once it's obligated, it's not summit to the sequestration cuts -- subject to the sequestration cuts. now, if you are, you know, ash carter or the sec def and you're looking t at this from a dod perspective, you don't want a lot of people obligating a lot of money because that narrows the pot of money. so the percentage -- if there were a significant amount of early obligations, the percentage cut to all the remaining funds will go up slightly. so from a macro perspective, you wouldn't want people to do that. but if you're down on an individual program, you know, if you're self-interested, you would want to obligate as much of that funding as you can by march 1st. and we did see, it's hard to say if this was a result of the previous sequestration deadline, but we did see a lot of contracting activity in late november and december all the way up until december 28th just, you know, heading up to the january 2nd sequestration deadline that we just avoided. so we may see a repeat of that. it may be even more of a flurry of contracting activity. yes. >> so what challenges does the -- [inau

other spending cuts to take the place of the sequestration. and i still think there are a lot of questions as the services work through there with some -- this with some accounts exempt. some not. some are going to be hit pretty hard. >> overall from a good fashion and at least trying to make clear that some of those are going to be dramatic cuts? >> it was a beginning but i still think there are lots of details to be fleshed out that most people including most members of congress don't fully appreciate. just how painful this is going to be. >> you've been a bipartisan member up here and you're now one of the gop part of the gop leadership. what's it going to take to strike a deal that averts sequestration, extends the cr, avoids the train wreck in a way that can leave the house but also be passed in the senate? >> well, i think everybody is grappling with that magic formula. you know the first thing you've got to have is a willingness to seek that compromise if you will. where nobody gets everything they want but everybody gets something that

also a potential second sequestration. we wouldn't have the authority under sequestration to choose between modernization. unless we can reprogram that, and that would be pretty limited, i suspect we wouldn't have that option. >> it was 62 billion. it was our best estimate and now it is still rough. the changes are quite complex. but it looks like about $45 billion for defense. >> you seem to be quite upset about the smaller budget. that means you're going to be upset likely with chuck hagel? >> well, first off, i'm not sure what the president will announce today. and if i did know, i wouldn't stoop and i'm not. i'm not smart enough to do that. [laughter] i think that if it isn't senator chuck hagel, we will work with him and the american people. budgets are about risk. you get a certain amount of money and you get a certain amount of risk. the country decides they want to take more risk, we will need to work with whoever the nominees are today and if that person is confirmed to try to make those trade-offs. we will find a

sequestration is part of that. the deadline of march 1, the new deadline, it is implicitly ties any resolution of sequestration to the debt ceiling debate. some in congress have said that for every dollar increase in the debt ceiling, we want a dollar in spending cuts. sequestration is a result of that last -- of that philosophy the last time we hit the ceiling. they wanted spending cuts equal to the raise in that that ceiling. congress could not agree. that is why they came up with sequestration. sequestration cuts are cut left over from the previous debt ceiling increase. now we are facing another moment where the debt ceiling needs to be increased. if you want to increase it to give us a year of operating time, that would be about 3 trillion dollars. putting these on the same timeline doubles the problem. i'm not confident that congress can come up with another 2 trillion dollars in deficit reduction by that deadline. with the fiscal cliff, relative to what would have happened if all of those programs had been e

you start to go from sequestration there was a sequestration 54 point* seven with a national defense function in our share was 52. and the total was 62. it is roughly 9%. and is smaller because they reduce the size of sequestration and the taxpayer effected. is that clear? [laughter] sari. -- sorry. but requesting authorization for the base closure we have seen the fifth round that preceded york ministration where it was difficult to realize savings but should be even think of it as a realistic way? >> i think so. i will not give you examples but we believe there are. i would not use 2005 as a guide but it was more transferring units around. although we will get savings there. it will be awhile before we break-even. if you look at 93 year 95 round the average savings was two or 3 million per year. that is probably realistic if we have base closure authority. before we know for sure we have to go to every base ha installation and let the commission make their choices but there are savings to be had with dollars and civilian personnel. and to reduce spending personnel they need to give

