Skip to main content

tv   Tonight From Washington  CSPAN  June 2, 2010 8:00pm-11:00pm EDT

8:00 pm
>> i do not know. >> i presume that you are aware of the case of the kuwaiti blocker who has been detained over accusations that he consulted the mirror of kuwait. -- the emir of kuwait. i was wondering if anything what the administration or department of done on behalf of the case. >> let me take the question. .
8:01 pm
>> from carnegie mellon university, this is about 45 minutes. >> ladies and gentlemen, the president of the united states. [applause] >> thank you. thank you very much. thank you. thank you. >> let me begin by thanking the entire community for welcoming once again and for the wonderful work he and his faculty and staff do here each and every
8:02 pm
day. i also want to acknowledge your outstanding mayor who does not look any older than the last time i saw him. [applause] >> it is great to be back in the beautiful city of pittsburgh. i love to be in a great sports town. last year, i told -- i tapped them ready to serve as my ambassador to ireland. i invited both the steelers and the penguins to the white house to celebrate their championships. [applause] seeing how the black hawks are headed to philadelphia tonight with a 2-0 lead in the stanley cup finals, i am glad that we on this side of the state. [laughter] i noticed a couple people said
8:03 pm
there were rooting for the black hawks which tells you something about the rivalry between pittsburgh and philly. of course, we meet here at an incredibly difficult time for america. among other things, a time when the worst environmental disaster of its kind in our nation's history is threatening the gulf coast and the people who live there. right now, stopping this oil spill and contain the damage is the top priority not just in my administration but of the entire country. we are waging this battle every minute of every day. at the same time, we are continuing our efforts to rebuild from an economic disaster. it has touched the lives of nearly every american. that is what i want to talk about today. the state of our economy. the future we must -- we must
8:04 pm
seize in the past we chose to get there. it has now been a little over 16 months since i took office on may 1 of the worst economic storms in our history. to naaigate that storm, might administration was forced to take some dramatic and unpopular steps. these steps have succeeded in breaking the free fall. direction. the economy that was shrinking at an alarming reigned has now been growing for three consecutive quarters. after losing an average of 750,000 jobs a month during the winter of last year, we have now added jobs for five of the last six months. we expect to see strong job growth in friday's report. the taxpayer money to shore up the auto industry has been repaid.
8:05 pm
both gm and chrysler are adding ships but an operating at a profit. -- shifts and an operating profit. that does not mean this recession is by any means over for the millions of americans still looking for a job or a way to pay the bills. not by a long shot. the devastation created by the deepest downturn since the great depression has pitted -- has hit people across our country very hard. it is not going to be a real recovery until people can feel it in their lives. in the immediate future, this means doing whatever necessary to keep the recovery going and to spur job growth. in the long term, it means recognizing that for a lot of middle-class families, for entire communities in some
8:06 pm
cases, a sense of economic security has been missing since long before the recession began. over the last decade, these families saw their incomes decline. they saw the cost of things like health care and college tuition reach record highs. they lived through an economic expansion that generated more job growth than at any prior expansion since wwii. some people have called the last 10 years the lost decade. the anxiety that is out there today is not new. the recession has certainly made it worse but that feeling of not being in control of your of -- of your own economic future, the sense that the american dream may be slipping away, that has been around for some time. for better or for worse, our generation of americans has been
8:07 pm
buffeted by tremendous forces o. the spurt, a city once defined by the steel industry, knows this better to just about anybody. the ability of jobs and the entire industry to relocate or there are skilled workers and an internet connection has forced america to compete like never before. from china to india to europe, other nations have already realized this. there are putting a greater emphasis on math and science and demanding more from their students. some countries are building a high-speed roads and expanding broadband access. they are making serious investments and clean energy because they want to win the
8:08 pm
competition for those jobs. we cannot afford to stand by while the world passes by. the united states of america did not become the most prosperous nation on earth by sheer luck. we got here because each time a generation of americans has faced a changing world, we have changed with it. we have not feared our future, we have shaped it. america does not stand still. we move forward. that is why i said that as we emerge from this recession, we cannot afford to return to the pre-crisis status quo. we cannot go back to an economy that was too dependent on bubbles and that, financial speculation. we cannot accept economic growth that has the middle-
8:09 pm
class making less. we have to build and new foundation for prosperity and that is exactly what we have been doing for the past 16 months. it is a foundation based on investments in our people and their future. investments in the skills and education we need to compete. investments in its 21st century infrastructure for america from high-speed roads to high-speed internet. investments in research and technology like clean energy, that can lead to new jobs and new industries and exports. this new foundation is also based on the form that will make our economy stronger and our businesses more competitive. reforms that will make health care cheaper, our financial system more secure and our government less burdened with debt. and a global economy, we cannot pursue this agenda in a vacuum.
8:10 pm
at the height of the financial crisis, the coordinated actions we took with the g-20 prevented a global depression and helped restore worldwide growth. as we have recently reminisced and europe, economic difficulties in one part of the world affect everybody else. that is what we have to keep working with the nations of the g-20 to pursue a more balanced world. that is why we need to coordinate financial reform with other nations so we avoid a global race to the bottom. that is why we need to open new markets and meet the goal of my national export initiative, to double our exports over the next five years. that is why we need to ensure our agreements are enforced. some of you may have noticed that we have been building this
8:11 pm
foundation without much help from our friends in the other party. from our efforts to rescue the economy to health insurance reform to financial reform, most sat on the sidelines and shouted from the bleachers. they said no to tax cuts for small businesses, no to tax credits for tuition, note to investments in clean energy. they said no to protecting patients from insurance companies and consumers from big banks. some of this is just politics. before i was even a not ready, the congressional leaders got together and did a calculation that if i failed, they would win. when i went to meet with them about the need for a recovery act, in the midst of the crisis, they announced they were against it before i arrived at the meeting. before we even had a healthcare bill, a republican senator
8:12 pm
actually said if we are able to stop obama on this, it will be his waterloo. those were not very hopeful signs. to be fair, a good deal of the other party's opposition has also been rooted in their sincere and fundamental belief about the role of government. ittis it believed the government has little or no role to play in helping this nationnmeet our collective challenges. it is an agenda that basically offered to answers, more tax breaks for the wealthy and fewer rules for corporations. the last administration call this recycled idea of the ownership society. what it essentially means is that everybody is on their own. no matter how hard you work, if your paycheck is not enough to pay for college or health care
8:13 pm
or child care, well, you are on your own. if misfortune causes you to lose your job or home, you are on your own. if you are a wall street bank or an insurance company or an oil company, you pretty much get to play by your own rules. regardless of the consequences for everybody else. i have never believed that a government has all of the answers. government cannot and should not replace business as the true engine of growth and job creation. government cannot instill good values and a sense of responsibility and our children. that is the job of parents. too much government can burden us with that -- debt.
8:14 pm
i understand these arguments. it is reflective and my policies. one-third of the recovery act were designed was made up of tax cuts for families and small businesses. when you think back to the health-care debate, despite calls for a single payer to a government-run health care, we maintained a system of private health insurance. i also understand that throughout our nation's history , with the threat of overreaching government against the dangers of an unfettered market. any one of us may expand charge of the some point in our lives. we have recognized that at times when only government has been able to do what individuals could not do and corporations
8:15 pm
would not do. that is why we have roads and highways. in public schools and police forces. we have made scientific research that has led to breakthroughs like a gps. that is why we have lost protect the food we eat and the ear that we agreed. that is how we have rules to ensure that minds are safe and oil companies pay for the spill they cause. there have always been those who said no to such protections. note to such investments. there were accusations that social security would lead to socialism. medicare was a government takeover. there were bankers that planned
8:16 pm
the creation of the federal deposit insurance would destroy the industry. there were automaker's that argued that installing seat belts was unnecessary and unaffordable. there were skeptics who thought that cleaning our water and air wouud bankrupt our entire economy. all of these claims to proved to be false. all of these reforms led to greater security and greater prosperity for our people. what was true then is true today. as november approaches, leaders in the other party will campaigned furiously on the same economic argument they have been making for decades. fortunately, we cannot have to look back to many years to see how their agenda turns out. for much of the last 10 years, we have tried it their way.
8:17 pm
they give us tax cuts that burn not paid for. they credit regulations and put industry insiders instead of oversight. the shortchanged investors -- investments in clean energy and education and research and technology. despite all their current moralizing about curbing spending, this is the same crowd that took the record $237 billion surplus that clint left them and turn it into a record $1.30 trillion deficit. we know where those ideas lead us. we now havv the choice as a nation. we can return to the failed economic policies of the past or we can keep the building a stronger future. we can go backward or we can move forward. i want to move forward. i think america wants to move forward.
8:18 pm
the for step in building and a foundation that allows us to move forward is to assess the risks that have made our economy as competitive. out deregulations, crushing health care costs, and a growing debt. we cannot compete as a nation if the irresponsibility of a few people on wwll street can bring our entire economy to its knees. that is why we are on the verge of passing the most sweeping financial reforms since the great depression. it is a reform that will help prevent another aig. it will and taxpayer-funded bailout. it contains the strongest consumer protections in history, protections that will empower americans with the clear and precise and efficient indeed before signing up for a credit card or taking out a mortgage.
8:19 pm
financial reform will not guard against every instance of greed or irresponsibility on wall street. it will intron a new principle in our financial system. from now on, and said of competing to see who can come up with the more clever scheme to make the quickest buck, financial institutions will complete -- -- will compete to see who can offer better services and better product. that competition benefits wall street and main street. that is what we need to get this legislation done. that is why we cannot afford to go back. we have to move forward. we also know we cannot compete in a global economy if our citizens are forced to spend more and more of their income on medical bills. if our businesses are forced to choose between health care and hiring. if state and federal budgets are weighed down with skyrocketing
8:20 pm
health-care costs. that is what we finally passed health insurance reform. let's be clear. the cost of health care is not going to go down overnight because legislation passed. in an ever-changing industry like healthcare, we will continuously need to apply more cost-cutting measures as years go by. once this reform is in full effect, middle-class families will pay less for their health care in the worst practices of the insurance industry will and. people with pre-existing medical conditions will no longer be excluded from coverage. people who become seriously ill will no longer be thrown off of their coverage for reasons contrived by the insurance company. taxpayers will no longer have to pay in the form of higher premiums for trips to the er by uninsured americans. businesses will get help with
8:21 pm
health care costs. small businesses are already learning their eligible for tax credits to cover workers this year. with last waste -- with less waste, this will do more than any step that we have taken in the past decade. the other party has staked their claim this november on repealing these health insurance reforms and said of making them work. they want to go back. we need to move forward. making health care more cost- efficient is critical because it is also true we cannot be competitive as a nation if we're dragged down by our growing debt. let me talk about this. but the time of cloth, we had a one-year deficit of over $1 trillion and a projected deficit of over $8 trillion over the
8:22 pm
next decade. most of this was the result of not paying for two major tax cuts skewed to the wealthy and a worthy but expensive prescription drug program that was not paid for. i always find it interesting that the same people who participated in these decisions are the ones who now charged our administration of fiscal irresponsibility. the truth is, if i had taken office in ordinary times, i would have liked nothing more than to start bringing down the deficit that they created. we took office amid a crisis. the effects of the recession put a $3 trillion hole in our budget before i walked through the door. additionally, the steps we had to take to save the economy from depression temporarily added more to the deficit by about $1 trillion. if we had spiraled into a depression, our deficit and debt
8:23 pm
levels would be much worse. the economy is still fragile so we cannot put on the brakes too quickly. we have to do what it takes to ensure a strong recovery. the growing economy will unquestionably improve our fiscal health as will the steps we take in the short term to put americans back to work. that is why i signed a bill that will provide tax cuts for businesses that hire unemployed workers. that is why i encourage congress to pass a small business lending fund so they can get the credit they need to grow. that is why i believe that it is critical that we extend unemployment insurance for several more months, that americans who have been laid off get the support they need to provide for their families. we have to work with state and local governments to make sure they have the resources to prevent likely layoffs.
