publicly on those issues in the next few weeks. >> i hope the committee has the full picture for 2010 through colin 11 because i don't want you to be under any illusions of the. >> i am sure we have an absolute full picture of everything. he mentioned the bbc world service to read to you think it would be helpful as it clearly has been with regard to the arab world and iran if we had a television channel coming out of the bbc world circus to try to increase the media coverage? because like understand bbc world service radio is heard by about a 10% of the pakistani population which is quite a high figure but clearly the urban population, much more that doesn't rely on radio as new satellite cable television channels i just wonder if another television channel would be something to think about. >> one of the things i always

have to say to the colleagues is the government doesn't control the -- bbc world service so it's important i don't look like and deciding what the challenges are. but i think all of us know the vibrancy of the urge to written media, remarkable the vibrancy and if it's interesting. let me find out what the b.c. independently might decide on this. >> one of the problems in getting pakistan to deal with the threat and also more help with afghanistan has been historic threat from india. do you see any change in that

situation? >> i think there has been a significant change in the last couple of years in the appreciation in pakistan of its domestic terrorist threat. so now it is possible but also members of the public about the fact whenever they think of the as you say perceived indian threat there is a domestic -- i think a lot of pakistanis still believe in the ancient right but i think there has been a change and the labor recognizes the threat. they would say as well. >> how would that manifest itself? and natural disposition of forces? >> you got 120,000 pakistani army on the western border and it's a pretty big change. >> as opposed to in the last couple of years you've got the

premier operation, you had the swap operation and you've now got the south waziristan operations. historic the the front year, the pakistani frontier corps have been having a pretty rough time at the border and now you've got significant enforcement however you still have -- it still remains the case improve relations between india and pakistan would be a boost to the pakistani ability to concentrate on what i believe is a real threat in that context. it's a the moment nothing can do more to help build confidence on the india pakistan track than a successful conclusion of the prosecutions started in the mumbai because because many indian politicians and people who have perfectly willing to

support in the pakistan dialogue so we cannot have a dialogue until there is real showcase that pakistan's domestic problem to project properly addressed and the mumbai prosecution they are pursuing with dedication the conclusion of that, successful conclusion would be a significant. i think it is worth saying both governments deserves credit for the resumption of the pakistan dialogue at an official level of the moment, and of course the indian foreign minister and pakistani foreign minister came to the conference in afghanistan. >> a follow-up question. can i ask you who came to the london conference? we invited to be completed iran to the conference and can you tell us what level -- >> it didn't attend.

sycophant didn't attend at all? >> nope. >> obviously that is a great disappointment. do you think iran has gone wrong in assisting the stabilization development and afghanistan? >> at this point it suggests somehow we have been -- there is almost fault on our side and it's a great mistake on the part of the iranians not to, because it suggested they were not actually interested in bringing stability to the country that has been delayed coming implementations for them and the minister protested to me last year about how important afghanistan was and how you wanted to work on that. and of course the failure to turnout was i think a mistake on the irony in part and undermined their own claims to be a responsible partner, but i am happy to repeat to this committee that as far as i am

concerned, iran should be part of the regional dialogue about the future of afghanistan, how its sovereignty can be respected and what can be supported. >> we've got two minutes. >> i want to ask the end of this parliament this is my last status. >> i've never felt used getting at me. >> and the nicest possible way. >> at the cabinet level, but discussions are there about how we would code as the united kingdom if we had another crisis blow wealth elsewhere in the world? i am not just talking about the deployment of armed forces, the armed forces deployed and, but also the capacity of the government come in your department and others to cope. it does seem to me we are in a very precarious situation, and if something unexpected blows up in the world we would not be able to rapidly respond either in terms of military deployment or the resources in the form a commonwealth office.