the sequestration act will allow federal obligations possibly is in this mid-february. the sequestration that was supposed to take effect on january 1 prevented cats to all discretionary funding programs. the highway trust fund that primarily funds the highway and transit account is protected, would not have been subjected to the sequestration got. the new starts funding programs, new source of funding for the central suburb project, we are keeping a close eye on that because there is a potential cut to the program. we are also keeping an i on the continuing resolution for the federal appropriations level. in october. in october 1, there was a six-month continuing resolution of the federal appropriation bill which expires at the end of march we expect that it will be some type of grouping with a revisiting of the debt, the sequestration in the continuing resolution to allow for fiscal appropriations to continue to the end of the fiscal year. one of the things that was included in the bill passed at the end of the year, the commuter tax benefit extension to the end of 20

sequestration is part of that.he deadline of march 1, the new deadline, it is implicitly ties any resolution of sequestration to the debt ceiling debate. some in congress have said that for every dollar increase in the debt ceiling, we want a dollar in spending cuts. sequestration is a result of that philosophy the last time we hit the ceiling. they wanted spending cuts equal to the raise in that that ceiling. congress could not agree. that is why they came up with sequestration. sequestration cuts are cut left over from the previous debt ceiling increase. now we are facing another moment where the debt ceiling needs to be increased. if you want to increase it to give us a year of operating time, that would be about 3 trillion dollars. putting these on the same timeline doubles the problem. i'm not confident that congress can come up with another 2 trillion dollars in deficit reduction by that deadline. with the fiscal cliff, relative to what would have happened if all of those programs had been extended, what they

of sequestration is certainly out this. in more than three decades of working in and around the defense budget, i've never seen a period featuring any greater budgetary uncertainty the than we're looking at over the next few months and through march. it gives a whole new meaning to the term march madness, and i can't wait for it to be over. so what does the rest of fiscal year 2013 look like? i know that we face, we know that we face sequestration starting now on march 1, 2013. we're still working on the details, but the total sequestration for dod appears to be roughly $45 billion if it all went into effect, about 9% of our budget. that is less than the sequestration we faced before passage of the new year's day act. that could have been as much as 12%. but we also have two fewer months in which to accommodate those changes. we also cannot rule out an extension of the continuing resolution throughout the rest of this year, and that would sharply reduce the operation and maintenance funds that we have available and that we

no sequestration. rightnow there will be sequestration.he deal in the works would delay that for 60 to 90 days, so the new congress could restore spending cuts potentially. i don't think it ever happened in my lifetime. i have a few more yeast than you do. i don't think it happened that they actually cut anything. do you think that the fact republicans agreed to the tax increas that will get some kind of spending cuts? we keep hearing it is about spending, it is about spending. >> i think the hardest part to understand seems they have no skin in the ga. as a business owner and president of a company i have responsibility to as my clients and my employees and we make decisions that are fruitful and beneficial for the company with the money that we have. why doesn't the government have to do that? i feel very strongly that you know, we are held to some limitations. in fact it i against the law, if at times i was to spend more money than i actually have. doesn't make any sense. adam: no, it would make you a politician. >> absolutely. absolute

sequestration on the defense spending. >> these $500 billion in cuts in sequestration will bring on topthing very close to a trillion dollars of defense cuts the first obama term. the extra cuts really go well beyond muscle. we are into bone. defense secretary panetta has made that clear. in the president's own defense secretary saying that our fense capabilities are being cu unacceptably, you know that is bad. and let me just say, this is not a matter of ben counting. this goes to the ability of america tosustain the international order that our economy rests on. you're not going to have sustained prosperity in the united states if the united states can provide whatever minimal order there is in the world today. that's the direction we're heading in. gerri: what's going to happen as a practical matter, los, peop, a machine. what will get cut? >> if the sequestration goes through over the long term, obviously the worst thing that will happen will be our inability to procure the sophisticated and expensive weapons system that we need. in the short term on sure there will try personnel la

we're two months, sequestration looms over all discretionary spending.on the armed services committee, so i pay particular attention to the defense, but i the programs that will go the next two months without any idea of how much money they're going to have. it didn't do anything on that, and then worse it locked in place, made permanent 90% of the bush tax cuts. are the house republicans seriously going to put revenue on the table as we deal with the fiscal cliff and the debt ceiling? the size of the cuts to critical programs to deal with the deficit now that we locked in 90% of the bush tax cuts is way beyond what i can accept. >> eliot: you're exactly right. it's an argument that it's mystifying to me that more democrats didn't stand up and say this isn't efficient. we only get the revenue over the ten years. it's quite small that the gerald government is considering and in return to that we locked in 90% of the bush tax cuts denying the government the revenue needed for progressive purposes. i'm mystified by this calculous. >> i am, too. because repu