8:24 pm
as below ahead, we cannot lose sight of the urgent need to get our fiscal house in order. there are four key components to putting our budget on a sustainable path. maintaining economic growth is number one. health care reform is number 2. the third component is the tight -- belt-tightening to reduce the deficit by $1 trillion. starting in 2011, we will enact a three-year freeze on discretionary spending outside of national security. something that was never enacted in the last administration. we will allow the tax cuts for the wealthiest americans to expire. we have gone to the budget line by line and identified more than 120 programs for elimination. we have restored a simple budgeting rule that every family and business understands
8:25 pm
called pay as you go. we will charge the largest wall street firms a fee to repay the american people for rescuing them during the financial crisis. [applause] a fee that will bring down the deficit by $90 billion over the next decade. that $90 billion represents about one eighth of the amount these banks will pay out in bonuses over the same period of time. finally, the fourth component is the bipartisan fiscal commission that i have established that will provide a specific set of solutions by the fall to deal with our medium and long-term deficits. i have to warn you, this will not be easy. i know that some like to make the argument that if we would just to eliminate pork-barrel projects in foreign aid, we
8:26 pm
could eliminate the deficit. it turned out such spending makes up just 3% of our deficit. you combine all foreign aid and earmarks, that is 3% of the budget. meeting the deficit challenge will require some very difficult decisions about largely popular programs that make up the other 97%. it means we will have to sort through our priorities and figure out what programs we can do without. on this point, i strongly agree with my friends in the other party. what i do not agree with is the notion that we should also sacrificed critical investments in our people and our future. if you are a family tightening their belts, you will definitely sacrifice going out to dinner. you are not going to sacrifice saving for your child's healthcare education. it is precisely our investments
8:27 pm
in education and innovation that will make america more competitive in the 21st century. [applause] we cannot go back, we must go forward. [applause] that is why i have made education reform and top priority. we want every citizen to have the skill and training they need in the global economy. from the day you are born through whatever career you choose. last year, we launched in national competitioo to improve our schools based on the simple idea instead of some funding the status quo, we will only invest in reform. perform that breezes student achievement and inspire students to excel and math and science and turns around failing pchools.
8:28 pm
to achieve my goal of insuring america has the highest proportion of college graduates in the world by 2020, we passed a law that will make college affordable -- more affordable by ending the -- that will say students billions of dollars, including students right here at carnegie mellon. [applause] it is a bill that will revitalize our community colleges which are a career path away to the children of so many working families. in addition to trimming our workers for the jobs of the future, we are investing in the innovation to create those jobs here in america. the research, the technology, the infrastructure that will secure our economic future. right now, as we speak, the recovery act is putting
8:29 pm
americans to work building a 21st century america. there is no reason china should have the fastest trains or rural pennsylvania should be without high speed internet access. we have to make those investments. from the first wrote to the first interstate highway system, this nation has always been built to compete. we are going to invest in our new infrastructure expanding broadband and helping information technology and advancing manufacturing facilities. america's first high-speed rail network. we are also investing in technology that will lead to new jobs and entire new industries. consider what we have done with clean energy. the tax credits and loan guarantees for the recovery act alone will lead to 720,000 clean energy jobs in america by 2012.
8:30 pm
[applause] 720,000. i will give you one example. the united states used to make less than 2% of the world's advanced batteries for hybrid cars. by 2015, because of the investments we made, we will have enough capacity to make up to 40% of these batteries. this brings me to an issue on everybody's mind right now. namely, what kind of energy future can ensure our long-term prosperity? the catastrophe unfolding in the gulf right now may prove to be a or of corporations taking dangers shortcuts to compromise safety. or a combination of both. i have launched a national commission to the american
8:31 pm
people will have answers on exactly what happened. but we have to the knowledge that there are inherent risks to drilling for miles eneath the surface of the earth. these are risks -- [applause] these are risks that are bound to increase the harder it will extraction becomes. we also have to acknowledge that america runs solely on fossil fuels should not be the vision we have for our children and grandchildren. [applause] we consume more than 20% of the world's oil but have less than 2% of the reserved. without a major change in our energy policy, our dependence on
8:32 pm
oil means we will continue to spend billions of dollars of our hard earned well to foreign countries every month including countries in dangerous and unstable regions in other words, our continued dependence on fossil fuels will jeopardize our national security, it will smother our planet, and it will continue to put our economy and environment at risk. i understand we cannot and our dependence on fossil fuels overnight. that is why i supported a careful plan of offshore oil production as one part of our overall energy strategy. the and we can pursue such production only if it is safe and if it is used as a short- term solution while we transition to a clean energy economy. the time has come to aggressively accelerate the transition.
8:33 pm
the time has come once and for all for this nation to fully embrace a clean energy future. [applause] that means continuing our unprecedented effort to make everything from our homes and businesses to our cars and trucks, more energy efficient. it means tapping into our natural gas reserves and moving ahead with our plan to expand our nation's fleet of nuclear power plants. it means pulling back billions of dollars in tax breaks to oil companies so we can prioritize investments and clean energy research and development. the only way to transition the clean energy will ultimately succeed, as if the private sector is fully invested in this feature.
8:34 pm
if capital comes off the sidelines and ingenuity of our open doors is unleashed, and the only way to do that is by finally putting a price on carbon pollution. many businesses have already embraced this idea because it provides a level of certainty about the future. for those that face transition costs, we can help them adjust. if we refuse to take into account the full cost of our fossil fuel addiction, if we do not factor in the environmental cost in the national security costs and a true economic costs, we will have missed our best chance to seize a clean energy future. the house of representatives has already passed a comprehensive energy and climate bill. there is currently a plan in the senate, a plan that was developed with ideas from republicans and democrats that would achieve the same goal.
8:35 pm
this bird, i want you to know, the vote might not be there right now but i intend to find them in the coming months. i will continue to make the case for a clean energy future where ever and whenever i can. [applause] i will work with anybody to get this done. [applause] we will get it done. [applause] the next generation will not be held hostage to energy sources from the last century. we are not going to move backward. we are going to move forward. this overarching principle that we must invest and embrace the innovation and technology of the future and not the past applies beyond our energy policy. that is why we have decided to devote more than 3% of our gdp to research and development to spur the discovery of services and products and businesses that we have yet to imagine.
8:36 pm
we have proposed making the research and experimentation tax credit permanent, a tax credit that helps businesses afford the high cost of developing new technology and new products. last year, when it the largest investment in basic research funding in history. the possibilities of were this research might lead are endless. imagine a new treatment that kills cancer cells but leaves healthy ones untouched. projector medicine that and the agonizing wait for organ transplants. imagine a lightweight best for soldiers and police officers that will stop on a piercing bullets. educational software that is as effective as a personal tutor. intelligence -- intelligent prosthetics that will enable a wounded veteran to play the piano again.
8:37 pm
imagine all the workers and small business owners and consuming -- consumers would benefit from these discoveries. we cannot know for certain what the feature will bring. we cannot guess with 100% accuracy what industry and innovation will next shape our world. i am sure there were times in this city when it could not imagine life without steel mills, heavy smog is filled the streets. when that industry shrank and so many jobs were lost, who could have guessed that this bird would fare better than many other cities and reemerge as a center for technology and bring jobs, health care and education. who would have thought that the university of pittsburgh medical center to one way adorn the u.s. steel tower or that this institute, carnegie-mellon,
8:38 pm
would be the region's largest employer? all of this came to be because as a community, you prepared and adapted and invested in a better future. even if you were not always sure what that future would look like. that is what america does. that is what we have always done. the interest of the status quo will always have the most vocal and powerful defenders at every level of government. there will always be lobbyists for the banks or the insurance industry that does not want more regulation. or the corporation that would prefer to see more tax cuts instead of investments in infrastructure or education. let's face it. many of us on the prospect of change scary. even when we know the status quo is not working for us.
8:39 pm
but there is no natural -- there is no natural lobby for the research that may lead to a life-saving medical breakthrough. there is no lobby for the students that may not be able to afford in not -- a college education but if they got one could end up making discoveries that would transform america in the world. it is our job as a nation to advocate on behalf of the america that we hope for. to make decisions that will benefit the next generation even if it is not always popular. even if we cannot always see those benefits in the short term, we make decisions like this on behalf of our own children every single day.
8:40 pm
while it is harder to do with an entire country as large and diverse as ours, it is no less important. the role of government has never been to plan every detail or dictate every outcome. at its best, the government is simply not to put barriers in the way of opportunity. our people come up with all of their drive, always end up building the rest. if we can continue building that foundation in making those hard decisions on pat -- on behalf of the next generation, i have no doubt that we will leave our children in america that we all hope for. thank you very much, everybody. god bless you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] [applause]
8:41 pm
8:42 pm
8:43 pm
8:44 pm
♪ >> i said this president is going to be impeached. woodward said week and never used that word impeachment around the newsroom lest anybody think we have some sort of agenda. the all of that moment stays with me. >> search for watergate with the c-span video library. what woodward and bernstein from earlier this year and look what other key players have said about the break-in and cover-up. explore washington your way. >> on monday, israeli commandos killed nine people aboard a ship headed for the gaza stripped
8:45 pm
drawing condemnation from governments around the world. here is israel's benjamin netanyahu commenting on the raid. >> good evening. the state of israel is confronting international hypocrisy. it is not the first time. two years ago, we acted against the hundreds of missiles that the hamas shot towards israel after we left gaza. they shot at our citizens and
8:46 pm
hit behind the citizens. the idea of exit against hamas% -- to prevent as much as possible the innocent population being hurt. despite all of this, [inaudible] regretfully, something similar is happening now. here are the facts. hamas is continuing to arm and iran is smuggling weapons. i need to clarify that the missiles and rockets that iran is smuggling to gaza are intended to hurt the settlements around gaza. i remember that i i remember thatn the past and today, i am telling you, the missiles and
8:47 pm
rockets that iran is smuggling into gaza hurt tel aviv, jerusalem and even beyond. some of it is already within gaza. this is why it is our duty and our right, according to the international law, to prevent this weapons from g weaponsaza through the air or sea. this duty, the previous government understood. the last few days was an attempt to break this blockade. we allow merchandise to come into gaza. it was to break the blockade.
