we've heard a lot about the consequences of sequestration. and, yesterday, the question was asked at the pentagon about whether or not they're planning and, again, the response was consequences and not the plan. i was wondering if you could either expand on clark's comments about the alternatives to sequestration? do you see a logical path for legislative roll back? and what do you think the dod is doing to plan for sequestration and how is industry reacting? let's talk about the alternatives. basically, here's how it lays out. the super committee failed to find 1.2 trillion in deficit reduction. that means, under the law, you're going to find they're going to take 1.2 trillion out of the budget. they do that by allocating half the cuts to defense, half the cuts to nondefense. of the 600 billion allocated to defense, you get to take out 18% for interest savings because you're not going to be borrowing as much. so now you're down to 492 billion. it applies to what's called the 050 budget function that 96% of that budget function is dod. the ot

the sequestration kicks in on january 2nd, 2013. that's a very magic date. it happens to be after the presidential election, and the congressional election in 2012, but before any of the individuals who are elected in that election actually take office, which means that if anything's going to be done about that sequestration it's going to have to be done by the 112th congress, the congress we have today. so the baseline then for the budget that we're going to be discussing this morning, the fiscal year '13 budget is actually the fiscal year 2012 appropriations, which was passed by congress late in december. there are two interesting dynamics at work here that we'll come back to over the koufcours the morning. one is the sec. dear of defense has made it clear that he anticipates the reductions that he's taken so far, you know, all that he wants to take. he does not want sequestration and he stated that crystal clear yesterday. now there is a little bit of ambiguity and room and we'll look at some of the nuances if you will because when you don't have numbers

now, sequestration, actually, takes more. and there's a great deal of language out about it that doesn't take into account a careful reading of the law itself. and this is worth pointing out, because the basis of any change will not be the language out in the ether it will be in the law that is signed and passed by the president. proceeding ones, provides enormous to the executive branch in general and the defense department specifically in allocating cuts across a broader base, all previous sequestrations were done at the ppa level. every line had to take the chainsaw approach. as was said yesterday. this one is at the account level, that means the appropriation account level. that mns chainsaw cuts omr armiy and mil pers, and that is exempt by the way. so that or ship construction navy. not every account has to have an equal effect, right? the pentagon has consider flexibility and the president has considerable flexibility. it is -- provide additional flexibility including perhaps modest flexibility year over year. the othe

why sequestration, however, would be a bad idea. the thing i want to emphasize is the end of history should, i think, has not gone far enough in finding the savings. this is the main critical point i want to meet today in the spirit of provoking discussion. i think it will be on the minds of lawmakers and presidential candidates for the next few months, because what the administration has done, i believe, is to essentially understate, the way all administrations to, the real cost of the current defense program. when it calculate savings, it is doing so from an unrealistically management point. therefore we're not making deep enough cuts to accomplish the budget targets that are in law. what this means, if i am right, and i've done my own independent calculations, and i do not claim to of done it perfectly accurately, but i learned in graduate school days with major patreus when we were taking classis together, and what i found is you actually have to go a little deeper and make somewhat more significant cutbacks to achieve the budge

getting back to the sequestration, would the unprecedented degree of flexibility that you describe give the defense department a once in a generation opportunity to cut things that have been sacred cows in congress? is this the chance to cut the program in the sub committee chairman's district? >> what a clever question. it sort of reminds me of richard nixon's secret plan for ending the war in southeast asia. it would potentially provide a once in a century opportunity to do that sort of thing. i will tell you though, i see not only no indication that anybody is willing to step up to that, but i bull dozers lined up outside the building if that occurred would materialize very, very quickly and we would see some elimination. what it does is provide the opportunity for those of us that want to contribute to the discussion and provide advice as rich noted earlier, to be begin thinking a little more creatively aboutflexib flexibilities that you would need to have to execute this. we all agree this is not the end of the reductions. and the document said that released from the pentagon, if y

