area identified as being in need of some substantial review and that is why the ses bone it budget was cut by 85%. call-in. ..

>> well, you're correct that there's an exemption for fcs, but i will tell you that our initial analysis is that that 159 employees is not just fcs employees. >> i agree. >> i think you would agree with that. >> i do. >> let's go to the employee. how could the region aide public building administrators receive a bonus of more than, well, almost $55,000 which appearing to have been awarded for planning the western regions conference. how could that happen? >> i don't know the specifics of that particular individual. i do know that there are a

number of individuals who won the government wide rank that has third party review of the submission, and those awards are quite substantial from 20%-35% of pay. if you have an employee, the top end of the range is $17900. you can get to sizable awards if you win one of those very, very significant and special awards. i think in the case of the individual you're speaking about, they won one of those rank awards, but i don't understand the justification of that particular one. when did it trouble you that anyone involved in implanting the western region conference that was so extrave gaunt, such a -- extravagant, a waste of

taxpayer's dollars, any kind of bonus? >> that's why we have to take a good hard look at the performance system within the organization and one of the ways to judge performance is not just meeting numbers, but providing leadership and accountability. a step in that direction that we're taking is we want to institute 360 # degree review process for all leaders within the organization so that they can be assessed not simply by their superiors, but by their peers and employees to that we can get a sense of what places where we need to develop the leadership skills of our employees. >> i want to also point out that if a recommended award is in excess of $25,000, which many of these awards were that we've reviewed, that the directer of opm reviews the nomination, and

the president's approval is actually required. my point is that it's not as if there are not systems in place to try to put a check on excessive awards to individuals who have not warranted that kind of recognition, but it sure looks to me like, gsa ignored those checks and circumvented safeguards in order to give extruer their awards to many, many employees, and in many, not all, and i want to be clear on that, but in many cases, the awards do not seem to have been justified. would you agree with that based on your review so far? >> based on our review, i think our actions speak to the p

analysis, the fact that we caught the budgets of the awards by 85%, and said back to our folks that, listen, this is going to be something you get for really special exemplary justifiable acts that, frankly, the test is going to be, can i explain it at a senate hearing? >> that's always a good test. [laughter] thank you, mr. chairman. >> thank you, senator collins. senator johnson. good morning. >> good morning, and thank you, mr. chairman, and, you know, thank you for holding this hearing. i felt the best disinfectant is light of day, and explaning in front of a senate hearing is a good benchmark. senator collins, interesting, as i was briefed for this, looking through the materials, the thing that jumped at me was the -- have you seen the video by chance? i viewed that yesterday, and

inspector general, i appreciate the fact your staff will let us release that. it's important, although we're not talking billions of dollars here, i think those antedoal examples of just outrageous spending by the federal government is important. it is important to note this is not just one conference. it was in 2010, $30,000 spent on time-temperature picture frames handed out to the participants. again, i appreciate that and look forward to the video being released. the american people need to see that abuse. you have canceled 47 conferences. can you tell me what the purpose of those conferences were and why were nay ever scheduled in the first place? >> well, that was part of the reason why we canceled them. we looked at the -- every

conference has to have an explanation and what theñhr bent to the taxpayer is and what results we'll get out ofñhr it. in some cases, a valuable conference, the governor g conference, so many flaws in the way it was constructed that we referred it to the inspector general for additional analysis, the legal team looked at it, and while there was value to the conference, we didn't think we could explain or justify the mechanism by which it was put together. other conferences, frankly, we just didn't feel there was sufficient justification for us to use taxpayer money to send people to them. >> can you describe what they were about? my guess would be those were going on for decades. they are going on today in other agencies, and so i just want to get an explanation of what are some of the government corchtions about? >> well, i think the primary focus is to bring people together and to improve their training opportunities to

exchange ideas, to build connections and relations, and so there's nothing wrong in principle with the conference, but the question is are there other ways to do it? are there other means in making the connections? are there other events like the annual expo event where people could do it instead? that's our task to push back on the organization and say, listen, it's very important that we recognize the limitation we're facing with these resources, and it's important that we look at different ways for us to get whatever value they thought they were going to get out of that event. >> well, the conferences going forward, what are those about? >> those are about training, and those are about connections between vendors, particularly small businesses, and the agencies they serve. there are things like the expo conference which we brought together thousands of venn -- vendors, thousands of government

contracting officers, provided hundreds of hours of training. we made sure, though, that when people get there, they recognize that they were going to a government training conference, and it was going to look every bit the way that sounds, and 245 meant it was going to be a steer, business oriented, and if they didn't have business to do that, they needed to a, not come, or, b, leave when they were done. >> you worked for government departments; correct? department of treasury and justice? >> yes. >> without ratting them out, but i'm asking you to rat them out, is there a similar type of process in terms of having 50-60 conferences a year? >> well, i came from the treasury department where i know from the secretary down, we took very seriously our stewardship of taxpayer resources, and so certainly in the three years i was there, i never saw anything like that.

>> mr. miller? >> neither have i. i did not see that at the department of justice. >> okay. gsa's the only one holding conferences? we're hearing judicial conferences -- >> they would have conferences -- usually training -- at the national advocacy center in south carolina, and they would train attorneys and those types of conferences, and they would have a heavy agenda. >> what did they cost? typical budget for those things hundreds of thousands of dollars? >> i wouldn't doubt that very much. >> okay. speaking about -- in my briefing materials, i have listed gsa's budget is a quarter of a million dollars, which unfortunately, in our government is a rounding year. that's not the full budget; correct? >> no. >> what is the total budget in terms of your fees? >> the best number to use is $23

billion. there are about another $40 billion as the chairman pointed out that flow through our vehicles, but not directly through gsa. >> as a business person, when you see some department out of control, you eliminate it or cut the budget. i'm highly skeptical when the comments go back decades on how to control the agencies then, that we're going to be able to do it -- as phenomenal you may be in managing eights, to get it under control. i believe in many cases, the agencies just have to be cut. what percent cut in terms of the budget could the gsa live with? is that really the best way to force efficiencies? >> i would be concerned about doing across the board cut. i think the really important thing is look at the mission that the gsa -- >> haven't people been doing that for decades and not getting control over it? >> well, i think, part of the concern is, for instance, on the

federal facility side, we need to make sure we're not cutting the budget so badly that we can't care for the facilities. the big issue here is are we applying the resources that we have been given in the way that they are meant to be applied? are we applying them to repairing buildings? are we applying them to provide the most efficient acquisition services? i think that's what makes people really upset is if you have $800,000 spent on a conference that could have gone into building a better heating or ventilation system for a building that's saving taxpayer money by reducing energy, that's incredibly unfortunate, and that's where it's abusive. >> okay. just real quick, another subject, i just want your response. i sent a letter, and on april 30th about the green council lead program, it's the 2012 program's draic departure. i'm concerned about products not being able to be utilized in government buildings that would cost jobs. are you working on that?

will we put a stop to that or costing jobs? >> we're looking at those standards, and we want to make sure there is a fair, open process for those standards. i don't know where we are in responding yet to the rule makings. i want to be careful that i don't upset that very complicated legal process, but i will say that we've heard many of those concerns, and others, and we're trying to reflect them in the way we handle that. >> okay. i'll enter this in the record here, and. i want to work with your staff and that process. thank you, mr. chairman. >> thank you very much, senator john johnson. >> it's good to be here this morning, and i want to start first with mr. miller. i have a very vivid memory of the two of us in an office in the gsa building in kansas city going over one of your audits,

and as a former auditor, you said things to me in the meetings that went into my hard drive which was you believed there were people -- this was back way before the conference was ever seeing the light of day in las vegas. it was about what i found in terms of a public relations contract that was given out in kansas city without a bid that seemed to be terribly wasteful, and frankly, without much result. i remember you communicated to me in that meeting that you, as a wisenned auditor in government where surprised and frankly deeply concerned over some of the responses you have gotten to findings, and that's when i began to realize there was a really rotten problem at the top of gsa. i also have a vivid recollection of talking to the head of public buildings on my cell phone, and i remember where i was standing.

when i was complaining to him that he was not taking aggressive action against the woman who had misled this committee at a hearing about that contract, and that you had documented that she had misled this committee, and i remember talking to him and saying what are you going to do? he said, you know, nobody reads that stuff. that was a moment that i understood how big a problem we had at gsa because he was dismissing the ig's findings, and i found out later they had given them a bonus, made a mistake in judgment, violated procurement. she was a regional boss, and she had misled this committee, and you had documented that. they gave her a bonus.

so i just want to complement you for your doggedness. i want to compliment you for what you do. i'm hopeful we get the inspector general act passed. it's on the floor being held. we'll call out the secret holds because the more than we empower the igs, the more we make sure you are doing your job, the more likely it is that we're going to be able to clean up messes like this. now, i think you're trying very hard. i have great respect for the bold moves you've made, and if anybody doesn't think what you've done is bold, they don't understand. they don't understand the federal service and federal government if they don't understand when you cut the bonus budget by 85%, that's an earthquake in fcs wormed. there's nodding heads in the room because they understand that calcified power of the

federal government. that's the question i want to ask you about. i know there's argumenting on both sides, but in a very tricky move between the transmissions of administrations, the gsa basically took the political pointments from the different areas in the country, and they removed all of their power. when no one was watching between the bush administration and the clinton administration, they took political appointments, the eyes and ears of congress into the agency, and they put them out to pasture and they took away all of their power. now, i ask both of you, and nobody ever said anything. no one realized this happened until all of the sudden when the new people were put in place, they found they had an office with nobody reporting to them, no authority to do anything, and so this woman in gsa in kansas city basically didn't have to listen to the regional amin

traders appointed in the political process whatsoever. i mean, no power. is that a good idea, and why did no one ever say anything about that because all i it was, in fact, muscle up the calcified middle management of this agency at what i think could be the expense of the congressional oversight. >> i'll take the first stab at it. i actually agree with you that there was substantial problems with the way that the organizational changes have been made, and that's why i have done everything i can to reverse them and clarify the role of the regional administrator. some of the changes are going to require some additional work on what is the long term role of the regional add min straiter, how does the region fit in the organizations. there's bigger questions, but in the meantime, i don't want administrators out there not feeling they are empowered to call out waste, abuse, or concerns and say they don't have

power to resolve them. we've done a couple things giving them the head of contracting authority so that they are the -- they are the ones who get to determine whether things can be bought. they work closely with our senior procurement executive to determine who has warrants and frankly who doesn't have tome to operate the federal government. we have a weekly phone call with the add administrators, the depy ad min strait -- add min trader, and if they are not listened to, bring it to me. call me. e-mail me. if someone doesn't think they report to the regional administrator, i hope they think they don't report to me. so that's what we've been doing to ensure we have clarity of the role in the organization. >> we understand when the regional administrator in kansas city tried to impact this situation, he was called to washington and asked to sign a loyalty oath.