we go to sequestration ththose budget cuts, tse cututs in spending, , could last a lon time and becomet. th is the fallback pition if they don't reach compromise e on spending cuts and entitlements. >> no matter what they say in davos, it matters here and they should care. let's turn to boeing and what started as a bad week a a couple of weeks ago has g gone frfrom bad to worse. the grounding of the dream mininor -- we don'know how l long -- the grnding of the dream liner, we n't know how long that could go on. bolling is divided betweenen -- they arere trying to look at wha is happening with the battery on board, andhe japanese manufacturer is taking a different angle. where do we stand righght now?w? remarkably, the japanese government, who represents the many f factors in all things commcial, said that overheating was not a problem. boeing has to get this right. the end of the day, it is the boeing company that goes out if they havanother overheatiting incident ithe year. this is a terrible hit u.s. exportrts. by the w way, the people a airbus a not h happy aut thihis, because they

the remainder of this fiscal year to mitigate the impact of sequestration.s to start adjusting way we expend dollars. we literally don't want to follow-up our own clip created by the sequestration problem. that is our problem and challenge as managers of the taxpayers resources. there are no specific targets because they would not mitigate the impacts of sequestration and all they can do this sort of anticipate this. the chairman described it yesterday to steel ourselves what might happen. >> can you tell us what share of the cuts that the air force has to bear? >> well, we do have a sense for this. and i think that at the macro level it was about 18% or 20% for reductions by her own accounts. i will see if i can get more detail for you on that. that is the estimate of all of this to take place. in the near term, as we introduce these strategies over the next month or so in order to slow spending. we are not looking at that particular target. >> thank you. the airmen and the air force are wondering about what our job will be in the future. that is the differ

postponing sequestration doesn't prevent it. it just prolongs uncertainty for our force and military families. as i said before, sequestration is a self-inflicted wound on national security. it's an irresponsible way to manage our nations defense. it cuts blindly and will play. it compounds risk in a compound's readiness, compromises readiness. readiness is now is in jeopardy. on the brink of creating a hollow force. the very thing we said we must avoid due to the unprecedented convergence of factors mentioned by the secretary. sequestration will hit over under a revolution, implementing the cuts made in the budget control act and still fighting a war in afghanistan. anyone of these would be a serious challenge on its own. together they set conditions for readiness to passed the tipping went as early as march. we won't shortchange those who continue to research those ready to deploy. it would be unconscionable to do otherwise. likewise, will continue to care for wounded warriors and families. for the rest of the force, operation

as one way for sequestration. i think that's what you just mentioned. i'm just wondering, how actively as the white house working on not an in sequestration are not specific point and how concern is the white house that getting rid of these would affect what is one of the few bright spots in the economy, all the jobs and economies. >> one of the few bright spots? i contest that. i think there has been, as i just noted, a month to month job creation. there was positive economic growth in 2012, 2011 and we continue to believe this as i that unless actions by those in washington take us in a different direction, we will see positive economic growth and job creation this year. so the idea that you need to subsidize an industry that has enjoyed record profits that taxpayers have to subsidize just doesn't make sense at a time when we have to make choices about how best to use their resources. the speaker of the house boehner put forward, in theory at least, a proposal late last year the city could buy an $800 billion in

we're going to have a sequestration fight, a debt ceiling fight. we're going to spend the next months, at least, having these fights again and again and again. so this deal to me fails on every single front. and leaves us worse off. >> woodruff: are you that negative about it. >> no, i mean, i feel like poly go lightly compared to david, you know, i'm just, listen to him, i'm ready to slit my wrist force goodness sakes. i don't think it was-- when both sides basically admit seemingly that they lost, it is probably not a great victory for anybody. the president insisted on going in. there had to be 1.6 trillion in new revenues. john boehner at 800 billion. and they go to00 billion. that's not exactly a great triumph. >> woodruff: who's responsible. >> whose's responsible. judy, i mean we have, bob dole was a great man and a great-- said on capitol hill we love to make tough speeches but we don't love to make tough choices. the fact is that the american people who want all the benefits, and want the free lunch, and don't want a single gray hair on th