is their discussions of the government level, at cabinet level as to come to know, what would be our capacity to respond to the unexpected? >> well, i think it is a good question. i think the emphasis on the flexible skills, which is an emphasis not just in the military but also in the diplomatic service, means that if there was something that suddenly began overarching priorities, there could be redeployment. there could be new resources. there could be a new effort. and so i think the flexibility, the adaptability of the system is actually quite high. but obviously, that would mean we would -- what else can you do but i think the premium and as a comprehensive network which is able to respond in a serious way. i don't know if the committee has taken any evidence or opined at all about the defense review but the 1966 and 1966 defense

white paper said defense is the servant to foreign policy which of course is true and it's important to recognize the need to think about the foreign policy context that we face and then make deployments and decisions on the defense side or on the diplomatic side to service that. >> last ten seconds use of light reaction when you raised the question of the for an officer resources, and i want to make it clear i have sympathy for you in your department but it does seem to me it is down to the old-fashioned cabinet responsibilities you've got to raise it with 20 others. this is grossly unfair to the department but also that the department should be frustrated in carrying out a primary interests are bound the world because of problems regarded -- in other words the departments are going to take sacrifice. >> i hope the record will record the smile on my face when i say

we don't want sympathy. it's not somebody, we want your respect, your criticism of your engagement come in your ideas, but sympathy we don't want people want to deliver on the shared objectives that we have and i think that the committee has been internationalist in its outlook which is what the foreign office is and that is the sort of a shared interest we have and that is based on what i have always enjoyed with the committee. thank you during much for the way that you've worked with us. >> can my before we conclude i just want to place on the record thinks of this committee and the staff for the corporation to the cooperation we have had people abroad and in this country over the period of the committee. we cannot conclude our work yet. we have three significant reports that we will be publishing before we finish, one of which we will address

directly the issues that you have been talking about. and i confident that the successor committee in the next parliament will continue to pursue the scrutiny function of the fort and commonwealth office and hopefully as effective or more effective than we have done. but i would like to thank you for coming today and ms. pierce as well. >> thanks a lot.

the new c-span video library is a digital archive of c-span programming. from barack obama to ronald reagan and everyone in between. over 157,000 hours of c-span's yo now available to you. it's fast and free. try it out at c-spanvideo.org. secretary of state hillary clinton begins a week-long trip to latin america this weekend to meet with the region's leaders on several multilateral issues. the assistant secretary of state for the western hemisphere affairs talked about the trip with reporters at this half-hour briefing. [inaudible conversations]

>> good morning, everybody very happy to have with us today secretary arturo venezuela was when to walk us through the trip to latin america. you know she will be traveling to chile, brazil, costa rica and guatemala. again from february 28 to march march 5th and without further ado i will turn it over to the assistant secretary valenzuela. >> good morning. yes, we are delighted that the secretary will be traveling this week to southern cone and into central america. as you know, last year the secretary did travel to mexico for the oas general assembly. and this travel this year is a continuation of course of our

efforts to engage in the countries of the hemisphere on a multiplicity of issues. as you know, president obama and the secretary have pledged greater engagement with the countries of the western hemisphere. we are working on a whole host of bilateral issues with all of the countries in the region. they are grouped into sort of three general baskets. the first basket is what you might call competitiveness and on issues of social equity and social justice. the second basket is issues of public security, which is a major concern for a list of the countries in the region where we are trying to look to how we can repackage and rethink the way in which we do our collaborative work with countries in the hemisphere on such things as crime and organized crime and also the counter drug effort. and finally, we are concerned

about how we can partner with other countries in the region on such issues as space governance and how we can have more effective government in order to enhance the quality-of-life of the citizens of the hemisphere. this is actually a very exciting time to go. as you will remember, this is -- 2010 is the 200th anniversary of the independence of the countries of the americas. the actual independence in different countries comes at -- on different dates. at this time around, it is argentina -- 2010 argentina, chile, mexico, and columbia. we have common histories of having a stylist in the new world societies based on the concept of popular sovereignty, profoundly influenced by the enlightenment that these are -- this is the continent of the republican forms of government, so the 200th anniversary is a very important time to read these societies are very similar in many ways colin code

fragments of europe established in the new world on -- in countries with indigenous societies, with forced migration of slavery, with the narrative of emancipation, with a search to try to strengthen the concept of space governance, based on the notion of social justice and equal opportunity to everyone. so have comment,, and sort of goals and history. and this is what we are trying to do in our engagement with the hemisphere to have discussions that are of respectful, that -- where we are not going to come down and tell people that they need to, but rather we are going to seek to come up with common solutions to common problems. and that is what our dialogue will be in the entire -- on the entire trip. we began in uruguay on march 1st with the inaki region of president mujica.