that was frankly shocking to me that that would occur. he was pointing out the problems, and he was called on the carpet, and i was -- i was then began a mission to rattle the top cages in gsa. i'm glad las vegas came along because that toppled the entire structure which needed to go. as time went on, and i became more and more familiar with the decisions made, i was more and more surprised at some of the judgment called made. jury presenter general, do you have -- jury presenter -- inspector general, removing the power of the regional administrators to have any kind of soup vise ri -- soup --

supervisory authority whatsoever. >> we found two data points. one with kansas city where there was an out of control regional commissioner, and many problems you discovered in your hearings, and another data point, obviously, is the western regions conference where we had a regional commissioner again that was out of control so that that structure was not working. ultimately, how an agency organizes itself and how it chooses to manage itself is an agency function. it's not really the job of the inspector general to tell them how to organize themselves. i feel like that's a bit out of my lane. >> well, i just want the chairman to know that this happened, and it was almost as if they waited in the confusion of the transfer of administrations knowing that no one was going to be paying close attention, and they moved quickly and cleanly to change

the supervisory authority of the appointments that congress has a role in, and i think the reason congress has a role in those appointments is that it augments and enhances the oversight capacity of congress, and clearly, even though i am -- so far, i will tell you, i'm a big fan of the acting commissioner. i think he has taken really aggressive steps that are hard to do in government to clean this mess up, and i don't think we can keep playing the horse. when the horse is trying very hard to clean up everything, but i do think that it's something we ought to take a look at as to exactly when and how this happened because, you know, i think it's really problematic that they had enough nerve to do this when no one was looking. >> thank you, senator. i agree with you, and we will take a further look at it. thanks for bringing that to light. i have a few more questions so

we'll go to another round. i wanted to talk with you about purchase card abuse which has been a long standing concern of our committee, and that is whether agencies generally exercise proper controls over purchase cards which are government charge cards given to employees for making small procurements. overall, it needs to be said use of these purchase cards saves the government money because it helps e -- eliminate paperwork. the numbers are remarkable showing how large the federal government has become. federal employees spend over $30 billion annually using these purchase charge cards, and this generates -- pleasure to say -- approximately $2 billion in rebates to agencies from the credit card companies, but,

obviously, we have to guard against abuses by those who use the charge cards for illegal or fraudulent purposes. i adhere, shamelessly, but constructively, it's my strong hope that before congress adjourns this session that we give final passage to a bill sponsored by collins, grassley, and myself, s300 to require agencies to adopt better internal controls over the purchase cards. gsa is the agency that negotiates the contracts with the major credit card companies for the charge cards that federal employees use so obviously we hope gsa sees itself as having a special responsibility for being a good steward of charge cards. the deputy was arrested in 2010

and pleaded guilty for embezzling taxpayer money for personal use on items such as luxury hotels, meals, and spa treatments. my question is this. one of the things that was interesting to me that i learned in your responses to the questions that senator collins and i posed in our letters was that there have been very few disciplinary actions that gsa for purchase card abuse in the last five years. only one action in 2007, one in 2008, and none at all for years 2009-20 # -- 20 # 11. maybe that's because there's no purchase card abuse, and on the other hand, when we see some of the other irresponsible behavior you got to wonder, and i, therefore,mented to ask you going -- therefore, wanted to ask you

going forward are you either looking into whether there have been abuses that should have led to disciplinary action, or are you taking proactive steps now to make sure that there are no to the best of your ability to the uses of the purchase credit cards? >> the answer to both questions is yes. on the retrospecktive work, we work closely with the inspector general going through and looking at particularly these conferences and other spending. spending in areas where we saw a pattern of abuse, and go and reconcile past purchase card or travel cards to see if we can find anything there. going forward, i think it's important that we create the same kind of systems in oversight that make it impossible for people to hide behind the organizational complexity, and raises our visibility into how people spend taxpayer money within gsa. one, we reduced the number of purchase cards within the

organization by nearly 15% with just simply taking back a bunch of the cards. the other thing we're going to do starting in the next fiscal year is we're going to buy a set of analytical tools so that we can really look at the purchase card volumes through gsa and try to find patterns and discern information. this is something that the credit card companies, the purchase card companies provide as an extra service, and we're going to avail ourselves to it to get better data, more transparency so we can see what's going on in the field. >> i appreciate that. mr. miller, document -- do you want to comment on the use of purchase cards? >> we have ongoing reviews and since 2009 we uncovered $1.9 billion in purchase cases. i highlighted that in the opening statement. we continue to analyze them. our office of forensic auditing makes investigations and makes

referrals. we have criminal investigations going regarding abuse of purchase cards. >> okay. that's important. it doesn't really seem accurate or adequate that there were only two disciplinary actions in the last five years at the agency for improper use of purchase card. do you agree? >> i can't dispute that figure. i don't have disciplinary actions taken against holders of purchase cards. i noted in one case that's ongoing, the purchase card authority was reduced. >> yeah. >> so that did occur. now, of course, the prosecution, a criminal prosecution is not a disciplinary action. the person is usually fired as a result. >> right. is that one going on now? >> criminal investigation?

>> yeah. >> i believe we have more than one. >> yeah. and outside the western region or is that -- >> yes, outside -- at least one is outside. >> oh -- >> we have others going too. >> okay. >> yeah, i think they are all outside of western region. we also have criminal investigations in region nine as well. >> right. okay. that's important, and certainly says that what you're doing to try to curb the possibility of purchase card fraud by employees of gsa is totally justified. i want to pick up on a question that was asked about the region. we talked about how important it is to get the regions under control from the central or head

quarters operation, but i think there were other questions to ask about the regions as well, and i'll start with you, with a broader question. gsa now has 11 regions. the national capital region and ten other offices, and i wanted to ask you whether you thought about the baseline question of whether this is too many regions? whether gsa really needs that many regions? >> actually, that has been the first question we asked in each one of the top to bottom discussions we had with each of the regions. >> yeah. >> by the 11th time, i answered the question, they were better at answering it, but the fact is that what we do has stuch retail component to it, if you will, that we actually manage, you know, over9,000, close to 10,000 individual facilities, and those have, you know, leases or government owned, specific, local needs, and they have specific, local requirements.

we do contracting work with agencies that are spread throughout the entire country, and so their specific needs that those agencies have. the big question we have to ask ourselves, though, is how do we structure the regions, and do we need redundant and due publictive systems in the regions? how do we overcome the challenges that have faced the organization since that piece in 1955? the ability to have transparency and visibility into what's happening at the local level and making sure there's consistency in the way the services are delivered. one of the things that was very striking to me and really supported our decision to move forward with consolidating our i.t. function is that we have 11 different building management systems. each region has their own i.t. system for managing building operations. >> right. >> that -- ewe know, buildings, yes, each one is different, but

there's not that variation. as a result, we don't have as much visibility into the way these buildings are operated. brian and his team's job is harder. as a result, we don't have the best control and oversight magnificent of the resources. we need to untangle that web of reporting of transparency. i think we have to ask ourselves the bigger question, the question not asked since we're founded in the late 40s, early 50s, what is the best way for us to cover the map and cover services. >> okay. your answer today is you're considering whether the 11 regions are appropriate or too many? >> i think that's fair to say. that's a broader discussion we want to have a part of the budget process, we want to continue to have it within the organization. in the meanwhile, though, that

is not a reason for us to -- >> yeah. >> not to make sure regional administrators don't have the power and the resources and the accountability they need to oversee the functions, and, you know, it's a big country, a lot of buildings, a lot of transactionings, and we are going to need some regional infrastructure. what does it look like? how does it work? it's reasonable for us to keep asking those questions. >> just one more question on the subject which senator -- do you think, we need a political appointee over each region, or should this rather be a civil service person? >> mr. chairman, that is, i think, really out of my lane to pine on that. the administrators are the eyes

and ears of the senate because they have a great deal of input into the political appointments. on the other hand, i've always been a career employee. i have a great deal of faith in career employees too. this is not up to me to make this call. i have seen abuses each way, so -- >> sure. do you want to step in? >> i was hoping he'd answer for me. [laughter] since he didn't, i have to keep going with it, i guess. no, i think that's also one of those bias line questions to ask ourselves. how do we structure ourselves? how do you have the right level of accountability within the organization? you heard senator mccaskill make the observation that you don't install a group of folks who sit there for so long that they don't feel they don't report to anyone. that having been said, you know, it's hard on a continual

political replacement cycle to find that many high quality people to do those jobs. that's the balance we have to strike. we have the budget review, questions asked, and we do have a constitutional event happening in november that will allow us then to go term to term or administration to administration. it's time to ask those questions. >> very good, thank you. senator collins. >> thank you, mr. chairman. i'm going to pick up where you left off because. we had the discussion that you just did when we were talking on the phone. i think this is a difficult issue. how do you ensure accountability and appropriate authority, and no whom should it be vested? i served as a regional administrator of the small

business administration for new england in the final year of the first president bush's administration. i loved the job. i felt we made a real difference at a time when new england was going through a lot of bank failures. i also heard from the employees that i was privileged to work with about previous regional administrators and some previous administrations who -- how shall i say it -- did not take the job as dill gently as i did. i think that this is a difficult call because these are short term political appointees. some of them are terrific, believe in public service, are excellent managers, have terrific skills. some of them, frankly, are being rewarded for helping the

