railing on the auto industry and how the president saved the auto industry. the reality is any big brand like best buy or any chevrolet or chrysler, they go into bankruptcy and they're a brand that's been manufactured for 100 years. any investor will salivate to adopt that. you don't need the federal government to step in and in an unconstitutional way save the investors money and give it to whoever they want. i wish the democrat would get off the stick about how the president saved anything. >> the markets will work as well. >> if it did, we wouldn't have gm or chrysler. it didn't work. we need our money pulled together to help create jobs and save jobs for americans. that's all this is about. the president had the courage, the insight, and the toughness to make those decisions happen. >> gas prices.

we learned that speaker john boehner before this past recess break told his rank and file that gas prices could be a huge issue in the 2012 campaign. how concerned are you that rising gas prices could hurt your re-election and could impact democrats chances of taking back the house and keeping the senate? >> i'm not concerned about the politics of it. the reality of it is that these oil speculators, many of them on wall street, are driving up the price of oil and increasing the volatility of the oil market and demand for oil from china and india is keeping those prices up. the president understands that we have to responsibly reduce our dependence from foreign oil by looking at all sources of energy, wind, solar, the president has increased oil and gas production domestically in the u.s. and then also look at better ways of being more energy

efficient. being more conservative on how we use our energy. >> was he wrong on the keystone pipeline to delay that? >> he wanted to make sure that this pipeline didn't jeopardize the environment and pollute our water quality. he's allowing the companies to reapply for the permit. i think that's totally proper. >> on gas prices, your colleague has said the president should tap the strategic oil reserves in this country, do you agree with him? >> that would be a way of addressing it but again the fundamentals of it, oil speculations is driving the oil prices up. it's been reported that just a day after the outbreak in libya, oil prices went up dramatically even though the oil supply remained unchanged. it's speculation that's driving

all of this. if anything we need more safeguards against this type of rapid speculation that's driving oil prices up. over time oil prices will go up because of oil demand. we've got to look at other ways of providing transportation fuel other than petroleum. we have to difficulteversify ou spectrum. >> the democrats war on energy is not going unnoticed by americans. the election will be another shellacking. >> this is what he doesn't understand. this is why the president will carry michigan. we're the great lakes state. we have fresh water resources. water quality is so important. we have a strong commercial fishing industry. we have to preserve our natural resources as we diversify our energy resources as well and that's what the president is doing. he's striking the right balance. in weaning us from our dependence on foreign oil but making sure that our natural resources and our public health is protected at the same time.

as a leader he has to look at this in a balanced perspective. i represent one area i can fight for detroit. the president is fighting for the welfare and benefit of all of us in america. >> democratic line. winston is joining us in lansing, michigan. winston, good morning. are you going to vote in this open primary today? >> caller: i am thinking of voting in this primary but i have been reading the laws and in michigan even though they say it's an open primary, we have to declare what party that we wish to belong to in voting for this primary. i'm still weighing that. thank you for taking my call. >> hold on. if you do decide to vote in this, who are you going to vote for and why? >> caller: i will probably vote for rick santorum. >> and why? >> caller: rick santorum is consistent in saying that if he had an opportunity to make a

decision, he wouldn't vote for it and though i'm against rick santorum at least he's telling the truth and mitt romney is not telling me the truth. mitt romney claims that he's a son of michigan but then when we need him most he bails on us. he has to understand if president bush initiates the process, president barack along with that initiative also receives two awards. can i also -- i would also like to correct the gentleman about how the uaw, chrysler, gm, guys in this particular situation, we are not playing on an even playing field as far as trade. we cannot send our cars to japan or korea.