sequestration actually takes more. is a great deal of language out about sequestration that does not actually take into account a careful reading of the law itself. and this is worth pointing out. the basis of any change in the sequestration process will not be the language that is out in the ether. it will be the law as passed and signed by the president. that sequestration, unlike all ,roceeding sequestration's provides enormous flexibility to both the executive branch in general and the defense department specifically in allocating sequestration cuts across a broader base. all previous sequestration's were done and what we call a program project or activity level. every single item had to take a chainsaw approach. this sequestration is at the account level. that means the appropriation account level. that means that the chain saw just cuts off, for example, milkers air force. milpers is exempt, action so everybody else would get a bigger cut. -- is exempt, actually, so everybody else would get a bigger cut. if is al

the other gorilla in the room besides sequestration is a cr. and we are heading that way into a perfect storm of issues that have to be addressed. and i personally see another 6-8 months here that we experienced last year. do you know if the department and the rest of government is trying to prepare some kind of strategy to deal with that? in terms of maybe prioritizing procurements, rescheduling procurements, et cetera. and if not, please ask them to do so. and that was really -- that's really to you, stephanie. >> to be honest, i think the executive branch has been so wrapped up in what we've been seeing lately that they haven't given it much thought. and this could be the former legislative staffer in me going come on, guys. i think you're right. we will be seeing crs. i think it will be longer than eight to nine months. i think for defense, you're looking at a year-long cr. for other parts of government, it will be shorter. i think you make some very good points. we will take that message back to people we talk to. >> there are a couple of

this is a real possibility, i still don't think you know sequestration will happen but what is the alternativet avoids it,s if you are going to avoid sequester ration, you have to cut social medicaid, medicare none of those things are popular to do, especially in an election year. >>> many people in the pentagon backed into the view, is he qwest ration is not going to happen -- quest ration is not going to happen because consequences would be so devastating however if we have a republican congress and democratic white house the system could be so paralyzed they can't escape sequestration. right now it is a legal mandate, it is legislated as law the question is will they have enough flexibility to remand or repeal it. >>> the house says we are not going to have it, senate says we are not going to have one. white house says we are not going to have one all they have not figured out is the sneaky gimmick -- >> the white house says we are not going to have one if they have a $1.2 trillion -- >>> the beginning of the previous use down turn of spending started in 86, sequester of 5 .8% of defense. >

sequestration is looming. give us a refresher on what that is all about, and what does that looming deadline mean for congress? guest: the super committee wanted incentives for the democrats and republicans to broker a big deal. that was cut for domestic spending for democrats. republican to not want to put taxes on the table, so they put defense cuts on the table. now the defense industry and defense hawks are saying there is no way the defense industry can take these cuts. others in congress are indicating, they are actually not cuts, it is cuts to the rate of growth. the fascinating thing here is, defense secretary leon panetta does not like these cuts looming, but president obama has said he is telling to veto anything that would mean cuts in entitlement spending. the defense cuts that are booming in 2013 are going to be talked about. host: what are some of the strategies we will see within congress on either side, on facing sequestration, how to avoid it or letting it go through? guest: democrats have com

on the other hand, obama has no way out of sequestration at the moment. and he's pledged to veto a pill that would soften any aspect of sequestration unless it's done in broader deficit-neutral terms. so he's sort of got a little tension in his own policy. so do the republicans in congress. i think that's going to be the interesting question to watch over the next ten months, the sequestration sort of stay on course to occur, and to really kick in 12 months from now, or does it get mitt gated in the meantime? that to me is the big question. this first round of cuts is totally fine if done wisely. i think the current thinking is pretty wise. >> and we'll be watching it. larry korb, michael o'hanlon, thank you very much. >> thank you. >> thanks, fareed. >>> stay with us, we have a very curious story up next. why most chinese this week couldn't watch their favorite tv shows. and won't ever be able to watch them again. i'll explain. [ monica ] i'm away on a movie shoot and it hasn't been going exactly as planned. cut. cut! [ monica ] i thought we'd be on loca