president be elected, and they may not have the skills necessary. i don't know the answer to this question. i truly don't, and i think it's something that we need to talk more about. clearly, there's an absence of authority and accountability, and that must be solved, but i don't know how to solve it because it depends on the person that's appointed. >> i feel the need to put in a plug for the regional administrators we have. we have a great team. they are committed, engaged, involved. one of the big problems and one of the big problems not resolved since that "fortune" article is that we have not built the real viz the down to the field level of work and so what happens is we have -- we have kind of

bureaucratic cloud cover that prevents us from really seeing what's going on in those organizations and because we don't have the commonty of the systems. it's hard for us to compare the data. the chairman pointed out the fact that we simply couldn't say how much we had spent on conferences because we didn't collect the data in that way, and we didn't have a central repository for recording that expendture. we need to have that. that's what we think helps us maybe solve some of the problems that we had not been able to solve up to this point. >> staying with the theme of accountability, mr. miller, you mentioned the recoveries for improper use of purchase cards and there was recoveries of $1.9 billion, which is a considerable amount. is there an effort underway to get costs recovered from the improper expendtures --

expenditures related to the private parties at the western region that were charged to the taxpayer? i understand there was a $120 birthday cake that an employee's spouse allegedly impersonated a gsa employee in order to get him to certain events, that per diem meal charges were submitted although meals were provided at part of the conference. is there an effort to recover those costs? >> that was one of the first conversations i had with dan, and dan and i talked about it, and i'll let dan tell you how he's actually submitted bills to these employees. >> with the assistance of the inspector general, the team helping us review the expenditures, we actually have submitted bills to a number of the employees. we received reimbursement from a number of employees involved in

the questionable activities. we withheld final payments of severance or other benefits for some of the employees who no longer are with gsa. in one case, we received reimbursement from a contractor that had provided uneligible expenses on their voucher to us. working closely with the inspector general, i will commit if there's a dollar to get back, i'm going to go and try to get it. >> glad to hear that. that's part of the accountability that also receivers as deterrence, and it doesn't substitute for disciplinary action that should be taken, but it should be part of the attempts to make the taxpayers whole, and i'm pleased you're being aggressive on that. i also want to follow up on the chairman's question about purchase cards. you mentioned that you'd reduce the number of people who had

access to purchase cards, and i think that that's a step in the right direction. i'm wondering if you've also considered putting a limit on how much can be charged to a purchase card. for example, our investigation revealed that an employee used a single purchase card for purchases totaling over a million dollars during a seven month period, and it appears to include some purchases from a vendor that was paid $104,000 when the purchase orders appeared to authorize only $55,000. this race is a bigger issue in my mind, and that is do we really want a single employee to be able to charge in excess of a

million dollars in just seven months? >> well, i think the question is what kind of controls are in place and what additional authorizations are required. if they are a buyer using the purchase card for how they are set up to be used as the chairman pointed out to save considerably on the amount of paperwork and the amount of the back shop work, you could have a position where it's perfectly reasonable or fine for someone to spend that kind of money. the question is is there appropriate oversight? are there controls? are other people signing off? do they have the singular ability to spend that money? if it's the latter, that's deeply concerning. i would mention the purposes were related to that one day federal excision service award ceremony that's been so troubling to us as well. >> i would just like to add to that that it was actually our

review working with the inspector general and at the request of congress of prior conferences that led me to refer that issue to the inspector general that particular conference because we saw enough problems with it we really wanted their additional insight whether there was something more than problematic, something just more than just, you know, inappropriate about it, whether there was anything actually illegal. final question for mr. biller i worked on capitol hill when the competition in contracting agent was passed, and as i read through the materials, i saw a notable disregard for the requirements to seek out competition in the award of federal contracts by gsa in order to ensure we're getting the lowest price at the best quality.

this, to me, is extraordinary. gsa is supposed to set the standard. gsa is supposed to be the model. i believe the contract to the resort at which the infamous conference was held was the sole source contract despite the fact there were clearly many hotels that would have been happy to bid on that conference. could you talk to us a bit about the violations of the competition requirement that you found so far in parts of your awe districts -- audits 1234 >> senator, you are exactly right. unfortunately the competition in contracting act, we uncovered a number of violations in connection with projects and testified on those violations in other committees. we have submitted a proposal that would require gsa to report

a violation of competition in contracting act to the oversight committees. much like the deficiency agent because currently, we identify the violations, but there is no remedy, and so we do have plenty of audits that have that as a finding that they did not have adequate competition. they violated the act, and unfortunately, it is not isolated, but it occurs a lot. >> thank you. in many ways, those are the hidden costs because we don't know how much would have been saved if the service or good had been put out, and we'll probably never know how much additional lost taxpayer money was involved. i think that's important, and i like your suggestion of the report to congress that

something, i think, will follow-up with you. thank you, both, for your testimony. again, i want to thank you, both, for taking on this task in such a serious manner. we do have to get this straightened out, but it's nothing that erodes the confidence of taxpayers more than reading of the scandalous examples of wasted dollars at a time when -- senators today working on a measure to provide training for veterans looking for civilian jobs and give them priority in hiring for federal jobs. now, members return for a vote to move a measure forward. vote:

vote:

the presiding officer: are there

any other senators in the chamber wishing to vote or to change their vote? hearing none, the yeas are 84, the nays are 8. the motion to proceed is agreed to. mr. reid: mr. president, i couldn't hear the number. what was it? the presiding officer: the yeas are 84 and the nays are 8. mr. reid: mr. president? the presiding officer: the majority leader. order in the chamber, please. mr. reid: on behalf of senator murray i call substitute amendment 2789 to the attention of the chair. the presiding officer: the clerk will report the bill. the clerk: calendar number 476, a bill to require the secretary of veterans' affairs various to establish a veterans job corps and for other purposes. the presiding officer: the clerk will report the amendment. the clerk: the senator from nevada, mr. reid for mrs. murray proposes amendment

number 2489. mr. reid: i ask for the yeas and nays. the presiding officer: is there a sufficient second? is there a sufficient second? there appears to be. there is. the yeas and nays are ordered. mr. reid: i have now, mr. president, a first-degree perfecting amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid proposes amendment numbered 2808 to amendment number 2789. mr. reid: on that i ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. there is. the yeas and nays are ordered. mr. reid: i now have a second-degree amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid, proposes

amendment number 2809 to amendment number 2808. mr. reid: i have a cloture motion to the substitute amendment. it is at the desk. the clerk: we the undersigned senators in accordance with provisions of null 22 of the standing rules of the senate hereby move to bring to a close debate on the substitute amendment number 2789 to s. 3457 a bill to require the secretary of veterans' affairs various to establish a veterans job corps and other purposes signed by 17, reid, harkin, bingaman, gillibrand, leahy, sanders, inouye, cardin, boxer, menendez, casey and mikulski. mr. reid: i have an at the desk at the language proposed to be stricken. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid proposes amendment 2810 to the amendment proposed to be stricken by amendment 2889. mr. reid: i ask for the yeas and

nays on that amendment. the presiding officer: is there a sufficient second? there appears to be. there is. the yeas and nays are ordered. mr. reid: i have a second-degree amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid proposes amendment number 2811 to amendment number 2810. mr. reid: i have a motion to commit with instructions. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid moves to commit the bill s. 3457 to the committee on veterans' affairs with instructions to report back forthwith the following amendment numbered 2812. mr. reid: i ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. there is. the yeas and nays are ordered. mr. reid: thank you, mr. president. i have an amendment to tin structions. they've -- that has been filed

at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid proposes an amendment numbered 2813 to the instructions of amendment 2812 to commit s. 3457. mr. reid: i ask for the yeas and nays on that, mr. president. the presiding officer: is there a sufficient second? there appears to be. there is. the yeas and nays are ordered. mr. reid: i have a second-degree amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid proposes amendment numbered 2814 to amendment numbered 2813. mr. reid: i have a cloture motion to the bill which is at the desk. the presiding officer: the presiding officer: the clerk will report the cloture motion. the clerk: we the undersigned senators hereby move to bring to close to debate on the bill to require the secretary of veterans' affairs various to establishes a veterans job corps and for other purposes. mr. reid: i would ask the reading of the names be waived.

the presiding officer: without objection. mr. reid: i ask consent the mandatory quorum be waived on the cloture motions just filed. the presiding officer: is there objection? without objection. mr. reid: i move to proceed to calendar number 4299, s. 2531. the presiding officer: the clerk will report the motion to proceed. the clerk: motion to proceed, s. 3531 to amend ther internal revenue code of 1981 to extend certain expiring provisions. the presiding officer: the majority leader. mr. reid: now that the senate has finally adopted the motion to proceed to the veterans jobs bill we've brought to a close the 380th filibuster during my time as majority leader.

less than six years. just now to start to bring debate to a close on the veterans jobs bill itself i've had to file the 381st cloture petition during my 5 1/2 years as leader. that's 381 cloture motions filed in just six years, actually it's less than that, mr. president. for comparison, six outrageous, mr. president. the the people's timing wasted. we just finished 30 hours of nothing. we're just starting our next 30 hours of nothing standing around looking at each other.

filibusters have increased in recent years but this is really unbelievable what has happened. the level of republican obstructionism has increased dramatically. it's increased dramatically just in the last few years. mr. president, we don't have to fight over everything. a veterans jobs bill, does that deserve a fight? when we were in recess subject to the call of the chair, the an veterans was brought here. he was missing one leg. he's 25 years old. he's an army -- he's tried to hang on to his other leg. mr. president, i wanted the pages who were in here, i called them up, introduced them to this young man. i wanted them to see what all this talk is about, of people who sacrifice for our country.