we're going to have a sequestration fight, a debt ceiling fight. we're going to spend the next months at least having these fights again and again and again. so this deal to me fails on every single front. and leaves us worse off. >> woodruff: are you that negative about it. >> no, i mean i feel like poly go lightly compared to david, you know i'm just, listen to him i'm ready to slit my wrist force goodness sakes. i don't think it was-- when both sides basically admit seemingly that they lost, it is probably not a great victory for anybody. the president insisted on going in. there had to be 1.6 trillion in new revenues. john boehner at 800 billion. and they go to00 billion. that's not exactly a great triumph. >> woodruff: who's responsible. >> whose's responsible. judy, i mean we have, bob dole was a great man and a great-- said on capitol hill we love to make tough speeches but we don't love to make tough choices. the fact is that the american people who want all the benefits and want the free lunch, and don't want a single gray hair on the beau

now i get to have the depot repair before sequestration. [laughter] >> thank you general.i am curious, given the trend going on about the f-35 program does the air force have a passing can you articulate it to us, to understand more fully what the sustainment cost will be for the aircraft and to bring that data into a system at the outcome of which will decide how many you can afford and when he will bring them into the suite and let them make mince will be. >> i know the secretary hasn't been on this one. let me tell you what the effort has been in the last six months or so. that lockheed-martin put together breathing while osama last assignment that was shared with our european partners in the program. they talked about the sustainment cost of the program. the number and they refer to it in terms of cost per flying hour. that was not the same number i'd seen in recent. is characterized in a different format. and so when i got into this job i ask our program officers to get with the lockheed-martin team and put these numbers side-by-side to figure out exactly what the dif

which means they are planning on bargaining even with sequestration reduction. neil: do those delayed sequestration cuts if the latest part of that ddal as well? >> what they are saying is that we don't want to fight the debt limit battle with the sequestration battle. neil: icu. >> it's not bargained away. but they are planning to bargained away. it is pretty clear that they will. they have made it a part of the arguments in favor of this open debt for the next four months. neil: do you think congressman, you think republicans generally have -- but the president has seen him blink too many times and he feels that he can run the table with that? to the good news is the republican house has twice passed budgets that would actually play this nation back on the course to fiscal solvency. it could pay off the entire national debt which is crushing by the time that today's college graduates are ready to retire. we know what path we need to be on to avert the catastrophe that is consuming grief. it is perfectly clear we ought to extend the debt limit in small incremen

i think we'll see it with sequestration.coming march 1st, not too far away and with the budget and the continuing resolutions. i think that's where the real fight will be, and i think we're seeing the consequences of an economy that's not investing, a government that has to pull back and what we saw in the gdp report yesterday, and, you know, who knows what we'll see tomorrow on the jobs report, but it's slowed down the economy and we're all waiting. >> absolutely. mark, good to have you on the program. thanks very much. >> thanks, maria, thanks, scott. >> we'll see you soon. the dow on pace for the best in 19 years or 24 years. it all depends on how you finish this hour. might be surprised to know that hewlett-packard is the top dow performer this month, and bank of america the worst. a quick reversal there of fortune because that was the exact opposite what have happened in 2012. so which stock do you want to buy right now? let's start talking numbers on the technical and fundamental side of the story. technical richard ro

they had to because of the sequestration that will be taking place. what was achieved is that the president the achieved his goal of increasing the tax rate on the wealthy. that was important. the loser clearly being speaker boehner. yet a bad beginning of the year. >> the voters send them across the washingtons and make sure that they get every benefit that the government has available to them. they some republicans to washington to make sure that they will not have to pay. both parties keeping promises. they will much such a single gray hair on that beautiful hair of social security or medicare. dog or a. wieters locked in the bush tax cuts which democrats, as a matter of faith and principal, argued against for 10 years and you just made them, except for the top 1.5%, the law of the land in perpetuity. >> perpetuity until the next congress. >> they said permanently and i do not see any republican voting to increase. >> mitch mcconnell out of desperation calling in joe biden to get this done. when i first came to washington, that is how things got go

and so, we need to face it the sequestration. we need, in my judgment, to see if we can set a target beyond 1.4 trillion over the next 10 years and we need to do it in a balanced way. and if not, we are going to threaten balance in this country, including the full faith united states and the president was in my judgment absolutely correct to essentially throw down the call went and say this must not happen. >> thank you for taking all the time at this. >> my pleasure. >> the greatest honor history can bestow is the title of peacemaker. this honor now beckons america, the chance to help lead the world at last out of the valley of turmoil and onto that high ground piece that man has streambeds since the dawn of civilization. >> we must embark on a program that benefits a very specific advances in industrial progress available for the improvement of underdeveloped areas. >> the brookings institution hosted a daylong forum on improving the u.s. economy. the first and a focus on manufacturing sector. includes the mayor of louisville k