>> all of this available online in our video library at c-span.org. we're taking you live now to capitol hill on your screen. secretary of state hillary clinton in between the chairman of the senate foreign relations committee, john kerry, and ranking republican richard luger. they are holding a hearing this afternoon on the state department's budget request for 2013. the president requesting $51.6 billion. that's a 1.6% increase over 2012. that includes $8.2 billion for civilian led operations in war zones and other overseas operations. live coverage here on c-span3. order. madame secretary, welcome back

to the committee. as always, i think you know this, it's a great pleasure for us to welcome you here, to have you here and it's enormously helpful for us to hear your thoughts especially at a time when we are facing so many different challenges and at the same time i think presented with so many opportunities. the demand for u.s. leadership, i think, has never been higher whether because of the issues raised by the arab spring, by nuclear proliferation, climate change, particularly the challenge of iran and the middle east. budget realities, however, have placed a premium on projecting u.s. power. not only effectively will you efficiently. i think that more than at recent moments we need a smart, coordinated and strong budget in

order to safeguard the american people and particularly to fund the administration's pursuit of opportunities and to face the challenges that we are all too well aware of. obviously for anyone running for office and i know you know this, madame secretary, cutting foreign aid and talking about comparison between some particular community at home where you are standing and our commitment abroad, is a pretty easy applause line the stump. and needless to say, it is good unsustainable fiscal course. we need to do wha in order to put our house in order. seems to me that our expenditures on diplomacy are really miniscule compared to the return on

investment. our international affairs budget is in my judgment a smart investment that ultimately yields outside returns and saves onhaul. there's nothing conservative abt policy budget of a few billion dollars today in order to spend a trillion dollars later on when an otherwise avoidable crisis c looms. this year's budget request reflects very difficult decisions and obvious tradeoffs. i commend the administration for identifying programs where we can save money for deepening reforms at state and usaid. we also all know how crucial our military is tour national defense and i think everybody on the committee and in the administration shares the belief that we would never hesitate to

use force when necessary but clearly smart and able diplomacy and development policy can neutralize threats before they become crises and can manage crises if threats escalate and sure stability and security after conflicts are resolved and all of this can be done at a development he cost of military experts support counterterrorism efforts at this moment countries like yemen, somalia, afghanistan and programs to destroy small arms and shoulder fired missiles. teaching foreign military officers american values and skills, create capacity so we can fight together and share burdens. training foreign law enforcement and counterterrorist officials am american investigative techniques increasing their capacity, their capability and

our security and implementing stricter export controls, training international weapons inspectors, securing our borders allows us to guard against threats and the threat of weapons of mass destruction and terrorism. so the stakes are enormous in the coming years. we will have great opportunities to build and redefine our relationships around the world particularly in the middle east. one egion is moving in many thing is clear. it is transforming before our eyes. as you know, madame secretary, i recently traveled in the middle east on a number of days in the region and came away moreth the opportunities that exist to help the people of the middle east seek their legitimate political and economic aspio but also a renewed sense of the fragility of this moment.

i truly fully share your perspective and the goals in the middle east and north africa which will make sure that we have tools and flexibility needed to act proactively and take advantage of opportunities when they arise. i look forward to continuing make sure that you have those tools and also to try to ascertain the best way forward with respect to the north supp change and the continued hopes that we all share for a renewed effort in the middle east peace process. we all know the difference that the united states can make. our efforts to vaccinate children, combat climate change, engage at-risk youth, promote core u.s. national security interests, our global presence also does something else. it creates jobs.

through loans and multilateral forums we lift the economies of low-income countries and simultaneously and this is important for americans to understand in terms of our own interests, we open markets for american businesses and recognize the connections between promoting our business and creating jobs elsewhere. energetic imperative for america and not a favor we do for other countries. it's who we are. it's in the american dna from marshall plan to our response to the earthquakes in haiti and floods in pakistan. it strengthens ours security and makes us stronger at home and in the world and as we carefully watch our expenditures, we also need to scrutinize the cuts that have been proposed, so we look forward to your comments this afternoon, madame secretary, and to talking throughout the year american economy remains under about the state department's great stress. priorities. the unemployment rate stands senator luger? well above the historical >> mr. chairman, i join you in

standards at 8.3% nationally and welcoming secretary clinton to the foreign relations committee once again. 9% in my home state of indiana. we look forward to discussing the administration's foreign at the close of 2011, nearly 13 policy priorities and budget requests for fiscal year 2013. since your visit last year, the million americans were still looking for work. the national debt has risen above $15 trillion posing extreme economic risk for our country. american families continue to bear the brunt of these economic uncertainties. within this context, the administration's request for resources must be prioritized to meet the requirements of budget austerity. while addressing the vital national security objectives that the chairman has so well outlined. this past year brought further uncertainty overseas. people in north africa and the middle east are marking the anniversary of their protests

