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tv   Capital News Today  CSPAN  May 13, 2011 11:00pm-2:00am EDT

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coming into the market in the same timeframe as those 1 million cars, that only used petrol or gasoline, we are not going to relieve the demand for oil anytime soon. so that 20 million barrels a day may be stable, but if in the u.s. we are below 7 million barrels per day production, and with the freeze on activity in the gulf of mexico, still continuing, yes, several permits have been granted since the shutdown of the gulf. . .
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someone played that speech. since then, it's been talked
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about all over the country with the experts saying impossible. but the retail price signs in california saying it's here. 5 dollars is here. and so the issue is the forecasters have never predicted accurately. i predicted $5 for a simple reason. we're not producing enough domestic oil in a country that has more oil than it will ever use. i testified in congress in february suggesting to the committees that we raise u.s. production back to where it used to be. ten million barrels a day. ten millions barrel a day equals half, just half of the daily requirement. it would take up to a decade to do that. but other things would happen as we produce three million barrels
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a day and get back to ten million barls a day. two things would happen. 3 million new american jobs. three million. not 3,000, not 300,000. 3 million new american jobs. nobody but nobody in this country has suggested a jobs program that comes anywhere close. the government in desperate need of revenue would get an additional $20 billion in oil royalties per year. the american people who do not like high gas prices for a good reason and the reason is our entire system of mobility is pred dated predicated on personal mobility not public mobility. some 250 million of those people have virtually no public transportation access that's meaningful. but they have cars.
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and they have been expecting affordable gasoline for decades and decades. you don't take that away without consequences. and so they would have lower price gasoline. by virtue of producing more domestic resources. what is congress doing it? what's the executive branch doing about it? well, congress is having the food fight that they've been having for the last five years. let's hate the oil companies. let's show the american people that the oil companies are bad for america. the white house is strangling by regulation the ability to produce domestic hydrocarbons, whether coal, oil or natural gas. we have a serious upside down problem. what do our friends in opec think about this? what do our friends in the air ab world think about this? in some respect, this is down right insulting. for the u.s. to take this
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anti-hydrocarbon view. on what basis for a hundred years. the united states economy became the largest economy in the world with the most envied lifestyle in the world on the back of hydrocarbons. yes, hydrocarbons are finite. yes, hydrocarbons have elements, nasty elements you don't want to see it, touch it, taste oregon smell it. you just want to use it in a confined system. when it's out of the system, things go nasty very quickly. witness the macondo well tragedy. another pipeline -- and other pipeline issues we've had in the past year in this country. that doesn't make them suddenly off limits. because the economy requires it. it's the lubrication of our economic life. and it's the method by which we live the social life that we
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live. so high prices get a huge adverse reaction from the american people and from their elected officials, understandable. but what's the next step? on the path that we're on, ladies and gentlemen, the next step and the heads of opec know this, and the leaders of sovereign arab nations know this and in a moment i'm coming on to china, they know this. and it is just a matter of a few years where it's not just the high prices that create social adversity in this country. but it's the gas lines. the lines of people circling blocks of real estate waiting for their chance to get a few gallons because rationing will kick in. and we'll go back to the 1970s
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experience of five gallons only. for which you wait hours on odd/even days to make your purchase. that's where we're going on the current path that we're on. because china, unlike the western democracies, is making some hard choices and coming to grips with its future. let me offer a few statistics that i think need to be understood because those statistics will determine the rate by which the west moves into gas lines. over the course of the next decade, based upon the current forecast in china's economic development, china will build five million kilometers of new highway. i didn't say 500,000.
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i said five million. what do you put on highways? cars and trucks and buses. using hydrocarbons for the most part. they will also build 170 mass transit systems. these numbers, by the way, come from wen wren jack. professor, university of alberta. they will build five million new buildings covering 40 billion square meters of space under roof. i didn't say million. and i didn't say feet. i said 40 billion square meters. what do you do with space under roof? you heat it. you light it. you cool it. all of which takes energy. they will build over 50,000 new buildings 30 stories tall or taller. 50,000, 30-story tall buildings. they're expecting 150 million tourists a year within the decade. how did they get to china?
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they don't walk. and they don't bicycle. maybe in china, they will walk and bicycle to see the sights. but they will fly to get there. they expect 65 million chinese people to visit outside china. they too will fly. china knows it needs more energy. and china has made decisions about where it's going to get its energy and here is one of china's tactics that is not reported in the west, but which the western democracies have to know about and it's called the loans it state oil company program. over the past three years, three years, that's recent, more than $120 billion in loans in loans have been granted to state owned oil companies for the purpose of oil and gas development for the purpose of direct contracting the production of that oil to
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china. not to the global oil pool for trading. but to china directly. including $10 billion to brazil. 20 billion to venezuela, 25 billion to russia. 10 billion to kazakhstan. 16 billion to gan a. ghana just produced first oil in 2011. 23 billion to nigeria and smaller loans to smaller state-owned oil companies. china is going to ensure to its economy and to its citizens that over the course of the next five years as consumption grows from 9 million barrels a day to 15 million barrels a day that it is not short of oil. where do those six million additional barrels come from?
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they come out of the existing production of the world, but directed toward china. with the loan program. this is a serious issue when the u.s. is bidding for two-thirds of its oil from the foreign trade opportunities and there's six million less barrels available in that pool because china's wrapped it up with futures contracts. we're not the only ones bidding. lot of countries will be bidding. it will go to the highest priced buyer, won't it? but there won't be enough. because five years on from now, ladies and gentlemen, we need 20 million barrels a day to get out of bed in the morning in this country. and we'll be producing less then than we are now on the path that we're on. when you think about opec in all of this and think about our arab
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friends, think about how wealth in the world is distributed and is being redistributed. redistributed through the purchase and sale of oil. opec nations current $110 a barrel have over $120 trillion of value in the ground. 120 trillion dollars of value in the ground. compare that to the entire market cap of the new york stock exchange which includes, as you know, all the major companies. that equals $45 trillion. 120 versus 45. let's add euro next. 20 trillion.
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add london, 4 trillion. add hong kong, 3 trillion. all of those western capitalists and asian capitalists market exchanges add up to about $75 trillion in value compared to the -- $105 trillion value in opec. you see where the value of money and you see where the transfer of wealth is headed. it's headed to those who have the hydrocarbons and in the united states of america, which has more hydrocarbons than it will ever need, the wealth sits in the ground untouched. during the recent round of high prices, the obama administration said basically the same thing that the bush administration said some years ago. three years ago.
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well, we're talking to our opec friends to see if they would increase production. that's not a solution. it's not a solution for tomorrow. what's holding us back? we have three problems. then i'll close. we have three problems. the perverse partisanship that infects our legislative and executive branches and carries into our judicial branches the perverse partisanship is harming america and americans. two, the political time mind-set of elected officials who think primarily in two-year election cycles cannot come to grips with the decades-long requirements of energy time investment decisions. what matters is what it takes to get reelected at the next election cycle. what doesn't matter is things that will happen past that election cycle when i might not
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have a job. i got to get reelected in order to get to the next election cycle. i will focus on those items most important to me on my next reelection. that mind-set is an inverse proportion to the needs of the energy system of the 21st century. third, we have grown our federal government to the point of dysfunction. when it comes to energy. as you can tell, i'm probably not very popular in washington, d.c. with the kind of statements that i make. but i see them astrue statements. and this next one really does offend people. because all over town, i ask the same three questions. why do we need 13 cabinet level officers to decide energy policy? we have one department of defense. why the 13 cabinet level officers get to decide energy
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policy in this country which is what they do from the department of the interior to the department of commerce to the department of state to the department of energy, the department of transportation, energy is spread all over the executive branch. and they are not famous in any administration for working cooperatively together. they each have their congressional charters to do what they do. second question, why do we have 26 congressional committees and subcommittees to manage energy in this country? 26. do we really need that many? as we know, the chair and the ranking member of every congressional committee is subject to change. how often? every two years. depending upon what the electorate wants to see happen in the congress. the third question is, why does every federal judge in this country have the ability to make decisions from the bench that affect the energy future of the nation?
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many of whom don't even know and understand the case being brought to them. but yet they can decide energy, policy, for the nation from the bench. this is a system that's dysfunctional, ladies and gentlemen. it does not work. it's not going to work. we need a solution. the solution i write about draws from american history. what history it draws from suggests that the structure the nation chose and any western democracy could do this, is to depoliticize the issue by assigning governance responsibility and authority through law to an independent regulatory commission. so in the 19th century the nation could not come to grips with its monetary policy resulting in the bankruptcy of the u.s. treasury in 1907 followed by its second bankruptcy in 1912. in 1913, the federal reserve act was passed. and from 1913 to 2011, with a
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few mistakes along the way, the federal reserve has enabled this nation to become the world's largest economy with a standard -- a world standard in the dollar. not a bad journey. not perfect. no human institution is perfect. but it's not been a bad journey. given what we know, eight presidents, 19 congresses, 13 cabinet officers, 26 congressional committees currently and hundreds and hundreds of federal judges currently, knowing we can't fix the energy future of this nation, how about an independent regulatory commission created by congress with four authorities, the authority on the supply side, what energy from what sources will be part of the american mix. second, what technologies for efficiency will we deploy. thirdly, what environmental protections for land and water and air are necessary given the mix of the energy supply that we decide and 4th, what about the interstate and regional
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infrastructure requirements this nation has which need to be dealt with in the 21st century. four authorities with a board of governors appointed by the president with advice and consent of the senate all done under law so the institution is indeed democratic. but it can't be lobbied. you can't lobby the fed. wow? imagine can't lobby the federal energy resources board as i call it. it could actually be independent. you can't really sue it either. nobody sues the fed. why waste your time? and money. so why would you sue the federal energy resources board? if we call it that. there's a solution there, ladies and gentlemen. i think it would set a model for the western democracies to follow. it would enable us to have ongoing intelligent productive conversations with opec, with
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arab nations, with china because in a democracy which we all know can be pretty sloppy from time to time, in the process by which we get things done, we can actually get things done and that's what's needed for the energy future of the united states. if the western democracies go south, i don't think that will be impressive to what the arab nations are currently wrestling with, which is the role of democracy in their systems, this their countries, in their governance. i don't think the western democracies want to see the chinese model repeated all over as the model for the world. so we have some -- this decade, i'll close where i started. chickens are coming home to roost this decade, ladies and gentlemen. we can't extend these uncertainties, we can't produce
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what we need to produce in this decade without energy and we can't resolve the economic requirements of the western democracies on the path that we're on. we need 21st century systems in every country. and those kinds of investments are the kinds of huge investments which rejuvenate economies in whatever form of government they have. and i leave you with this thought: it's up to us as citizens to insist upon these decisions being made. thanks for listening. [ applause ] super. thank you, john. now, floor is open for questions. but we have in front of each of you a 3 by 5 card and this is proven throughout the years to be more effective in the sense
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that it avoids people grandstanding and giving their own little speech. it disciplines individuals to make their questions more pointed and brief. but while they're being written and gathered, i will take the liberty to ask a few. these are how questions. how will the emergence of liquefied natural gas affect the energy production picture among major energy suppliers in the air rab world and elsewhere, including the united states and how will it likely affect global energy markets? liquefied natural gas is in many respects a gift to countries that need energy who do not have adequate energy within their borders. it's transportable. it's affordable. it's clean. it's safe. and it can and will be prolific. which is great news.
