest the chief executive with the power to offer incentives. if you're going to get better choices out of your government you have to raise the expectations you create for them in terms of their ability to do things. that is where we look so appalling and disappointing today. that is about rediscovering the ability to find some room for pragmatic, principal compromised. something we seem to have lost. ms. sandberg: let's follow-up on entitlement reform. i mean, it is impossible to look at the numbers and not decide the country needs to do

entitlement reform. you can wait until the inevitable crisis happens. so how do we hold our congress elected members, responsible for getting to the pragmatic compromise we need? mr. geithner: our system is famously good in extremus, but not so good for slow burning problems where rest accumulates. -- rust accumulates. that is our big challenge. there is no way around it except to confront these basic things. it will be easier to adjust to a new reality if you start now. ms. sandberg: entitlement reform. if you are treasury secretary now or about to become the new one for whoever is elected how?

mr. paulson: when i came to washington, that was the reason i ultimately decided to come, to work on entitlement reform. i got to work on some other things. [laughter] mr. paulson: but my own view is, it is all about entitlement about political reform. if you look at the issues, it is politically very complex. even though health care reform is complex, it isn't complex to do something better than we have now. i always thought we would extend