and their protests for democracy and accountability from their leaders. for some these anniversaries have been celebrations of a break with a troubled past. for others a reminder that progress remains very elusive. in syria, the world continues to bear witness to the violent repression by the asad regime against the syrian people. the tragedy unfolds daily bringing with it an increasing death toll. after the regrettable veto in the security council by russia and china earlier this month, the u.n. assembly voted as did the u.s. united statsenate to c brutal force against civilians. we must pay close attention to syria's weapons of mass destruction. in egypt, there have been

changing time lines, protests and sectarian violence. given this tentative transition when resources should be spent on building institutions is certainly our debate and disheartening that the egyptian authorities would choose to harass the work of civil society organizations focused on elections and government transparency. i look forward to secretary clinton's update on efforts to secure the release of those facing trial for their work on behalf of democracy. amidst these changes in the region, we face the ongoing threat to peace and global economy posed by iran. this iran government continues to flop the will of the international community for an end to nuclear weapons program and the most recent inspections by the iaea failed. iran refused to address the

iaea's questions or to grant inspection, access to the sites. the iranian nuclear program is a grave threat to our close allied israel and to our own security interests. growing understanding that this crisis may lead to military conflict has helped push oil prices well above $100 per barrel and increasing the number of americans are paying $4 or more per gallon for gasoline and most analysts believe prices will go higher. for years i've talked about the risk to the united states national security of our dependence on foreign oil. i appreciate secretary clinton's recent reorganization in the department in this regard which elevates the prominence of international security within the state department and i compliment you on this remarkable endeavor. given the intensity of multiple

crises in the middle east and uncertainty and threats to our oil supply, these are not limited to the current crisis with iran. it's incomprehensible to me that the president has rejected approval of the keystone excel pipeline. few national security decisions in the past several decades are more clearly at odds with core united states interests than the president's pipeline delay. the prospect that iran could have struck oil flowing from the streets for even a relatively short period underscores the importance of having safe and secure fuel supplies for the united states. the iranian threat is intensified by its growing alliance with the chavez regime in venezuela whi. our government should warn venezuela the united states

would regard such an interruption as threat to united states interest. today's high prices are difficult for american families and american businesses. without action the worst is likely to be months or years down the road. even if the iranian nuclear program is halted without resort to warfare, middle east oil supplies will remain at risk from political manipulation, conflict and terrorism. a serious sustained oil supply disruption could cripple our economy. over time we know rising oil demand from china, india and other emerging economies will reduce spare capacity and stress global oil supplies. the keystone pipeline is one of the best means at our disposal to overcome difficulties later. it sends a signal to overseas enemies that we are not serious about ending united states energy dependence.

pricing today incorporates expectations of future supply. we must not leave any doubt that this country will break its oil dependence on stableime and tha requires the united states governmentsu drilling. it requires stronger supply relationships with reliable allies like canada and it requires innovation to do more with less fuel. while bolstering energy security, thepipene would create 120,000 new jobs for americans with no cost to american my judgment should reverse course and i would encourage secretary clinton to recommend to the president that in our national security interest to immediately approve the pipeline. in closing i would like to express my appreciation for the dedicated men and women serving

in roles within the state department and usaid. in an era of declining resources, we're asking for them to deal with difficult and wide ranging challenges often at even greater risk. we're asking them to reduce threats from weapons of mass destruction, help mitigate epidemics and food and security, watch over the united states business interest and travelers, promote democracy and assist in combatting terrorism. we're asking them to achieve these united states foreign policy goals and enumerable others in a global environment that's increasingly dangerous for diplomatic personnel. we are very grateful for their willingness to serve their country and grateful for your willingness to serve our c a lo forward to your testimony. thank you, chairman. >> thank you, senator luger. madame secretary, the floor is yours. we welcome your comments.