i personally think the republicans signed up for an idiotic sequestration.deral -- the defense budget to take up 50% instead of the 20% that it represents and the federal budget so it has a disproportionate burden on already. that was completely in ignoramus who came up without one. the second part of the steel, they go around preaching about where or to have to do, this, that, cut. just let it go. just let it go and see what happens. because americans don't really get it. all the republicans look like a bunch of stodgy orthodox camino, members of an orthodoxy here just simply cannot resist saying no. if that's your idea, mr. president, it's your deal. let it rip. >> well, i mean, if it were not for the consequences of letting this administration and the autopilot that we are on for spending representative, would be with you. >> frankly, there should be no fight about raising the debt ceiling, and there should be notified about the reality of having to control spending. there should be a fight about how we do it, and what i would like to see the people in co

i have to get this fixed before sequestration. [laughter] >> given the churn going around the program, does the air force have a path and can you articulate it to us to understand more fully what the sustainment costs will be for the aircraft? and to bring that data into a system and the outcome will decide how many you can afford and when you can bring them in and what the processes will be? >> i know the secretary has an opinion on this. lockheed martin put together a briefing when i was still in my last assignment it talked about the sustainment cost of the program. the number and they referred to it as cost per flying hour. that number was not the same number i've seen in the briefings from our air force, it was in a different format. so when i got into this job i asked our workforce and program office to get with their team and put these numbers side by side and figure out what the differences were between the the number we thought and the number they had. that is one piece of it. can we determine where the reality is and the

they could cripple northern virginia's economy. >> the way this sequestration act is worded, you have an equal amount from every program project and activity. that defies logic. you can't furlough for a month air traffic controllers or meat inspectors. what do you do in the grocery stores if you furloughed meat inspectors? >> reporter: conley is also fog used on sequestration, but for the immediate future, he says some good will come from his vote. >> most of our constituents are not going to see thousands taken out of their paycheck in additional taxation. >> reporter: these two, while friends, are in the same party and they still couldn't great on this fiscal cliff issue. what does that mean for the new congress to be sworn in tomorrow? >> the new congress isn't going to be much different from the last congress. >> reporter: both really not expecting much to change in the 113th congress. in the meantime the issue has only been delayed another two months, forcing another deadline and likely more last-minute drama. i'm david culver, news4. >>> the average family income in fairfax coun

and so, we need to face up to sequestration. we need, in my judgment, to see if we can study target beyond it, 1.4 trillion over the next 10 years and we need to do it in a balanced way. and if not, we are going to threaten balance in this country, including the full faith and credit of the united states. and the president was, in my judgment, absolutely correct to essentially threw it on the car plant and say, this must not happen. >> thank you for taking all this time with us. >> my pleasure. [inaudible conversations] .. but how much of it in the address through congressional process? >> thank you for the question. i can tell you that tomorrow the president and vice president will hold an event here at the white house to unveil a package of concrete proposals to reduce gun violence and prevent future tragedies like the one in newtown, conn. they will be joined by children from around the country your president letters in the wake of that tragedy expressing their concerns about compliance and school safety along with their pare

the president said that when it comes to replacing the big cuts that are planned with sequestration,wants both revenue and cuts to come together. that could mean changes to the tax code, limits to deductions, tax reform issues that we were talking about earlier in the fiscal cliff negotiations. that could mean more changes, and certainly we haven't seen at the end of tweaks to the tax code. > jeremy, what about this issue of the overall economy? what is the impact there that you can read here early on? > > it is difficult to say for sure. i think this deal kind of bides us some time. with sequestration, with those big cuts, if those did come into place, if we did hit the debt ceiling and had a default, had a government shutdown, that would have a profound impact on the economy. right now we are looking at slow growth for 2013. morningstar's economist, bob johnson, sees about 2% growth considering everything goes right - that means we don't hit the debt ceiling, we replace a lot of these cuts. that is not very spectacular growth. if we hit some of these other issues, the growth could