8:48 pm
if this would have been broken, it the result of this flotilla, would've come hundreds of ships. the weapons you can bring on a ship is different from what you can bring back through the tunnels. on each ship, you can smuggle 10 tons of [inaudible] one ship was stopped in d.c. last year, there were hundreds of tons of weapons that iran was sending to the hezbollah. we caught tons of weapons that iran sent to gaza. it is our duty to inspect each ship that is trying to get into gaza to take out their weapons and to allow the other
8:49 pm
merchandise to enter. i need to clarify to the citizens of israel and the citizens of the world. the result would be an iranian port and gaza. it will have a destructive significance for every citizen in israel. and this is a real threat on the security of israel. i am telling you our friends in the countries that could decide that iranian forces in the middle east will constitute a threat on the european countries and therefore, we are forced to stop every ship intended for gaza. we wanted to take out the load
8:50 pm
on the ship and afterward, we inspected the ship's. the operators of the ship's rejected it out of hand. therefore, we had no other alternative but to go on to the ship. everything went smoothly at first. there were no special events. on the sixth ship, we encountered something completely different. our soldiers encountered a very extremist group that supported international terrorist groups and also supported.
8:51 pm
their weapons were obstructed. they shot at them. there were attempting to launch the soldiers. i want to ask herrif these are peace activists? are these pacifists'? . i need to note that if soldiers protected themselves and constrained and i am proud of them. . i am asking myself what would soldiers have done they would
8:52 pm
have acted similarly and i would assume in many cases they went beyond it. we are very sorry about the loss of life. our soldiers encountered, they risk their lives. i think the international community, i asked them what you would have done in such circumstances? what would you have done to protect your citizens? what would your soldiers have done in aasimilar situation? therefore, we will continue to protect our citizens.
8:53 pm
to keep the children of israel, security above everything and in this matter, and it is important that we call the united. this is at our heart. commando raid on a boat headed for gossip was one of the main topics at to date's state department briefing. the u.s. voted against a resolution condemning israel. this is about 40 minutes. several things to talk about before taking questions. and about one hour's time, the secretary will meet with indian
8:54 pm
education minister as we began to get into the strategic dialogue. we have the indian officials now are riveting and tomorrow, there will be a significant day as we have intensive and wide ranging discussions with a broad range of cabinet officials and a large indian delegatton. also today, we met with several activists. the leaders of democracy
8:55 pm
fellows. this is a program under our middle east partnership initiative. it is a three month program the west provides to young civic and democratic reform leaders from the region to complete academic course work at the maxwell school at syracuse university and complete a professional assignment with a political non- governmental or public policy organization in washington. this year's cohort is adverse group representing algeria, egypt, israel, jordan, kuwait, lebanon, libya, oman, syria, the bishop, the west bank and yemen. in the region, george mitchell spent the day with the u.s. delegation with the palestine investment conference in part of our effort to support the economic reform and institution
8:56 pm
to efforts. during the course of the day, he had the opportunity to talk with president obama about the pick and they are attending dinner as we speak. he will have other meetings this week with both palestinian and israeli officials although some of that schedule is being worked out. today in the dominican republic, the d r is hosting the world summit for the future of haiti, solidarity beyond the crisis. this is the first time donors have met since march 31 when the donors conference in new york pledged more than $5 billion to haiti over two years for the nation's most immediate rebuilding needs. senior officials from the department of state and usa are part of this delegation that
8:57 pm
includes secretary clinton, the deputy secretary and christopher millikan from usaid. this follows up and heady with the government officially launched the interim heavy reconstruction commission. that was discussed in the un on march 31. turning to africa, africa gradually and commend the government of liberia for its commitment to the rule of law. the message being sent a strong and clear.
8:58 pm
we are united in a strong partnership to combat a threat to both countries. also in africa, the u.s. is troubled by the government of peron the's decision to expel a human rights researcher from the country. she and other police accredited organizations and the run they must be afforded the ability to engage, operate and report freely on conditions within the country. the government should reconsider its decision to expel the researcher and allow the researcher to return to continue her work for human rights watch. just before taking your questions, a couple questions pending from mr. de's briefing. we have been granted access five times in cuba to the detainee. we continue to ask that he be
8:59 pm
released immediately on humanitarian grounds and he be allowed to return to his family. our next round of russian adoption talks are scheduled for june 14 through 16 here in washington. we are still awaiting final confrontation from russia on those dates. finally, regarding georgia's municipal elections from the weekend, we congratulate the people of georgia on the conduct of municipal elections on may 30. there were if i would from international monitors and a marked progress -- we did observe some irregularities in individual precincts and those concerns were noted by the group regulating.
9:00 pm
we are encouraged by the central election commission's efforts to increase transparency and responsiveness to electoral concerns. we also agree with the group that significant shortcomings need to be addressed. >> you said earlier that the human-rights council passed a pretty strong resolution condemning the flotilla incident.
9:01 pm
i'm wondering if this is the kind of thing that you were thinking about when you were talking about an international component to the israeli investigation. >> well, i think you heard in our explanation of vote that we considered this to be a rush to judgment. i would call attention in the resolution that it actually condemned the attack by israeli forces before israel or anyone else has had the opportunity to fairly evaluate the facts. so that is the reason why we voted no. >> sorry. that's the only reason? >> well -- >> because it said condemned in the strongest terms the outrageous attack by israeli forces -- >> well, in other words, before there's even the opportunity for an investigation, in our view, this resolution put the complete responsibility on israel. we thought that was an inappropriateness. as we indicated, we thought this was a rush to judgment. we have called on and supported
9:02 pm
the -- we've supported the un present statement of a couple of days ago calling for a prompt, credible, transparent, impartial investigation. we continue to believe that israel is in the best position to lead that investigation. as the secretary indicated yesterday, we want to ensure that there is a credible investigation, and we will continue to talk to israel and other countries about possible international participation. >> but a fact-finding commission -- a fact-finding mission by the human rights council is not a welcome thing, in your view. >> we do not support that proposal within the human rights council. yes. >> with the japanese prime minister hatoyama resigning yesterday over the futenma issue, he apologized for not
9:03 pm
being able to handle this issue very well. so that the two governments just made an agreement last week, right? so the u.s. is kind of involved in this political situation. so how do you see this political change in japan, and what kind of influence will you get? >> well, we respect the japanese political process and prime minister hatoyama's decision. we will work closely with the government of japan and the next prime minister on a broad range of issues. and i think today the chief cabinet secretary stated that the futenma agreement will be respected, given that it is a government-to-government agreement, and we share this expectation. yeah. >> according to a recent poll, 80 percent of okinawan people
9:04 pm
opposed to this relocation to camp schwab. and as you know, as i said, the japanese prime minister resigned because of this. so it's not supported by the jaaanese people. so how can you still say it's political -- still politically sustainable? >> well, i mean, we value the u.s.-japan security alliance. we think that the presence of u.s. forces in the region, including in japan, is of tremendous importance and of value to both of our countries. we -- and i think that's -- the importance of our presence in the region and the u.s.-japanese alliance is underscored by current tensions in northeast asia. so we have, we believe, reached a fair resolution that sustains the alliance.
9:05 pm
we understand the burden that this places on the japanese people. as part of our agreement, we have pledged to do everything that we can to help manage the impact that this has, particularly on the people of okinawa. this will be something that we continue to work closely with the japanese government, but as we indicated, we think we've reached a resolution of this relocation plan and we will work with japan to carry it out. >> [inaudible] considering the prime minister has resigned in response to this agreement, don't you think this has damaged the alliance, this agreement? >> well, i mean, i'll leave it to the prime minister to explain the circumstances under which he felt it important to resign. and our alliance is about much more than just the future of futenma.
9:06 pm
but this is an important issue, but it's only -- it's one of a number of -- wide range of issues and common interests that the united states and japan share. we will continue to work on this program with the japanese government. >> as you said, there has been an agreement on futenma, but there are no -- the elections are now planned for july, i think, in japan. do you feel that the issue might come back during the campaign? >> well, that's one of the with the government over aely number of months. it was a very thorough review. everyone went back over all of the details, and i think the japanese government came to reaffirm that this new plan, a modification of the plan that it inherited, was the best way
9:07 pm
forward. we think we've -- with some technical details still to be worked out, we think that this is the best way forward and we're going to continue to work this with the government of japan. charlie. >> can i go back to the gaza flotilla aftermath -- >> before -- do we -- okay, good. go ahead. >> can you bring us up to date on what you know about any americans who might still be in israel? have all of them been sent back towards the u.s.? and do you have any numbers that are more updated than yesterday on -- >> i checked in with our consular affairs folks. they have had contact with 12 americans. all of them have agreed to be deported. some of them have already moved out of the country. this is not to say that these are all americans that might have been on one of those ships, but we have had contact with a dozen and we expect that they'll all be leaving israel in the next 24 hours. >> i'm sorry, did you say they agreed to be deported? is that something you can agree to? do you have a choice? >> under the israeli arrangements, i think they had
9:08 pm
to -- >> sign. >> -- sign something that then led to the deportation. >> and that 12 includes the one who was injured, right? the one person who was hospitalized and then released? >> yes. >> p.j., on -- yesterday, i think we were talking about ihh and the accusations that it is part -- it supports terrorist organizations. there were some who said it supported al-qaida in some fashion. did you get some clarification on that? >> well, we know that ihh
9:09 pm
representatives have met with senior hamas officials in turkey, syria, and gaza over the past three years. that is obviously of great concern to us. that said, the ihh, which stands for the humanitarian relief foundation, has not been designated as a foreign terrorist organization by the united states. >> so the u.s. does not believe it has connections to al-qaida? >> we cannot validate that. >> sure. >> can we stay with the flotilla? >> sure. >> sorry. >> has the u.s. or has it been considering calling either privately or publicly on the israelis to lift the siege of gaza, as several of this country's allies have done in recent days and even the new york times, for that matter? >> well, again, we support the expansion of humanitarian assistance to the people of gaza. and at the same time, we recognize that israel has legitimate security concerns given the attacks that have emanated from gaza in recent months and years that have endangered the israeli people. we will be talking to israel and other countries about ays in which we can improve the flow
9:10 pm
of assistance to gaza and support the people of gaza while meeting israel's security concerns. >> mr. davutogluusaid in istanbul that he had asked the secretary to convey his demand that all militants would be released. can you confirm that? >> i did yesterday. during the course of the secretary's meeting with foreign minister davutoglu, he expressed concern about the status of turkish citizens, wanted to see them released. i believe the israeli government has indicated that all of those involved with the flotilla will be released. and you're seeing the flow of turkish citizens and other citizens out of israel and back to their home countries as we speak. we understood the turkish concerns and we conveyed those to the israeli government. >> do you know if this incident came up at all in the secretary's meeting with these 17 middle east --
9:11 pm
>> it was a relatively brief meeting. i think it was more like a photo opportunity. so i can't say. >> you don't know if -- were you there? >> no, i was not there. >> just on the investigation, what israel is talking about is the idf leading its own internal investigation. so is that acceptable to the united states? or when you talk about international presence, are you looking more to the south korea model? >> well, as the president's statement in the security council indicated, we support an investigation that meets international standards. there are a number of ways of doing that. we'll be talking to israel about how it can best lead an investigation that is broadly viewed as credible by the international community. >> and that could potentially be led by the idf itself? >> again, i'm not going to prejudge what -- how the investigation proceeds. we obviously recognize that not
9:12 pm
only does israel have its own interest in understanding what happened, there are a wide range of countries that had citizens represented in that flotilla. they, too, will want to see that this is a credible, transparent, impartial investigation. we support that objective and we'll be talking to israel about how best to accomplish that. >> speaking of talking to israel, have there been any high-level talks between u.s. officials and israeli officials other than the mitchell talks today, either the secretary or the white house or nsc, that you're aware of? >> i'm not aware of any that would involve, say, the prime minister today, although i can't speak for the white house. but the secretary has not had a high-level discussion with either the -- any top-tier
9:13 pm
israeli official today, to my knowledge. >> does that include the defense minister? >> she last talked to him on monday. >> p.j., can you give us a little more precision on the sanctions -- push to bring up the sanctions at the united nations? it's been tabled or at least, i should say, circulated, correct? and the next step would be up for vote. is that where we are? >> i think there are -- there's still work being done on -- technical work being done on the annexes to the resolution, so it's hard for me to say precisely where this process is. obviously, we think this is one of the most important issues facing the international community. and as i said yesterday, the iaea's latest report underscores that iran continues to refuse to comply fully with the international obligations. we're going to put forward this resolution in the coming days and we expect all responsible members of the international community, especially those entrusted to serve on the un security council and deal with
9:14 pm
these matters, to support the resolution. >> so when you say put forward, you mean for a vote? >> as we said yesterday, the president has indicated he wants to see this accomplished by the end of spring. we see that date on the horizon and we expect to meet that objective. >> okay, some international diplomats -- some brazilian diplomats and others are saying, "why now," when you do have this agreement that the brazilians and the turks worked out with iran, that they have still a month to follow through on giving up that 1,200 kilograms of low-enriched uranium. why not give it the month even if you're skeptical, as the secretary obviously is? >> well, first of all, this is one of the most urgent matters. we are very conscious of the fact, and we take the iranian statements at face value.