the administration budget that is being unveiled right now doesn't presume sequestrations of there's administration isn't planning on the sequestration as a matter of current policy or as a matter of its current budget submission to the congress that comes forth next month. it's a little confusing for those of you that are not following it in detail but it's worth pointing out we are living in an ambiguous. we don't really know where things are headed. but i want to do briefly today is explain why i think the initial cut, the 400 to 500 billion in the cuts in the administration is assuming and is supporting is a good idea. why sequestration would however be a bad idea is the administration i think has not gone quite far enough in finding those savings and that is the main critical point i want to make today in the spirit of provoking conversation. maybe it can involve some of your discussion with undersecretary flournoy, but i think it is going to be on the mind of lawmakers and presidential campaigns for the next few months because of the administration has done i believe is to esse

sequestration is looming. talk about what that is about and what is the looming deadline going to been to a congress this year? >> the super committee, it wanted to have incentives for democrats and republicans to broker a big deal. for democrats that was cuts to domestic spending and for republicans they did not want to put taxes on the table, so they put defense spending. the super committee flops. now the defense industry and defense stocks including senator john mccain are saying that it is no way the defense industry can take these cuts. barney frank says they are not cuts. they are cuts to the rate of growth. they're not that significant. the fascinating thing is with defense secretary leon panetta, is not like the cuts that are looming. president obama has said that he vows to veto anything that would head off the cuts regarding entitlement spending. the defense cuts that are looming in 2013, i think, will be talked about a lot. that will be talked about a lot on the campaign trail. host: what strategie

with sequestration. so the secretary said it all right at the end of a sense, which is the congress needs to do its work here. sequestration is the way to do business. >> if i could add. we have just been through a very healthy process in this department of developing this budget. it's something i've never seen before in my 33 and a half years in doing this sort of work. and we did strategy and then we about strategy to guide budget decisions. very refreshing. if we get into a sequestration position, that turns the entire process on its ear. it basically takes a chainsaw to a budget that is developed and out of the ashes will have to write a new strategy. that's not the way we want to do business. >> secretary, summit programs are being delayed for reduced in quantities. we'll were always told when you do that the unit cost goes up pics are you creating further problems down the line when you will be able to afford these programs? >> we are very attentive to that. in some cases that will occur, that mana

and the super committee failed, sequestration is the law of the land it requires $500 billion in cuts other 10 years, and there is no plan to accommodate that. we hope we will soften that blow. >>shepard: the critics, have a number of complaints. >>guest: well, it will be interesting to see where they come from. the president has been careful here. he didn't talk a lot of numbers. we don't know, for example, how many f35 fighter jets are cut. or the number of missile defense secretary of defense -- missile defense programs are cut back. what i would cut back where it says in the document we are not like throw do large scale counterinsurgency again. i don't think we want to do that again. but, sometimes you don't have a choice. what if pakistan collapses and the army pleads with us for help so they do not lose their nuclear weapons? that is a situation where if you don't like that mission you could feel pressure to do it. that is the one comment i would scrutinize in the weeks ahead. >>shepard: a lot of what if's to consider. thank you, michael. fox news is america's election headquart

we had on the aircraft navy seals, and it was very well executed. >> on sequestration, i am curious.done any war gaming, if you will, on what it would do with the strategy of congress does not change the current -- it would seem to me as good stewards of the taxpayers' dollars, it would make sense to at least think about it, given that the political environment in this country is doubtful. >> i will just make a couple of comments on that. this budget is based upon the fiscal guidance that we got from the office of management and budget. the work of the super committee failed sometime in mid november. we were well on the way to putting this budget together at that time. we said repeatedly, the secretary said it, the chairman said it, that both in the manner that sequestration would occur and the magnitude of the cuts, that would be disastrous for us. the strategy we gave you two or three weeks ago, we would have to start over again with sequestration. the secretary said it all right at the end of his sentence, which is that congress needs to do its work here. sequestration is no way t