this is the second time that the uruguayans have inaugurated president of the left, and it should be an exciting time. uruguay, as you know, is a country with a long and strong space tradition. it's a country that punches way up beyond its lead in terms of engagement in the world. uruguayans have always been well thought of, their leaders have been respected. and let me remind you that uruguay is the second largest contributor to peacekeeping operations per capita of any country in the world. and indeed in haiti uruguay and

contribution before the earthquake to the haitian stabilization effort through the u.n. was almost equivalent in terms of its size to that of brazil, and just a little bit lower than that of nepal. the three countries where -- had over 1,000 troops. and uruguay continues to be very much interested in working in that regard. from uruguay, we travel then to santiago, to chile, that same day in the evening, march 1st. she will be meeting with president bachelet. the secretary has a relationship with the president. this will be her last week in office. they will attend an event, one of the signal events that -- or projects that the president bachelet has to address issues of social inclusion, which has been one of the earmarks of her

government. and then there will be a bilateral meeting with president-elect with sebastian pinera, who takes office on the 11th of march. from chile, the signature will travel to brazil. she will of meetings with president lula with the foreign minister amorim in brasilia, and then travel to solve all -- sao paulo, where she will be visiting certain activities in sao paulo particularly in afro-american -- and afro brazillian university in brazil. then from there, the secretary travels to costa rica for the pathways for prosperity meeting which is a ministerial meeting of a hemispheric ministers come

and will be discussing many of the themes that i outlined at the top. pathways is one of the secretary's signature initiatives. she has expand this initiative that began earlier to add a whole host of other components, including such things as microcredit, ways in which you can in power when in. it all fits in with the theme of trying to look for ways to enhance competitiveness, with a significant component, too, of encouraging private public partnerships in the search for greater competitiveness and to address issues of social inclusion. issues like corporate social responsibility, for example, are also on the table. she will then, on that same day, have a bilateral meeting with president harry -- arias, who is also, as you know, leading of this command will be meeting with the president-elect of

costa rica laura chinchilla as well. and then finally on the final day of her trip, which will be the next friday, she will travel to guatemala and meet with president colom in guatemala and at the same time with several of the other presidents of the central american countries, including president lobo of ponder as, president funes of el salvador, president fernandez is coming from the dominican republic as well. so this -- and present arias will attend. the full attendance to that meeting is not quite settled because people have been adjusting their schedules. at any rate, that's kind of our objective on this trip. we are very excited about it and the psychiatry is very excited

about it, and i look forward to taking your questions on the trip. >> can i ask you about to countries that she's not going to? argentina and honduras and why not? >> on all of these things it's always a complication as to how to schedule trips in terms of everything from flight time to some of the other priorities of the secretary -- what's the flight time between montevideo and be a? >> -- >> about ten minutes? the flight time between costa rica and guatemala is about --

>> the flight is an overnight flight. and so its, you know, just in terms of the logistics of the fight it would make much more sense to just go to uruguay and have a bilateral meeting with the president of argentina, so that would be held on the afternoon of march 1st. this trip was built a around the uruguay inauguration so when we looked at the schedule and we saw how can we touch as many of the countries that we can in the southern cone around the uruguay inauguration that is the schedule that we came up with pity and the return trip also, the flight from sao paulo to post rate is seven hours, is a it is a reminder how large the

continent is. in fact to know, remember to travel from my am i -- miami. is to make use it was billed zero the uruguay election. i mean inauguration. it could have been built from the july inauguration. is there some kind of -- is three signal you are trying to sit here? >> no sigler whatsoever. it had to do in large measure with the scheduling issues the secretary has come and, you know in an ideal world we would attend all of these inaugurations. but obviously it is difficult to do that. so, when we looked at the calendar, the fact that the pathway meeting had been on the agenda for some time earlier, and this was the best combination of things. and i think -- i'm very pleased with the way in which we were able to sort of, i think, cover all of the interests that we

wanted to cover. >> sir, the inauguration defense in montevideo are going to attract leaders from across the region, some of the leftist leaders that has been antagonistic at times with the united states -- morales, shut is -- i think even the role castro may come, is that correct? >> i don't know. >> will there be bilaterals with some of these people? and in the case of chavez and more alves, will the secretary interact with them at the defense? >> precisely the focus of this was to be a southern trip. the only bilateral that this on the books is with the president of argentina. >> can you elaborate? wiltz of all clans figure and pretty highly their? are you concerned about what is going on there?