9:15 pm
they say never mind any agreement on the trr, we are going to continue to enrich uranium to 20 percent. that is a clear violation of the safeguards agreement and multiple un security council resolutions. so we are moving based on what we know, which is that iran continues to enrich. and as the iaea report indicates, it is not in compliance with its international obligations. the united states has reached a judgment shared, we believe, by the p-5+1 that iran is only going to change course if we apply the kind of pressure that
9:16 pm
is represented in this un security council draft resolution. so while the trr -- the joint declaration in tehran may technically fulfill what had been the proposal back on october 1st, we don't think that it fundamentally addresses the larger concerns about iran's noncompliance with its international obligations. turkey understands that. brazil understands that. and when this is put to a vote, turkey, brazil, other countries will have to judge how to proceed. >> can i go back to the human rights council, though, for a second? >> yeah. >> you said there was a rush to judgment. it didn't agree with the initial findings. i'm wondering, in light of that, what you make of the fact that only the dutch and the italians voted against this with you, and that some of your closest
9:17 pm
allies, including the french, the belgians, the japanese, the brits, and the south koreans abstained. >> well, i mean, we understand that. one of the reasons why we joined the human rights council was that we hope that over time that it would take a more balanced and appropriate response to urgent situations. >> right. >> and as our statement indicated, we believe that this particular resolution is a rushed judgment. it risks further politicizing a
9:18 pm
sensitive and volatile situation. so we made our judgment that this was not the right vehicle to advance the understanding of what happened on these ships. but we respect the fact that other countries may have a different view. >> so in the 18 months that -- or 15, 16 months that you've been on the council, have you seen it improve? >> we think our presence on the council is positive and constructive. >> and how did that manifest itself in this vote? >> well, there was -- i mean, all we can do -- we have a vote. [laughter] we don't dictate what the human rights council -- >> well, the previous administration didn't -- i mean, didn't -- they basically ignored the whole council because of situations like this. >> and we don't think ignoring these issues -- >> so your no vote is enough? >> well, i mean, the no vote is what we're empowered to do as part of the human rights council. we will continue to work -- i mean, we'll engage in the human rights council just as we're engaging on the margins of the international criminal court
9:19 pm
review conference. you had a briefing about that earlier this afternoon. we are willing to work constructively with countries around the world on the most urgent issues that face us all. but we understand that there'll be times where our view may carry the day, and there'll be times where our -- other countries have different points of view. yes. >> mr. crowley, it is the israeli's actions that need to be investigated. so how can israel, too -- best investigation -- why is the united states opposed to un investigation? >> as we've said, we are completely supportive of an impartial investigation that helps us understand what happens -- what happened on these ships, and more importantly, working collectively, how we can meet our common objectives of increasing the international
9:20 pm
support for the people of gaza, and at the same time, supporting israel with its legitimate security concerns. we believe that israel is in the best position to lead this investigation. but as the secretary said yesterday, this has to be credible. the international community will be watching this very closely as it unfolds. we want to see this done in a way that meets international standards. we'll be talking to israel about how best to accomplish this. we'll be talking to other countries that may want to play a role in this. and as we -- as the secretary said, we are open to ways of making this as credible as possible, including international participation. and that is our view. >> why -- i think his question, though, was essentially why? and can you explain why israel is in the best position to lead
9:21 pm
the investigation [inaudible]? >> israel is a vibrant democracy. it has effective, competent institutions of government, and israel is fully capable of investigating a matter that involved its forces. and so can israel conduct a fair, transparent, credible investigation? the answer is yes. >> on the u.s.-russian adoption talks, can you tell us how far the sides progressed towards the adoptions agreement? during the previous round of the talks, the russians gave their american counterparts the draft agreement. any chances that this agreement
9:22 pm
will be initialed or adopted or signed -- whatever you do? >> huh? >> that those documents -- >> yeah, it's a good question. i mean, we're committed to reaching an agreement that improves safeguards and procedures for -- to better protect adopted children and families. i believe we have a text that has been tabled on this issue, but whether we will resolve the remaining issues, i think i would not predict. we want to get it done as quickly as possible. whether it happens in this next session or takes a while longer -- these are complex issues and they have to address the legal and policy aspects of both countries. so we'll have the next round and let's see how that goes. >> and who's going to take part in the talks on the u.s. side? >> we'll -- it'll be led by the -- an interagency team. i think -- we'll check and see. i mean, we had -- we had one at a -- that was led by our principal deputy of consular affairs. we had another that was experts. i'll take the question as to who we expect to participate on our end. >> p.j., on mexico, as you know,
9:23 pm
there's a lot of concerns and frustration in mexico due to the arizona law on immigration. these have raised due to the death of a migrant worker that was detained by the u.s. border patrol and beaten and shot with a taser. what is the position of the u.s. government with regards with this incident? i understand the mexican government have already sent a diplomatic note about it. >> well, let's separate the two issues.
9:24 pm
certainly, we are sorry for the loss of life involving anastacio hernandez-rojas. we are in touch with the mexican government. we believe that his family has been paroled into the united states following his death. we have received a diplomatic note from the mexican government. it is being investigated both by dhs and by the police
9:25 pm
department in san diego. and this obviously represents the challenge of securing the border on both sides, and we are very mindful of the fact that those who try to enter the united states illegally, there is a significant loss of life every year along the border as people endeavor to come here. it's why the administration supports comprehensive immigration reform. the president the other day, i believe in a press conference, talked again about his concerns about the arizona law. but we continue to see immigration reform as the only way to normalize and expand the opportunity for immigrants who
9:26 pm
want to come to the united states and do so legally. i'll come back. >> on north korea? >> mm-hmm. >> the united states has extended economic sanctions against north korea under the un security council resolution 1874. is there any the u.s. has additional sanctions against north korea? >> well, we do have existing authorities under 1874, other sanctions. we did have a meeting here yesterday with the south korean vice foreign minister. i believe he is in new york today. and we will follow the lead of south korea in terms of when this matter comes before the security council. we want to see the international community provide a united response that sends a clear message to north korea that these kinds of tragic and provocative acts will not be>> i can't judge. i'll defer to -- i'm not -- i don't know what the explanation was from china. clearly, the kind of senior- level engagement that we have with the likes of secretary
9:27 pm
clinton, secretary gates, others, we think it's important. during the course of the recent strategic and economic dialogue, regional security issues, military-to-military issues, were discussed. i think that was one of the bases for secretary gates's trip to china. i wouldn't hazard a guess as to the rationale in postponing this visit. >> can you take the question, since you -- it seems like you haven't had a chance to look into it, but as to whether or not you're disappointed about this? because it seemed like one of the things that the administration has been trying to do, and for quite some time now since the taiwan arms sale, has been to get the military-to- military contacts back on an even keel with the chinese so they don't get torn up every time there's something that annoys them. >> well, i mean, we share that view. and there were some very detailed and direct discussions
9:28 pm
of these issues during the course of the strategic component of the s&ed. but i think the pentagon is fully capable of expressing its views as to the reasons for a delay in this visit. >> okay. well, i'm just -- i'm perplexed becaase a senior official said to a group of reporters, "i think you will see one of the takeaways over the course of the next couple of weeks that suddenly chinese friends might have time for secretary gates's visit. " and it just seemm like they got that completely wrong. i wonder what changed. >> again, as to the basis of china's decision, china can explain that. as to our -- the impact that that may have in terms of military-to-military engagement, obviously something we do support, i'll let the pentagon talk about that. >> but do you think -- >> can i go to the un issue? >> okay, i'll come -- go ahead.
9:29 pm
>> do you think it's going to impact the two sides' relationship, especially consider the fact the two sides' relationship's gotten better in a couple -- past few months? >> okay. try me again? >> i said, do you think the postponement will influence the relationship between u.s. and china, especially consider the fact the relationship's gotten better in the past few months? >> i mean, i think we value the current state of the relationship. the s&ed was wide-ranging. there were a number of cabinet officials there. we certainly see the value in having our secretary of defense talk to his counterparts in china. we have vitally important regional security issues to discuss, not the least of which is the current situation with respect [inaudible] sinking of the cheonan. again, as to the reasons why
9:30 pm
china thought that this was not the best time to have this meeting, i'll defer to china to explain that. >> hear the un -- what is he, special rapporteur or special something-or-other on extrajudicial killings, has come out today with a pretty critical report on the targeted assess of the drone strikes? i presume that the administration still believes that these are legal, but i'm wondering if you can -- if you have any reaction, specific reaction to this report. >> i don't. >> you -- >> i don't have a reaction. >> your legal advisor was on the telephone with some of us a little while ago, saying that there would be some kind of reaction to this report. >> okay. i'll take that question. >> can you check with his office, perhaps? i -- realizing that he is halfway around the world. >> one of my favorite lawyers. >> and since he addressed it in
9:31 pm
an on-the-record session not so long ago, i'm also a little surprised that you have nothing to say about -- >> well, you asked me if i have an immediate response. the answer is no. then you asked me if i would -- >> do you have an explanation of administration policy on this? >> i will not get into the matter at this point. i'll take the question as to whether we've had a chance to evaluate the un report and if we have any reaction to it. i'm not aware that we've had a chance to read it. charley. >> please, following up a question from yesterday, are there conversations with the mexican government about the extradition of the television producer bruce beresford-redman? >> my understanding is we have not received an extradition request. >> thank you. hold on. two more.