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and so the liquefied natural gas, coupled with hydraulic fracturing of shale gas has really opened up to the world the entire world, and think of the continent of africa for a moment. africa cannot develop without energy. africa is short on hydrocarbon energy. other asian nations, short on hydrocarbon energy and it is and will remain an affordable type of energy. so i'm a big fan of liquefied natural gas and natural gas in general. i do think we have to be mindful of the environmental risk associated with development of hydraulic fracturing and i don't think we have all the answers yet in regards to that. i think we have all the answers with respect to liquefied natural gas, but we also can see and it could happen that liquefied natural gas can become a security issue if it is not
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properly guarded, maintained and secured. >> what steps would you recommend to forming of such an energy resources board? >> well, it won't happen if we leave the debate to the people inside the beltway in washington, d.c. it just won't. the idea of creating an energy resources board, an independent regulatory commission, taking away from the executive branch, taking away from the legislative or judicial branch current authority, that's not an easy conversation for people who hold the current authorities to have. it's also not an easy conversation for k street or lobbyist groups to have because it goes against what they stand for. so you have all of the antibodies around this concept living in the place where the decision would ultimately need to be made. so how do we get it done?
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well, i didn't start citizens for affordable energy just as a hobby. citizens for affordable energy, the foundation that my wife and i founded three years ago exists for the primary purpose of educating all americans and could be applied to all western democracies on the issues of energy in the environment so that an informed electorate in a democracy can know better what choices they have. and by talking about these issues in straight manner, without a republican or a democratic bias to the discussion, people get to see the cold hard facts of where we are and where we're going. a consequence of that, i believe, because i believe in democracy, i i believe in an educated electorate, that with an educated electorate on these matters, the demand will arise either through the natural intelligence and pragmatism of the electorate or when we're standing in gas lines and we're
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paying $7 or $8 a gallon when we can get the five gallons we can get after hours in the gas line. we'll have plenty of time to discuss the alternative form of governance which is the independent regulatory commission. so we'll be driven to it by emergency conditions if we're not driven to it because of its simple rational pragmatic opportunity. >> if you can, please update us on the context and analysis of carbon tax and global warming. how do they fit into all of this? >> i think the -- as i describe the issue in my book, rather than tackle global warming, rather than participate in the debate on climate change, my recommendation is let's go to the heart of the issue. let's go to root cause. let's deal with root cause in a
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factual sensible pragmatic way. let's talk about waste management. because that's what we're dealing with. the waste management of a hydrocarbon product that produces waste. and that waste can be solid as in the case of coal ash. that waste can be liquid in the form of water contaminated runoff and that waste can be gaseous as in the emissions of not just co2 but other forms of waste. i find it completely unproductive and, therefore, unsolvable to focus on climate change and global warming because of the reason todays. what i mean by that is we don't agree or they don't agree. parties will never agree as we saw in copenhagen on solutions because of the variability in how people see the issue. if we tackle it as a waste
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management issue, civilized societies have learned how to manage waste pretty well. physical waste, we recycle a lot of it. liquid waste, we treat it. gaseous waste, we capture it. those technologies are available to us. so my approach is to look at every country in the world and say do you want to live in the stench and the mess and the degradation of your sovereign territory, or do you want to clean it up? i think most people would opt to clean it up. and that, to me, is how this would be better handled as a waste management notion and the sooner the better. and the more technology we apply to it, the faster and the less expensive it will be to clean it up. all across the board.
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>> please comment on the gas pricing tax breaks and subsidies that were discussed yesterday on capitol hill. >> well, i think the five executives were pretty angry. i think a number of democratic senators were pretty angry. but let's put it in perspective for a moment. i thought the chairman baucus did a really good job of describing the problem and the dilemma the nation faces in that the nation doesn't have enough money to pay its bills. that has to be dealt with. i thought the executives were justifiably angry when they basically said why us? why pick on us, my company? and to put that this perspective, if you live in a village of 100 homes and the city council decides that it needs more money and it goes to the homeowners of the five largest homes in the city and
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say, you're going to have to pay us more money because you obviously have money because you have this large home. we're not going to go to the other 95 people because they won't like it. they'll be unhappy. so we'll come to you because there are only five of you and you can't stop us. that's the analogy that the five energy executives faced yesterday. why us? we know we have a problem. we know the nation is convoluted in its tax code. but instead of picking on five individual companies who then have to explain to shareholders why they remain a good investment when their cost structure just goes up and they can't do anything about it and investors say i think i'll invest in somebody else who doesn't have to worry about these additional costs. so they're protective of their enterprise as a homeowner would be protective of his house. and that's a natural
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inclination. so when what i said during the herring on a couple of msnbc segments and fox segment. i go back and forth between the two which makes for an interesting life if nothing else. i said let's talk about the problem in a different way. i went back to my congressional testimony. why don't we produce three billion more barrels a day. that solves the government revenue issue. that's $20 billion a year, not 4. isn't 20 a bigger number than four? let's create three million jobs. let's lower the price of gasoline. doesn't everybody win in that formula? wouldn't that make some common sense, economic sense and some social sense? probably. but it doesn't make political sense. that's the problem. because the political sense is all tied up in partisanship and the desire to determine the outcome based on the partisan view. but that won't solve the problem and even one of the democratic participants yesterday said i doubt this bill will go
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anywhere. so all of much ado about nothing. with gas prices, they're going to fluctuate through the summer at a fairly high level until some of the effects of the china factor chips in. and by 2012, 2013, we can see a higher plateau because of the scarcity of product, the continuing demand unless, unless and this is quite possible, we simply go back to recession. it's true. if you want lower gas prices, recession is a quick cure. we saw that in 2008. but there are other issues in a recession. like joblessness. we can't stanch higher joblessness in this country. lord knows the turmoil we have today and the bills we can't pay. we need jobs, we need economic value creation and lower gas prices. all three. >> can we stick on gas prices
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from another perspective in the sense that if here it reaches $5, some moment that it already -- murmur that it already has. how much would it be in roder dam, tokyo, london and brussels and elsewhere tonight and the implications of those statistical facts in terms of how the united states is seen and becomes competitive internationally in the eyes of friends, partners and allies who look at us and conclude that we have the best arrangement with this commodity. access to it. and the pricing of it, of any maiming juror industrialized country -- major industrialized country in the world. >> in general, the world pays the same basic crude price. whether you're purchasing brent, which is currently more expensive than west texas intermediate, there is a gap that's largely driven by events
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in libya. events in cushing, oklahoma. where high inventories in cushing keep west texas oil priced lower because there's a lot of it sitting there. can't be moved. infrastructure doesn't exist to move it in the volumes needed elsewhere, which means a lot of the east coast is getting gasoline from europe which drives the brent price higher because it's not just supply and it's not just supplying europe, it's supplying a lot of the northeast. the consequence of that is the separation of the brent and the west texas intermediate. in general, other countries use gasoline for other social purposes and therefore, put a different tax level on it. largely, the european countries, with excellent mass transit systems, i might point out where people can enjoy global mobility without a vehicle personal vehicle and in this country we can't. they have used the gasoline and diesel as an opportunity to raise national revenues. thus they have a higher price.
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so consumers will pay $8 or $9 a gallon ee give lent for what we're paying 4 or five dollars for. so nearly ties the price. the res of the world looks at the u.s. with some envy at a consumer level. when you get into the darker discussions and the deeper discussions at government level, there has to be fundamental resentment because the u.s. is the major cause of the global high crude oil price. the u.s. uses 25% of the world's daily production. and it doesn't produce much or enough of its own domestic supply. the u.s. has the option of dramatically increasing. so 7 to ten million barrels, a 40% improvement in domestic production. it would go a long way to easing the burden on the entire world if the u.s. would just come to
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grips with its own demand. so there's a resentment that the selfish necessary of the united states in refusing to produce its own natural resources drawing the world's natural resources into the united states market raises the price for everyone and that's seen as unfair. >> beyond the price implications of the u.s. position here, linked to the mention of the arab spring and the quest for greater dem caization of the systems of governance and political dynamics where it has occurred, could you address the i am pli daitions of america's image along the lines of what you just commented on in terms of our taking 25% as a portion of humanity we're 5%. so from a perspective, we would
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be consuming a finite depleteable vital commodity to economic groet and material well-being and standard of living. five times our share. if democracies values are one person, one vote, one person, one moral share, how do you see the implications of these statistics, your statistics have been profound but they do have implications, including america's image. >> in using 25% of the oil production every day, it does feed an ghi that is roughly 25% of the global economy. so while there are only 300 million people in this country relative to the rest of the world, those 300 some odd million people produce 25% of the world's gnp. so there's actually in my opinion a fairly balanced ratio of energy consumption versus
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energy used for production. when you put it on a per capita basis, it does swing it in a very different direction. but if you're measuring dollars produced for dollars consumed in terms of energy, it's roughly equivalent. that message doesn't get out, however. so the u.s. is seen as an energy hog by much of the rest of the world. and the lifestyle of the u.s. nonetheless is envied because of the creature comforts. i think a great part of what we're seeing in the dissatisfaction and disruption in arab nations is the relative deprivation that more and more people see, feel and understand and i would largely submit the economic deprivation that people are experiencing. i give tom friedman credit who writes about a 50-year gap. where over the last 50 years, nation after nation after nation
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have seen economic growth and development coupled with a variety of other kinds of social improvement, whether it's education, whether technology, whether it's infrastructure in which nations have dined of expanded -- kind of expanded. particularly in asia. done a pretty good job. but with the advanced communications of today's technology, millions and millions of people are discovering how far behind they are. they're not happy about how far behind they are. now, there are some countries in the middle east that have dealt with this more successfully than others. we're not seeing the so-called con taij on spread to those countries because there's a recognition that that is being addressed by those governments. so i think it's -- we really have to capture the importance of the economic value creation of energy production and then make sure that that economic value gets dealt with productively in societies so
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that everyone can see a way forward. >> i'll ask several and then you can choose the sequence in which you wish to answer them. could you address the possibility of greater u.s. investment in alternative energies and which of these would potentially reduce dependence on foreign oil? what are the prospects for development of central asian reserves and who are the competitors for same? will shale gas be able to replace nuclear and inefficient old coal generated power and if so, how? >> in the last chapter of why we hate the oil companies, i lay out a 50-year plan for the nation to reinvent the energy system in the 21st century. and it calls for the use of all forms of energy as part of that
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recreation. it calls for cleaning up hydrocarbons in ways that waste management technology can take care of. it calls for continued expansion of nuclear with new nuclear technology, not the 50, 60-year-old technology we see in today's nuclear plants, including aging nuclear construction of -- in those plants. and it's time for a new generation of nuclear technology. but in addition, massive research and development of natural sources of energy win solar and tides. i was once asked on a talk show will we ever have free energy? i thought it was a brilliant question. when we're surrounded by sunlight all day long, wind most nights and tidal movement that never stops because of the draw of the moon, that all creates a form of passive energy. why don't we turn it active? why don't we turn it into ee
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electrons? we don't have the technology yet that can do that efficiently and effectively, meaning cost wise. but why aren't we really concentrating on the ability to take that variable natural energy, find ways to make it not variable, but continuous through storage, and as a national effort or an international effort really concentrate the research and development nanotechnology to create the kind of efficient material that can capture more energy from the sun. the kinds of devices that with minor tidal movements can continuously generate electricity from tidal movement or river quurnt movement. there's all kinds of opportunity in part of a 21st century redesign that doesn't watch that energy just pass us by day after day after day which takes the pressure off hydrocarbons many
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respects. takes the pressure off riskier forms of energy, such as nuclear. but delivers affordable, available, sustainable energy to people all over the world. in terms of central ashe yashing the biggest challenge i think will be infrastructure and logistics, as well as geopolitical security, fundamentally based on rule of law. central asia resources are ample. they could help the world distribute and use more energy. but there are a lot of risks and there are a lot of problems. i think it's going to take time and really concentrated effort for nations that did not understand or use rule of law during the entire post world war period up until recently, and for them to come to grips with the infrastructure and don't forget, the distances are vast. so the cost of infrastructure has to be dealt with as well. but across borders in central
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asia, there's not a peaceful relationship with neighbors. that adds to the geopolitical risk. once you start sharing an infrastructure with political systems that are not necessarily compatible, it does present future problems of do we have a sustainable commercial supply system here or what? i'm sorry the third question? >> that was the one i just did. >> that was it. go with these two. last five state of the union addresses by the president of the united states, the last two of the previous administration, the first three of this administration are vulnerable to the charge of pandering to some of the more base jing lis particular sentiments among american voters in the sense of
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calling for an end of dependence on foreign oil or curbing a reliance on foreign oil with foreign really being a code word for arab and islamic oil and not canada, not mexico, not calling for a divorce from driving or transportation per se. but simply not doing it on arab or islamic oil. how do we get to this particular place and what are the implications for the head of the united states not being the educator or the informed person and the communicator that we know him to be as you have been today? >> in the political world, rhetoric means a lot. rhetoric moves people's emotions. it frames people's thinking. but rhetoric is not a plan.