>> there is an ample agenda with argentina, and i think that with argentina we are not going to be discussing just simply bilateral issues but also some of the international issues. the argentinian sefton fairly outspoken on issues like iran and international terrorism. these are questions we will discuss with them. we will not be discussing the fall plans issue with them. this is a matter for the argentina and britain. it's not a matter for the united states to make the judgment. >> can i remind folks to keep your [inaudible] -- mr. secretary, yesterday were a couple of days ago president christine a kitchener said she was disappointed in the way president obama was handling all

of the issues and their relations with latin america that everything was disconnected and especially the issue with ponder as was disappointing. chavez also was saying something along those lines. what is the reaction and a is it an okay environment to talk to argentinian and the kind of like bringing another message after what happened last year? >> well, she is -- >> i don't know if you can speak that in spanish also a leader is that possible please? >> she's entitled obviously to her opinion on this issue. we just simply disagree. we think that not only if we have our very significant engagement over the past year with countries in the hemisphere at the same time having to focus on to the very difficult and

significant crises the first of course being the honduras today talk that took place last june and also the more recent earthquake in haiti which absorptive of attention and what we see by the way significant cooperation across the countries of the americas including the argentinian to the peacekeeping operations in haiti. on hunter is as we can see today we are the -- one of the reasons the secretary participate in this meeting with central americans is precisely because the central american countries have taken a significant leadership role in trying to bring about a resolution to the ponder increases and we see indications now that not only the central american countries but other countries in latin

america are moving forward to recognize the and thinking about reinstating honduras back into the united states. so we see the outcome in honduras as a very successful case of standing for a very fundamental principle, and that is that you cannot tolerate the to fatah in a country that sends a precedent and that since we joined the hemisphere in this regard but at the same time, you know, a solution had to be found to honduras. as one central american president told me in our conversations we cannot afford to have ponder a speed myanmar. we need to work to try to see how we can engage backed in the election. the election has been recognized by the international community

has a valid one. it certainly reflected the desire of the honduran people of this particular point the steps have been taken to move ahead to restore honduras to the american system and to fully restore the space and constitutional order in honduras. >> but if i can follow on that what about just meeting with christina and what is that meeting way to be that there is disappointment on the region and basically very vocal between her and shot is seen as a very disappointed with it the president about his handling their relationship with iran? >> we have people who might disagree. one of the reasons it is important to schedule the meeting like this, and we offered this meeting was precisely so that we did have an exchange of views on some of these issues, and i think that

if that is in the her position we would disagree on the way in which the honduran situation evolved. but let me stress again the dalia log, there's a host of things we are doing on a bilateral, on the bilateral basis that are very constructive. there is free good cooperation on law enforcement issues that i stressed earlier are very important. and at the same time, we have been pleased at the votes that the argentinian is taken in the international atomic energy agency on iran. and the argentine position on international terrorism has been a very good one. so this is a conversation that we will have. like many things -- we share very many things with the argentine's, and we were very much like to be able to strengthen our relationship with argentina as we move forward. >> i want to ask a question

about brazil. all the volume from argentina. the question is that in may president lula will travel to tehran, and yesterday it was said in the same room that although brazil has a lot of influence, also have to have responsibly. i want to go directly to the point, what kind of conversations are -- what is going to be with lula? are you going to tell him, lula, you need to press more iran? what is the real factor in the meeting with lula in relation with iran? >> as you know undersecretary bill burns is in brazil today and so he's going to be having conversations with his counterparts on many issues also on this particular issue, and the secretary will have the same conversations there. and let me make it absolutely clear that we will be telling our brazillian counterparts we

encourage them to encourage iran to regain the trust of the international community by fulfilling its international obligations which we feel that they have not fulfilled. so we will be urging of the brazilians to take a constructive role with regard to the engagement with iran. >> assistant secretary, you talk a lot about the common things the united states has with region. it seems the region, in recent months, and since this administration came into office, it is feeling a little bit more divided from the united states and that -- you know, just last week, countries in the region formed a new regional alliance that left the united states out and included cuba, flexible. there have been divisions over honduras, some would say disappointments with the u.s. over honduras. there have been divisions over the bases agreement with columbia, disappoint fans from some countries. also, so there were -- in some cases, these countries are forging economic and political

relationships that supercede relations with the united states, and some say go against the u.s. interests like brazil and iran. so does the delighted states at all feel perhaps that this is in its efforts to sort of stop ordering the region around, it's also beginning to lose influence in its region? >> i don't think so, and if you actually go back and look at the history of the relationships between the united states and the region, i can think of many periods where there was a far greater dissonance between the united states and the countries of latin america. and we can go way back if you want to, but we don't have time to do that. but certainly nineteenth-century, the united states began, as i said earlier in my remarks on the celebration of the anniversaries of -- the 200th anniversaries of the