9:32 pm
>> on cuba, any reactions, or what reaction does the u.s. have to cuba's transfers of political prisoners to prisons closer to their families, conditions that they have been negotiated by the catholic church? >> let me just broaden that point slightly. we continue to hope that prisoners of conscience will be released rather than just relocated, and as soon as possible. >> thank you. >> wait. hold on. hold -- >> let me follow up on jill's question on iran, the iranian resolution. could you be a bit more specific with regards to the timeline, when you, approximately, hope to introduce it for the vote? are we talking about a week? two weeks? >> well, again, the president said he'd like to see this done by the end of spring? is that june 20 or 21? >> twenty-one. >> [laughter] so sometime between now and then. >> do you have any update on the status of this american lawyer who was arrested in rwanda? there are some reports that he tried to kill himself in prison this morning. >> i can't say. >> and apparently, his wife or
9:33 pm
his family is trying to -- is seeking a meeting here at the state department. >> all i can tell you is that we have visited and spoken with peter erlinder. he was taken to the hospital this morning and remained there overnight for observation. his u.s. and rwandan attorneys have had access to him and we expect that due process will be accorded by the rwandans in a timely and transparent way. >> do you know why he was taken to the hospital? >> i do not. >> p.j., one other thing. you know, i didn't flag these to you guys so if you don't have an answer, taking it is fine if you wish to do that, but i presume you're aware of the case of the kuwaiti blogger who has been detained over accusations that he insulted the emir of kuwait. and i wanted to know what, if anything, the administration or the department may have done on behalf of his case. >> let me take the question. >> thank you. >> thank you. [captioning performed by
9:34 pm
national captioning institute] [captions copyright national cable satellite corp. 2010] >> heated questions about the issue. this is an hour. >> i will report to the house on the events surrounding the gaza. >> the immediate action the government has taken and our next steps. in the early hours of may 31, the israeli defense forces interrupted the flotilla. the incident led to injury and death to a number of passengers may be on one of the vessels. we await details for all of the casualties and but it is apparent that many will be turkish citizens. i have spoke to the prime minister's to offer our condolences. two of the boats have been delayed by mechanical difficulties and remain at sea. " we believe they are en route to gaza.
9:35 pm
it appears that a total of 37 british nationals were involved in the event. this is different from the number the prime minister gave a short time ago based on what the israeli ambassador has said before. i have spoken to our ambassador in tel aviv and the latest figures are 37 including 11 dual nationals. we have received access to 28 of these individuals, one of whom who was deported yesterday. -- reported yesterday. >> the fact that we have not yet been given full information of british nationals detained in access to all of them. we are urgently pressing the israeli officials to resolve this within hours. there is real and justified anger at the event that have unfolded. the position of the government is as follows -- our guideline is not to travel to gaza we have made it public that we deeply deplore the loss of life and we
9:36 pm
look to israel to do everything possible to avoid a repeat of this unacceptable situation. the u.n. security council have rightly condemned the violence which resulted in the loss of these lives. we continue to demand urgent information and access to all uk-pulse -- uk nationals involved. we are seriously concerned about the seizure of british nationals in international waters. the prime minister has spoken to the israeli prime minister, i have spoken to the israeli foreign minister and
9:37 pm
parliamentary undersecretary of state has been in close contact with the israeli ambassador in london. the embassy in tel aviv has been in constant contact with the israeli authorities. i am grateful for those hon. members who have been in contact with relation to their constituents and have provided information. we recognize the concerns for those involved. israel has told us that they will move as quickly as possible to deport those people from the flotilla currently held in israel. if they agree, there will be deported very quickly. those who remained unwilling to leave can stay for 72 hours in the tension which is the time limit allowed for them to appeal against the deportation. our understanding is after that, they will be deported. if it is our understanding that they have begun to transfer detainees to countries that are not represented in israel. and we understand those
9:38 pm
individuals allegedly involved in violence against serviceman will have their cases examined in line with israeli legal procedure. we do not believe there are anyt category but i hope the house will appreciate this is a fluid situation. our international partners are working to facilitate the swift release of those detained. if turkey is sending six planes to fly out there nationals the duties of other countries may join the fllghts. we believe some of the british nationals are now on these flights. the united kingdom has played a part in the european union and you and in a grieving for a full and independent investigation into these events. we will ensure full accountability for the -- for the events that have occurred. further discussions are taking place in other international groups.
9:39 pm
we stress to the israeli government the need for it to act with restraint and in line with its international obligations given that its actions appear to have gone beyond what was warranted or proportional. we need to know if more could have been done to minimize the risk or to reduce the number of death and injury. the event aboard the flotilla are very serious and have captured the attention of the world but they should not be -pviewed in isolation. they arise from the unsustainable situation in gaza which is a cause of public concern here and around the world.
9:40 pm
it has long been the view of the british government that restrictions on gaza should be lifted, a view confirmed and a united nations security council resolution which calls for the delivery of humanitarian aid and which calls on state to alleviate the humanitarian and economic situation. this has not happened which is a tragedy. it is essential that there is unfettered access to meet the humanitarian needs of the people of gaza but to also allow the reconstruction of homes and livelihoods and to more -- and to permit trade to take place. the palestinian economy is an essential part of a viable palestinian state that i hope will one day live alongside israel in peace and security. as the ones productive private sector has been decimated and ordinary residents have lost hamas that benefits. they have total control of the economy. groups that are even more radical and violent are finding
9:41 pm
their place in the frustrations of a generation of young people. current is really restrictions are counterproductive for israel's long-term security. we will therefore continue to press the is really a government to lift the closure of gaza and plan early discussions with international partners about what more can be done to ensure an centered flow of aid while insuring that aid reaches those that need it and is not abused. i discussed this with secretary clinton last night and we will be discussing this urgently. the house must not forget the role of the hamas in this conflict. they are directly undermining the prospect of peace. violence has continued in recent days with rockets fired and israeli military incursions and air strikes in response. we call on hamas to take immediate and concrete steps to unconditionally release it captive held for four years and to and interference with the operations of ngo's in gaza. it is more clear than ever that
9:42 pm
the only long-term and sustainable solution to the conflict which produced these tragic events is a two-state solution that has a sovereign state living alongside a secure israel with a light -- with a right to live in peace and security recognized by neighbors. the talks under way are more important than ever. these events should not undermine those talks but instead underline how important they are. the government will make in an urgent priority to get british diplomatic support to buttress that process. the government will continue to keep the house informed of developments. >> thank you, mr. speaker. i am grateful to the foreign secretary for his statement.
9:43 pm
i said in the queen's speech debate last week that a policy of policygaza the search for peace will not work. in the early hours of monday morning, it is a barrier to aid but to any hope -- any hope of peace at all. the attack by the israeli defense force is the latest in a series of self-defeating and deadly moves by successive israeli governments. on this side of the house, we join international condemnation. israel does have rights to security against terrorism but we're talking about the policy that has nothing -- done nothing to defeat terrorism. until the people of gaza can be confident of an education for their children, of being able to feed and clothe their families adequately and live without a prescribed list of what they cannot use in their kitchens, there is no way that peace will be heardd
9:44 pm
we negotiated the response to the u.n. security council resolution in january of 2009 which eventually brought the gossip war to an end. it demanded the full flow of humanitarian aid into gaza and the trafficking of weapons into gaza. this must be the central demand of the international community. that means pressure, not just engagement. misery is being brought to palestinians and nothing is done to weaken the hold of hamas on the region. revenue from smuggling funds hamas. the latest episode caused innocent lives to be lost. the only people smiling are the projectionists. the answer to them is a political process will drive and momentum.
9:45 pm
we talked about parts of the talks. they are only worth having if they serve as a prelude to substantive negotiation. i have gone on too long without getting to the big issue. i have a set of questions for the foreign secretary. the welfare of british citizens, the lack of clarity about the position of british nationals is completely unacceptable. we are talking about 37 people. they have a right to consulate support. it says so in their passports. this should be given that support immediately. if it is being denied, we should be denouncing it, if not saying we are disappointed. >> hear, hear. >> the legality of the action. i spoke to the turkish prime minister last night. it is clear they intend to
9:46 pm
pursue this question. can you tell the house if he believes the action that took place in international waters was the legal -- was the legal? the foreign secretary says he wants to know if more could have been done to minimize the risks or reduce the number of deaths during the raid on the flotilla. surely, the point to ask is why on earth armed and legal force was used at all. there is a fundamental principle here. the language of condemnation is used very sparingly and its national relations. it is our view on this side that the loss of innocent civilian lives should always be condemned and we have done so since monday. the language was repeated in a statement monday night which said the security council condemns the acts. we welcome this. the foreign secretary and prime minister have not used this language themselves. we call on them to say loud and clear that the british
9:47 pm
government does condemn the loss of innocent civilian lives and if he will not do so, i say he is setting a very dangerous precedent and sending a bad message. fourth, the government's intentions going forward. we note the when's calls for an independent investigation and welcomed them but there are outstanding requests for investigations into incidents during the gaza war 18 months ago. whether the majesty's demint argued for a u.n. investigation now and if not, why not? bridget majesty possible government -- majesty's government argued for a u.n. investigation now and if not, why? that actually damages israel. what actions do you propose to take through the un and the eu
9:48 pm
to improve the daily lives of the people living in gaza? do we not need urgent engagement to get an agreement for those forces to be deployed? mr. speaker, this is a political price, not just a humanitarian one. this is for the christmas responsibility for all the parties lies. we will support all efforts on the part of the government to make gaza part of the wider international drive for peace in the middle east. without such an effort, there will be no peace in the middle east. >> mr. speaker, i am grateful for the broad support for what is clearly a bipartisan policy across the floor of the house and its concern for the people of gaza is felt very deeply in
9:49 pm
all parts of this house. as he reminded the house, he did take part in the u.n. resolution and has always argued as we hhve argued that ignoring gaza not work. this is a problem that must be addressed. i am grateful for the implicit support you have given to the government's position and the argument that is made that the israeli policy toward gaza does not loosen but titus the grip of hamas on the people of gaza. he can tell that i am disappointed and dissatisfied with the israeli response that has gone on over recent hours for consular access. the reason i did not condemn them unequivocally is because there is a complicating factor which is many of the people who were aboard these ships did not
9:50 pm
have their passports or destroyed all of their papers. it is not immediately obvious to which nationality they belong. added to that has been a clear lack of preparedness by israel to handle this number of people and to deal with this number of consular inquiries. that is why our consular staff will be working very hard to hammer on doors and ask people if they are british. it has been a chaotic situation. it is completely unsatisfactory. i am glad some of these people are being able to leave the country. it is the most immediately urgent part of our work to ensure that all british nationals had been identified. he asked whether i had spoken to the turkish foreign minister. i did.