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rhetoric comes and goes. some are better at it than others. but the mood that swings around through rhetoric can be very dangerous. we've seen in american history the rise and fall of pop u lism over our history and it has never ever gotten us where we need to get to as a so sight. so while short term minded politicians focus primarily on their election or reelection may use rhetoric as a political tactic and tool, it only belittles the society in which they try to lead. i think it's dangerous. and i think that the as you said pandering to certain jing which is particular instincts among people is a very, very dangerous tactic for any public servant to take serving the needs of a democracy. what we need is information.
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we need data and all the information and all the data that i know suggests that partnership, full partnership, integration, accessibility, respect are absolute essentials in today's international community. oil is and has been and will be a global commodity. it's fungible, it's transportable and it's incredibly valuable. and the dumbest thing and i use that word deliberately, the dumbest thing this country could do is alienate the source of 105 trillion dollars of value as we look into the future. because the -- not sharing in that value, not participating in the development, the economic development, the social development of different parts of the world in a democracy
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which aspires to lead is simply shirking our international role of leader. and we have some best case gam ms to point to in american history that other countries could avoid not making the mistakes we made through our history. remember, we had a civil part, apartheid. we still had religious fundamentalist issues in this country where religions don't respect one another yet pray to the same god o. these are pretty serious issues to come to grips with and pandering to pop lism doesn't help solve the problem. i'm very worried about alienating any part of the world. we only have one earth to share. we only have so much time on this earth. the fact that we would divisive and suggest that we can separate ourselves if a community where we know we can't doesn't make any sense at all. >> a flip side of that would be the question how do we get from
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where we were to where we are in the sense that within the last ten years consult tivl there seem to have been a consensus that america's strategic imperative was energy security and having to do with this strategic lines of ghun indication vital choke point waterways from there to this proclaimed or recommended divorce? was there a particular date and event and incident, action/reaction or was is the shear accumulation of bias and rhetoric and partisanship in the american domestic political arena? >> in my view it was a combination of both. it's the intermingling of several dynamics. including among those dynamics one i mentioned earlier, the growth of the military industrial complex.
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if you don't have guns, you got nothing to shoot with. if all you have is guns, the answer to every question is shoot. maybe overstating the case a bit. but the reality is the military industrial complex puts one nation in a position of super power with the willingness and ability to use that power as and when it feels it's necessary. unilaterally. that's one issue. second issue. as the muslim population of the united states has grown and as new customs and new traditions and new appearances and new languages have entered into the american society, they have not been all that well-received in certain parts of our society. because there is a difference there and we have not taken the time to fully understand the difference. we've had trouble with dark skin, african heritage, hispanic
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heritage and now muslim heritage, arab heritage in a multicultural society. so when people say diversity and multiculturalism is simply political correctness, they're wrong. it's part of life. and we still have too many families that do not embrace, who do not teach diversity and multiculturalism to their children as the fact of life. i think we miss out on that. that's another dynamic that's added to it. and 9/11 was a particular offense against the territorial integrity of the united states, perpetrated by mastermind criminals. but i think it took on meaning beyond the mastermind criminals that did what they did and it took on some cultural implications andy mentions where
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the military industrial complex kicked in its contribution to the resolution of that and the lack of the attention and focus on diversity and multiculturalism in too many part of our society have prevented us from finding, i think, the more common sense and pragmatic solutions in that we share one sky, we share one earth and we ought to share the benefits of all the cultures, not just in our own society but around the world. and take care of the criminals and treat them the way criminals need to be treated. >> where can one go to find out more information about your organization? >> citizens for affordable energy is a 501c 3 foundation. it is not a lobbying organization. it is nonpartisan. it is funded only by consumers of energy.
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producers of energy are not permitted it make contributions to our foundation. in order for us to appropriately use the word affordable. producers of energy want profitable energy. that may or may not be affordable. consumers of energy want affordable energy which means they can pay for it. and so while we respect producers of energy of all kinds, we choose not to take any of their money, which enables us to speak freely and wherever we go without being attributed to the voice of an energy producer. of any kind of energy. citizens for affordable energy has a website which is quite simply. citizens for affordable energy.org. we invite members, we invite contact, we have quite a bit of information on the web. we invite you to sign up. it's all free. there's no charge. you can be a member at no
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charge. we welcome your membership because we do believe the grassroots is the solution for virtually all of our problems and by informing grassroots participants across the nation of who we are, what we stand for, the fact that we are nonpartisan and nonfunded by energy companies, puts us in a pugs to try to promote smart practical pragmatic systems. you can read the book, straight talk from an energy insider. it will direct you to that website in the last chapter as well. thank you. question is do you have any plans, intentions to inject your rhetoric into the forthcoming rhetoric of the coming presidential campaign? >> if invited to give talks by
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candidates in different parts of the nation with respect to the nonpartisan energy items we're talking about, of course, i'd take any opportunity i can to address populations or organizations on these issues. as a candidate, no. i have a serious objection to the funding of political campaigns in the united states and if the current political system or the paid political system continues, i won't be a party to it. >> bringing this to a close, several seemingly related questions. one is that 2011 already has proven to be an extraordinary year, not just in the united states but globally and interregionally, regionally and intra regionally and nationally in many part of the globe. between now and autumn will be
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the tenth anniversary of september 11 and all of the emotionality and focus of that particular event. in september, the same month will be the convening of the united nations general assembly where there is a movement whether it will come to fruition remains to be seen. whereby the united nations general assembly will announce its recognition of an independent state of palestine living in stability peace and security adjacent to the state of israel. it has already been an emotional moment in terms of what occurred in the past week after a ten-year effort. but there are other moves afoot that also have their implications. one is that while we've been speaking and meeting here, george mitchell, the president's envoy for the middle east peace
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process, of which there really isn't a process, as a diplomatic process is one is charitable has tendered his resignation in the last hour. this year is also indeed next week will be the 30th anniversary of the establishment of the gulf corporation counsel comprised of the united arab emirates and others. it's the 40th anniversary of the united arab emirates which as example of political engineering stands up as the single longest and most successful example of arab political cooperation, coordination and integration in modern history. is so happens that we've tried to have a confederation twice in the united states. each time with 13 members. each time it failed. so this is a part of the world
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from which we can learn a lot. more than just matters of oil and gas. more than just aspects of the people there being objects but also actors. more than these cup tris and cultures being blessed with mountains of money in a number of cases as opposed to also part of the triad of jewish, christian, islamic culture and contributions to world civilization. what you've done today, though, is to keep us focused on this light source in terms of humanities well-being and economic growth. we're much in your debt, sir. thank you. [ applause ] my pleasure. thank you.
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next the european parliament did he debates the immigration of africans. then a report on the solvency of medicare. then the former president of shell oil talk about u.s. arab energy relations. on book t.v. on c-span 2, antonio u has talks about the deep water horizon -- it released millions of barrels of oil into the gulf of mexico. in a reason to believe, governor patrick recounts his life from chicago's south side to the massachusetts governor's office. . how goldman sachs came to rule . how goldman sachs came to rule the world.. ???
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>> the countries of the european union are considering tougher border control laws. this is about 55 minutes. >> let us now move on to the next item on the agenda. on emigration flows and asylum
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an impact on the schengen agreement. i would like to welcome the representative of the council and the president as well as the commissioner representing the european commission. i would like to give the floor to the president in office of the council. the floor is yours, madam. >> thank you very much, mr. president and hon. members. the government in this other neighborhood are posing a serious challenge for the european union. that serve to underscore the importance of looking at the whole issue of how we manage
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migration and refugee flows. the council has been called upon to submit before the european council plan for the development of capacities to manage migration and refugee flows. the conclusions adopted by that -- on the 11th and 12th of april, 2011, is important in this direction. the presidency has convened an extraordinary meeting of the council on justice and foreign affairs for this thursday, may 12. in order to discuss the issue of the management of migration and refugee flows. we will have to prepare the meeting of the european council on the 21st of june which will address the same issues. we cannot of course stand idle
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in the pace of events on the other side of the mediterranean. the eu and the member states are ready [unintelligible] the latest developments in north africa and those member states most concerned. of the past few months, the eu and the member states have made available approximately 96 million euros of humanitarian aid and we are committed to continue to provide support as the situation requires. the council has invited all member states to continue their support for international organization of migration and the red cross and all relevant actors, the efforts of which are paramount in helping those displaced as a consequence of projected violence in libya. those members staged more directly affected are receiving
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contributions of funding, equipment, and technical expertise. for example, the commission announced earlier that approximately 25 billion euros emergency funds could be made available for member states such as italy and malta. furthermore, the newly created european asylum support office, though still in the process of becoming fully operational, is also available to help. some member states including hungary have said already that they are ready to relocate refugees from malta and order to alleviate pressure on the authorities there. apart from specific measures, the council remains fully committed to the further development of the common european asylum system. work is underway in councils and parliaments and some progress has already been achieved,
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despite the technical difficulties and the politically sensitive nature of this subject. in general, the management of the flows into individual member states requires effective management of borders. as far as the management of external borders is concerned, [unintelligible] providing operational support. in light of the latest developments in north africa, a joint operation was launched on the 20 the february, 2011, following a request from the cut in government. this is aimed at preventing and protecting illegal border crossings. it is supporting the italian authorities might debriefing and screening migrants. the council also referenced the
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decision to mobilize funds to continue the planned joint operations. we have urged member states to provide further technical resources as required in support of the agency's operations. you know very well that the proposal is in the house and we have been negotiating its, and i count very much on the support of parliament for being able to put an end to this legislative proposal and have a successful negotiation. against the background of the recent migratory pressures from north africa, it has become a high priority for the council. i would like to express my thanks for the good cooperation and i very much hope that an agreement can be achieved by
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june 2011 as was put forth by the european council in march. development in the mediterranean in relation to that tunisian migrants arriving has also raised questions about internal borders. the council fully agrees with the view held by almost everyone here that the freeing of those persons within the shinkin area is a major achievement. they have also underlined that they were proposing this with the intention of -- in proving the governors of the schengen area is a means to this end. in light of the increased pressure of the external
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borders and calls for member states to strengthen the system , the council needs to look into how we can further guarantee the principle of free movement and at the same time, the citizens need for maintenance of a high level of internal security. at this thursday council, the president plans to initiate discussions on the schengen agreement that have been put forward on the communication on migration on the first of may. a mechanism concerning a coordinated and temporary introduction of controls as a measure of last resort. based on objective criteria and respecting the community method. the council will also have a chance to discuss how to continue work on revision of that schengen negotiation to
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ensure more uniform implementation. our immediate priority is to deal with the effect of the dramatic events in the southern mediterranean, but we also have to draw lessons for the future. we need to put in place a strategy for the longer-term. some of the issues i have set out will help creating such a strategy. i look forward to discussions that can lead to comprehensive answers in line with our global approach to migration. along these lines, the prime minister has recently stated we should clearly differentiate between economic need and political refugees. europe must have something similar to the marshall plan for the countries of north africa to treat a livable conditions -- to
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create liveable conditions. that will require consultations with our neighbors and partnership with the countries of northern africa and it will need to take into account a wide range of factors such as international protections, migration, mobility, and security. to conclude, from a wider perspective on our southern neighbors, all available means in a transition to open, democratic, and prosperous society. this is the best possible way of addressing the factors driving immigrants toward our shores. thank you very much for your attention. >> thank you, madam president of the council. [applause] on behalf of the commission, mr. president, the floor is yours.