>> thank you very much. i appreciate senator kerry, ranking member lugar, members of the committee to be here once again to have this opportunity. i want to thank you for the support that this committee has given to the state department and usaid over the last three quite consequential and unpredictable years. i'm especially grateful for the very kind words about our diplomats and development experts who are the world, some in very difficult circumstances. you have seen the world transforming right before your eyes from arab revolutions to o to a more dispersed but still dangerous al qaeda and terrorist network and in this time only the united states of america has the reach, resources and relationships to anchor a more

peaceful and prosperous world. the state department and usaid budget is essential for our national and economic security. it's also something more. a down payment on america's leadership. when i took this job, i saw a world that needed america but also one that questioned our focus and our staying power. so we have worked together to put american leadership on a firm foundation for decades ahead. we ended one war and are winding down another. we have cemented our place as a pacific power. we have also maintained our alliance across the atlantic. we have elevated the role of economics within our diplomacy and we have reached beyond governments to engage directly with people with a special focus on women and girls. we are updating diplomacy and development for the 21st century and finding ways to work smarter and more efficiently and after the first diplomacy and

development review, we created two new bureaus, taking the work we were already doing on counterterrorism and with other counterterrorism and energy. i really commend senator lugar. it was his idea, it was his talking with me when i was visiting with him prior to my confirmation that made me determine that we would actually accomplish this. we have reorganized our assets into a bureau focused on fragile states. like many americans in these tough economic times, we have certainly made difficult tradeoffs and painful cuts. we've requested 18% less for europe and central asia preserving our most essential programs and using savings for more urgent needs elsewhere. we're scaling back construction of our embassies and consulates

improving procurement to save money and taking steps across the board to lower costs. our request of 51.6 billion represents an increase of less than the rate of inflation and just over 1% of the federal budget. this is coming at the very same time that our responsibilities are multiplying around the world. today i want briefly to highlight our five priorities. first, our request allows us to to sustain our vital national security missions in iraq, afghanistan and pakistan and reflects a temporary extraordinary costs of operating on the front lines. as president obama has said, the tide of war is receding but as troops come home thankfully civilians remain to carry out the critical missions of diplomacy and development. in iraq, civilians are now in the lead helping that country emerge as a stable sovereign democratic power. this increases our civilian

budget but state and usaid are asking for only one-tenth of the $48 billion the u.s. government spent on iraq as recently as 2011. for iraq including defense spending is $40 billion less than just two years ago. we're doing what must be done to try to normalize our relationship at a far lower cost than what we have been expending. over time despite the tragic violence of this past week, we expect to see similar governmentwide savings in afghanistan. this year's request will support the ongoing transition helping afghans take responsibility for their own security and their own future and ensuring that this country is never again a safe haven for terrorists. we remain committed to working on issues of joint inte pakistan including counterterrorism, economic stability and regional

cooperation. second in the asia pacific, the strong network of relationships and institutions because we believe in the century ahead no region will be more consequential to our economic and security future. as we tin belts around the world, we're investing the attempts to do more with less. in asia we are strengthening our alliances, launching strategic diali dialogues underscoring america will remain a pacific power. third, we are focused on the wave of change sweeping the arab world. as the nation transforms, so must our engagement. alongside our bilateral and security support, we propose a $770 million middle east and

north africa incentive fund. this fund will support credible proposals validated by rigorous analysis and by congress from countries that make a meaningful commitment to democratic change, effective institutions and broad based economic growth. in an unpredictable time we can respond to unprecedenteded needs in a way that reflects our agility and our leadership in the region. this budget request would also allow us to help the syrian people survive a brutal assault and plan for a future without assad. it continues our assistance for civil society and arab partners in jordan, morocco, tunisia and elsewhere. it provides a record level of support from our ally israel and makes possible our diplomacy at the u.n. and around the world which has put in placetoughest country faced against iran. the fourth priority is what i call economic state craft. in particular, how we use

diplomacy and development to create american jobs. with more than 1,000 state department economic officers working to help american businesses connect to new markets and consumers, we are pushing back every day against corruption, red tape, favoritism, distorted currencies and intellectual property theft. our invest in development helps us create trading partners of the future. we've worked closely on three trade agreements that we believe will create tens of thousands of jobs in america. we hope to work with congress