9:51 pm
one of the points of having an investigation will be to learn more about the legality of what may have happened. the turkish foreign minister is connected to another question. he thanked me for the role played by our ambassador at the u.n. security council because the statement that was delivered was of course on behalf of the members of the security council, including britain. that is very much our language, as well. we certainly condemn acts which elite to the deaths of civilians. i have done that before. i do that again. there would be no difference between us on that particular point. on the matter of investigation, it is imperative is independent, credible, transparent, and it is certainly my view and the view of the united states that the
9:52 pm
investigation should at minimum have an international makeup. and it is possible for -- it is impossible for israel to establish such an inquiry. on other occasions, and greece have not when we may be thought they have been prompted. we look to israel to cede to the international calls for such an inquiry and investigation. it would not be logged -- belongs if they refuse to that we would add our voices in that case for one conducted under international auspices. he is right to say urgent workings should be taken on providing the mechanism for access to aid into gaza and trade in and out of gaza while ensuring israel that will not be used for the smuggling of arms. that is the urgent work we are
9:53 pm
kicking forward with our partners in the eu and u.s. and it is something we will have to come back to the house on. >> it is easy to beat contemporary -- to condemn issael. the questions we must ask ourselves is that these things taken by themselves will bring about the solution that we all seek. drawing on our own colonial experience and also on our recent experience in northern ireland, is it not clear that sooner or later, however controversial it may be, that hamas have to be brought into the circle of discussions? >> i always listen to my right and honorable and learned friend. he will be aware of the principles that have been very clear for some years that hamas must accept previous agreements
9:54 pm
and recognize the state of israel. that has been the longstanding tradition of british government and the un and the rest of the quartet. what i referred to earlier is the need for them to make concrete movement toward those principles in order for the rest of the international community to engage with them. i continue to believe that is the right position and one that we have in common. that must be sustained. >> in welcoming -- may i ask if he recognizes that those innocent lives may have well included any of the 37 citizens that were present in a situation in which we see is
9:55 pm
released committing a war crime of piracy in international waters, kidnapping and murder and all of this and pursued of imposing an illegal blockade on gaza amounts to punishment as i thought myself as i led an international publication to their earlier this year. will he assure the house that if the israeli government fails to comply with the perfectly modest request that is made of them that action will be taken to make israel rejoin the international community? >> yes, mr. speaker. i think it is very important that israel does respond to the call from across the whole world for the prompt, independent, into which we have added oury%-
9:56 pm
voice. if no such investigation is forthcoming, we would also want to advocate such an inquiry under international auspices. a blockade of gossip is counterproductive bridging a blockade of gaza is counterproductive. he is right to point out that fatalities could have occurred along the british nationals. it is our strong advice and has been our advice and will be our advice that british nationals do not travel to gaza. let me make that absolutely clear. they are going into a dangerous situation. that is the clear position of this government. >> the debate to follow this statement is prescribed.
9:57 pm
i need short questions and short answers. >> those of us who were able to enter gaza after the last incursion could only come to the conclusion that there had been a disproportionate use of lethal force of dubious legality. does he agree that there has been a repeat of precisely that and what is the british government to do to try to ensure that the same repetition is not again and again and again? >> hopefully i covered that point in the statement that i have given. i referred earlier to the actions that have been taken by israel to appear to go beyond what is warranted or proportionate. i away those words very carefully and have also said it is unacceptable and that israel must act with restraint and in line with its international
9:58 pm
obligations. we have given a very strong message to israel, there can be no mistaking how strongly we feel about this. >> bearing in mind this is a ship in international waters, it should be condemned. one has to agree not to board a ship in iiternational waters can only legally happen in the most exceptional circumstances. that is the basis from which we are working. >> my constituent was injured when the foot till it came under attack -- flotilla came under attack. thee45 tons of medical equipment
9:59 pm
he helped to collect as floating aboard the ships and the mediterranean. will the foreign minister use his influence to have this equipment delivered? >> my hon. friend the minister has just undertaken to look into what is happening with that specific shipment. i believe some of the aid on some of the ships is now arriving in gaza. >> this is a deplorable tragedy. can the secretary tell us what steps he will take to ease the transfer of goods through the crossing so that israel's security can be met? they have legitimate security needs against an enemy.
10:00 pm
>> of course israel has a legitimate security needs. that is why i stressed in my statement to the role and responsibility of hamas >> farms cannot take place in gaza and get the flow of humanitarian and economic trade can take place. clearly, some additional insurance is going to be necessary for that to happen. that is what we are urgently working on.
10:01 pm
>> has not been clear for a long time that the blockade of gaza is a legal and amounts to cruel and unusual punishment and is subject to international laws and intervention? >> the argument i make is what effort the argument about its legality, it is not achieving its objective. it is not the right thing for israel to do. no doubt the government of israel would make a different argument. they have been saying that the blockade is lawful because they are acting and their own self- defense. therefore, the thing to persuade them off is this is not serving their own security interests and the change of policy is urgently required. >> i note the foreign secretary paused demands for unfettered access to gossip. can he tell the house how he
10:02 pm
believes in the absence of a blockade of shipping into gaza, the people of israel can be protected from the unprovoked assaults by rockets and other armaments which are being reported -- sent in to buy terrorists? >> i have referred to the international work to give assurances that such importation of rms cannot take place while humanitarian aid in general economic trade can take place. and i stress again that it is not serving the interest of the security of israel to maintain the current positions which is actually putting more power into the hands of a mosque. that does not serve the security of israel. >> to accept israel to desist from its selected footage to
10:03 pm
make the case with the media rather than the to take place in this terrible incident. >> my hon. friend is a very powerful point but we were doing a lot if we could stop everybody from using selective footage. it is not a line the need for the impartial incredible inquiry for which we have called. >> but israel has killed 1400 people using false passports and have now killed people on the high seas. i support that on the mission. is it time that we took exception against israel such as lifting the trade agreement so that they understand that they cannot act with impunity and kill people and with the have just done on the high seas.
10:04 pm
>> israel will be listening. i did not think the right policy is to impose sanctions. the right policy is to urge a course of action that have urged today, the lifting of the restrictions and blockade and the setting up of the credible an independent investigation. i think those are part of the practical way forward to concentrate on and therefore the right foreign policy for this country. >> and welcoming my right hon. friend's statement, would he agree that the effect for the brutal israeli blockade is to drive all trade and to the tunnels, some of which are now large enough to accommodate four by four vehicles. cards my friend makes a powerful point. what in effect happens is hamas
10:05 pm
is able to bring goods to the tunnels providing funds for themselves while impoverishing the people of gaza. that is it for the reminder that this is not an effective policy. is not an effective policy. >> the israelis are aware of the world wide revulsion of what has happened this week. without any justification whatsoever and taken with other meant -- measures that have been spoken about, is it not clear that israel seems to show no concern at all but it is out of control? but i would not necessarily reach the conclusion that there is no awareness or concern about international opinion in israel. there has been a good deal of criticism and the israeli media of the government over the last
10:06 pm
couple of days. sometimes that is bitterly critical. we saw that in the aftermath of the lebanon war four years ago. i think you would be oversimplifying it to put it the way it was just put. there is a consciousness and israel of international opinion and that is why we have to express ourselves in ways to ask them to do reasonable things setter in their own interests. >> will the foreign secretary acknowledge that aid from israel has been up to 1 million tons since january 2009? will you also acknowledge that the reason for the blockade, which we all want to end, is because of continued terrorism by hamas, the hijacking of
10:07 pm
convoys in the smuggling of arms from iraq into gaza? >> it is very important to remember the role played hamas. we need to see an end of the rocket fire into israel as well as the other measures we have called on israel to take. my friend brings that necessary balance to the questions we are having today. >> the secretary will know that the siege has been ongoing for three years. given that the condemnation and criticism to not seem to change the actions of israel, what further action will he propose to take in terms of the association agreement? there is an accord that provides for suspension and the light of human rights violations. what he considered suspending debt agreement to get the met
10:08 pm
-- to give the message we are serious about this? >> i do not think israel will doubt the seriousness of the message. the fact that the resolution was agreed to so rapidly with the support of the united states and united kingdom will have made an impact on israel. if she could of her the conversations that we have had with their israeli counterparts, which he could be very confident that they are aware of the strength of opinion and our deep concern about these issues. the eu-israel agreement is not exactly progressive at the moment. i think the point that is made about that. it is not really an additional measure for this particular situation. i really want to concentrate on trying to make sure that the credible an independent investigation takes place and
10:09 pm
the cases are understood in israel for the lifting of the blockade of casa -- gaza. >> mr. speaker, the flotilla of itself, which was probably doomed to fail, was an expression of the frustration of ordinary people at the failure of the united nations and the failure of the quartet to get israel to comply with its u.n. obligations. the foreign secretary has had conversations with mrr. clinton. i understand he is also meeting with the eu by rep. i wonder if he believes that between us if we can actually encouraged the quartet to now take more firm action with israel which still today seems not to understand the gravity of the situation? >> there is a real international focus on these matters. that is true in the u.s. and
10:10 pm
with the you high rep. she certainly has the same focus on these issues. many other -- in the margins of that, many of the foreign ministers had discussed this issue. i think one of the results of this action is to really bring this to center stage. and it has shown a spotlight on the problems of gossip to which so many right hon. members have heard. i think it is important for us to take the momentum from that and make sure the necessary work continues over the coming weeks and months to improve the situation. >> with the foreign secretary not accept that what he said today it really amounts to saying that the united states, britain, and europe will continue to cooperate and that
10:11 pm
this toleration should be brought to an end and if necessary, britain and the other members of the nato should say that if another flotilla sets off, we are willing to give it naval protection with the royal navy reverting to its traditional role of protecting the freedom of the seas? >> i understand in every case where members are expressing their outrage at what has happened. in many parts of the house and of the country, but as i have explained, in pursuit of practical policy, which should be concentrating on the two things that have identified, the setting up of the right kind of investigation and inquiry and doing so quickly and making the coherent case for the lifting of the blockade.
10:12 pm
i think those are the right he refers to british naval protection. i have to say that the last prime minister promised a british naval deployment in the mediterranean to try to stop arms smuggling and to -- into the region but none were sent. i will not make empty promises. >> given the importance of the investigation of the foreign secretary, does he not also believe there is a very possible case for international arbitration and the international court at the hague. after all, it is not only questions of international law but the causes are well known but they have not been resolved by the intervention of the quartet. international arbitration may be a very good route to adopt. >> the position we have taken does not exclude things.
10:13 pm
they are quite difficult things to bring about i think the priority is to have an inquiry and investigation as soon as possible that meets the criteria that i have set out. we have not excluded advocating other courses of action if it is needed. >> i think we have pussyfooted around israel for long enough. the only language they understand it is not the language of diplomacy but the language of a hot boot. sanctions, telling them to stop building more supplements, and also insisting that they have talks with both sides. i would hope that the former secretary will enforce much more robust foreign policy against israel.
10:14 pm
>> i have not immediately put on my boots because i think the right way to approach it is for it to make sense to people in israel and the rest of the world is to advocate the measures i have been calling for today. that, i think, is a crucial ingredient for israelis to see. in a way that the whole international community can respect and take seriously. and that the blockade makes no sense, even from their own point of view. it is a democratic country. it is possible to make these advances in these situations. >> it has been made quite clear that the blockade is counterproductive because of the suffering it causes to the people of gaza.
10:15 pm
we pressed the international community to lift the blockade as a precursor to a peace settlement. >> it is a very important part of any mideast peace settlement. the question reminds us that it is very important to continue the work on the peace settlement. those perks in the talks have been taking place. we want those to become much more serious. the european nations now have to look to how we can push those talks forward. certainly, ending this blockade is an integral part of signing any such durable solution. >> israel has done nothing wrong -- to say that israel has done nothing wrong when they send commandos to international waters to attack an unarmed population.