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>> thank you, mr. president and distinguished members of this parliament. today we are here to debate migration and cross border movement of citizens. let me start by reminding all of us that yesterday was the 61st anniversary of the schuman operation that laid foundations. from that day, people have been willing to come together and put aside their differences to build a european continent without borders where our citizens can move freely between countries. for regions like the one where we are now, here in strasburg, which is like alsace, it no longer equates to borders. the bet that extends far beyond these border regions. for the vast majority of european citizens, the right to move freely is the embodiment of
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the project. one of the most tangible results of the european union project. i am pleased to say, most europeans use their right to the full, making around 1.25 billion journeys as tourists within the european union every year. that would be completely impossible without the european union. i still remember when we had to overcome so many difficulties to go from portugal to spain. it is indeed great progress of civilization that countries are able to put borders down and to freely lets citizens moved. [applause] moreover, for the economy as well, free movement is central to success of the single market and europe's continued efforts to boost growth and jobs. to put it plainly, free movement
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is to europe what foundations are two buildings. remove it, and the whole structure is undermined. last week, the commission presented of communication on a more sensitive approach to migration, referring to a portal on that schengen agreement. great intelligence and sensitivity in finding the right approach to such a complex matter. and concentrate on the governance of schengen because i've understand it is the most important concern here in the parliament. there are many proposals, like a common european asylum system, but i hope will have other occasions to go deeper into that discussion. last year, the commission put forth proposals to preserve and
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strengthen the valuation mechanism of shenzhen, what is now a central project. last year, well before the recent developments, the commission found some problems in the governance of shinkin rigid -- schengen. resulting pressures have bin laden some weaknesses and coordinated the reaction in the management of schengen. in the wake of these exceptional circumstances, we urgently need to reinforce the governments of schengen and the borders. we need better cooperation between member states themselves. while recent events have provided a spark of urgency to bring this to the table, the commission take this opportunity to address the longstanding inconsistencies and
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end result issues that provide the scope for some member states to act unilaterally and not necessarily within a european union perspective. it is time to stop this. the commission has already taken short-term measures to deal with the situation. in addition, the package would put forward last week urges rational reflection, taking into account short-term needs of strengthening borders as well as abroad a porsche -- a broad approach to migration. evers to boost european competitiveness. this is not a knee-jerk reaction. this is and must be a broad
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scope of measures built on the foundation of a strong -- and defining the best interest of the european union now and into the future. at the same time, it tends to give relief to those members states who are trying to cope with an unfair share of the migration burden. and thousands of people writer on the shores of one country, it is not just because they dream of living in malta. is a because they are seeking a better life in europe. countries that are more directly exposed to massive migrant inflows cannot be expected to deal with them alone. the rules on free movement of citizens benefit all countries in the european union. it is the duty of all countries to support countries under particular pressure at some time or another. this means that burdens have to be shared equitably. this means that all member states need to take their responsibilities seriously. when looking at burden sharing, all the pressures and
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contributions need to be taken into account. this is the very spirit of the european union, the management of crisis by solidarity and responsibility. solidarity and responsibilities are the key words in our response. emigration is the european challenge and requires a european response. that is what the commission's proposal aims at a step further of the governors of the schengen system, showing there can be solidarity between member states. it is about, and governance, not unilateral moves. this is part of an overall approach to strengthen a move to a european system. allow me to make one point crystal clear. this is not about finding ways for member states to reintroduce border controls. a burly believe that to do so would catastrophically undermine not just what europe
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has constructed over the last 61 years, but to sabotage the ability of our efforts to build a prosperous and integrated europe for the future. moreover, member states already have the right to unilaterally reject the right has been exercised in the past in short- term, exceptional circumstances such as terrorist attacks or the movement of drugs. these exceptions show remain exceptions. i cannot emphasize strongly enough that reintroducing border controls is not a desirable development for europe. they should be an absolute last resort. moreover, we all know that internal controls can be useful, but they are not part of approach on integration nor do
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they represent a cost efficient, long term solution. this has always been the case. the fact is that when faced with a massive arrival of migrants, no member state would be totally in a better position to try to deal with them alone. the proposals we put forward one year ago to strengthen schengen group and evaluation mechanisms and intensified coronation of border surveillance will help create a sense of union might discipline and shared guidance to the system that will ensure that in the future, countries will not feel pressured to take decisions alone that affect all schengen signatories. this is not a new policy. it is a chance to strengthen it, a step forward for joint european governments, not a step back.
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we cannot be blind and not face the fact that there is a problem in schengen governance that we have to resolve. if we do not records existing mechanisms, member states will continue to act alone and be encouraged to act alone. this is why we think the best way to avoid putting schengen at risk is reinforcing the rules of governance of shenzhen and clarifying some of its aspects. this is not caving into pressure from any part of europe. by announcing our capacity to deal with crises, it will put of work reverse -- more robust governments in place with better tools to resist extremist pressure in the future. it is not a proposal just to deal with short-term events.
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there can only be real confidence and long-term solutions if we show we can effectively address the short- term issues as well. it is not about turning back time. it is about getting governance right today for the challenges europe will surely face tomorrow. it is about strengthening the rules. i am confident that this house will approach are some -- support our approach in our efforts. united in our determination to keep up the principles on which our union was founded. we know is fashionable in some quarters to be extremist or populists are sometimes to waive the flag of -- we will resist all these kinds of pressure. to succeed in this, we need to give citizens the confidence that we stand for on two things. first, and correcting the
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shortcomings of the existing system so that effective relief can be brought to situations of pressure and crisis. second, on ensuring on this basis the for respect of human rights and humanitarian principles on which our union was founded. people are ready to recognize solidarity if they are confidence their security concerns are addressed decisively and comprehensively. i count on the support of this house and call on the member states to quickly take the necessary decisions. our proposal is on the table. now is not the time to wait, it is the time to act. i thank you for your attention. [applause] >> thank you. on behalf of the political groups, the european people's
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party. >> >> the schengen is one of the great achievements of the european efforts to the citizens the live every single day when they are traveling and it is the realization of the european dream, a europe without border controls. that is why looking at the last week, we must make it clear that in this house, we must make sure that this idea behind it is not going to be harmed through any change or debate. we will defend this principle in the european parliament. 25,000 refugees in -- from tunisia have landed and we have been talking about -- look at sweden, they have 25,000 people who have accepted them and we see that others have taken even more refugees in the south of
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europe. nobody has the idea that because of this very difficult situation to question schengen, so i want to make it very clear that it is a pity that now as we face this challenge, we should consider having a schengen debate, when fortunately we have to. secondly i would like to express the view that we want to practice solidarity when we are talking about for example, we see solidarity expressed their. also the basic principle which is the individual responsibility of states, and the commission should look at its if their records in europe where this can be taken out of for so that you cannot accept refugees in the first arrival states. then you should say how to deal with those countries that are
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not implementing this rule, at least that is the minimum standard for the european union and we would like to city commission becoming active on the preparation of the council. i would like to bring up three points. first on migration. ladies and gentlemen, we must look at the demographic development in the long-term and reckon on more immigration. we have high levels of unemployment. we must be very careful, and secondly, -- the early i am appealing to everybody to ensure that the countries that are now outside the door of schengen are not forgotten at the background of this debate. we do not want lower standards for the extension, but if they
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comply to the standards, they should be allowed to join the schengen area. >> thank you very much. i do not agree when you say that the commission's communication is not good. i am afraid not. i think it is over the top. i think is actually erroneous in some respects. we are not talking about a crisis on our hands here in the european union. 400,000 people from libya wanted to need a. that is a crisis for tunisia. 20,000 crossing the mediterranean to come into europe. that is not a crisis for europe. if we could do proper burden sharing in europe, we would not have this problem. you just mentioned the figures yourself.
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you never got excited about these figures previously. you talk about article 78, paragraph three of the schengen agreement. i wonder whether you know about it? it says if you have one or several member states who are confronted with an unexpected pressure of third country nationals coming into this country, then you may take measures. a proposal should be tabled by the commission and put to the council after parliament. bearing in mind in 2006 women had the world cup for football, we decided to introduce certain measures to deal with border controls. there is absolutely no reason why we should cave in to the populist approach of the head of state of two particular
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countries. they have tried to find a different solution. we should not support them. what actually happened, president of the commission? indonesia, that all speak french, -- into an issue, that all speakers, but that is a good thing. they could just get off to france, that is fine by us. mr. berlusconi then meets with the french president, and obviously he reacts by saying you cannot be serious about this. you cannot just ship them all to us, therefore we are going to close the borders. now they are saying we need to reintroduce border controls. the commission issues a communication, rather than
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saying this is absolutely the wrong way to go about things. i would have expected you to respect that. we are also losing our european spirit here. how can this be? one of our greatest achievements among the fundamental freedoms is freedom of movement for our citizens. that is one of our major achievements. we have here a marginal problem that could perfectly well be handled, but despite that, you have to match heads of government who get together and go against that. here arbitrarily decided to suspend that great achievement. how can that possibly happen? for these people to win, it would be enough for us simply not to do enough to fight what they are trying to do. i just want to say one more thing. i live on a border.