we had on the aircraft navy seals, and it was very well executed. >> on sequestration, i am curious. has the department done any war gaming, if you will, on what it would do with the strategy of congress does not change the current -- it would seem to me as good stewards of the taxpayers' dollars, it would make sense to at least think about it, given that the political environment in this country is doubtful. >> i will just make a couple of comments on that. this budget is based upon the fiscal guidance that we got from the office of management and budget. the work of the super committee failed sometime in mid november. we were well on the way to putting this budget together at that time. we said repeatedly, the secretary said it, the chairman said it, that both in the manner that sequestration would occur and the magnitude of the cuts, that would be disastrous for us. the strategy we gave you two or three weeks ago, we would have to start over again with sequestration. the secretary said it all right at the end of his sentence, which is that congress needs to do its work here. seque

even without sequestration. you might say why bother making such a fuss about an accounting difference or an arithmetic difference. the reason is right now the nation is willing to rethink this question of defense strategy. we got a lot of people focus on the. we should make good use of this moment. and the problem is if you make cuts piecemeal after the fact year after year after year, you wind up doing it in a somewhat less strategically. so while i think the administration has generally been a very good job with its new thinking and added a couple of areas i think it might need to go further. i just want to lay out a couple of those. i want to have most of the conversation with you in the remaining 20, 25 minutes we have in this session so let me just lay out a couple of the ideas that i think should be more central in administration strategy. and i'm going to finish with one that is near and dear to your heart which is the role of the reserve component, especially in planning for future possible groundwork.

in fact, even if the most cuts under sequestration.get act. >> failure of the super committee. >> automatic cuts and terrible and going to destroy our military. >> takes us back to 200divide levelings. that was not a leann year for the pentagon . continue to grow. >> we do have one graph. this shows projected military spending if something done and this line shows after obama's charges and both are still going up. why is there all of this talk about cuts and cutting defense to the bone and then some in the washington post of all places. >> in washington, john, the people's money is the government's money until the people get it. they assume that spending is going up. those of us not in washington don't assume that. again in washington it is sanct. they are responsible if we make the kinds of stradgic changes. they didn't go far enough. but we have strategic changes and reevaluate the military's mission to focus on keeping america safe and secure. our core interest. >> if america did that we would spend 700 billion and 400 billion rough

strategic choices that i was talking about in that prediction, but the bigger harder choices await the sequestration, the amount of cuts could double and panetta hasn't begun to answer those questions and he really doesn't know. those are the cuts that scare people. chris: troubling. anyway, we'll be right back. chris: welcome back and happy new year. and happy election year, i guess. thanks to today's great roundtable. major garret, gloria borger, kelly o'donnell and david ignatius. that's the show. we'll see you next week from new hampshire. [captioning made possible by new hampshire. [captioning made possible by nbc universal]

strategic choices that i was talking about in that prediction, but the bigger harder choices await the sequestration, the amount of cuts could double and panetta hasn't begun to answer those questions and he really doesn't know. those are the cuts that scare people. chris: troubling. people. chris: troubling. anyway, we'll be right back. chris: welcome back and happy new year. and happy election year, i guess. thanks to today's great roundtable. major garret, gloria borger, kelly o'donnell and david ignatius. that's the show. we'll see you next week from new hampshire. [captioning made possible by new hampshire. [captioning made possible by nbc universal] it's all about jobs. it's all about respect. security. the american dream. [ jamaul ] good jobs in tough times. a chance to move up and do better. [ delaunta ] excellent healthcare. [ caletha ] beautiful benefits. what they used to call the american way. it still works here. [ jennifer ] not a single layoff of a u.s. manufacturing worker. [ glen ] not one. not one. doing things the right way. quality. [ jimmeka ] building cars that americans want.