10:16 pm
for many years, israel has put itself above international law without consequence from the international community. what should be the actual practical consequence if they do not abide by the will of the international community this time? >> we will say, mr. speaker, if they think in the and they have done nothing wrong. the cabinet is meeting this afternoon for the first time since this incident. we will see what comes out of that, if anything. in terms of the investigation and the inquiry that we and the rest of the world have called for. i stress that i think it is important to make the case for these two things come up for that investigation and for the lifting of the blockade because. and this is an argument that has to be one within israel as
10:17 pm
well as the rest of the world. that is why i am taking the approach that the previous government has broadly taken. and that is the right approach. >> it is a little rich for the israeli government to justify its behavior on the grounds that it is denying the terrorist organization when they have showed itself perfectly willing to prescribe munitions for use against civilian targets. >> again, that adds to its strength of feeling and point made that will be widely noted and hope taken note of in israel. >> this was an illegal act on international waters that involved citizens from many
10:18 pm
countries. surely the only way we can have a credible an independent inquiry is there international mains. it is the foreign secretary support that and if not, why not? >> we shall see about that. the member may be right in the end. israel has previously held inquiries into some of the sx bridging some of the actions in lebanon which certainly were independent and credible by international standards which meted out sickert -- considerable criticism to the authorities -- authorities in israel. an investigation should have an international presence. i have not excluded this government advocating the sort of inquiry he would prefer to see if no other action is taken.
10:19 pm
>> were the sea blockade to be lifted, what assiitance to the government, european union or nato offer to israel to stop the smuggling of weaponry from those to rogue states? >> such assistance and assurance is very important. that is why we are now consulting with other nations on but the best vehicle for doing so. how much more the european union can do. it is very important that we are able to stop the flow of arms into gaza just as it is so vital to open up gaza to humanitarian aid and more normal economic activity.
10:20 pm
>> i join my colleagues in condemning the actions that were taken by the israeli government. two of my constituents are currently in detention in israel. i agree with the foreign secretary that an international independent investigation is important notwithstanding, the undersecretary agreed to meet with my constituents who were there because nothing beats hearing it from the horse's mouth. >> plans are being worked on to meet a group the answer to the question is yes. >> the call for an international, impartial
10:21 pm
element to an investigation. is it not crucial to ensure that if peace talks resume and turkey's role, which had been an important regional ally to israel, is supported and encouraged? >> it is very important and that the proximity talks turn into more than proximity talks. turkey has become very active in the region. we have referred several times to the role of the turkish foreign minister and our proceedings this afternoon. they have tried very hard in recent years to bring syria and israel closer together and have come for a close to doing so and bringing permanent peace between syria and israel. they played a very constructive role in the region and i am sure they will do so in the future. >> the unauthorized importing of
10:22 pm
a vessel in international waters by armed combatants is normally referred to as piracy. will he not use the word on this occasion? >> the blunt sector has been courting the blunt right gentleman has been converted into a secretary who weighs his words very carefully. it is important for us to argue for that investigation and be prepared to see what the investigation produces before we feel the need to add any other language and how i express things today. >> the speaker for the secretary of state appears to have ruled out a number of options within
10:23 pm
the european union context in dealing with israel. what exactly is the u.k. doing within the european unit to maximize diplomatic pressure to end the blockade on gaza? >> i do not conscience of ruling anything out, mr. speaker. i am not ruling anything out. i must stress that there is an enormous amount of pressure. i had dinner with many of the european foreign ministers in sarajevo last night and will see more today. they are all expressing themselves in very similar ways and very emphatically. if there is no doubt about the intensity of the feeling and the pressure from the european union. clearly, we will want to discuss as a body what more we can do about that and most importantly, what we can to working with the united states to try to give new momentum to the middle east peace process. it is up there on the agenda and
10:24 pm
on the minds of european foreign ministers and there will be a great deal of pressure. >> i have been to gaza twice. can i ask the foreign secretary to work -- -- it is exactly what the israeli government wants to have a news blackout to hide the appalling situation going on there. can i add that the conversations with mr. lieberman and not to win to get us anywhere. we need sanctions if israel is to lift the blockade and the >> the conversations are a part of what we need to do. the overall approach and the reaction to the suggestion of sanctions, i understand the strength of feeling and his knowledge about the situation. it is our general travel advice to not go to gaza. sometimes member of parliament are able to go in a privileged
10:25 pm
and particularly safeway. that must happen and that is welcome. it is important for this house to have as much knowledge and information as possible about what is happening n the ground. i am not discouraging right members from going under the right circumstances but let's not make that for the general public. >> the foreign secretary mentioned that there may be charres under israeli law. should not the killers of the aid workers face charges under international law? >> mr. speaker, since we have called for an investigation, i do not think we can preempt such matters. i stress that the aid workers and activists and people that are involved, however we want to describe them, who may have been a position, so far as we know do not include any of the british nationals. the hon. member makes an opinion
10:26 pm
that is a consensus of the house. um hence we're calling for the credible investigation. [inaudible] israel has a well-founded reputation for hoping these crises go away which has been very successful. these event are the recruiting sergeants for terrorism. what will be different this time? >> i cannot guarantee what the3 i can say that these incidents have shown a particular spotlight on to the situation. the speed and unity of the diplomatic response is unusual.
10:27 pm
i referred earlier to the ease with which the u.n. security council statement was agreed, including with the u.s., and i stress that point, and i think that will have been duly noted and israel. i know it has been duly noted. can i promise what form or what reaction the israelis will not provide? i cannot. we will watch it very carefully and minutely and argue very strongly for the measures that i have set out today, not excluding other courses of action in the future. >> it is an unusual sight to see a york shier sentiment linguistically restrain. he made what is a refreshing and robust statement. the former secretary mentioned the rapid crossing is becoming reopen. we have been told that it has been a crossing point for
10:28 pm
munitions of war. will this be monitored? will it report to the house and will we be the region will we be able to consider that this is simply another border crossing -- 0.4 in excess 0. crossign point for hamas. >> does this also and knowledge that the international community itself has responsibility to ensure the weapons are not smuggled into gaza? i know we did not want to send a gunboat spot can we be told what practical sense in the
10:29 pm
international community take to offer assistance to israel and egypt that there are not going into the gaza which will reinsured the public opinion that will be as horrified as these events as these people in the house. >> one puts one's finger on what is required. there have been various forms of activities that were meant to give assurance. clearly, that has not worked. we clearly need to find a new method to do so. that is how it turned out under the previous government when it was offered in never materialized. and that is why i am not making any rash promises. given the huge importance of this decision, the u.k. will do whatever we can to assist. >> my constituents want more
10:30 pm
than pressure. would you come back to the house and report on the timetable for discussions just as we did in ireland? >> many more discussions in this house. i am not offering a timetable but i have indicated that we have not excluded other actions and pressures in the future. i have been very diligent and would be very disappointed if we did not have a further opportunity to discuss this. >> i welcome the robust statements from the foreign secretary. is he aware that this chart says there is no solution to the palestinian problem except by jihad. the and she did some proposals are a waste of time, an exercise in futility. our struggle against jews and israel will remain erect until it is eliminated. this kind of and as a medic in anti-jewish language is the
10:31 pm
official doctrine and policy hamas. hamas is part of the problem but not yet part of the solution. >> i am grateful for the right member. i never thought i would take those worlds -- words. i hope i've made that point in my statement about referring to the ideological ideals of how moss -- hamas. they have refused to swear off the violence and recognize the right of israel to exist. until they start making concrete movement towards those things, it is difficult for the international community to discuss the future with them. the hon. gentleman ads forced to that argument. >> everybody who wanted to contribute was given the opportunity to do so. we come to the main business.
10:32 pm
we will proceed to read the orders of the day. >> coming up next, the financial crisis inquiry commission hears from investor warren buffett and the head of the moody's credit rating agency. president obama talks about the economy during a trip to pittsburgh and later, reaction to israel's ships headed to gaza. >> on tomorrow's "washington journal." the look at efforts to secure the mexico-u.s. border. also, brian o'neill, an attorney who represented alaskan fishermen in the 1989 exxon valdez oil spill. and a discussion about public education with the national education association president. it begins live each morning at 7:00 eastern on c-span.
10:33 pm
>> we have three new c-span books for you. "abraham lincoln,"the supreme court,"and "who is buried in b."nt's tom to order, go to /books. each is a great gift idea for father's day. >> now, part of today's hearing of the financial crisis inquiry commission as they examine the role of movies and other credit rating agencies. we will hear from the ceo and from berkshire hathaway ceo, warren buffett. one of moody's largest shareholders. this is two hours 20 minutes.
10:34 pm
>> we are going to been the second session of our hearings and decisions made based on those decisions made during the financial crisis. we are joined at the witness table by mr. warren buffett, the chairman and ceo of berkshire hathaway and the chairman and ceo of moody's corporation. i would like to start, thank you for being here. i would like to start by doing what is customary for all witnesses. how would like to ask you to stand and be sworn.