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the migration problem in the mediterranean region, how can it be managed? would it be managed by my traveling between the border? can you explain that to me? very open and what about this. what we have seen the last weeks on this issue is a shame. italy issuing temporary basis and permits to read these of tunisia and france reacting by producing internal border checks, as if in fact you suddenly did not exist anymore. let's be very open about this
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and say what it is. it was a ping-pong game by two governments, by it berlusconi and sarkozy on the back of refugees who are in fact in trouble. that is what was happening. [applause] a game that has been disastrous port schengen, but also disastrous for the european union and for the image of the european union. by rich reducing internal border checks, it contradicts the whole interest of the union and the basic principles. it was absolutely out of proportion. 27,000 tunisia's is not a marginal problem, but he is right when he is saying that compared to the 350,000 people from coast to vote in the coast
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of all war, we are clearly not talking about -- in kosovo war, we are clearly not talking about a migration tsunami. the communication document will read the following sentence. to be used as a last resort in truly critical situations, a mechanism may therefore need to be introduced, allowing for a coordinated and temporary reintroduction of controls. that is the problem with the whole communication. this means that the commission proposed an additional possibility to reintroduce border checks that is not foreseen in the actual schengen
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accord. i hope the whole parliament is fighting such a reintroduction. on the contrary, it means that the commission wants to restrict the current problem that is foreseen. national security, public order are the two elements in the actual schengen accord. it means it allows member states to reintroduce border controls, then you can support -- have the support of the group for the full 100%. what i am asking you is to rewrite the communication. to rewrite the communication and more specifically, the sentence that is saying that a new
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mechanism shall be introduced. all you have to do is say that it will strengthen the actual proclamation. >> i and my group welcome this opportunity to debate the issues and problems that europe faces in the area of migration and the schengen system. the debate is long overdue. now is the time to focus not only in providing free movement, but better guarding the borders of member states and the it is itself. rather than pushing for more legislation, we should be making the legislation that we already have were better and harder for all the citizens of the union. however, current concerns from member states are not reactionary, but instead, the inevitable consequence of over 20 years of ever-changing circumstances in europe and
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around world. there is no doubt that schengen has been a success in many ways, but europe is facing challenges that simply did not exist when the system was first created. large-scale unemployment, migration from north africa, terrorism, organized crime, and it will trafficking has provided us with problems for more complex. it is not an unfair assessment to say that the current system is now shown to be flawed and ill-equipped for the new circumstances we find ourselves in. we need to create an effective tool representing the modern needs of europe's member states and able to improve the situation for all. this needs to be complemented by renewed strength in making sure the other agencies of the eu are there to support states in securing the eu's external borders and that the problems are not exasperated by for the countries that may join the eu
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and that are ill prepared to face the challenges. this is a problem basalt through communication and cooperation, but europe's cooperation and schengen policy require review, reflection, and then sensible reform. >> my dear colleagues, the one thing i do not understand here, 27,000 tunisian succumbing to europe. we are talking about insecurity. what in security? it is true that incredible things have happened in tunisia and egypt and in libya. may i remind you that when we had a war in bosnia, we were handed out free temporary residence permits. in germany, they took hundreds of thousands of refugees.
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germany is still there. has not gone under. all this talk about the ship going under is propaganda and now you are telling us mafia and criminals as if they were arriving. they just walk in and you do not see them and they are here. stop telling us this stuff. the problem is quite simple. in north africa, there are people today. let's have a pack of solidarity between europe, at 27,000 spread around four hundred million. you cannot tell me that is a big problem. let me tell you one thing, i am affected by this. the united states reduced the jews. there was a boat called the st.
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louis. i am fed up on hearing every time people are in difficulty that they are the problem. the problem is not them, it is us. it is our ability to show solid theology, our ability to throw open the doors. shut up, in all humble this. now, let me tell you something. let me tell you one thing. you know what happened in paris. yana tunisian at italian residence permits. the french police arrived and said you know what we are going to you would you? they tore up their permits. they have a work permit officially issued by italy, and they say it does not count and they tear it up. if that is the lot in europe, then we are wrong. that is why i am asking you here
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today to put a stop to this, stop telling us that the problem is in north africa, security problems. it is a problem of the insecurity of the people who live there. let's share them out among us. let's allow them to stay here with temporary residence permits until things calm down. if you spread them around for europe, there will be no problem. if we agree to a debate on it schengen, if we agree to this populist pressure and racism, you know what is going to be with these border checks. it will be a check on what people look like. all those people with the darker skins will be checked up on. then we will have a europe that
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is fine for the people with white skin but not the people with the darker skin, and we will fight against that. >> we have codetermination on the location of remedies and we have actually agreed on emergency measures, but now we see that one year later, we are discussing it again. we have support for what we adopted at that time, but now we are talking about the distribution of refugees or the
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residents of representative duties. has got a lot more difficult but many are now dying at sea. i think we must decide what to do in the future to handle these refugees. there will be a lot of recipes, but it is not a huge number. we must protect the citizens. that also means that we must protect people elsewhere. if they are in danger and also if they are lost at sea. we want to set aside schengen, and we cannot and we must not do it because it would be harmful to europe. there is no way that we can except it. on the one hand we must make sure that there is finding of
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the exceptions of refugees and we must distribute them, but you know how many arms we have been selling to give it -- to libya over the last few years? we are talking about more than 300,000 euros. hungary is the first country that has declared its preparedness to accept refugees, and this is the responsibility we must make to distribute the refugees. >> in the courtyard here we had armed soldiers. we had imperial eagles. we had the flag being paraded and raised. it was a display of militarism and eu nationalism. i hope it was all just a bad
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dream, but today we have you. he began by reiterating the fact that the free movement of peoples is the embodiment of the european project. you then go on to say that it is the gypsy of member states to share the burden of migratory flows into europe. you advocate a common eu emigration policy, but of course you know that you are losing, because of the route that has blown up between italy and france shows that when there is a crisis, it is the nation's state that wins. so you are worried that you are losing. in your defense of your position, you resort to intolerance. you resort to nationalism. you made me realize that what i saw yesterday was actually for real. you attack those who want to control their own border policies. you attack them as extremists.
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worst of all, you attack them three times for being populace. isn't that a dreadful thing? the power of the ballot box. when people dare to vote no in referendums, they are populist. when they want to control their own borders, that our populace. i put it to you, the populists are actually democrats. eric is. that flag has represented liberal democracy far more than any other member state of this european union and it will go on long after your star spangled banner has disappeared. >> the floor is yours.
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>> thank you, president. schengen provides that there'll be no more inspections on internal bodies within the eu. schengen provides that inspections at internal borders in the e will be dropped. the problem is that the agreement has not been kept, because external bodies are not being properly checked. so we must recognize that 60 years after schengen was introduced, it has not been a success, and if you in providing a solution, it is part of the problem. the member states must be given back the opportunity to protect without any inflow. we need other measures.
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you must tackle very hard these networks of people smugglers. the member states must of rewarding illegal immigrants with residence permits. we must really send them back home, the illegal immigrants and economic refugees. if that doesn't happen, i can assure you it is the end of schengen. i want to protest against the insults being thrown around, a populist, extremist, and all the rest of it for people who simply want to protect the borders of their own country. there must be no more of this. it is not appropriate. the rules must be applied. nobody talks about applying the rules. we need to stop throwing out insults'.
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>> the schengen zone is indeed very important for american citizens and the message is coming out clearly from this chamber today that we need to fight together not just to preserve it but strengthen it further. we rely on the european commission to achieve that and it the european parliament will be behind the european commission in strengthening schengen. if there are two lessons we have learned in respect to what happened in recent weeks, it is these two lessons. internal borders within schengen, depends on a common strategy, a common concern on our external border. if our extra borders are weak, then we will have problems on our internal borders. we need to look it that. italy burst under pressure, with 25,000 people. it gave them a temporary permit.
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they moved to france. france fell to pressure and has redirected national borders. therefore the external borders or a common concern. secondly, schengen need solidarity, and solidarity is also about sharing the responsibility. sharing responsibility is also relative to the size of the member states. the current system, people who arrive in one country remained in their country where they arrive because our laws, including in the dublin regulation, insure that they have to remain in the first country of arrival. this clearly needs to change, because it is no longer tenable. 1000 people arriving in the smallest member state, my country, malta, or equivalent to four hundred million arriving in
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the entire european union. so yes, 25,000 are nothing, they are a drop in the ocean for the entire union, but 1000 people arriving in the southernmost member state are a lot. we need therefore to link schengen with solidarity. schengen need solidarity. thank you. >> are you ready to answer my question on blue card rule? >> does it include the strengthening schengen's borders, and in particular, the border between greece and turkey? >> what are the conditions, -- one of the conditions to join
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the schengen zone is in the strengthening of the external borders, and precisely because they are a common concern, is the responsibility of all the member states to ensure that the external border is strong. one should fulfill those conditions, then you can join schengen. that is precisely what countries such as romania and bulgaria have done. this goes to show that strengthening the external border is also a common concern. >> necks, report on the solvency of social security and medicare. after that, the former -- a pitcher of u.s. air of energy relations. then another chance to see the european parliament debate the emigration of africans. tomorrow on "washington
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journal," peter landers has an update on the legal challenges to the new health-care law. myron ebell and bill snape discuss the endangered species act, and stephenorlins talks about the status of trade disputes, exchange rates, and other issues. "washington journal," live at 7:00 a.m. eastern on c-span. >> what series of choices did they make to become terrorists, to kill hundreds and thousands of people? >> investigated the journalist richard miniter looks at the architect of the 9/11 attacks. >> now that bin laden is dead, this is what we have to fear, these terrorist entrepreneurs. >> inside the mind of a terrorist, sunday night on "q&a". you can also download a podcast
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of "q&a", one of our many signature interview programs available online at c-span.org /podcast. >> next, a social security and medicare fund trustees released their program on the fiscal position of both programs, projecting a shorter lifespans for each. we will hear from treasury secretary tim geithner as well as other trusties including kathleen sebelius and labor secretary hilda solis. this 35-minute news conference was held at the treasury department. >> i will go to the far end when i am done. welcome, nice to see you all. the social security and medicare boards of trustees met this morning to complete their annual financial review and to transmit
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their reports to congress. , richard foster. thank them a today's reports make clear that while both social security and medicare have sufficient resources to meet their obligations for least the next decade, it is important that we put in place reforms to strengthen these programs. social security and medicare benefits are secure today but reforms will be needed so that they will be there for current anfuture retirees. the social security program has dedicated resources that will cover benefits for the next 25 years but in the year 2036, one year earlier than was projected in last year's report, the
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social security trust fund will exhaust its assets and income, incoming revenues will be insufficient to maintain payment of full benefits. and due to technical changes in the economic assumptions underlying the projections, medicare's hospital insurance trust fund will exhaust its assets in 2024, which is five years earlier than was projected in last year's report. th medicare report illustrates once again the importance of the reforms in the affordable care act which will significantly strengthen medicare's finances and extend the life of the medicare trust fund. the trustees reports under score the need to act soer rather than later to make reforms to these entitlement programs. last year of course the president and congress took a timely first step by enacting the most significant entitlement reforms in decades but we have to go beyond the affordable care act and
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identify additional reforms. americans are living longer and health care costs are continuing to rise. if we do not do more to contain e rate of growth in health care costs, then our commitments will become unsustainable. so in light of these reality, the president, as you know has proposed a balanced comprehensive framework for deficit reduction. and this framework includes health care reforms that will generate substantial additional savings on top of those that will be generated by the affordable care act. now of course weshould not wa for the trust funds to be exhausted to make the reforms necessary to protect our current and future retirees. larger, more difficul adjustments will be necessary if we delay reform and by making reforms soon at are phased in overtime, we will help reduce uncertainty about future benefits. now as the president said, social security and medire
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define and reflect the values of america. they are commitments that make our society more fair and more just. we have kept those commitments for generations but our responsibility is to make the reforms necessary to allow us to maintain those commitments for the future. now on a slightly separate note, on monday, may 16th, just three days from now, the united states will reach the debt limit set by congress and because congress has not yet acted to raise the limit, we have now set in motion a series of extraordinary measures that will give congress some additional time to raise the debt lamt. -- limit. i want to encourage congress to move as qckly as possible so all americans will remain confident that the the united states of america will mt all its obligations, not just our interest payments, but also our commitments to our seniors.