this man hopefully will be well and after some more rehabilitation time that he can go out and look for a job. and have at least one artificial limb. this is a veterans' jobs bill that is being held up, for what reason? i don't know. or do i know? the bureau of labor statistics notes there are about 200,000 unemployed post-9/11 veterans, approaching a quarter of a million. and as our nation appropriately winds down our military commitments abroad, we can expect increased numbers of newly separated veterans to enter the work force. the veterans' jobs bill is a $1 billion investment in our veterans. this bill would increase training and hiring opportunities for veterans that would help to create jobs for vets. i commend senator nelson of florida and the chairman of the veterans' committee, senator

murray, for their hard work on this bill. you feel, i've already received word that the senators -- republican senators -- are simply unwilling to pass this measure. one republican senator, for example, is insisting on a vote on something relating to pakistan. another senator has filed a right-to-work amendment. and yet another republican senator has filed the department of defense authorization bill as an amendment to this bill. as important as pakistan and many other issues are, the senate ought to be able to focus on this young man that was here in the well this evening. we ought to be focusing on creating jobs for veterans. now, we all know what's happening over here. the republican leader, you have to admire him, he stuck to it. his number-one goal is to defeat president obama.

and that's why we haven't been able to legislate. everything has been stopped. everything. we've been able to push through a few things but not many. as always, i will do everything i can to work with senators to get consent agreements to provide for consideration of this legislation. if we can reach agreement on this, however, i don't have much hope but i guess i'm always hopeful. but in the meantime, i'll do what i need to do to ensure that the senate can vote on this important measure. i'll do what we can to help create jobs for america's veterans. we need to do it for everyone. but can't we just agree on veterans? i know that now we're 30 hours postcloture. we all know the drill.

scores and scores of times. the presiding sf is a new member of this senate, relatively new, served here going on two congresses. but he's an expert at watching this. the senator from oregon has watched this and he understands what's going on and it's not very good. so the time will run out on th this, 30 hours from whenever the vote was turned in, but we -- first of all, mr. president, we -- we just -- mr. president, it's easy to get -- especially when i'm used to the math, the ryan math, you get mixed up on numbers a little bit. so let's go back to where we were. we've just completed a wasted 30 hours. i had to file cloture now on the underlying -- underlying bill. i've done that. now we have to wait two days for this to ripen.

the two days is going to expire on friday. now, we are going to vote on friday but it's not going to be at a time convenient to everybody. we're going to come in shortly after midnight tomorrow night ask we're going to vote on this. and then the 30 hours can start running then. and then we'll vote saturday again. if people cannot work together to help veterans, then we're going to make sure the american public knows what's going on here. so we won't vote tomorrow night but we will vote -- we'll vote -- it has to be any time two days from now and we can do that tomorrow night, mr. president. actually, friday morning. early. a little after midnight. and i'm sorry i got a little mixed up on the 30 hours, two

days for something to ripen, and then, as i said, i've been very confused because of the ryan math. it's really been difficult for me to accept all that. a senator: mr. president? the presiding officer: the senator from kentucky.mr. paul: where to start? i mean, what a charade and what a farce. the majority filibusters their own bills. they fill up the amendment tree. they don't even pretend like they're going to work with the other side. how do you expect to pass legislation if you won't allow any input from the other party? a charade and a farce. as far as helping that young veteran, our soldiers went to war in afghanistan to get bin laden. we finally got bin laden and we got him with the help of dr. dr. shakil afridi. i don't see one peep from the other side, i don't see one bit

of concern for the man who helped get bin laden. our soldiers went to afghanist afghanistan, that young man lost a limb, a young man in my town also lost three limbs. they did it to get this horrible mass murderer, bin laden. this happened and this is why we went to war and we're going to do nothing to support the man who helped us get bin laden? we send good money after bad, billions of dollars have been squandered in pakistan. pakistan then tortures the man who helped america get bin laden. and we do nothing. i've asked for 15 minutes to vote on this issue. 15 minutes. no one's obstructing this for any sort of personal vendetta. i'm more than happy to work with the majority. i care deeply about the veterans. i care deeply about housing and helping the veterans who have fought for their country.

but this is about whether or not we as a country and the american taxpayers will be asked to send good money after bad to allies that are not acting like allies. today we were reminded that our enemies are relentless but we are also reminded that our so-called allies are not acting like allies at all. we are saddened by the assassination of ambassador stevens and his fellow workers and we are appalled by the lack of protection for our embassies by our supposed allies. we send billions of taxpayer dollars abroad, and what do we get in return? disrespect, disdain, and now ultimately violence. i have two amendments that i wish to call down. first, not one penny should be sent to libya until the assassins are delivered to justice. not one penny should go to egypt until they guarantee the safety

and protection of our embassies. and, second, not one more penny should go to pakistan until the doctor who helped us get bin laden is freed. is it too much to ask of the senate -- i'm more than willing to cooperate. i'm more than willing to let those go home who want to go home and campaign. i know it's going to be a tough election for the other side. but the thing is, i'm more than willing to let you go home any time. i do this because it's important that our allies act like allies. it's important that we have a vote, that this senate go on record and say, do you support the american taxpayer, do you want to help the man who helped us get bin laden? and so, mr. president, i ask unanimous consent to set aside the pending amendments and call up amendment 2783 and also another amendment that is at the desk and yet to be numbered. the presiding officer: is there

an objection? the majority leader. objection is heard. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: the senator from kentucky that says there's no input from the minority, but, in fact, the substitute amendment

we're going to vote on in the next day or two that's now pending before us has numerous provisions authored by senate republicans. i respect the senator from kentucky's interest in the relations with pakistan, egypt and libya. but every now and then, the senate should be able to focus on a small good thing. to veterans, this is a big thi thing. like helping them. and so i understand my friend's tenacity but i understand also how the senate operates. i just think that my friend from kentucky maybe should have bee been -- should have run for secretary of state rather than the senate. a senator: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call: quorum call:

mr. reid: i ask consent that the call of the quorum be

terminated. officer without objection. mr. reid: i ask that we proceed to a period of morning business, senators allowed to speak up to ten minutes each. officer without objection. scried i now ask unanimous consent that the senate proceed to h.r. 336 -- 6336. the presiding officer: the clerk will report. the clerk: an act to direct the joint committee on the library to accept a statue depicting fred lick dug us will and provide for a permanent display in emancipation hall of the united states capitol. the presiding officer: is there objection to proceeding to the measure? without objection. mr. reid: i ask unanimous consent, mr. president, that the bill be read three times, passed, the motion to reconsider be laid on the table, with no intervening action or debate, any statements related to this matter be placed in the record as if read. the presiding officer: without objection. mr. reid: i now ask consent that the senate proceed to s. res. 551. the presiding officer: the clerk will report. the clerk: s. res. 51,

commending the four american public servants who died in benghazi libya, including ambassador j. christopher stevens for their efforts on behalf of the american people in condemning the attack on the united states consulate in benghazi. the presiding officer: is there objection to proceeding to the measure? without objection. mr. reid: mr. president, i now ask that the resolution be bread to the preamble be agreed to, the motion to reconsider be laid on the table, with no intervening action or debate, and all senators be added as cosponsors to the resolution, that any at the same times related to this matter be printed in the record as if read. the presiding officer: without objection. mr. reid: i ask unanimous ask ct the senate proceed to s. res. 552. the presiding officer: the clerk will report. the clerk: s. res. 52, wrecking the month of october 2012 as national principals month. the presiding officer: is there objection to proceeding to the measure? without objection. mr. reid: i ask that the

resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table, with no intervening action or debate, any statements related to this matter be printed in the record at the appropriate lace as if read. fer if he without objection. mr. reid: i ask that we road to s. res. 53. the presiding officer: the clerk will report. the clerk: s. res. 553 designating september 22, 2012 as national falls prevention awareness day, to raise awareness and encourage the prevention of falls. among ordinarily adults. -- among older adults. the presiding officer: is there objection to promoting measure? without objection. mr. reid: i ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table, with no intervening action or debate, and any related statements be printed in the record as if read. the presiding officer: without objection. mr. reid: i ask unanimous consent that the senate -- when it completes its business today it adjourn until 10:00 a.m. tomorrow morning, thursday, september 13. following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, and the time to be the two leaders be

reserved for their use later in the day, the majority leader be recognized and the first hour db when we come in, i be recognized and that the first hour be equally divided and controlled between the two leaders or their designees, with the majority controlling the first harks the republicans the final a. the presiding officer: without objection. mr. reid: this evening the majority -- i filed cloture on the substitute amendment to the veterans jobs bill. as a result, the filing deadline for first-degree amendments to the substitute is 1:00 p.m. tomorrow. under the rule, the cloture votes in relations to the veterans jocks bill will occur on fry. taked about that earlier this evening. we'll decide what time we'll do that tomorrow. we hope we can reach agreement to have the vote or votes tomorrow. and if not, mr. president, we'll be voting this weekend, including tomorrow, late at night. if there is no further business to come before the senate, i ask that we adjourn under the previous order. the presiding officer: the

senate stands adjourned until senate stands adjourned until a

>> i've been astounded that for a piece of history that we know so much about, columbus kept numerous journals, but lots of letters, took more trips to the americas and then starting with this second trip, their elected officials described that army officials in all kinds of people doing lots of writing. missionaries. we know what happened. 30,000 people had their hands chopped off. within 30 years, 2 million inhabitants have asked daniela had been killed. this is part of human nature. no human being wants to be judged by their darkest day. no nation wants to be judged by their darkest day. but when nations have dark days, we have to acknowledge that.