independence -- that the united states did support the countries of latin america against the colonial powers when they were trying to reimpose colonial rule in the region. that was the famous monrad doctrine, at that particular time, was to have the european powers the of the region. there were -- period of big diplomacy was a very difficult period where the united states actually occupied several of the countries in the region. and then of course, we had the good neighbor policy under franklin roosevelt and then the very difficult period during cold war. and if i think that these various particular times and at the difficult moments, even as recently for its simplest problems that we may have had over the central america war this is a time that's very, very different. and the post cold war era. they're really isn't that much significant difference between the united states and the countries of the americas. we have very common goals. we are seeking the same objectives. we want to improve the quality

of lives of our people. this is a continent where we don't have the same kinds of challenges that we have in the other places in the world. and it's one of the reasons why the united states appears to pay less attention to the region of say the president. but that is not the case. we are continuously -- the fact that we don't have the problems in the americas, for example, of the nuclear proliferation means, of course, that is a whole area that we don't have to deal with america on. in fact, there's a consensus on so many british u.s. and what we are looking to that is to sort of strengthen those -- that consensus to be and i know that there are dissolvent dissonant voices out there, but let me get to your first observation. also, we do not see that fact that the countries of latin

america are trying to put together some of their own mechanisms for integration as, in any way, a deleterious to the objectives that the united states are pursuing -- quite the contrary. if, in fact, through efforts in the integration that can build better confidence measures between countries, if they can avoid protectionism's which they often have between their countries in order to expand trade, if they can build a better sense of integration, this reduces intrastate conflicts. all of these things are important. they are not a deleterious to the u.s. interests. and let me say one final thing. this does not -- the fact that they are talking the velte setting up some other organizations, which they have done in the past as well, does not mean that they are going to be abandoning the oas. and the organization of american states is a qualitatively different kind of institution. it's one based on treaties. it's one based on the broad

agreements like the inter-american charter, but also the inter-american human rights convention, and all of those sorts of things. these are obligated treaties that go way back. and we see in importance now of strengthening, in fact, the organization of american states. that fact that other institutions are wise, too, is not necessarily a problem. >> thank you. >> one or two more questions. >> to follow up on the last question. the secretary clinton last year pointed out that during what she said was a lack of engagement during the previous administration, other countries had made inroads there -- china and iran and i think maybe russia as well. i can't remember the exact countries she mentioned. but that -- implicit in that is that the u.s. had lost influence in the region, so i mean, are you gaining that influence now and how? >> well, if i looked at the trade flows, if we looked at the investment flows, if we look to the cultural flows, if we looked at close of people, if we looked at things as remittances, they

are what $50 to $70.000000000 in remittances from the united states to the countries of latin america also show the enormous integration of our hemisphere, and the important role that latin america immigrates immigrants have lead in the united states, and in forging greater bonds between the countries. so i see a really strong, strong process of engagement culturally, as well as on all these other efforts that we are making. now, on the question of china, this period that has been very -- where latin america has been very successful economically. if we go back to the need tds, at the time that we talked about the tremendous disconnect in the region, we also had societies where you had -- economies where you had hyper inflation and stagnation. and the reason why the countries in latin america were able to resist the international financial crisis was because they do some fundamental reforms and they began to really export

other countries. and china has become a very, very important exporter destination for the countries of the americas. so part of the answer is we want to encourage countries to export, we want to come encourage countries to grow, to be more dynamic to create jobs, and to become more engaged in the international community. so we don't see that necessarily as damaging to our interests; quite the contrary, successful societies and economies are in our interest. what we would have to worry about would be incursions' of countries like iran. and it's not quite clear what may be some of their own objectives might be in the region. but generally speaking, latin america engaged with the rest of the world -- this is why the chileans have been so successful. the chileans have i think something like 57 free trade agreements with countries across the world, and their economy has grown enormously and the art

reduced since 1990 poverty rates from 40% 12%. it's an engagement with the world which we have welcome. thank you very much. >> the engagement with iran -- can i just ask one thing? >> sure. >> the engagement with iran by brazil, to see that as helpful to the united states? i mean, i've heard conflicting reports that the united states is one way believes that brazil can serve as an important mediator, in a way between the united states and perhaps there's some benefit to brazil's having a relationship with iran. can you tell me, does the united states see this as a good thing or a bad thing? >> well, let me say this; and in my conversations with other u.s. officials government conversations with brazilians, they do say that. they say we want to be able to engage because we want to be able to have influence, and by having influence, we would be able to press them.