you have sequestration with another $500 billion in cuts. you've got paneta saying i can't cut anymore. the president saying i will veto any attempts to be cut. it looms over the implementation of this strategy. the final thing is this is one side of the coin, but until we see what's in the budget, we won't really know whether this did. >> whether the administration puts the money where the mouth. >> it certainly is timely, as the president pointed out in remarks last week before the presentation, we are out of iraq, al-qaida, to use the phrase has been decimateded and we are ready to draw down and turn over responsibility in afghanistan. so in effect what we are doing with this strategy is putting the post9-11 bush strategic priorities behind us and looking to the future which means first and foremost pivoting to asia. >> one thing the president laid out right up front as a fan is channeling president i sen hower and saying -- and it strength. >> we all know that ultimately the economic basis of national security is critical. there has been

strategic choices that i was talking about in that prediction, but the bigger harder choices await the sequestration, the amount of cuts could double and panetta hasn't begun to answer those questions and he really doesn't know. those are the cuts that scare people. chris: troubling. anyway, we'll be right back. chris: welcome back and happy new year. and happy election year, i guess. thanks to today's great roundtable. major garret, gloria borger, kelly o'donnell and david ignatius. that's the show. we'll see you next week from new hampshire. [captioning made possible by new hampshire. [captioning made possible by nbc universal] from the bedroom you could see the fire and that work me right up. and it was absolutely terrifying. we got out of there as quickly as we could. i'm watching the house burn up and i'm sitting there saying, there goes everything. these days you don't have to lose your house in a fire to know what it's like to be left on the edge in the cold. the shelter gave us a place to stay. and citizens energy helped the shelter with heat. i'm excited to finally have a place of my own. c

sequestration is looming.alk about what that is about and what is the looming deadline going to been to a congress this year? >> the super committee, it wanted to have incentives for democrats and republicans to broker a big deal. for democrats that was cuts to domestic spending and for republicans they did not want to put taxes on the table, so they put defense spending. past board. -- past for me. -- fast forward. the super committee flops. now the defense industry and defense stocks including senator john mccain are saying that it is no way the defense industry can take these cuts. barney frank says they are not cuts. they are cuts to the rate of growth. they're not that significant. the fascinating thing is with defense secretary leon panetta, is not like the cuts that are looming. president obama has said that he vows to veto anything that would head off the cuts regarding entitlement spending. the defense cuts that are looming in 2013, i think, will be talked about a lot. that will be talked about a lot

the world so how did the rhetoric stack up to reality well arty's christie infers out explorer sequestration in her port. for president obama america is back renewing american leadership can be felt across the thing that leadership though is not strong enough to win over china or even traditional allies like india south korea and japan who won't follow americans lead when it comes to cutting iranian oil out of the market as we've built our enemies. to the enduring power of our moral example america is back one question who exactly looks to america as a moral example internationally and many are actually outraged at america especially after a decision made about the us marine who led his men on a shooting rampage and had in two thousand and five that killed twenty four civilians his punishment a lowering of his rank a cut in pay and no jail time i was expecting that the american judiciary would sentence this person to life in prison so that america could show itself as democratic and fair meanwhile bradley manning remains in custody and may for the rest of his life he's accused of leaking cla

to meet the $487 billion target you will understand why we give the harsh warnings we do about sequestrationre going very far with $489 billion. as the secretary said, we're looking at things we have not had to look at in this department for a decade. he has made as put everything on the table and undergo a very thorough process. we have undergone the strategy exercise first so we would not make the budget changes without having a strategy behind them, strategic insight behind them. i think when you see what $489 billion is, people will easily understand why is a question -- see why sequestration would be so disastrous. >> when we roll out the budget details, you will understand the hard part, because there are a lot of hard parts, both in terms of hard parts, and also people stepping up to the plate and making tough political decisions to do the right thing for the nation's defense. every strategy does have risk. we think we have managed this in a way that the risks associated with this are acceptable, but i think there is a point at which it you went too far down the road in cuts, that sta