>> former secretary james baker and robert rubén on the fiscal challenges facing the u.s. and politics of dead. a half-dozen organizations in the coalition hosted this to our discussion. [inaudible conversations] >> good morning, everybody. kinnear may? i don't know if this is working. thank you very much for coming. we welcome you. we are delighted to have you here for the start of a series. this is a serious but considers

america's greatest national security risk. and that is our fiscal and alan. we cannot -- we cannot remain a global superpower if we have such a fragile feet of clay when it comes to our financial underpinning. this is truly a national security issue, which is one of the reasons why we see sis want to be involved with it at the other reason is my boss ever going to do that and that is senator sam nunn. she said when your boss wants to do something, do something. so i went to thank you, boss, and i look forward to recommend fuller these sessions. why are we doing this and why are these gentlemen are former members of the house, former members of the senate. why are they doing it? because america is not having a debate on what really matters. what really matters is the fiscal future and finding a common sense solution that meets

the basic test of fairness and efficacy. and both parties have the same strategy for this election, which is to anchor their own base so much the vote against the other guy. they're both doing the same thing and that is not a foundation for solving the fundamental problems we have in this country. this country is come in a perilous way, financial. and we have to have a strategy that eats that test that is fair and makes sense. and the only way to do that honestly is to do it a bipartisan basis and this is what you are seeing here. you are seeing leaders said in their careers, and congress have the strongest commitment to finding solutions, not having debating for spirit and it worked to find solutions. that is what this is going to be about and i am so pleased that were able to bring them together and it wouldn't be possible

without senator nunn, my boss, taking early to make it happen. so let me turn it to him to get started for real. i want to thank all of you, but i would also say everyone in this room, i think you take it seriously, which is why you are here. yet just as much of a responsibility as they too to get this an agenda for the country. so senator nunn, i thank you. [inaudible] >> i appreciate your welcome, john, and appreciate you making craig colin in and resource available to help him to suffer. they've been invaluable. and while i'm here, to be completely unbiased, we thank you for making csis the premier national security foreign policy think tank of the country and perhaps in the world. so we thank you for all of that. before anybody else does it come i want to label this the overhead of gang at her. so that is what -- we've been there and i'm mad at me feel

like we've got to call one more time to try to see if we can get together and help the country. i want to start by thanking my law partner pete domenici and the bipartisan policy center including steve bell and also including alice rivlin was not at this morning, but will be further foreign spirit and special thanks to my cochair of the concorde coalition, which is cohosting this and playing a big role. cochairman warren rudman from the very beginning, terrific leader and moran couldn't be here today. i've invited joined us earlier in a telephone conference, but could not be here today. they have been full partners in planning and sharing this forum with pete domenici and myself. bob bixby in the concorde coalition team have been at the supper.

we thank you and we'll be hearing from those in the course of the forums. this is the first of four forms organized by several organizations who perform a variety of different belief that america's current fiscal course is both irresponsible and unsustainable. these organizations beyond concorde, csis include the american business conference, miramax that before him who have been leaders in this arena for a long time and worked with pete and i am strengthening america commission many years ago. jamesa baker the third institute of public policy at rice university and you'll hear from jim necker later this morning at the belfry center at harvard university, graham allison and his crew. the hoover institute at stanford university, john taylor to hear from later. and former ceo -- cbo rather, direct or rudy pinner who is here this morning and has been invaluable and his advice and

guidance. or also working to full cooperation of the campaign to fix it at shared by new hampshire senator judd gregg and ted randel and lead very capably by the committee for responsible federal budget, president brian mcginnis. not sure whether my has made it here today, but she is doing an outstanding job and working on this fiscal arena. were also working closely in this quest with fiscal sanity as i call it with david walker's comeback america initiative and peter g peterson foundation's ongoing and invaluable efforts to call attention to the fiscal challenges that threaten our nation's future. finally i think all 35 of our former senate colleagues who have signed onto this initiative and whose names you will see in your program. we are honored to have with us on this panel is former senator, bill brock, byron dorgon and bennett johnston, former representative bill frenzel, dan

glick named and john tanner. you would hear from them in just a few minutes. some of you may logically ask, what brings former members from both political parties together in the heat of the election? my answers are growing concerned that our nation is in a perilous fiscal position. plus the seeming inability of our political parties toured together. but we are not here to preach doom and gloom and hopelessness because we believe are feasible and responsible solutions that we can pursue to protect their children future if we work together, if we work together. to succeed our elected leaders will have to summon more political courage and be willing to engage public and honest dialogue about the magnitude of the challenge and trade-offs involved in various solutions. when you're not about numbers in these forums, but this is not a

complicated calculus or physics problem. it's about addition, multiplication and far too seldom subtraction. the hard part is making political choices that involve compromise and shared sacrifice and it's just not about numbers. it's about discussing fiscal challenges for citizens and taking control of our own fiscal future before the debt dominates our choices and also our children's future. this day in my view is not far away. ultimately this is a moral issue. each of us should think about the nation we inherited from mothers and fathers and ask what we're leaving to her children and grandchildren. from those we now praises the greatest generation, we inherited a country with a sound balance sheet that underpinned a growing economy in which children could look forward to being better off than their parents. unless we asked not to bend current trendlines commode will pass along her children and

grandchildren a nation weighed down by unmanageable debt and unsustainable deficit. let's not pretend it will be easy. not only do we face looming burden of debt, the u.s. and global economy are fragile. america faces to the challenges if we restore prosperity. the economy must grow, which requires private and public investment in skills, knowledge, modern infrastructure and a progrowth tax system, which we certainly do not have now. the other challenge we must put our federal budget on a sustainable path so that debt is no longer racing faster than the economy can grow. these two challenges must be addressed simultaneously. we cannot have growth without fiscal stability for fiscal stability without growth. failure to address the living dead or weakened the competence of both consumers and savers and inhibit faster recovery and job growth. but sharp, immediate cuts in

spending are large and immediate increases in taxes such as those now on automatic pilot for january 1 unless action is taken, it will likely push us back into a serious recession and of course then the deficit and the debt get worse and worse. while this task is difficult, it also offers us an opportunity to create a virtuous cycle of, greater fiscal stability would promote economic growth and future growth and increased fiscal stability. the good news is that current members in congress of both political parties, teas and ours who understand the stakes that are willing to work together by putting the country first, but they don't get support for their leadership and the congress, nor did they get support from the white house. as we saw the last two weeks, democrats and republicans have very different ideas about the role of government and what it should cost. my concern is not the difference

is subtle. the soviet different political parties. always have and always will. but my concern is the easiest compromise as it so often seen is to pay for the democrats vision with the republican vision of lower taxes. that is a bipartisan compromise we can no longer afford. there's an old country stand up and the axes in the tissue have to focus on a gated out. in my view, both political parties spend most of their rhetoric and most of their attention on who put oxygen in the ditch and little about how to get it out. even those who believe their party is 100% right and the other party is 100% wrong, have to recognize there is no chance that one party is going to be able to run over the other and impose his perfect solution, & co., certainly not intend to prevent severe damage to our nation. we can no longer afford to act out winston churchill's prediction that america will

always do the right thing after we have explored every other alternative. common sense america must rally to support people to the other side and find ways of working together. our elected officials will build bridges at the american people demand it. that is what this is all about. the american people have to get involved. it is encouraging that some thoughtful individuals and bipartisan groups have developed a reasonable set of reasonable policy options that could stabilize the national debt, encourage economic growth and ensure the sustainability of critical government programs like social security and medicare law and into the by making modest changes now. two of these groups produce reports that deserve close attention, both because of individuals involved in the comprehensive nature of that recommendation. the national commission on fiscal responsibility and reform

by erskine bowles in a bipartisan policy center debt reduction task force chaired by a pete domenici and alice rivlin. we will hear from this forum next week and we have our friend keep with us today. both groups were able to reach agreement on plans that called for shared sacrifice for substantial changes throughout the federal budget rather than some selected parts of it. both groups took our fragile economy and short-term economic concerns into account while they not credible, long-term, structural reforms. they put everything on the table. they did not pretend they can make social security and medicare untouched and get the oxide of the ditch. they did not pretend we can increase the defense budget and decrease revenue and get the oxide of the ditch. in both the house and senate, some courageous members of both parties also desired their

efforts to build up pond to simpson/bowles and sent through recommendations. our annual dinner on thursday september 20 goodbye she was pleased to honor senator saxby chambliss and senator mark warner 213 of six in the senate, leadership on this crucial issue. to raise awareness about our national fiscal crisis, are strengthening of american group plans to have for forums before the first presidential debate. today's session will focus on the global economic and foreign-policy implications of america's debt. i can't think of any two leaders were credible to discuss this and former treasury secretary, robert rubin and former treasury secretary of state, jamesa baker the third. people introduce both bob and jim when they join us at

precisely 10:30 a.m. jim baker is coming in by satellite. our next forum will take place monday afternoon comes september 17th here is the sis about the visit to panels. the first panel next monday will focus on national security implications of the nation debt. we'll be joined by secretary of defense bob casey former chairman of the joint chiefs, admiral mike mullen. secretary gates will join us by satellite from washington state. the second panel next monday will look at bipartisan solutions. we'll be joined by alan simpson, white house chief of staff, erskine bowles, both by satellite as well as pete domenici and omb director alice rivlin hearing person. the third forum will be on thursday, september 7 in new york city and will focus on progrowth tax reform and will announce as participants in a couple of panels next week. the fourth and final four and

will turn to washington in monday afternoon, october the first at the topic will be health care and entitlement cost control. of course this is the most important and most difficult challenge, but it has to be faced. that is what we scheduled. i briefly, what do we hope to accomplish? simply put and enabling each understand the nation's fiscal crisis inside and outside of washington paper but the average american, especially young people to better understand what is at stake for them if we don't get this right. these are not table stakes. what we do or don't do will affect this country for a long time in the future. we want the media to hold candidates accountable to ask tough questions and follow-up questions when their plans for a sick arithmetic. we want to support, strengthen and add to the group of senators and members of the house of both parties before their political

party and they will explain how they work with others to solve this crisis rather than playing let's pretend. our leaders in washington can no longer answer the question of what is two plus two with another question. what do you want it to be? fiscal matters in both parties have a robust political strategy. no doubt about that. america's future requires a governing strategy. all is essential if we need strengthening america and protecting our children's future. over to you, pete. >> thank you very much, sam. join me in thanking you, wish we had done to bring this form to this point and as we listen to you, we feel certain that we look at where we want to go.