and so we need to face up to sequestration. we need, in my judgment, to see if we can set a target beyond it, $1.4 trillion over the next ten years. and we need to do it in a balanced way. and if not, we're going to threaten balance in this country including the full faith and credit of the united states. and the president was, in my judgment, absolutely correct to essentially throw down the gauntlet and say this must not happen. >> thank you for taking all of this time with us. >> my pleasure. >> appreciate it. thank you. nothing "money rocks". [inaudible conversations] >> this weekend marks the 57th presidential inauguration. sunday at noon it's the official swearing-in ceremony at the white house. our coverage includes your phone calls and begins at 10:30 eastern with a look back at the president's 2009 inaugural address. then monday the public inaugural ceremonies with the swearing-in at the u.s. capitol, the inaugural luncheon at the capitol and the afternoon parade. we'll also take your calls and comments on facebook and

i can see them extending sequestration and see them doing all these things again.ng the can down the road. it has had the living daylights beat out of it. someone should care about that can. >> i like their suggestion. >> let the governors -- the senate -- >> the senate was able to pass a lot of things. >> they passed this mess we've got. >> with the exception of the state of california the way the governor handled that. it was very clever on the part of governor brown to realize the fiscal cliff and deficit and tax negotiations were going to lead to a lot of people accelerating taxation and then they'd pass a retroactive tax in november to increase tax rates, extremely savvy. >> i didn't mean the governor from california. >> extremely savvy on his part. >>> up next, an update from senator bob corker. bottom of the hour, senator john barrasso on the fiscal cliff deal and fixing our crisis. the market indicator will come up. s still the one for you - you know it even after all these years. but your erectile dysfunction - you know,that could be a question of blood fl

a garish asians. -- sequestration negotiations. is that clear? sorry. >> you requested authorization for base closures. how much savings are still there? we have seen the fifth round of the base closure process was one where it was difficult even more so than in past rounds. that is perhaps not surprising. >> i think there is consolidation's out there. i will not give you examples because that would end my tenure quigley but we believe there are -- tenure quickly but i believe there are. there were more transferring units around and a fair amount of force protection efforts that were quite costly. the best i can do is some rough history. if you look at the 1993 and 1995 rounds, the average savings once we were fully in place with $3 billion a year. i think that is probably realistic if we get a base closure authority again. before we know for sure, but would have to go to the process of going to every base and insulation and organizations and asking for data and making specific decisions, and then letting the commission review them

host: sequestration hasn't been worked point what are your thoughts as sequestration allow to happen.will cut a lot of programs and republicans expressed concern about. guest: i didn't like the nature of the cuts. i thought they were poorly done. do i think they would have a negative impact on defense. i thought the house did a good job last year of offering a replacement, a different plan for cutting not only the same amount of money but more money actually, significantly more money. i do think it's important that we do cut the spending. the only worse than cutting defense is not cutting anything, which is effectively what we did last night, had we put off for two months. even oh -- keep in mind are the sequester cuts is what we promised you that we will cut spending one dollar every dollar increase. that was suppose to be the cut that's kicked in two days ago. that didn't happen. we have not cut spending one dollar since we increased the debt ceiling deal in august of 2011. here we are again getting ready to have the same debate about raising the debt ceiling again. we cannot cut sp

you feel sequestration's going to happen? >> i would like to believe that the congress will do the right thing. the problem is this -- last year i thought a sequestration was there was not a chance it would happen. there was not a member of congress that did not think it was the wrong thing. and that should not happen. but the longer they delayed dealing with it, and now, instead of dealing with this quaestor in the budget deal, they simply delayed it. now we are facing it again. frankly, my fear in talking to members of congress is the issue -- this issue may be in a difficult place in terms of their willingness to confront what needs to be done. for all those reasons, and the uncertainty, what could happen on the debt ceiling, if you put all that together, we cannot sit back and not to prepare for the worst. that is what we're trying to do. >> having been a chief, the way the mechanism is established, we would have to absorb $52 billion of production, whenever it starts. in october, it is 52 billion over 12 months. january,

the defense department, budget, and sequestration. this is 35 minutes. >> good afternoon, everyone and happy new year. like to take this opportunity to provide a preview of the next few weeks here at the pentagon. tomorrow evening, panetta will continue con taugses on israeli defense administration. we will welcome hamid karzai to the pentagon president karzai will receive a full honors welcome. the secretary and president karzai will visit the 9/11 memorial who remember the people who lost their lives when al qaeda attacked the united states. secretary panetta will participate in meetings with president karzai at the white house. this provides the opportunity to discuss the ongoing transition and our commitment to afghanistan following transition at the end of 2014. looking to next week, on monday, secretary panetta will department for a week-long trip to europe. it will take him to spain, italy, and the united kingdom. this provides an opportunity to meet with allies and discussion the mission in afghanistan. these nations combined