in fact, even if the most cuts under sequestration.t act. >> failure of the super committee. >> automatic cuts and terrible and going to destroy our military. >> takes us back to 200divide levelings. that was not a leann year for the pentagon . continue to grow. >> we do have one graph. this shows projected military spending if something done and this line shows after obama's charges and both are still going up. why is there all of this talk about cuts and cutting defense to the bone and then some in the washington post of all places. >> in washington, john, the people's money is the government's money until the people get it. they assume that spending is going up. those of us not in washington don't assume that. again in washington it is sanct. they are responsible if we make the kinds of stradgic changes. they didn't go far enough. but we have strategic changes and reevaluate the military's mission to focus on keeping america safe and secure. our core interest. >> if america did that we would spend 700 billion and 400 billion roughly

if congress does nothing, something it does very well, there are two sequestrations that take place. one cuts spending and one raises taxes. remember, bush tax cuts expire if congress does nothing. so all of a sudden there are pressures that can bring the budget deficit down. the deficit problem gets solved in a blunt, crude way but maybe that's how democracy works. it's easy to spot all the problems we face, but i think there are also some silver linings here and that's where i'm putting my money. so let's get started. you've heard my thoughts. i'm now joined by three experts who have agreed to gaze into their crystal balls for 2012. anne marie slaughter, teacher at princeton, previously did strategic planning for hillary clinton. ian bremmer president of arab group, global risk research firm. daniel franklin, editor of the economist magazine's world in 2012 special edition. welcome. so, ian, you do this kind of thing for a living. let's first start with something simple like iran. is the united states or israel going to attack iran in 2012? >> absolutely not. i can't see the united

that needed to come up with deficit reduction of 1.2 trillion dollars to prevent the automatic sequestration and across-the-board cuts. if they had gotten that far which we know they didn't, the cbo would have had to judge if the specific changes actually met the target. if it didn't, then we either would have gone back to the drawing board to end things to bring them up to the target or the difference between what they did in the ultimate target is still subject to the across-the-board cut which is now what will happen unless changes are made 271 to be mean by scoring? >> guest: cbo is required to do cost estimates of every single piece of legislation doing taste going out of a congressional committee before it could be considered on the floor of the house or the senate. that is a very important role for what existed prior to that point*, and nobody was doing the cost estimates and a way that was trustworthy prior to the creation of cbo but you would either have the president's budget office to do a cost estimate but that was not immune from influence in the way the president likes this bil

of some mandatory spending, the sequestration of cap and discretionary spending so the full flowering of that is seen here for the first time in a way it was not in august. but we've also talked about this with joint select committee. we talked about it in a report we issued in mid september when we first laid out what we thought the enforcement procedures would do so i don't think it should be news but it is true that it is in our outlook. >> follow-up on that question. two related questions. first of all, do you assume the automatic cuts hit o.c.o. as well as other regulatory spending and secondly, can you explain why in your alternative scenario you assumed that the automatic cuts are repealed? >> yes. so the first question, just to bring everybody to the conversation, is whether there will be a reduction in the funding for overseas contingency operations, essentially the war in afghanistan and other places called o.c.o., and yet the -- so the sequestration -- if i had this wrong -- the sequestration budget authority for discretionary programs for fiscal year 2013 applied to the ov

if we get into a sequestration position, that turns the entire process on its ear. it takes a chainsaw to a budget that is developed. we will have to write a new strategy. that is not the way we want to go. >> some of the programs on the list are being delay. we were told when you do that, the unit cost goes up. are you creating further problems down the line when you will not be able to afford these programs? >> we are attentive to that. managers of those programs are trying to mitigate that effect. when you are slipping and reducing the size of the buy. the reduction in regional defense, where do you expect that to have the most of that. how much time do the regional allies have to absorb what you are saying. >> first of all, we remain committed to the european capital approach. we intend to keep it on track. we are not going to decrease anything we have done so far. many other things in this budget will find themselves in a situation will -- where it will grow. we will have to work with our partners and ask them to invest in some of these capabilities. in several