.. work together to forge budgets that try to balance government spending with revenues. we had colleagues on the left and the right who expect -- except for a handful of the extreme were partners in a work. even after your retirement,

senator, congress, and president worked together despite the pat disarn ranker that may have been there in the prior life. indeed after devotions between president clinton and the congress, we were able to create four consecutive years of balance budget. many watching this event today may forget the drama and the tensions surrounding the negotiations. we had our aid lodge then just like now. however we put together a coalition. i call it a coalition of the courageous. what we face now is more dangerous than what we faced ten, twenty, thirty years ago, but we we see policy makers refuse to corporate as if america had all the time in the world to solve the fiscal problems. if we do not address the debt starting now, we risk suffering an economic emergency. we risk turning our great land in to a poor country, a lot i

was -- hold enough to appreciate the dangers of measuring faced in world war ii, i know that our very existence wassed at stake. i believed that our existence as a powerful nation able to uphold the values that we hold dear is threatened today. it is not some foreign power that threatens us. it's our own unwillingness to take actions necessary to curb our debt that all sobers and analysts worth listening to and policy makers call unsustainable. debt is not something that we see on the daily basis. we don't think about it as we watch a football game or the nfl or take our children to school or go support the nationals as a new wonderful team here in town. it is a silent killer. slowly eating away at our society.

it is easy to ignore too many people are fooled by today's historically low interest rates. those rates aren't low to market analyst because se the least run down house in the terrible neighborhood. global investors put safety and preservation of cape tal first in this dangerous world. our debt, although it is huge, is considered relatively safe for now. with the federal reserve as buyer of last resort, the global economy weak, low interest rates on our debt are inevitable. but that won't last forever, at some point markets will demand that america be paid a competitive rate for the debt. indeed if historical rates in the the ten-year note in "the

situation" now within a decade the interest payments would exceed every dollar we spend on national security. every dollar. the debt is not a republican debt. it is not a democrat debt, and there is no use in one party blaming the other for the debt. it is an american debt as it approaches this particular time in this country's life. the only solution to it is an american solution. one where leaders of both parties get together in a better future of defiance of polarized ideology that dominate today. let me stress three things. the time to act prudently has come. indeed it has been here for some time. second, delay merely means that measures that are long-term that can be faced in with only a little pain will become short term and cause great disruption

and pain. for example, our health care spending continues to dominate out of control spending and perhaps we can show that on the graph. show the particular one. you see it? can you see health care spending where it is going? the blue line, it is going up, up, and away. that's what we what we. we can reform the system now and phase in reasonable changes or be faced with a crisis like greece for benefits need to be slashed overnight. the third, policy makers have to admit that they have made policies they cannot keep. made with good intentions, yes. but given america's demographic, they cannot be kept. we cannot keep health care promises we have made in exactly the form that we have made them. we cannot keep a tax system that

we have promised. we cannot create programs that attempt to solve every ill that mankind is eared to. and senator nunn, the third point may be the key. policy makers have fumbled around and fumbled around this issue again and again for years and now because none of them want to admit that they have made promises that cannot keep. it is easier to be aid logically air grant than it is to be realistically humble. our leaders have the opportunity write the fiscal ship. it will take cooperation and decisive pes, but the excuse that politics are tough and tougher today than in our time simply won't wash. every generation has had that excuse. vietnam, watergate, rite in the street, foreign aggression, war

we are here today to challenge our policy makers to face up to the challenge and restore the economic strength of this nation. there is no way out. and closing, it can be done. thank you. >> thank you very much, pete. [applause] >> we're going do this in alphabet call order given the various seniority. and the present sensitivity between the upper a and lower houses. bill? >> the cause of education reform in 1983, [inaudible] really good folks published a report called "nation at risk." when the urgency of reforming our education system. it's been a 30 thirty years

sin we have had that report on the desk, and precious little has been done in many cases with are at least as bad off as we were. we are now in a fiscal world this is a nation at risk. and we don't have the luxury of waiting for another thirty years. we don't know -- [inaudible] but it just stunning to me to see [inaudible] the last couple of days say they're in the process of downgrading u.s. debt as s&p. but unbelievable that the debt of the united states can be at risk. but they there you have it. it's a big deal. there's no particular magic. the truth is, we've elected learns who have been unwilling to tell us we have to pay what we ask for. so we haven't done it.

the debt is now burdening our economy, our growth, or job creation, and frankly even our attitudes. it creates a [inaudible] that says don't take risk. you already owe too much. when you slow down that regard you slow down the ability to solve the problem. that's where we are today. so a couple of rules as we begin this conversation to shift from a problem approach to a solution approach. first of all, let's try to get our leaders to say there are no quick fixes and there no absolutes. let stop. the exercise that they will never support a tax enclose or touch on social security or

entitlement. all that does is to delay the honestly the ability to work together. we have to do what we have to do to fix the problem that we created. and that's the bottom line. so i guess where i'd like to end up, if the people have not been told the truth, there can be no higher responsibility for us as leaders for those who are candidate to inform them as to the degree of risk they and their children face. that summerly means that we have to do have in the campaigns when we're asking for peoples votes a willingness to stay, i can't do it without the other side. you can't keep saying i'm not going talk about this until they talk about that. you have to be in the same room at the same table, both are you

saying the country has a problem. and until we do, we will be tragically a nation at risk. >> thank you, bill. byron? >> thank you very much, and let me thank sam and the pete for the leadership as well. i'm here to support the effort. i think we are a lost in a long, dark tunnel of fiscal policy trouble and i think it's a danger to the future of this country. we know that we have a crushing debt that is growing and unsustainable. and we know that that exist at the same time as we have a weak economy struggling to find the footings. there's an urgency, i think, to summon the will and the wisdom to deal with the circumstances at the same time. the d.a. limb ma is that some will tell us the solution for a weak economy is completely at odd with the solutions to put our fiscal policy back on

track. i understand the teachings of economic, taught some myself in college. i believe that we can do both and must do both for the future of the country. the solutions are obviously not painless. they are painful. but it just seems to me that a plan that asks americans to be a part of something bigger than that themselves a plan that would give them confidence about the future is a plan they will embrace. it's the case that in a era of rancid partnership perhaps more than any of us who serve for a long while in congress have ever seen. some would say it is just not possible to reach comprise and set the country on the right course through political cries. i don't agree with that either. i think the history of a couple of hundred years of history of this country is sprinkled with the examples of leadership and

comprise and courage and character that sprouted flowlt our country in the right moment by people who put the country's future ahead of their own future. i believe that will and can be the case today. but it needs to be nudged and that's what the problem will be pushed is a better example. that's what the the certificate about. i very much appreciate the work that is being done by the group. >> thank you, byron. bill? >> thank you, senator. i'm delighted to be here as part of senators nunn and pete domenici have program particularly glad to be with folks of my own age for a change. [laughter] [inaudible] i do want to say that the problem as it has been laid out is real. and the two senators, i think, have given us a pretty complete

picture what we face and how we have to face up to it. i can't embellish that at all. only know we're in an election contest now, none of the parties nor the candidates at any level are probably going to engage in the discourse that we think that's necessary to lead to a solution until after the election. however, after the election we have to have some progress in the lame duck session before the cliff of the end of december. the american public has not grasped the urgency of the situation. congress understanding this -- that the end may not come tomorrow. it may come the day after is content to wait until if comes. there is a time and the american people are not wanting to stand

up to be the first in line to make sacrifices. that's normal. normally they are willing to follow good leadership. and it is now time for our elected leaders and those who will be elected to spanned up and lead. and that's going require comprise, it's going to require give on entitlement taxes, ten, all of the element of the budget have to be involved. we all know that the general framework, but somebody has to negotiate it and that's up to our elected leaders. we're going try to nag them until they do. thank you. >> thank you very much, bill. representative and secretary dan gligman. . -- glingman. thank you to pete domenici if are your leadership.

it's tough to make -- one foot on the brake and the accelerator. now the brakes are burning up. it's tough enough under the best of circumstances. but, you know, in that environment, coupled with the campaign environment money in the political system, 24 media cycle, nobody seem the to be free to make decisions. the incentive for leadership are really difficult, and so but it's not all bleak and, you know, it struck me that when you look at great institutions that worked well from great companies to academic institutions, there is a kind of symbol of a high performance team, teamwork is part of making the institutions work. so you look at fortunate 500 company, you look at europe start-ups, you look at academics and labor union an ngo. the ones that work are based on team work from the top down. they are part of a team.

they work together. we have great trouble in our country now being a team. a high perform team. and i think that makes it more difficult for us to address the very serious problems with deeply controversial are political solutions. i think we can make them, doesn't take rocket scientist to know what we're doing. hopefully after the election, we will go back to a system teamwork. we did that in the second world war and the descrption. we have all day done that it has to be lead by a president who is the ceo much this teamwork. the team so to speak. there's no absolute parallel to a corporate environment but the president set the policy and agenda. it requires people to follow along and work together and i honestly do believe that these concepts that team work and the principles of social institutions are just as applicable to government as they are to the private sector it and

the nonprofit sector. we haven't seen them working very well because of the disincentives they talked about before as byron talked about the need for character and comprise. but in order to get that, you have to make sure that people believe that we're all in this boat together. there's got to be leadership at all levels and has to start with the ceo of the country, the president. and then it -- it's not easy because in political environment we're in, someone defeat a ceo under any circumstance and not make him successful. the truth of the matter is if the ceo is successful in bringing people together, then we can tackle these problems which are not insure insurmountable at all. i'm hopeful this the post election environment with the nagging that bill is talking about. we will be able to look at this is a problem we are in it together. country sinking swim. we begin to operate more like a

high perform team. thank you very much. >> thank you. >> our next speaker is jay bennett johnson democrat from louisiana. i don't know if we were telling everybody where the members were from. i thought i must tell them where you're from. you look so different from when you were here. [laughter] >> thank you. i want to make sure they remember you. [laughter] >> thank you, pete. [laughter] unless the congress acts in the lame duck as we know we go off the fiscal cliff and probably in to recession. this is a broad agreement among us and i think officially among both parties that we need to grand bargain. my concern is that in the lame duck by try dog too much by try to be get a grand bar dan, which is virtually impossible in the

lame duck that we go on the gridlock and that we go off the fiscal cliff. with a can we do? now, there a lot of sentiments for what they call a credible down payment. that is a reduction in the deficit, not all the way to the grand bargain but partially. i think that's a fool'ser rand. it's going to be just as hard to get a virtual data credible down payment as to get a grand bargain. all of these things interrelate tax, deficit reduction, entitlement reduction and each party said we won't give you that unless you give us there. they're all interrelated and there's not time for, in my judgment, a credible down payment. what we can do, what the congress can do in a lame duck in any judgment is two things.