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i want to return the floor now to my colleague and fellow trustee, secretary kathleen sebelius. >> thank you, secretary geithner and i think that, we have heard in today's medicare trustee report that there's no question we have strengthened medicare but there is still work to be done as the secretary has already said. from day one the obama administration has made protecting seniors for today and tomorrow a top priority. and that's why we implemented a series of reforms over the last two years including those in the affordable care act signed into law just a little over a year ago which have already produced significant savings for the medicare hospital insurance program. now without these important steps t hospital insurance trust fund would have been exhausted in 2016, just five
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years from now. instead, today's report found that the hospital insurance trust fund will remain solvent until 2024. over the next 75 years, medicare costs on average are projected to be 25 lower due to the new law. this is happening even as we're adding important new benefits to help people with medicare stayhealthy and to reduce the cost of prescription drugs. this year the projected exhaustion date of the mecare hospital insurance trust fund did move forward from last year's projections. this is due in large part to lower payroll tax revenues as a result of the slower than expected economic recovery. it's important to note this is exactly what we've seen inprevious recessions. and that, having the affordable care act in place is the main reason that those projections are not worse. indeed what the trustee's
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report shows that the affordable care act has put medicare on a much more sustainable path. because of the law, medicare costs per enrollee are now expected to grow more slowly than gdp per capita, through 2019 after growing much faster than gdp per capita for the last four decades. still the report shows we have work left to do. every day, nearly 48 million people our parents, grandparents, neighbors and friends rely on medicare for the medical treatments and prescription drugs they need to stay healthy. to keep medicare strong for them and for their children and grandchildren we need to continue to look for opportunit to slow medicare costs by improving care and reducing waste and fraud. we recently launched the partnership for patients, an existing effort that has brought together hospitals, doctors, nurses employers, patient advocates and others, to iprove the quality and
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safety of care for all americans. if reach the goals we have set for just this one program, medicare will save anher $10 billion over the next three years and as much as $50 billion over the next 10 years, as well as saving 60,000 lives. and the president's fiscal framework would build on the affordable care act to save medicare another $200 billion over the next 10 years. what we can't do is follow the republican plan to turn medicare into a voucher program and shift the cost to seniors. under that plan a typical 65-year-old who becomes eligible for medicare, would pay an extra $6400 a year out of their own pockets for health care. even worse, the plan does nothing to address the main factor driving up medicare spending and other health care spending, are which is the underlying growth in health care costs. medicare is a promise to all
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americans that if you work hard, you can retire knowing that your medical bills won't force you into bankruptcy. while our work is not finished, today's report shows that the steps we've taken in the last two years have put medicare on a more ten sustainable course for the future. i would like to now turn over the podium to our colleague, secretary hilda solis. >> good afternoon and thank you for being here toy. today we've heard much about the long-term financial outlook of social security and medicare. undoubtedly challenges remain that threaten both the solvcy of these programs and the retirement security of many american workers and beneficiaries whodepend on these benefits. program costs are projected to increase significantly through 2035 for mainly two reasons, the rapid increase in reirrelevant toos of the baby boomer generations and
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lower birthrates of more recent generations that result in slower growth of the labor force and gdp. furthermore, people are living longer, so while costs of these programs are rising it's critical to recognize contributions of demographic. in addition slowing the growth in projeed long range cost of medicare will depend largely on program changes under the affordable care act which will take effect in the coming years. this highlights the importance of making every effort to ensure that the affordable care act is successfully implemented. theffordable care act extend health care coverage for tens of millions of people who would otherwise not have access to health insurance. and to create a more efficient health care system, the legislation will rein in costs even as we expand and promote quality, not just for medicare beneficiaries but for everyone. while trust fund income and earnings are projected to cover costs for a few year the trust fund assets will
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ultimately be used to pay for benefits, benefits like the social security disability insurance, the di trust funds, which are projected to be exhausted in 2018. this is especially important as the unemployment rate remains unacceptably high. loss of wage income hasand continues to be devastating for working families across this country but it also erodes the payroll tax base, the revenues from which are needed to pay current program benefits. the department of labor is playing a critical role in getting the country back to work and has put in plac many policies and progrs that are providing opportunities for americans to succeed, keeping our workers safe and making sure that working families keep what they earn. these efforts aren't only critical it revitalizing the middle class, they create more revenue for social security and medicare. for instance, we vrl a program called job corps. it is a free education and training program that helps
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young people earn a high school diploma or ged to find or keep a good job. the job corps program provides low income youth with skills they need to succeed in career and in life. there is no question that young workers who join the labor market through job corps and other training initiatives fundamentally strengthen social security and medicare programs. we're also working hard to tackle worker misclassification. when workers are properly classified they receive the pay they earn and deserve and for the work thathey do and social security and medicare svices receive the appropriate taxes that are paid on their behalf. additionally we're also creating opportunities for our workforce development system to partner with state and community-based organizations, businesses serving association and economic development agencies to expand employment opportunities for people with disabilities. let me be clear. people with disabilities can and want to work. there's a growing body of evidence that proves that
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workers with disabilities meet and exceed the job performance of coworkers without them. yet the talent, those with disabilities bring to the workplace, continues to be undervalued. thus, their labor force participation remains lower and their unemployment rate remains very high. increasing the employment of people with disabities is not only good for them, it's good for social security and for medicare and it's critical to the economic prosperity of our country. the social security and medicare programs provide an important safety net for millions of retired workers and beneficiaries, many of which are lower income and who depend on these benefits to survive. we must act and we must act swiftly to provide smart, viable solutions that will fill the gap between income and costs of these programs. the well-being of our people in the future and prosperity of our country depend on it. thank you again f being here today. and i'd like to next introduce commissioner
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esther. >> like to begin by saying that in my opinion this year's report is a better document because of the collegial work of our new public trustees, dr. rieschour and dr. blah house. we went three years without public trustees and we need perspective that we bring. public debate about social security has focused on retirement benefits. from a technical point of view as president obama has mentioned many times, legislative change is relatively straight forward. if congress has the will to makeeaningful changes they can do so with high degree of confidence that the program will perform as predicted decades into the future. this year's report is typical. there are no big swings relating to the oasdi fund.
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our disability programs are far more complex though than our retirement programs. there is a long history of well intended reforms cause unintended consequences. and i think the riskof that result is greater than in the past. congress has allowed ssa's demonstration authority to lapse. it has not asked gao to do the type of research that uld support serious reforms. disability legislation predicated on anecdotes or sound bites would be a disservice to beneficiaries and taxpayers. one area that desperately needs reform and want to echo secretary solis here whereby partisan support has been very possible in the past is area of work incentives for the disabled. historically congress has been frustrated by low numbers of people who return to work b it has layered new legislation on top of old without revisiting the old and made the problem
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worse rather than better. the complexity of the statutes, deters many beneficiaries who are inclined to try work. one and indicator of this problem is a congress in cent years has appropriated up to $23 million annually just for coractors to explain these complexities to our beneficiaries. it is time for congress to review all statutory work incentives from scratch and ask the simple question, is this the best we can do? we need clear, significant incentives if we want those people who can retur to work to do so. the president this year in his budget sent to congress our work incentive simplification prorofl or wisp, with which would be a good start for bipartisan progress. i urge the house and senate to review this proposed legislation quickly and schedule hearings on this topic as soon as possible
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this year. thank you and i will turn now to dr. blahouse. >> well, i'd like to begin, first of all, by thanking secretary geithner for the outstanding work that his team at treasury did in managing this process. adding my thanksto the terrific actuaries at cms and ssa for the outstanding work that they do. thanking secretary sebelius, secretary solis and commissioner astrue as well for terrific work their staffs did throughout the process. i want to most of all thank, dr. riesch 135is er fellow trustee ideal partner in very pressureable experience for me. we report each ye on. two programs, social security and medicare. medicare is by far the most complex, difficult to project of the two programs.
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social security is a much easier challenge to grasp intellectually. so i willspeak about social security and leave medicare for dr. rieschuor. the story in social security, is pretty straightforward. costs are growing in the program at a pretty rap pace and will do so until 2030s as consequence of baby boomers entering retirement. by our projections cost of paying benefits in 2035 will be 17% of the taxable wages that workers earn and total costs will amount to 6.2% of national gdp. before the baby boomers enter retiment in 2007 report, the last one before the boomers began to hit the rolls, these figures were 11 1/2% of taxable payroll and 4.2% of gdp respectfully. you could see we'll have substantial continuing cost growth in the social security program to
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the point where mid 2030s, costs will be roughly 50% larger relative to the size of the economy compared to where they were before the baby boomers enter retirement. that much we have long-anticipated. we knew that was coming and we knew it would place financial strains on social security but unfortunately at the same time as the boomers began to enter the retirement rolls we experienced a economic downturn. and so some of these fiscal pressures have arrived earlier than previously anticipated. in 2010 for the first time since the mid 1980s incoming tax revenue began to fall behind outgoing benefit obligations. in this year's report we project that these deficits in social security which began last year will be a permanent feature of program finances going forward unless and until legislative correct are enacted. now because of interest payments from the general fund to the trust funds, the nominal value of the trust funds continues to rise and we project that will
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continue to be the case through the early 2020s. there are some important caveats to be made about that. one is that in terms of financing benefits, the nominal value of a trust funts is probably not quite as importance as duration of benefits the trust funds can finance and presently the costs of paying annual benefits is rising at a more rapid rate than the nominal value of trust funds. so-called trust fund ratio which measures the amount of time full benefits can be paid by the trust funds peaked in 2008. is declining this year and will continue to decline going forward. the other caveat i issue echoes an important point made by secretary solis and commissioner astrue we have more pressing challenges the disability side of the equation than we have on the retirement side of equation. disability fund is declining in nominal terms and we project exhaustion of the
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disability fund by 2018. in this year's report we do not change our view of the long-term fundamentals after affecting social security. none of the long-term assumptions, basic economic or demographic assumptions have been changed relative to last year's report. what we have done we updated data for more recent information about longevity trd, trends in immigration, and economic performance. of these the most important to the long-term projections is a change in longevity experience. we'll find that both in the years 2007 through 2010 and going forward, we expect greater advances in longevity than we're anticipated in the 2010 trustees report. indeed much of this is already the books and has already occurred. as commissioner astrue indicated we do not have a qualitative change this year in social security's long-term out look. at the same time you will see a significant change in the 75-year acutarial balance for social security. last year this was measured
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at 1.92% of taxable payroll over 75 years. this year's report has 2.22% of taxable payroll. that is a 30 basis point change. we don't tend to have wild swings in social security finances as commissioner astrue said but this is actually the largest single year deterioration in the 75-year balance we'vseen along with a comparable change in the 2009 report since the 1994 social security report. in the end i would just say to all of you, if, there are any of you who don't feel like struggling through the entirety of the medicare and social security trustees reports i would commend to you the messages written collectively by the six trustees and by the two public trustees. they echo the appointments that have been made earlier here today that the earlier we act to strengthen these programs the better off we will be. time is important i the sense that the longer we wait the more our options narrow. of course in the trustees report we present the illusttive nightmare
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scenario which shows that at the point of trust fund exhaustion in social security we would be looking at either a 23% benefit reduction or an increase in the payroll tax rate to the 16.4%. but if we act earlier, we will not have to face consequences of this magnitude and indeed we'll be able to preferentially look after interest of vulnerable low income americans and those already in retirement. i've been heartened to see people on both sides of the aisle their intention to do just that. with that i will yield to my fellow trustee. thank you. >> good afternoon. i'm pleased to be here and participate in this process with my fellow trustees. i want to begin by just making a few comments about the process. as you've been told by
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several of the other speakers before dr. blah house and i -- blahouse. assumed our responsibility in september of this year, the two public trustee positions had been vacant for three years. so there was no public trustee input to the 2008, 2009, or 2010 report. as major responsibility of the public trustees is to assure that the american people that the financial and acutarial analyses that are contained in these reports are done in a subjective of a manner as possible using the best available data and estimates and employing the most appropriate methodologis. having been emersed in this process now for a bit over six months, dr. blahouse and i feel that there is no doubt this is the case. one can not be impressed by the dedication and expertise
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by the actuaries and their staff. the departmental staffs that support the ex officio trustees and the staffs of the social security administration. we participated in what was an open, robust and vibrant discussion of the numerous issues that have to be resolved each year as these reports are developed as e-mails flown back and forth, sometimes late at night, we've seen all of the participants have been striving to produce the most accurate possible projections of what our inherently uncertain numbers. we've also been encouraged by the collective effort that has been made to make these reports more transparent. and the thrust that was spearheaded by commissioner astrue to improve the aspirational clarity of what tends to be rather dense
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material. i will turn and make a few comments that relate in a very broadway to the content of these reports. first, i add my voice to what already is a chorus that is emphasized that undecurrent law these vitally important progrs are on, are on unsustainable paths. the sooner policymakers address this problem, the less disruptive and, the unavoidable adjustments will be and the greater the possibility for adjusting in a way that is banced, equitable and measured. well the bottom line message of the 2011 reports are no different from those of previous reports. one can not but be struck by the uncertainty that surrounds the environment in which both social security and medicare operate. while our economy is improving steadily, we live in a very uncertain world, one in which economic developments in europe,
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political instability in the middle east, or changed national priorities in asia can have profound repercussions on our economy, our employment, our growth, and these programs. within our borders we are in the midst of a period of unprecedented innovatn in the capacity of medicine and unprecedented amount of experimentation in the way we deliver and pay for health care. these changes are being spurred by many efforts in the private sector and by profound changes in public policy, most notably the affordable care act. because of this turbulent environment, unavoidably there is wide confidence ban around around the estimates for medicare cost for the short and intermediate run, not to mention the much longer time period.