what we want to try to tell the brazilians is yes, if you have engaged met with iran, we really want to encourage you and urge you to, in fact, use that engagement in a way that you can push the of iranians, in fact, to meet their fundamental international obligations. if you don't do that, then we will be disappointed. if you do that, then i think that will be an important step that can be taken. >> thank you. >> thank you triet >> thank you very much.

the joint economic committee

held a hearing today to discuss ways to promote job creation. witnesses included experts from the business community including a company that specializes in job creation. this as two hours. [inaudible conversations] >> hello. the meeting will come to order, and i'm thrilled to be joined by senator bingaman and mr. congressman braley is. he will be here momentarily but i want to start on time because votes are projected for 10:30 and i will have to leave for that. i first would like to thank mr. mr. jarris and mr. hassett for their willingness to return to capitol hill against dee dee to

begin to be the last meeting on february 9th was snowed out, and the weather continues to cause problems. roger altman, former deputy treasury secretary for the country was going to testify and now a leading businessman and he has been snowmelt and not able to come, so i ask unanimous consent to put his testimony in the record. today's hearing continues our in-depth series on job creation. today we will be examining the prospects of the labor market recovery from the great recession, which is fueled by the double-digit crisis in both housing and the financial sector. a report and recent of hit by professor alan blinder which was based on the testimony that he was supposed to give before the committee before he was snowed out presents a clear picture of the two possible policy options to increase private sector employment. either increased demand by consumers and businesses were

give employers the incentive to hire workers. on tuesday that gec you heard testimony from dr. doug elmendorf, the director of the congressional budget office. his testimony showed that an employer tax credit similar to the one in my bill is one of the most effective and efficient ways of spurring hiring. his testimony also showed extending unemployment benefits as the biggest bank for the buck on the economy. the benefits quickly multiplied beyond original recipients since families will spend all of their benefits on food and expenses. those purchases have a ripple effect throughout the economy. we have come a long way since last january when the economy lost 779,000 jobs in that month alone and recorded an average monthly job loss of over 750,000 jobs in the first three months of 2009.

last month, we lost 20,000 jobs, and in the most recent three months of the obama of penetration, the average monthly job loss was 35,000. so we are headed in the right direction thanks to the recovery act, the economy is growing. the bureau of economic analysis reported that in the final quarter of 2009, the economy expanded at a rate of 5.9%. the recovery act included a tax cut for 95% of all american families and created jobs while investing in and clean energy infrastructure and education. while we have brought back the economy from the brink we are not yet where we need to be in terms of job creation. over 8.4 million jobs have been lost during the great recession and in addition to the 14.8 million workers who are currently unemployed there are 8.3 million workers currently

working part-time that would like to work full-time and the last year congress enacted policies that support struggling families and encourage job creation. these actions include creating and extending the first-time home buyers credit, boosting funding for small business loans via the small business administration, extending safety net programs and extending the net operations loss carryback provision that will help small businesses hire new employees. but we need to redouble our efforts to create jobs. the senate a jobs bill which passed this week is a step forward and an encouraging sign of bipartisanship. it includes a scaled-down version of my employer tax credits. i'm happy the senate has included this as dr. blinder said in his op-ed reducing costs for employers to hire new workers will create jobs. during today's hearing we will explore other options and hear

other ideas for helping workers get back on their feet, spark consumer spending and white in our economic future. i am pleased dr. brenner was able to testify today and provide us with his forecast of which sectors and regions of the economy are expected to grow in the coming here. mr. joerres will be giving manpower on the ground experience on increasing demand for temporary workers. job creation and a temporary help sector is a leading indicator of progress in the labour market. since september, 2009 temporary help services has added over 247,000 jobs. 52,000 in january alone. finally he will be giving his views about future growth and the health of the labour market. i am also pleased to see that today's panel will touch on another topic discussed on tuesday with the cbo and that is the rule of uncertainty about

joint government policies on dampening economic and employment growth. i look forward to a lively discussion with the panel today, 1i hope will help spark bipartisan efforts to create certainty so that households and businesses will feel confident and lead the country out of this great recession. thank you for coming and i recognize my colleague. >> thank you. i don't really have an opening statement. i look for to hearing from all of you about our prospects from accelerating the economic recovery and creating jobs and your best suggestions as to what policies we could adopt that haven't been adopted. thank you for being here. >> you're in charge. >> okay. ink -- >> let me just start unless you have preference in the order you would like to testify.