first, agree on the size of the deficit reduction. in my judgment, simpson bowls had it about right at $4 trillion over nine or ten years with $2 trillion in cutting, $1 trillion in taxes. $1 trillion in interest save pings. secondly, they need to provide for some kind of matrix with time horizons milestones so that for example, you can say by march the 1st, you must have reconciliation instruction to the committee telling them how much they have to save in each category, and that must be passed by march 1st. failing to meet that, then you go back to some kind of a sequestration. and have milestones throughout the rest of the year because the

grand bargain is going to take the greater part of a year. i mean,less face it, you cannot reform the tax code. you cannot do the things rapidly in a lame duck. now, in my judgment, we could be useful in outlining and trying to get agreement on that two goals, that is size of the reduction, and the mechanism by which the congress goes in to next year's and enforcemented heck ni. because remember, congress is to going to insist on some of -- sort of fail safe -- so if the congress doesn't act that something will happen like a sequestration. i hope we can get together on that kind of program. >> thank you, bennett. tom roemer democrat indiana and

also ambassador to india. tim? >> thank you, senator, thank you for the relationship leadership and the senators up on the panel. thanks to the think tanks who have helped organize this event, i'd like to point out a couple of things that happened in the last 24 hours, point out two or three trend and talk about why with what america faces globally in the world today is a essential for us to have our fiscal house in order. so that america projects it's power efficiently and effect evely and powerfully in the next century. first of all, in the last 24 hours, we have tragically lost the united ambassador in libya. and on the front page of the financial timeses this morning, the headline read that now might join the s&p as downgrading the

united good credit ratings. excellent credit ratings. both of those project serious threats to the united. one, how do we continue our diplomatic efforts, or military and economic efforts atbroad export to engage the world, explain american values and make sure our people are safe overseas? and two, how do we politic that great credit rating of made in the u.s.a.? i am an optimist. i believe that we can achieve the outcomes. the bock that many people are reading talks about great leadership. quotes some people talking about the worst congress they'd ever seen in terms of a gridlock. and we overcame that. just as i optimistic we will

overcome the gridlock own capitol hill we have seen today. two ways around that our great leadership, "battleship" leadership, democrats and republicans working together as they did fifteen years ago for a plan budget in 1997, and secondly, tweets, blogs, social media, the american people have to weigh in. they have to come forward and say when you take deficit reduction action, good things happen in america. not only for our children, for our businesses, to project forward, predict what they can do for exports going overseas. for the tax code, thing good thicks happen to get our economy to move forward. let me conclude by saying in terms of the optimism they talk

about harry truman once said this, and i quoted, no government is perfect. one of the chiefer have chew of a democracy is the defect are always visible and around democratic process can be pointed out and corrected, unquote. we can't point out the defects and we can with optimism and "battleship" correct these and move forward. we will project american power in the century ahead, and i'm very optimistic for the united states of america the best years are ahead of i.t. thank you very much. >> thank you very much, tim, and our final member today is john tenor. we'll have a few questions from the audience. then we have time we have a beginning at 10:00 30. bewill go straight to jim baker and bob. john, you wrap us up. a democrat from tennessee.

>> thank you, mr. chairman, and thank csis concord coalition and all who participated in this. i intent to be brief. but with the accent it may take awhile. [laughter] yeah. i've been on a lot of panels. i don't know that i've ever on one where i agree with every word that's been said so for a. i hope do you do too. these people have devoted a lot and effort to what we're doing here today. i however that -- hope everyone takes it as seriously as we possibly can. i want to talk a little different. fifty years ago this year, there was a case in the united supreme court from my old congressional district in tennessee called baker v. car inspect the -- the judiciary said they did -- that apportionment of seize based on population was a --

[inaudible] it involved the equal protection, and all the rest of it. and that from that came the system this we have today. that system today is where the state legislatures, politicians, draw districts for state house, state senate, united house of representatives seats. after i don't know about this last census, but for the last ten years, we've been talking about it. we had a billing -- it went nowhere in congress. what happened too us over the time is that we have impose inned a verptly and i think unintentionally a parking lot elementary system on a representative form of government. it doesn't work. and parliament, you know, you only have two -- [inaudible] you have the government and opposition. the government decides something and happens. one of my friend said they suffer up to fife years at the

time. the terne any of the majority. our forefathers intentionally did not want that system and set up a three-branch system. not only does our system encourage comprise, it forces it if our government is to work. our problem with the debt and deficit is not so much math met ics, it's part of it it is the political will do something about it. and the way members come here after the 2000 census there were 91 seats left in the united states house of representatives that were even within the hypothetical margin of error of the 50/50 voting pattern which means over 300 members are being neglected -- elect in the party primary where the most patch elements reside. we wonder why we are the polarization that is killing our

ability in the congress really reach conclusions that are sane, sendsble so that can everybody can at least live with it if not embrace and endorse it. we only talk about this every ten years. but it affects us every day. i hope you'll give it some consideration. and i would just conclude by saying, either we fix our problem or children's future is believing bleak. that's the bad news. the good news is, we can if we have a political will to do so. they cut me off. length of time. >> thank you, mr. chairman. >> thank you very much, john. i don't know why, but i unevery word you said. [laughter] i agree. i think we have a little time here now between now and 10:30. i don't know that i have exactly the right time. i'm going to ask folks to make

sure we cut off in a minute or two and make sure we get the satellite hooked up. we'll have questions if anybody has any from the audience? [inaudible] there's a question right there. >> okay. >> thank you all for being here. my name is cory i'm a graduate student at the george washington university. and the question they have is really about the approach that we actually should be taking to "battleship" and, i mean, that in a sen should we be looking at the idea put fort by the democrats and. ares and trying to find comprise within the idea or trying to find and circulate new ideas we haven't tried and talk about. if so, how do we get the ideas circulating? my view is that we've had a two-sterling blue ribbon groups of people the simpson bowls who

worked on this exact problem. our group is not here to reinvent the wheel. those were the best frameworks to work from. but within those frame borks, there are a lot of unanswered questions. i don't think anyone has a precise exact answer how you deal with the escalading health care cost. it's a government tal problem of first magnitude, it's a societyial problem beyond the government. it affects every business in the country and patients around the and the whole health group of providers. so ideas in the health care and entitlement area how we going bend the line the trajectory is there a all important. i don't think anybody has perfect solution. it's very complex complicated. i think most people would agree we would be off if we can throw the code out and start over. it's hard to do. ideas along the line are

enormously important. main thing i think this group would like to see around the country is young people and indeed all of the citizens getting involved in trying to encourage people in office running for office to entertain and listen to occasionally to other people and entertain the possibility they may no beeted completely correct on everything. if we don't start listening to each other. it's going to be hard to any kind of agreement. that would be a role particularly how young people could play -- [inaudible] other people may have answers. in the two proposals that have been alluded to, if you shake it out comes a simple proposition that in order solve the debt problem, at least this is one of the solutions, you have to

reform entitlements not to affect the current recipients because, remember, entitlements don't need to be worked on for eight, ten, twelve years. you can put them on a line like this and barely have any impact. none back ward and you can go a long way forward before anybody is impacted. so you to decide to go in to a room and talk about that. at the hurpd of tax expenditures worth trillions of dollars and decide which or all of which could be changed, removed,

repealedded, and what you get from that apply both to the debt and to the debt and to the budget. it turns out that we have never yet had a bipartisanship group with authority looking at those two in a package to see what they could tell the american people negatives are. we just generalize the negatives. if you once sat down and look at them in detail and looked at them i believe with leadership you have a beginnings of a solution. you don't need to find new solutions. there are few new ones in my opinion. they are real. everybody knows them. thank you. >> tim? >> [inaudible]

i've been working with the next generation group of young people at college campuses that been trying to put a forrum together for the presidential candidates. as you probably know, you look pretty young. a lot younger than all of us on the panel. the two biggest issues to college graduates and college enroll's right now are college costs and tuition and debt, and the deficit. the national deficit. so they need to weigh in to this and secondly, again, reading this book, lyndon banes johnson put a coalition on civil rights together that was not just church group, it wasn't just african-americans, and religious groups, he worked with business leaders. he worked with labor leaders.

he -- to get civil rights and voting rights bills done to push up with the american people in demon descraition. i think a lot of it has to come from america. leadership comes both ways, comes from people in washington, and it comes from you. >> billy? >> sam, i'd like to see us -- i'd like to see us sponsor a governor norquist-type pledge. i'd like to see our pledge say i pledge to work on a bipartisanship basis to seek a grand bargain with everything on the table. and put it out there and see who refuses to sign that. >> thank you very much, bennett. is that the way you do it? louisiana? [laughter] >> yes.