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given this reality it is important that the central tendency projections we produce be ones that represent a sustainable future which under the current law is not the case. i want to close by saying that both, on my part and on dr. blahouse's part we look forward to working with the actuary, other trustees and their staffs on future reports and hopefully on policy changes that eventually will put these two programs on a sustainable path. thank you. >> thank you, dr. reischauer. we'll take a couple questions. i ask you leave any technical questions to the background briefing we will do after the secretaries and trustees depart. we'll take a couple. up front? >> this is for secretary sebelius. you mentioned some affects of the affordable care act on medicare. besides the 500 billion that
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was cut from medicare advantage, what other specific programs are affecting that long-term cost? if you could just explain some of them? >> first of all there wasn't 500 billion cut from medicare advantage. that is a portion of the reduction in cost increases over time. certainly there are some significant delivery system reforms that are just getting underway, we anticipate significant savings. the accountable care organization structure, the new partnership for patients which i just mentioned which has some cost savings. we have new tools for going after fraud, waste and abuse last year alone produced about $4 billion back into the trust fund. we produced a report yesterday that is available in more detail which, analyzes about $120 billion
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worth of savings over the next five years, which are part of the early implementation of the aca and that can give you considerably more detail. >> in the back. >> could you explain the distinction between social security ing in deficit and the trust funds being exhausted? is it slightly deceptive to talk about social security running a deficit currently considering it takes in less than it pays out until 2036? >> [inaudible]. can you hear me? good. i'm glad you asked that question. actually in last year's press conference stressed the importance of the media unrstanding the term exhaustion which means something different to the actuaries than it does to the average person and that
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what exhaustion in 2036 this year means that we'll have money to pay a little more than 3/4 of benefits with no other legislative changes. now that's not good. we need to have the congress step up and make changes so that that's not the outcome but that's radically different from, it is totally bankrupt, there's nothing there at all and, is a constant irritation for me picking up the news clips and seeing how often the media reports that exhaustion figure as if there would be no money left in the trust fund. so bless you for asking that question. in terms of the cash flow, i havesomewhat similar response. we have moved to, from very slightly positive in several of the coming years to very slightly negative. it is a rounding error in terms of its significance in my opinion and has no
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significance in terms of the long-term future of social security. again as i stressed last year, at matters in the ng run is the exhaustion date and the percentage of benefits we can pay after exhaustion, whether we are, in terms of points of view of social security, and the stability of the system, there's really, these tiny swings in the grand scheme of this from one year to another, from slightly cash flow positive to slightly cash flow negative, in my opinion, are not significant for the long-term future of the program. >> we'll go right here in the middle. yep. >> the disability trust fund is a much worse shape than the social security trust fund. both you and secretary solis talked about incentives for returning people to the workforce. in a time of chronic unemployment where a lot of people use the disability system as pseudo unemployment insurance
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system, what are some of those incentives? >> i think the most important thing is to, to simplify it. if you work through what someone on the rolls who has to, decided to try to go back to work, has to try to master, what the ramifications are, it's extremely complicated and we know from experience that the difficulty of doing it, and the fear that if they make a mistake that they might forfeit, usually not the cash benefits that matter. it is medicare and medicaid benefits that matter. that is a very significant deterrent. simplifying the program and making it clear what happens when you try to go back to work, if you fail what happens and what happens to your medical benefits i think that's a enormously important. and i don't think you could take, certainly i couldn't sit down and explain it to you and get it exactly right in all the technical glory. and it's not reasonable to expect the public to
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understand that. so i thinkthe most important thing, go back from scratch. realize that a lot of these well-intentioned statutes from the past are the in conflict with each other and they're detering people from going back to work. so what we' done in the wisp proposal is given congress a cost neutral example of how that might be done so that the significantly more simple and that the ramifications for health benefits in particular are going to be exponentially clearer to people. and i think particularly as the economy improves that will result in a significant amount of return to work. but let me add one qualification to that because i've had this conversation recently with several members of the media. a significant portion of the disability, disabled population is unreasonable to expect them to go back to work. that's why we have the program in the first place. itis significantly less than half. fothose who can go back to
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work, we should do it because, it promotes dignity. there are small savings to the public, but it will not significantly change the solvency of the disability fund even if we are successful at the high end of your reasonable expectations in and of itself. the work incentive programs are not going to change the solvency picture for the fund. >> thanks very much, everybody. thanks to our trustees. >> the former president of shell oil talks about u.s.-arab
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relations. after that, and house hearings on the fcc process for making rules. live on c-span, john boehner gives the commencement address at catholic university in washington, d.c.. after that, michelle obama's commencement address at the university of northern iowa, at 10:15 a.m. eastern on c-span. >> now available, a complete guide to the 112 converse. inside, new and returning house and senate members, including twitter addresses, district maps, and committee assignments and informational the white house, supreme court justices, and governors. order online at c-span.org/shop. >> next, with national gas prices topping $4 per gallon, to
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talk about the rising gas prices and u.s. energy policies. this is hosted by the national council of u.s.-arab relations. he is the founder and chief executive of the group citizens for affordable energy. he is interviewed by john dick anthony, founding president of the u.s. air relations. this is a battle over one hour. -- this is a little over one hour. >> thank you, dr. anthony, and good afternoon, everyone. it is a pleasure to be here at this time in this place to talk about what i think are astounding issues that we as people have to deal with. i refer to this decade in the 2010-2020 period as the decade in which the chickens come home to roost. for the western democracies of this world.
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what do i mean but the chickens coming home to roost? we have some major issues, ladies and gentlemen, in the western democracies that some other parts of the world are watching and waiting to see how will these democracies deal with such difficult and challenging decisions that must be made and cannot be deferred. what i am referring to our decisions about sovereign deficits and how nations deal with having spent more than they take yen for too long, and what the implications of those are in democracies where parlements and congresses have difficult times making hard choices, and what will happen to the economies and the society's if this deficit rose -- deficit growth continues and is not addressed in this decade.
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in the united states, the world's oldest western democracy, there is a serious come to grips time with education. we are developing a nation of haves and have-nots. educationally, which has consequences economically and socially. how do we come to grips with this? it has been going on for a considerable period of time. we are going through an enormous demographics change as well in the western democracies, as the baby boom generation, post world war ii generation, fades into later life, in which they have security and income needs that will further stress the budgets of western democracies. the whole question of welfare and medical care is something
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that is being addressed oregon, did -- addressed or not, depending on which country you talk about, but collectively, it remains a major issue. and then the issue of the military-industrial complex, which president eisenhower warned about at the end of his second term, which has evolved, as he predicted it should not, and now it is such a major factor of our economic life, our political life, and our international life, that it, too, is one of the chickens that must be dealt with as they come home to roost. in the midst of all of this, is the energy issue, question, debate, concern with all of the above. i would say that the united states of america, at the current time, is upside down on
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energy, without fully understanding are realizing it. one of the reasons i wrote the book, why we hate the oil companies, is to try to shed light on what it is we are dealing with. yesterday's in washington d.c., on the 12th of may, we had a repeat of a food fight that happened in november 2005. it happened in june 2008. i was there for six of the food fight between november 2005 and june 2008. six food fights in congress, with house committees and senate committees in which nothing was resolved. companies were insulted. elected officials felt
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insulted, and not a single thing was done as a consequence of those hearings or yesterday's hearing in terms of resolving what is a huge energy dilemma for the united states of america, which is, where is the plan? where is the plan for energy? there is no plan for energy in the united states, and there has not been. even while the eight presidents, from nixon to obama, have spoken of the importance of getting off foreign oil, or spoken more emphatically about energy independence, not a one of them has put a plan forward that 19 congress is in that same time frame have dealt with. so we are living in this country, and europe is living in its own western democracy, with energy infrastructures that our products, by and large, of the post world war to build out, or in the case of the united states, pre-world war ii build
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out, for much of the coal and hydro power infrastructure that exist in this country, and i should say oil and gas infrastructure that exists in this country. that 20th-century infrastructure is getting old. it is just plain getting old. matt simmons, who many of you will recognize his name, the author of "twilight in the desert," used to say that the existing u.s. infrastructure, before he passed last august, the existing u.s. infrastructure needs 8 $15 trillion facelift to bring it to it's original standard. $15 trillion. for which there is no plan to do that. which means it is deteriorating, ladies and gentlemen. but no plan to refresh their
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existing infrastructure, it only gets older. the average age of coal plants in this country, 38 or 39 years. in the past five years, 100 coal plant projects have been put on the shelf and will not be billed because of opposition. not because of lack of money or lack of need, but because of opposition. it is not worth it to the boards of directors of the utilities involved to push forward with a plan for a new coal plant. the fight is too great. we have not build the new nuclear plant in the united states in 30 some odd years. there will not be one build this decade. it is already too late. the average age of original licensing or permitting for nuclear plant, 40 years. average age of nuclear plants today, more than 30 years. kohl plans are designed for 50 years.