. >> above and beyond that, we will see double that amount of cuts if there is a sequestration. does the white house plan to give us a a glimpse of what those cuts could mean when the budget is released in february? >> not that i am aware of. we firmly believe that congress should fulfill the responsibility it took upon itself as a result of the budget control act, and take actions necessary to ensure the sequestration never happens. it was designed to be onerous, so would never took place, as an alternative neither party preferred, and therefore would compel both parties to compromise in finding a broader, balanced approach to deficit reduction. we believe that even though the super committee's tenure has expired, there is ample opportunity if congress and republicans are willing to go along with what everyone who takes a serious issue -- this issue seriously acknowledges, that we to have a budget reduction, the sequestration will never be an issue. >> on all mile, will there be new policy unveiled there? >> i do not want to get ahead of the president. i do not have anything sp

of course they would be willing to allow sequestration because this time they would be able to blame republicans for also being part of what caused the cuts. cuts to medicare and cuts to our national security. not a good idea. not a good idea. well, national review on line has an article in the last couple of days with some great information and we have taken that information and put it in chart form from the article and double checked and apparently these are accurate numbers. these numbers, if anybody cares to contest them, actually come from president obama's own office of management and budget. it turns out that as this president and his administration has complained about not having money, not having the ability to make cuts, having to make draconian cuts to medicare and to our national defense, his administration has been sitting on money, hundreds of billions of dollars of money, that they haven't spent from 2010 and 2011. they're complaining about not being able to cut $5 billion or $10 billion when it turns out they're sitting on hundreds of billions of dollars that have not

the sequestration -- i am concerned about the sequestration. we will continue to have further cuts to medicare. host: there is a cap of 2%. guest: you talk about the 27% cut and reduction to reimbursements to doctors. doctors are providing medicare services to our seniors. i'm seeing these cuts and potential cuts to the quality of life of seniors. social security, reducing taxes on our seniors collecting social security. i am for income in judgment. i think perhaps people do not need those adjustments. means testing is a good thing. you have some in the upper income that do not need those benefits as the seniors on fixed incomes and of not had any cost of living increases. i would agree with him in making sure seniors have tax relief when they are on fixed social security benefits. host: the president gives his state of the union speech tonight. mitch daniels gives the response. he seems like a hard- working governor that has represented the people very good. i do not know him. i know he loves to ride that motorcycle. host: we have a picture of

you've cuts there, today you warned again about the possibility of more cuts through the sequestration process. but there are some who point out that that would even only get you to 2007 budget rates or so. w not go further at a time like this when we're able, when we perhaps are able to? >> exactly because of what i said earlier on. that this country still confronts major challenges in today's world. we are still fighting the war on terrorism. we have got iran. we've got north korea, we've got all of these changes taking place in the middle east. we've got the challenges of dealing with rising powers in asia. we've got the challenge of, you know, dealing with countries like russia, rising countries that like india and others, all of that represents the kind of challenges that we are going to have to deal with in this world of the 2 1s century. for that reason we've got to be careful. how we do this. now cutting almost 500 billion dollars is not chump change. the fact is it's a half a trillion dollars coming out of the defense budget. and that's going to impact on a lot of areas in the

now secretary of defense says if in fact the sequestration takes place-- a word that they use coming out of the supercommiee-- that it will affect the security of the country. that severe a defense cut. >> well, those defense secretaries always have to play scared and talk about fair and danger. i know leon. he's a brilliant man. he knows better than that. >> rose: you don't agree with him? >> no, i don't. i don't know of any country that's threatening us today. now, they certainly were in world war ii which was the war that i volunteered for and i'm glad thai did because then we had hitler, we had tojo, we had mussolini. they were all out to get us. >> rose: what size military budget will you think appropriate? >> well, i think we could begin working it down now, you can't do this overnight. but i would think that within five years we could cut it in half. we'd still be far and away the most powerful cotry in the world. >> rose: and would swre a presence in south korea? would we have a presence in europe? where would you make the cuts? >> we'd have some difference in europe but i th