10:35 pm
please raise your right hand. do you solemnly swear under penalty of perjury that the testimony you are about to provide will be the truth, the whole truth, and nothing but the truth, to the best of your knowledge? >> i do. >> we will begin by offering both of you the opportunity to make an opening statement of no more than five minutes. >> i have no statement. >> good. that will cut five minutes. we will take your opening statement and go right to questions. >> thank you. good morning. my name is ray mcdaniel. i am the chairman and ceo of moody's corporation. moody's appreciates the
10:36 pm
important work this commission is undertaking and on behalf of my colleagues, i welcome the opportunity to contribute our views for the role of credit rating agencies. over the past seven years, we have witnessed the events that many of us would have thought highly unlikely. the turmoil in the housing market that began in the subprime residential mortgage sector began eighth global liquidity crisis. the impact has created a great hardship for many americans. american families have lost jobs, homes, and college and retirement savings as a result of this financial crisis. moody's is well aware that the crisis of confidence in the market has impacted the confidence in credit ratings industry. at notice, our reputation is our single most important asset. for 100 years, moody's employees have brought inside to bring in trillions of dollars of that and hundreds of thousands of obligations across a broad range of sectors and regions. we have a strong reputation
10:37 pm
among capital market participants worldwide. moody's is certainly not satisfied with the performance of the credit ratings for the u.s. mortgage-backed securities and debt obligations over the past seven years. it has been deeply disappointed. starting in 2003, we observed a trend of loosening of mortgage underwriting standards and escalating house prices. we repeatedly highlighted these trends in our research and incorporated them into our analysis of the securities. by 2006, we were requiring an unprecedented level of credit protection. if neither we norother participants anticipated the rapidity of credit tightening that exacerbated the situation. even our enhanced credit protection requirements were not sufficient to ensure retting stability. with the benefit of hindsight, many observers have suggested that the events that came to pass were inevitable and easily
10:38 pm
predictable. as they were occurring, various outcomes were considered possible. market experts in the public and private sector had differing views about the ultimate performance of the u.s. housing sector and the potential effect on the rest of the economy. these questions persist today. the economic downturn exposed serious vulnerabilities across the infrastructure of the global financial system. members of my management team and i solicit ideas and perspectives from both inside and outside the company. we have sought to better understand what caused the performance of our ridings in the sector and have sought to improve the credit rate -- credit risk. we've undertaken numerous initiatives to improve the credibility of our ratings and strengthen their quality, transparency, and independence. these actions are extensive and have occurred in six principal areas. we have strengthened the analytical integrity of our ratings, enhanced consistency across groups, improved the transparency of ridings in the
10:39 pm
writing process, increased resources in key areas, bolstered measures to avoid conflicts of interest, and we continue to pursue industry and market wide initiatives. in each area, we have made good progress. i still believe more can and should be done. we wholeheartedly support racist -- legislative efforts that will reinforce high-quality rating staff and enhance accountability for without intruding into writing opinion content. women tend high standards of our breeding practices and transparency and our actions and metrics. thank you. i am happy to respond to any questions. >> thank you. we will begin with the questioning. i will start and the vice chair and members who led this research and investigation effort into credit rating agencies. let me start by saying the two issues of like to property
10:40 pm
gentlemen are the following -- first of all, business and management practices. corporate responsibility, management accountability. second issue is the model for credit rating agencies in the financial market. let me start with you today, mr. mcdaniel. let me ask you very directly. the reason i want to say that these issues are important is in trying to assess how we had this run-up to the financial crisis, we have found over the course of months that there is very -- there is very little self examination. but mr. with you. under your leadership, there were very significant failures at moody's. the product that your company offered proved to be highly
10:41 pm
detective. not just by small measures but by a large amount. 83% of your aaa rated securities were downgraded. in 2007, 89% of those which were investment-grade ratings were downgraded to junk. massive downgrades started in july of 2007 when housing prices have declined just 4% from the peak. some have said that the very enterprise was fraudulent if not -- if not in a legal sense but in a practical sense because the product is not closely approximate what they represented to be. if we flipped a coin, it would have been five times more accurate in terms of the result. your shareholders lost 73% of the value in the stock from peak to today. the ratings enabled the issuance of trillions of dollars of mortgage securities which we now know were rife with significant
10:42 pm
problems from fraud to misrepresentation and may have well fueled the housing bubble. investors relied on the ratings suffered enormous losses intercompany's reputation, something i know that mr. buffett has held important, is certainly under a significant criticism. my question for you is really who should be held accountable? we have a system of capitalism are there are regulatory mechanisms. we have owners, boards, and management of who should be accountable if not you? >> the performance of the housing sector, and as a result the ratings, that are associated with housing assets clearly have exhibited in variable performance in recent years. there was decades of strong performance leading up to the current crisis. we believed that our ratings
10:43 pm
were our best opinion at the time that we assigned them. as we obtained new information and were able to update our judgments based on the new information and transgendered we were seeing in the housing market, -- and trends we were seeing in the housing market, we adjusted our ratings. i am deeply disappointed with the performance of ratings associated with the housing sector. that is injurious to the reputation of the firm and to the long-term value of the firm. the regret is genuine and deep with respect to our ratings in housing sector. >> the april this further. -- let me probe this further. i know it is hard to keep the peaks and valleys.
10:44 pm
but me just say there is almost a common-sense test. your firm rated 42,000 tronches of rmbs aaa in a context where there are four corporations in the country and the context you were writing about 90% of the securities as aaa in terms of the corporate debt world where we have more transparency and understand the corporate data. only 1.4% side of that was rated aaa. you lead an enterprise for which you were compensated handsomely, $39 million, over this period. if american capitalism is about risk and reward, reporting says, should there have been a management change at moody's? do we need a culture in which success and failure are essentially accounted for? >> as i remarked a moment ago,
10:45 pm
we'd certainly believed that our ratings were appropriate when they were assigned. i recognize that those ratings have not performed well in the housing-related sector. as a result, we did make management changes. >> but not at the top. no board or ceo changes. >> if you are asking with respect to me, which i can see you are, it is a fair question. if we reach a point where either our shareholders or our board of directors or i do not believe i am in the best position to lead the firm through this period and into the future, then i will not be in my job. >> ok. mr. buffett, any observations on the responses by mr. mcdaniel? >> i have been more draconian in
10:46 pm
my view of the ceo's responsibility. in terms of financial institutions that have failed and have required assistance by the government, i think when society has to step in to save institutions for societal reasons, the ceo should basically the way of broke. there should be a real downside. incentives are an important aspect in behavior. in the end, i do not know who except for maybe john paulson would have been coming up with different kinds of ratings? it was the greatest bubblehead ever seen. -- bubble that i have ever seen. the entire american public was
10:47 pm
caught up in a belief that housing prices could not fall dramatically. freddie mac believed it. fannie mae to the debt. congress believe that. the media believe that. i believe that. very few people could appreciate the bubble. that is the nature of bubbles. the become massive dilution. i am much more inclined to come down hard on the ceo's of institutions that cost the united states government to come in and necessarily bolster them. >> let me prove that a little. i just want to sit for the record, i do think around the country there were people who thought the bubble was unsustainable. there were a number of experts. robert schiller, the real rub been a, a dean baker.
10:48 pm
-- nouriel roubini. this was something we had never seen hhstorically. moving beyond that for a minute, the rating agencies did play a fundamental role in accelerating the securitization and therefore some would argue that the origination of products intended to be highly efficient. we are talking about low teaser rates,-and a transition. there was a warning in 2004 from the fbi that mortgage fraud became so epidemic that if unchecked, it would result in a crisis as big as the s and l crisis. there were many flashing lights along the way. there is a country song by don mclean where he says when the gates are all down and the signatures are flashing and the whistles are screaming and you
10:49 pm
stay on the tracks of boarding the fax, you cannot blame the wreck on the train. was the role of the rating agencies to be referees in a game that got out of control? you told our staff that if they had not done the ratings come up they would have been hunted at by congress. do we not expect referees to make the call even if they get booed? >> they made the wrong call. they've basically believed, as most of the public did, you cannot have this as possible without overwhelming believe, it did not mean anything in 2006 to listen to henry paulson. look at me. i was wrong on it too. i recognized something dramatic was going on. i actually called a bubblette. that was wrong. it was a four-star bubble. the rating agencies missed it.
10:50 pm
you can look to the march 30, 2007 report by congress which had 200 people overseeing freddie mae and -- in may and freddie mac. they gave them a green light. >> f i take a different view -- i take a different view. they raised a number of issues. you said the ratings business was a wonderful business. q said that because it is a to wobbly, little capital is required. it turned out to be a good model for a short time. not necessarily. you are the largest shareholder. i realized by all accounts you cannot -- you were not particularly active or aggressive. you had a very infrequent contact.
10:51 pm
i want to probe the responsibility of shareholders. this was a company where 50.5% of the shares are held by five large orders. you had this tremendous spike in revenue coming from structure products. we have heard today and in the course of our interviews a lot of concerns about the change of culture and the pressure for profit, sacrificing ratings, what are the appropriate roles of shareholders and boards of directors and monitoring companies? what responsibility to look in to the problems arising and did the board and shareholders do what they should have done in this respect? >> in 2006, i was not sitting there thinking that the housing bubble was going to g g did or t
10:52 pm
was going to burst. if i had, i would have sold my stock. >> given the dramatic consequences that have happened, and i do think there have been reputation of damages. you said it takes 20 years to build a reputation, five minutes to ruin it. if you think about that, something about doing things differently. the question is, in the end, the ratings were wrong. there are reputation no issues. there has been a massive loss of shareholder value. should there be a new board? should there be new management? i would say that in this particular case, they made a mistake that everybody in the country made. march 30 of 2007, it was reported the overall asset quality is strong. all they owned was mortgages and
10:53 pm
that was march of 2007. >> i will just say, arguing with you about what the markets were saying, this was not a big secret. this was "the economist." there were a lot of warnings. even movies -- moody' you are saying this does not warrant looking at the culture of the company? it's certainly not put it is not necessary. >> this was 2005. let me move on. we interviewed a member of the moody's board who indicated the board was not particularly involved and did not discuss significant issues but the ratings process. there was a recent press accounts about the disengaged
10:54 pm
nature of the board but it's as the two senior executives approached with significant problems at the company. >> no. >> no? >> no. >> ok. not accurate. it seems to me that it was the worst of many worlds. the model by its nature creates pressure to produce credit ratings that serve the beneficiary and of those. it was said that whose bread i e to, whose song i sing. -- whose bread i eat, whose song i sing. you have the duopoly with enormous pricing power. you have a whole set of legal protections, including first amended protections. it seems to me like a pretty toxic brew of corporate non
10:55 pm
responsibility. do you think radical surgery is necessary? for example, mr. buffett, should be out of the issue of pay model? should we adopt the franken provisions in the senate bill which would say that when selecting rating agencies, they should be selected by the sec? what kind of radical surgery, had it been performed early enough, would have helped in the sense that the spreading agencies would not have enabled this flood of toxic mortgage securities? >> as the chairman, i hate issue are pay. we pay a lot of money and we have no negotiating power. >> i deeply resent the model myself. >> it makes for a wonderful economic model but as a practical or model, i have no negotiating power. i need a rating. it is required in many cases.
10:56 pm
if they say that it is $1 billion and i say it could be 900,000, there is no guy on the street. that is the nature of that. if you go to something other than user pay, it gets carried tricky. if i will buy a $10,000 municipal-bond, she will hear the ratings someplace published. >> united labs is a nonprofit model. you do not have the profit pressure. consumer reports does it. is this a broken model? if they wanted to rate bonds and people would accept them, i suppose it could happen. it would require a fair the large -- to require a large expenditure to rate all of these bonds. >> what about selection of
10:57 pm
raiders by people other than issue worse? >> and defect, -- in effect, i am told which raider's eye and to use. >> what about that as a change? >> i do not know the answer to that. the wisdom of somebody picking out raiders, will that be perfect? -- picking out raters. will that be perfect? >> the largest rating agencies operate under an issuer pays model. i think it is important for us to acknowledge and recognize that any business model in which the feet payer has an interest in the outcome is a model that has potential conflicts of interest and those conflicts must be managed
10:58 pm
properly. >> can they be? fannie mae and freddie mac, these four institutions that had this bush poll. -- this push-pull. can it really be overcome? it is like transparency. everybody loves it. they also say we can handle our conflicts. it does not appear to have been based on this leaders period. >> the poor performance of ratings from the 2006-2007 period and residential mortgage- backed securities and other related securities, housing related securities, it is not -- has not been replicated elsewhere in the business. to the extent that there is a
10:59 pm
concern that there cannot be superior ratings quality and even in the midst of a severe economic downturn, i think it is a misunderstanding. as i said, because the parties that are willing to pay fees for ratings, whether they be issuers or investors or government, have an interest in the outcome of those ratings, i do not see how to avoid potential conflicts of interest. we also have an important public good that is produced which is the ratings are made available to the general public for free. there is no selective disclosure of the ratings. large institutions to not have an advantage over smaller institutions or individuals in terms of the access to ratings. i think that is an important public benefit. >> this goes to management. this structural products division was a cash cow. this is a classicas


info Stream Only

Uploaded by TV Archive on