dr. berner, have you been adequately introduced here? i can certainly do that. >> i'm happy to proceed. >> let me just briefly indicate he's the managing director, the co-head of the global economics and chief u.s. economist with morgan stanley and we appreciate you being here. you are directing the forecasting and analysis of the global economy and financial markets and co-head of the firm strategy forum. usurp on the research staff of the federal reserve in washington where you directed the fed will base forecast and there's a lot of other things i had written here that i could say about you but i think that gave san qualifications. we are pleased to be with us today. what does she go today and we will hear from you and then i

will introduce mr. joerres. >> senator, thank you. other members may not be here. thanks for inviting me to this hearing. following the deepest financial economic crisis since the great depression the u.s. and global economies are starting to recover in our view however the recovery would be offered it and not job gains modest. in 2010 we expect real gdp to go three and a quarter% until three and half percent we expect annual job growth until 10,000 monthly over that period excluding hires for the central census. even as job gains are not a foregone conclusion we have yet to see job growth in the economy as you know it will indicators have improved this stila forecast. more important as you also know it takes a stronger job and economic growth the next few years to regain 8.4 million payroll jobs we have lost in this recession or to gain the

10.6 million jobs required to restore employment rate or the population ratio to the one prevailing before we got into the downturn. importantly as well our unemployment problem has become chronic, the two statistics i think document that fact. the median duration of the unemployment has reached 20 weeks and record 41% of unemployed have been jobless for six months or longer. so in my testimony today i will talk about four specific obstacles to hiring each of these has both cyclical and structural element to than. for each local talk about policies that might help foster economic growth and job creation. but first i want to identify, as you asked me to where the job gains are likely to be the next two years and why. we think the fans as an expert infrastructure capital goods, energy and health-related health care related industries likely will account for most of the job gain in the next 18 to 24

months. that echoes our view regarding the source of growth in our economy during the the combination of strong global growth, the effect of this fiscal stimulus and improving financial conditions thanks to the efforts of the federal research will continue to promote growth and improvement in many of those industries. and of course rising health care services continues. when we think about where the regional strength will be that's a little harder. for example industries that likely will benefit from exports and other strong sectors happen to be located in the regions hard hit by the regional housing problems. in our judgment the pacific northwest parts of the rockies and upper midwest, parts of the southeast and parts of the southwest seem likely to be the strongest regions. turning to export markets and employment which is important high expectation game and volumes of around 10% to be sustained over 2010. on their domestic demand growth and many of the major trading

partners, particularly in asia and latin america probably will average around 67% this year and in canada probably will grow more strongly than in the u.s.. a little slower growth in 2011 is likely to occur as the u.s. and overseas policy makers exit from their expansive fiscal and monetary stimulus. in manufacturing some 20% of unemployment in 2006 will strictly or indirectly related to exports and i expect that share to grow over the next two years. capital equipment and industrial supply exports likely will continue to do well while consumers will represent rising share of overseas demand. now let me turn to some of the obstacles to hiring. i think we did about the sustainability of the recovery legitimate as they often are early in the program and that is maybe holding hiring back. the fallout from the bursting of

the housing and credit buckles i think has intensified such concerns this time. i think it remains essential to pursue policies oriented towards reducing housing imbalance is, reducing debt and improving the functioning of the financial markets and financial institutions. in addition, i think there are four specific obstacles to hiring today. rising benefit costs, mismatches between skills needed and those available, a leader in mobility resulting from negative beckley and housing and uncertainty are sound policies here in washington as the congresswoman mentioned earlier. i want to turn to what you can do to help the economy and labor markets in progress quickly as possible. let's talk about the cost of labor. thanks to the high fixed costs of health and other benefits and taxes on labor to pay for the social safety net, the labor costs are out of line with other countries when adjusted for living standards. i say six cost because benefits don't vary with the work paid on the pro worker basis to be that