>> thank you very much. bill? >> it's wonderful how many people up here don't have an accent. [laughter] two or three things. first, i very much agree with bennett tim said we have a plethora of ways. the first exphiment to go big. go small, the same component, and same problem. it you do it do in a way that receives kind of support you need. if you don't have adequate size, if you don't have the right composition, and unfortunate

process you don't have for all of us as citizens as investors of business who create jobs, you don't have the assurance that we're going have to have that we are going deal with this problem. if you don't solve that problem. if you keep using quick fix. you are dead. you can't get from here to there. it's a long-term problem with a long-term solution. it's going take some time to work through it. >> bring ron? >> to underscore the need to "battleship" exists. bill and i were on a committee in 1984, when we wrote the last major tax reform.

reforming the tax code is vor difficult. even under circumstance where there is substantial bipartisanship i think. it's urge gent we do it now. i don't know if it can be done in a year. i know, it cannot be done without substantial bipartisanship. this is very different to do and if there is bipartisanship, it is do able. >> thank you byron. >> dan? >> excuse me, jo to point to your question. it strikes me over the last twenty or thirty years, the american people have been gaten down by the government is bad. it doesn't work. it's filled with crurption. is wasteful. [inaudible]

but the hell with everything else or save farm programs and hell with everything else. and somehow we have to go back to trying to instill confidence in the american people that even with the defect our political system is god, what our government does is generally beneficial, it's a positive experience with the strongest nation in the world because of that and then it will i think build support from the american people that a grand comprise is a positive thing to do. >> mr. chairman, could i comment for a minute? we're about to go in to a next session we have to distinguish withins. i would like to share with the members of the pan and the public. there's one thing that has to happen as we put together as a nation the solution.

sufficiently to take care of the expected needs of our people. if the gd sprks at pi it goes a certain amount each year. it permits more things to be done by more people that cost money and ours is not growing enough. whatever we put together, must be as best humans can do a growth or yejted budget or we won't have the tools to solve the problem with which tools are that we get richer annually rather than 0 poorer. we grow rather than not grow as occurring now. it's a must in whatever package we put together. thank you. >> i agree. and one thing that we are going have people from the american business conference testify later about the very point. how do you grow? these are the rapid growing medium size company in america.

i think time is right to turn to robert rue bin who is coming forward to the podium. bob, we hate to isolate you. your buddy jim baker is coming in on satellite. and [inaudible] [applause] we start with jim for whatever thoughts are on your mind. we turn to bob for a few questions. >> this is a -- exactly why i agree to work with sam because i knew i would get that one opportunity to introduce my great friend and so you're here today and we look forward to hearing from you. there should be no doubt in this room that gentleman who is before us is one of the most distinguished americans that

ever lived. we are fortunate that he and his associate than any living human being could get in their major room where they put up the awards that are so many. and i want to say that i serve with him and i know firsthand what a wonderful leader he is, how fair he is and how tough he is. he claimed his toughness as a executive branch member because he once was a u.s. machine. i told him that he was a softy, but he insisted they should tell no one how i made so many pieces of legislation work when i worked with him. but the important thing is, he

knows plenty about america and america's problems and the world and america's problems in the world. he will be our first speaker and join me in welcomes james a. baker. [applause] thank you, pete. [inaudible] over-the-top introduction i'm getting feedback here. >> we can't hear you. [inaudible] >> you can't hear me? [inaudible] >> we have to get the volume up. >> i'm hearing you okay.

[inaudible] you guys want them to go with the other speaker? >> yeah. >> you can't do this? >> think that we should be go -- >> pete, can you hear now? >> yes. >> yeah. all right. go ahead, jim, i think we hear you now. >> did you hear that? >> yes. >> loud and clear. >> okay. great. let me say let me say i'm still getting the feedback in my ear piece. let me say that i appreciate that over-the-top introduction that pete domenici gave me. i'm delighted to be here with you, pete, and sam and others with whom i've worked through the years, and particularly

delightedded to associate myself with the efforts you have here in order to bring some sanity to our fiscal problems. >> turn off. >> will the me say at the outset that i remain proud of the economic policies of the reagean mrs., i think which laid the groundwork of real gdp growth beginning in 1983. i heard -- i guess it was byron's comments about tax reform, i think what we were able to do in 1986, with tax reform with a republican president was significant because that proposal was passed really with democratic votes and there was a lot of cooperation from both sides of the aisle.

the same thing happened, of course, in 1983 when we fixed social security financial problems for awhile by getting -- by taking it out of the political debate that -- taking out of the political debate by getting the leader of the democratic party and leader of the republican party together to agree they were going to try to fix the problem. kip o'neal and ronald reagan. we fixed the problem. we need something like that today. i, of course, have come to you with a bit of bias in terms of how we might fix the problem because i was ronald reagan's treasury secretary for a four years, and my view strongly held view is not that americans pay too few taxes. but that our government spend too much. and i think that the that view

is incooperated pretty well both in semp son bowls and in the pete domenici proposal. one thing i know is that that a broad bipartisanship agreement someone mentioned earlier a grand bargain, if you will, is going to be necessary if we're going able to stabilize our debt. we cannot continue to move guard with a debt to gdp of over 100% as far as the eye can see. and a grand bargain, of course, is going require something that sadly, and many of the participates have said, is going require something that's become a dirty word up there in disney land than is comprise. i'm not going -- i won't go in to the domestic consequences that i think would be associated if we just continue on the current path

except to say that i think they would be catastrophic. instead let me say as former treasurely secretary and secretary of state focus on the international aspect of the debt problem before mentioning a few of the elements that i think should be part of any grand bargain. right now, of course, we enjoy a period of really low interest rates, and therefore we have manageable debt service. this isn't going continue indefinitely. everybody knows that, i think everybody agrees with that. i think most people do. in a real sense, the debt problem of ours is a fibbing time bomb as the world economy recovers and the u.s. economy recovers. interest rates are going to rise. lenders, many of them foreign, are going to begin exact a premium for lending to a government total federal debt at over 100% of gzp for as far as

the eye can see as i said earlier. what's happening to europe today, i think is a cautionary example. because when a sovereign debt crisis hit it is can strike overnight. when it hits the united states, what it'll happen? the fed will probably respond by raising interest rates, and -- the debt. that's going create groundwork for a period of low growth, high inflation and plunging dollar. it it happens, and it's not just possible in my view, if we don't make policy changes, it's probably. such a state of affairs could imperil the traditional role of the u.s. dollar as the world reserve currentty. that will increase instabilityd and international markets, it would dampen global rope and constrain, of course, the ability of our government to pursue an independent monetary

and fiscal policy. more generally, i think that our fiscal crisis, our debt crisis, if you want to call it that, runs the risk of undermining our leadership of abroad. it will be increasing and understandable problems for u us to reduce our expenditure on defense and diplomacy. that will con train our ability to respond to a world where both threats and opportunities abound as we have indeed see as a result of the tragic events overnight in libya and in egypt. and the final analysis, our strength abroad depend upon the economic health at home, can't be strong politically diplomatic militarily if you're not strong economically. and this fiscal crisis that we are facing, this big ticking debt bomb threatens both. you said to yourself.

what's the grand bargain look like? we're not hear to draft legislation or write agreements. but let me suggest to you if i might, based on my experience with tax reform and with that social security [inaudible] buffett tacts is projected to raise less than $50 billion over ten years. that's a fraction of 1%. of total expenditure over the period. secondly, someone said this earlier, any plan should strike a pro-growth balance. i think maybe it was you, pete, a pro-growth balance between

revenue increases and spending. the simpson bowls plan -- roughly three to one could be a great starting point as far as i'm concerned. my own preference might be for a plan more awaited toward cut. that's a matter to be discussed to be negotiated and comprised. third, any plan should include as far as i am concerned at least up front expenditure cuts. there really should not be tax increases done agreed to or accomplished until the spending cuts have already been made or at least ben legislated. now i'm cognizant under the importance of avogued further fiscal contraction during a period of weak economic performance. nevertheless, i think if you get in to the negotiation for a grand bargain, there needs to be a substantial down payment in terms of spending cuts.

if you don't have that, we will once again run the risk of raising taxes, while deferring the tough decisions on spending and we'll never see the agreed upon spending cut. that's happened once or twice forward. any plan should have a spending cap that establishes strict spending targets. our current high government spending to gdp ratio of 2% admittedly is at least in part due to the economic down burn. but till we need a spending cap to bring the number down to a sustainable level as the economy recovers. simpson bowls suggests a medium term goal of 21%. fine. that's a good starting point for discussion. negotiating, comprise it, i would personally prefer a lower number. but itst a good place to start. number five. any plan should include an

enforcement mechanism. i don't know who it was a minute ago talking about enforcement how important it is. ting might have been bill to guaranteed the spending cap is met and maintained. you need that. if you don't have it, the strong enforcement mechanism, if you don't have that a future congress can and will simply disregard the provision of any bargain. this is administratorly true, i think when it comes to spending. there are always good reasons if not economic reasons darn good political reasons to spend more money. as the most effective enforcement mechanism, i have long supported a balance budget amendment to the constitution but one with an overall limitation on the ray she of taxes to gdp. given political realities today, ladies and gentlemen, my view is we're probably going have to be satisfied if we can get it with a legislative approach.

something approaching for instance the lines offing? along the lines of a beefed up provision. that would mandate automatic sequestrations 0 f we exceed the target spending cap, and that would mandate sunset provisions having tax increases includinged as a part of the federal -- target percentage of gdp. that way it seemses to me you're taking care of both sides of the equation. for the more, i think that such an enforcement mechanism might feature supermajority requirements in both houses congress who repeal or change any elements of the grand garn. and lastly, let me say any effort to raise revenue is a part of the grand bargain can

focus on broadening tax base rather than raising race. somebody mentioned the large number of expendture loopholes and so forth in the current tax code. comp hennive tack reform may be a bridge too far in today's current political environment. because someone earlier said on the panel i remember the difficulties we face we achieving bipartisanship support for even a revenue neutral tax reform exercising in 1984. but if our objective is to reduce the ratio to debt to gdp, i think it has to be one of the objective and if our objective is to restore growth or it our economy, any revenue we race would be raising by closing loopholes rather than increasing imaginer rates.

am i sure of such an approach as that will work? let me be very frank with you, i think given today's or already disaition ever our policy, i'm for a from confidence that a grand bargain will even be struck. i hope very much that it will because it's the only way i see out of this trap. but i'm not sure it will be and this is particularly true, i think, if we continue to experience divided government, which is a very possible outcome of the november elections. all of that said, i think it is critical as many of you have panel have already said this morning, really critical that americans of good will republicans, democrats, independents alike do erg we can to press our elected official. to make the comprises hour painful that a