mr. campbell's player resaw afraid we don't have that information. >> i remember him being at it. and as i said, we got the paper from the ministry of defence and that was looking at the various options. but one of the things happening at this time and i think it is quite important to reflect on this is that it is quickly becoming the key issue. people are moving on from afghanistan. it was always going to be on the agenda once you had a september 11th. and as i said a different sense for everybody that we had to act. and so we had, you know, a perfectly good discussion about it and obviously i think from the defense point of view what cbs and the ministry of defence were concerned about was to make sure we got alongside any planning that was going on and did as quickly as possible. >> was the foreign secretary at that meeting? >> i believe he was but let me go back and check. >> because we heard from jack straw about the advice he gave in advance of that meeting, which is the one referred to. but we have heard that while there might have been some private distances the time betwe

mr. campbell and mr. stockman it is one of the signs of the apocalypse.stockman wrote the day before yesterday in the "new york times" the economy needs unproductive and increasingly parasitic banking system. make no mistake the banking system has been an agent of destruction for the gross domestic product and impositivishment for the middle class. -- impositivishment. how do we -- how do we stop the excess, the vulgar excess that is not rewarding productive conduct but is rewarding what economists call rent-seeking, what david stockman called parasitic that is taking money from the middle class and taking money from the real economy. it is certainly undermining all the that we need to be doing to build a sustainable economy that works for the middle class and works for ordinary americans. i have a couple of questions. is this part -- the focus on executive compensation, is this part of a bigger problem? i don't really want to regulate compensation. i would much rather the market regulate compensation. but the way the market is supposed to work where ther

mr. campbell wasn't present. >> you didn't discuss that issue? >> the note went around about the dossier and i remember my private sector asking if i wanted to engage and i said no. there are only so many battles you can fight. i decided to stay out of that one. >> i would like to go back into the machinery of government. you said there wasn't substantive discussion in cabinet but the argument we heard from mr. blair and jonathan powell and alastair campbell, essentially that it didn't matter if the official cabinet committee didn't meet or if committees where ad hoc with a small a or a small h but policy on iraq was being discussed intensively with the relevant people, the appropriate information, with challenge and risk assessment and diversity of views. was that the impression you had? >> absolutely not. i believe in the civil service way of turning things. mr press, was the young assistant secretary. but i think the ministers should be in charge of their department but come to the table and everything should be challenged and looked at and no

mr. campbell. >> thank you, mr. chairman. thank you, dr. orszag. so because the budget every year has deficits in access, it's not sustainable in your view; correct? >> deficits above 3% means that debt continues to rise as a share of the economy. it's why we need addition to the steps a fiscal commission. >> okay. what does unsustainable mean? what is it -- >> one way is debt is rising as a share of gdp. we were still in the situation where treasury securities are the safest and we have time to act. the risk is that ultimately when you are unsustainable course, interest rates will spike. and that will impede economic activity and harm the job creation we're trying to spur. >> okay. that's what you thought. if you look at the budget as it goes out, despite the fact that, you know, the deficit is around 4% of gdp as they go out. ddp growth is healthy. you protected by a percent. inflation, you have 2%. and interest rates under control. you have the tenure treasury at 5.2%. which means real interest are 3%. i mean that's all really good, you know, --

mr. campbell you did not want any discussions at this stage and did not one any of this swimming around the system. why was the participation restricted to two cabinet ministers and not, for example, to the secretary of state for international development secretary? >> we were discussing then what was likely to happen in relation to the politics and the diplomacy particularly in relation to the military. now, at a later time as you know there were officials from dfid were involved in the planning meetings. >> my understanding it came at a very late stage and -- >> i think the officials were together. it's true it was at a later time that clare short herself joined the committee. however, having said that, i mean, we were in pretty regular correspondence. and as i say in the end dfid equipped itself pretty well. it was not a problem that was capable of being cured by dfid. >> that's true. in the early stage of effective planning to go ahead you need cabinet involvement and why wasn't dfid involved in this? >> obviously, we were in close touch with the treasury and so on. and right at that mo

mr. campbell i think very purposely pointed out that unsustainable. >> was a start we are freezing on security spending, $250 billion over the next decade and that includes a lot of choices that are i know some people don't agree with. you know, they're additional investments in education but you can go down the tables in this budget. as a whole series of departments from the commerce department, interior department and so on and so forth that are declining even before you take into account inflation. so that is a start. now some people say that's not enough and we agree it's not enough. that's why we put forward more than that in deficit reduction. now some people say even that not enough and we agree. which is why to get the rest of the way there we think we need to work with you to come up with a bipartisan solution to that final piece to get us to where we need to be. >> okay, let me ask you more specific question. how much of the increase in spending received over the last year and a stimulus package and i guess to some degree even the bailout, the tire program, how much of that money is

mr. campbell, i think. that the postconflict pep rations being made by the americans didn't look at all good. at this point, you must -- i suppose have had some pause for thought. did president bush at this point when you hadn't really satisfied the preconditions he wanted to achieve offer to go at it alone and offer you way out? >> i think the americans would have done that. i think president bush actually one point before the debate said if it's too difficult for britain, we understand. but i took the view very strongly then and it was right for us to be with america since we believed it too. but it was device in the sense that there was a strong group. there was a group in parliament who also thought it was the right thing to do. so, for example, in the european union at time, i think 13 out of the 28 members were with america. japan, south korea were with america, major allies lining up with america. >> i would hoped to have a united situation in which everyone was on the same page and agreed. sometime

mr. blair, from jonathan powell, from alastair campbell, among other witnesses, is essentially that it did not matter if the official cabinet committee did not meet, or committees were ad hoc, but what that mattered was that policy on iraq was being discussed intensively with the relative -- with the relevant people, with the appropriate formation, with challenge, with risk assessment, with diversity of views. was that the impression you had? >> absolutely not. i believe in the old-fashioned civil service way of running things and i was a private secretary years ago in the home office when sir john chilcot was a young assistant secretary. >> you did better than him. [laughter] >> well, knows? minister should be in charge of the department, but all voices should come to the table, everything should be challenged and looked at. no one gets everything right. you improve things by that kind of discussion, and my department became famous as an effective organization and i think it was because we did things in that kind of way. the government does not and did not work like that. it is partly tha