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the average age, 38 or 39 years. think about 10 years from now, when the coal plant infrastructure and the nuclear plant infrastructure has come to the end of its designed life. and yes, we can extend permits and keep those plants operating, but how safe are they? how much risk are we inviting? continuing to operate as a necessity, plants that are at the end of their design live. meanwhile, this country fritters on the edge of alternative energy. they are doing not very much about our turn to the forms of energy, for good reason. it is not ready for primetime. the any decency, the technology, the land, water requirements of new alternative energy such as wind and solar and biofuels, they have not really thought those through.
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were revealed when form of 100 hours, it should be 1000 hours. imagine how much land. when you are using roughly 3 acres per tower, for 100 hours, you need a 300-acre plot. to build out the size you need, you are not talking 300 acres, you are talking 3,000 acres. so the land use of wind, the land use of solar, the land use of biofuels, these things have not been thought through to the point that we could ever scale up this kind of energy as a successor form of energy to the existing infrastructure. in the oil and gas case, the united states uses 20 million barrels a day, every day. 10,000 gallons a second, which is a figure you can better recognize, perhaps, than 20 million barrels.
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we produced 10 million barrels a day in the 1970's and 1980's. today we produce less than seven. that means we have to import two-thirds of the crude oil we use every day. we have an administration that uses the past tense for oil. as the president has said on numerous occasions with respect to tax deferment for oil companies, why do we subsidize the past, when we should be investing in the future? i have to really say to the administration, using oil and gas in the past tense is domestically misleading and internationally dangerous. dangerous because our national security is ever more dependent upon the steady flow of foreign imports. where do those foreign imports come from?
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everywhere. and this is where the arab nations, the middle east, an opec are very important part of our everyday life in america, because rhetoric will not make oil in the past tense. reality is, we have spent 100 years building a hydrocarbon infrastructure in the united states of america and across europe. that infrastructure is not going to change quickly. the president can boast and cannot explain that by 2015 we have a million new cars on the united states highways, hybrids, advanced hybrids, and battery cars, 1 million. that is progress. but against a base of 250 million cars on the road today,
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with tens of millions of cars coming into the market in the same timeframe as those 1 million cars, that only used petrol or gasoline, we are not going to relieve the demand for oil anytime soon. so that 20 million barrels a day may be stable, but if in the u.s. we are below 7 million barrels per day production, and with the freeze on activity in the gulf of mexico, still continuing, yes, several permits have been granted since the shutdown of the gulf. the so-called moratorium. but we have not resumed deep water drilling in any measure, and the deepest reservoirs, the deepest base since -- the best basis happen to be in the gulf of mexico where we are not allowing producers to produce
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for regulatory reasons. all the words to the contrary notwithstanding. they're simply not drilling, ladies and gentleman, because they cannot. they are not allowed. we have flip-flop back-and-forth before we will or will not open up new access. the house passed a bill, i believe just today, requiring more opening of reserves that are off-limits. the prediction is that bill is dead in the senate and the white house would veto it. as we decline u.s. production of oil but did not change the need for oil, it is why we are upside-down in this country. we are going negative. last december, i predicted five other gasoline. at a speech in at new york city. -- i predict it $5 gasoline. it was a slow week, christmas
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week, and someone played that speech. since then, it has been talked about all over the country, with the experts saying impossible, but the retail price signs in california saying that it is here. $5 is here. and so, the issue is, which forecasters have never predicted accurately, a predicted $5 for a simple reason, we're not producing enough domestic oil and a country that has more oil than it will ever use. i testified to congress in february, suggesting to the energy and power committee that we raise u.s. production back to where it used to be. 10 million barrels per day. 10 million barrels per day is half, just half of our daily requirement. it would take up to a decade to do that.
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but to other things would happen as would produce 3 million more barrels per day. two more things. one, 3 million new american jobs. 3 million, not 3000, not 300,000, 3 million new american jobs. nobody has suggested a jobs program that comes anywhere close. the government, in desperate need of revenue, would get an additional $20 billion in royalties per year. and the american people, who do not like high gas prices for good reason, which is the entire system of mobility is predicated on personal mobility, not public mobility, other than a few cities. at 300 million people in this country, 250 million have virtually no public transportation access that is
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meaningful. but they have cars. and they have been expecting affordable gasoline for decades and decades. you don't take that away without consequence. it would have a were priced gasoline by virtue of producing more domestic resources. what this congress doing about it? what is the executive branch doing about that? congress is having the food fight that have had the past five years. let's take the oil companies, let's show the american people that will companies are bad for america. the white house is struggling by regulation domestic hydrocarbons, whether it is coal, oil, natural gas. we have a serious problem. what do or friends and opec think about this? what do more friends in the arab world think about this? in some respects, this is
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downright insulting for the u.s. to take this anti-hydrocarbon few. on what basis? for 100 years, the united states economy became the largest economy in the world, with most enviable lifestyle and the world, on the back of hydrocarbons. yes, hydrocarbons are finite. yes, they have aliments, nasty elements. you don't want to see it, tested, taste, smell it. you just want to use it in a confined system. when it gets out of the system, things get nasty quickly. what this pipeline issues we have had in the past year in this country. but that does not make hatter carbon suddenly off limits. because the economy requires it. is the lubrication of our economic life.
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and it is the method by which we live the social lives that we live. high prices get a huge adverse reaction from the american people and their elected officials, understandable. what is the next step? on the path that we are on, the next step -- and the heads of opec know this -- and the leaders of sovereign arab nations know this, and in a moment i am coming to china -- they know this -- it is just a matter of a few years where it is not just the high prices that create social diversity in this country, but it is the gas lines. the lines of people circling blocks of real-estate, waiting for their chance to get a few
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gallons. because rationing will kick in and we will go back to the 1970's experience of 5 gallons only if, for which you wait hours. one odd/even days to make your purchase. that is where we are going on the current path we are on. because china, unlike the western democracies, is making hard choices and coming to grips with its future. let me offer a few statistics that i think need to be understood, because those statistics will determine the rate by which the west moves into gas lines. over the course of the next decade, based upon the current forecast in china's economic development, china will build 5 million kilometers of new highway.
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i did not say 500,000, said 5 million. what do you put on highways? cars, trucks, buses, using hydrocarbons for the most part. it will also build mass transit systems. this comes from the professor from the university of alberta. they will build 5 million new buildings in this time from covering 40 billion square meters of space under roof. 40 billion square meter sprins. what do you do with space-bar roof? light, heat, cool, all of which takes energy. they will build 50,000 new buildings 50's -- 30 stories or taller. 50,000. there are expecting 150 million
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tourists per year within the decade. how did they get to china? they don't walk. they don't bicycle. maybe in china they will walk and bicycle to see the sights, but they will fly to get there. they expect 65 million chinese people to visit outside china. they, too, will fly. china knows that it needs more energy and china has made decisions about where it will get its energy. here is one of china's tactics. which is not reported in the west, but which the western democracies have to know about, and it is called the loans to state oil programs. over the past three years, three years, that is recent, more than $120 billion in loans have been granted to state owned oil companies for the purpose of oil and gas development, for the
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purpose of direct contracting the production of that oil to china. not to the global oil pool for trading, but to china directly. including 10 billion to brazil, 20 billion to venezuela, 25 billion to russia, 10 billion to kasten, 16 billion to ghana. ghana just produced first oil in 2011. 23 billion to nigeria, and smaller loans to smaller state owned oil companies. china is going to ensure to its economy and its citizens that over the course of the next five years as consumption grows from 9 million barrels per day to 50 million barrels per day that it is not short of oil.
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where do those 6 million additional barrels come from? they come out of the existing production of the world, but directed towards china with the loan program. this is a serious issue with the u.s. is bidding for two-thirds of its oil from the foreign trade opportunities, and there is 6 million last barrels available in that pool because china has wrapped it up with futures contracts. we're not the only ones bidding. a lot of countries will be bidding. it will go to the highest priced by air, will they? because five years from now, we need 20 million barrels per day to get out of bed in the morning in this country, and we will be producing less than one we are .ow on the path we're on
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when you think about opec in all of this and our arab friends, think about how wealth in this world was distributed and is being redistributed. we distributed through the purchase and sale of will. opec nations correctly, at $110 per barrel, have over 120 trillion dollars of value in the ground. $120 trillion of value in the ground. compare that to the entire market cap of the new york stock exchange, which includes all the major companies. that equals 45 trillion dollars. $120 trillion compared with 45
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trillion. at hong kong, three trillion, all of those western capitalists and asian capitalists are exchanges at up to about 75 trillion dollars in value, compared to the $105 trillion value in opec, sorry i said it wrong. you see where the value of money and you see where the transfer of wealth is had it. it is going to those who have the hydrocarbons. and in the united states of america, which has more hydrocarbons that it will ever need, the wealth sits in the ground, untouched. it during the recent round of high prices, the obama
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administration said basically the same thing the bush administration said three years ago. we're talking to our opec friends to see if they will increase production. that is not a solution. it is not a solution for tomorrow. we have three problems, and then i will close. we have three problems. the perverse partisanship that infects our legislative and executive branches and carries into our judicial branches, the perverse partisanship is harming america and americans. two, the political climate mindset of elected officials -- the political mind-set of elected officials who think in two-year low election cycles cannot come to grips with the decades-long requirements of the energy time investment decisions. what matters is what it takes to get reelected at the next election cycle.
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but does not matter is things that will happen pass that election cycle when i did not have a job. i have to get reelected in order to get to the next election cycle, and i will focus on those items most important to me and my next reelection. that mindset is in inverse proportion to the needs of the energy system of the 21st century. third, we have ground our federal government to the point of this function when it comes to energy. -- to the point of this function. as you can tell, i am probably not. popular in washington, d.c., with the statements i make, but i see them as true statements. it and this next one really offends people, because all over town i ask the same three questions. why do we need to 13 cabinet level officers to decide energy policy? we have one department of
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defense. why 13 cabinet level officers get to decide energy policy in this country? which is what they do, from the department of the energy to department of commerce, the department of energy, department of transportation, energy is spread all over the executive branch. and they're not famous in any administration for working cooperatively together. they each have their congressional charters to do what they do. the second question, why do we have 26 congressional committees and subcommittees to manage energy in this country? 26. do we really need that many? as we know, the chair and the ranking member of every congressional committee is subject to change, how often, every two years. depending upon what the electorate wants to see happen in the congress. the third question is, why does every federal judge in this country have the ability to make decisions from the bench that
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affect the energy future of the nation? many of whom don't even know and understand the case being brought to them, that they can decide energy policy for the nation from the bench. this is a system that is dysfunctional. it does not work. it is not going to work. we need a solution. the solution i write about draws from american history, and what history it draws from suggests that the structure the nation shows and any western democracy could do this is to de- politicize the issue by citing government responsibility and authority through law to an independent regulatory commission. in the 19th century, the nation cannot come to grips with its monetary policy, resulting in the bankruptcy of the u.s. treasury in 1907, followed by a second bankruptcy in 1912. in 1913, the federal reserve act
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was passed. from 1913 until 2011, with a few mistakes along the way, the federal reserve has enabled this nation to become the world's largest economy, with a world standard in the dollar. not a bad journey. not perfect. no human institution is perfect, but has not been bad. given what we know, eight presidents, 19 tigresses, 13 cabinet offices, 26 congressional committees, and hundreds of federal judges, knowing we cannot fix the energy future of this nation, how about an independent regulatory commission created by congress with four authorities. energy on the supply side. what will be part of the american mix? second, what technologies for efficiency will we deploy? third, what environmental protections for land and water and air are necessary given the mix of the

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