second quarter will see the impact of sequestration. that is the conventional wisdom right now we will have the automatic spending cuts. >> if you look at the personal next number, that was very, very bullish. the fed is doing -- and i think, getting what they want. you could make an argument that if you look at the first kind of two, three of the asset buying, essentially they didn't work. we are now actually seeing traction. that's a function of the market slowly recovering or what the fed is doing is finally working. i think it's a little bit of both. but again, you are getting healing. you are getting household wealth higher. this is one of the things they were targeting. >> right. okay. i believe that rebecca's issues are fixed. >> can you hear me now? >> we thought we might be able to mime, you know, you could mime your answers, but you know, having audio is much better. >> you guys are great lip readers. that was exactly what i said. >> see that? >> well, you know. >> i'm right all the time. >> you're right all the time. rebecca,

it's going to happen in and around sequestration.point earlier about the fact why don't the republicans come up with a clear idea and clear frame. i think that applies to both democrats or republicans and i would submit the first side that does it in a clear big way that provides a bigger context and framing is going to be much stronger position. that's where the fight's going to take place. >> there is one clear deal i would make, larry, and i would recommend both sides to make. >> real quick. >> change cpi for the debt ceiling. get rid of the debt ceiling, permanent fix. >> i'm for that, everybody's for that except senate democrats aren't for that. we'll see. thank you very much. awfully sensible, if i may say so myself. tony, hang with us, we're going to have you back as a football analyst. but we've got some good news and even some better news. now, listen to this, regulatory menace lisa jackson from the epa is not only out at the epa, but the reason she's out is because the keystone pipeline is apparently going to be fully appro

the real risk to programs like f-35 is sequestration. effect on march 1st, every program project activity within the department has to be cut by the same percentage. they have to be cut by 9%. so the joint strike fighter budget for the current fiscal year will be cut by 9%. they're currently planning to buy 29 of those jets this year. that will have to come back. they will only afford 26, maybe even fewer. david: fort worth, texas where a lot of these planes are made. they have already taken steps, the town of fort worth, to try to diversify. to try to bring in other companies by giving them tax breaks, et cetera. what about a company like lockheed though? which is, while boeing has 50% of its contracts defense contracts, lockheed has almost all of them defense contracts. they have got to take a hit from this? >> oh, they absolutely will. but the buffer that they have is the backlog of orders that they already have in the pipeline. money that is already been obligated by the department of defense, when they have written a contract, signe

i think that will be part of the sequestration as well. >> the heritage foundation came out and said- basically gave it a huge thumbs down. how does this affect republicans who vote for it? is that something they carry with them in deciding this? >> i think it will be. i think with the change occurring with leadership and the fact that they are talking about scoring members, republican members on how they vote on matters going forward, yeah, i think some will look at that and weigh it, but the reality still remains, look, you got to, you know, reflect your constituency who sent to you the congress, reflect on also and more importantly, the priorities of the nation, and right now we are in a situation where it's not about one single member's district, it's about every district in the country, about every americans and how we managed it. and, you know, boehner, that's a big challenge over the last few months, trying to find that sweet spot. i believe with my buddy, lanny davis, that simpson bowles identi framework is a got starting point. maybe that gets another look going into the new

the american people have lost. >> this doesn't deal with sequestration. it delays budget cuts in the defense department for two months. >> that's correct. we have to wait and see what kind of additional measures will be taken on sequestration as they kick that can down the road 30 days. >> the republicans may be in the process of snatching defeat from the jaws of victory. if they block this they will, i think, be blamed. what happened was they got a lot in the negotiations. they took care of some of the wealthier supporters. they got the exemption on the estate racks to $5 million for a couple. they got the bush tax cuts to stay in affect for people up to $400,000. they actually won a lot in these negotiations, but they can't accept victory. if they scuttle this thing, the republicans will suffer greatly in terms of public attitude. this passed overwhelmingly in the senate on a bipartisan vote. >> that is true. when it comes to spending cuts, the ratio 14-1, how do you feel about that? where are the spending cuts, and is there a guarantee they would come