as the employers seek to cut the cost of compensation, the benefit costs for the growing weight between the total compensation and take-home pay. the recession made that wage bigger as cost cutting private sector employers cut take-home pay while leaving benefits intact. so religious leader costs go up in this circumstance versus other countries and media and the suckers. long-term solution to this issue include comprehensive health care reform and innovation to boost productivity and labor skills. the short run remedy might include the refundable payroll tax credit that we just mentioned. perhaps firms that increase payroll. cbo estimates that would be one of the most effective remedies as was just mentioned. the second obstacle i think is a mismatch between skills needed in the workforce or workplace and what there are in the work force. worker skills of greatly lead technical change and the big

changes in the structure of our economy. a dislocation in several industries and the recession, the man if i those who have been trained for one occupation lose their jobs and have difficulty taking another. even in health care there's a growing nursing shortage that requires new training facilities. the long term solution or solutions include policies that keep students in school, and of access to education, reorientation of the higher educational system towards the specialized and vocational training and community colleges and of course training programs firms like mr. joerres's seek. short-term remedies are a little harder. one short-term remedy basic skills needed for work with income support we need to implement insurance to help people bridge the gap during jobless spells. two other groups seeking employment newly college students and recently unemployed

teachers could be an ideal nucleus in my view for job training corps that was in power job-seekers with new skills. the third obstacle is labor mobility resulting from the housing bust. negative equity among the the nation of homeowners in my view leads to substantially lower mobility rates. one-third lower reporting to one study. that is leading to a we've of strategic default in which the borrowers and otherwise afford to pay decided to walk away from their homes. whether through foreclosure or the default process undermining the economic and social fabric of communities and reducing job opportunities. and so far the policies we have employed nearly to the car really haven't dented. the long term solution of course is regulatory reform which are essential to restore the health of housing finance. significantly improving financial literacy in my view is equally important. in the short run efforts to stabilize communities plagued by

for closure are essentials and they are worthwhile but they are not enough. modifying existing mortgages hasn't worked. redefault rates falling a modification or between 50 to 60%. i think establishing protocol for the short sales and principal reduction should be a useful tool in avoiding the costly for closure and strategic default. the fourth obstacle is policy uncertainty. i think that is a negative for the economy and for the markets. .. expand, buy homes and to spend.

the rise in uncertainty increases the option value of waiting as volatility in markets and the economy rises. moreover, this reasoning the potency of policy stimulus. in effect, it raises the threshold that you have to clear to make a business choice worthwhile. and conversely, uncertainly declined, the threshold falls with it. i can tell you some of the works in financial markets come in the market participants are used to thinking that political gridlock is good and prevent politicians from interfering with the marketplace. and by the way, i think sometime interferences essential and important. the financial crisis clearly exposed the flaws in my reasoning however with respect to appropriate financial regulation whose absence allowed abuses. the good doctor days more to be could be bad for markets at their long-term economics are partly the result of past policies and can only be solved.

they involve bipartisan leadership to take over there is robins one by one letter fearon call for shared sacrifice and benefits. the short-term remedies are no easier than all of us getting together. but they will be a tonic for growth. reduction of the uncertainty around political environment here in washington i think would give some clarity to policies in the direction we're headed and i think that what the court and improvement in our economy and our financial markets and would pave the way for renewed job growth. thank you for image. we have each take your questions. >> thank you very much. i appreciate you being here and appreciate your testimony. jeffrey joerres is the chairman chief executive officer of manpower inc. he joined manpower in 1993, served as vice president of marketing and later senior vice

president of european operations and global account management, promoted to president and ceo in 1999. 2001 was named chairman of the board. again, i have more information that i can put up here explaining your eminent qualifications, but thank you for being here and we're anxious to hear your perspective on these questions. >> thank you, senator. job creation is a topic that we absolutely, deeply believe in as everyday reconnect people to jobs is what we do as a living. globally we have more than 400,000 associates on assignment at any given day. in 2009, we interviewed over 12 million people during network of more than a hundred offices in the united states. we absolutely have a finger on the pulse of what's going on in the labor market. so what are we seen? companies are clearly starting to hire. there's no doubt about it. however the recovery, like the recovery of the last few recessions will be a jobless

recovery. this is because companies are much more sophisticated in their ability to assess their workforce needs. companies can determine exactly when they need workers to support the demand for the products and services. so from now on, companies will no longer engage in what was considered anticipatory hiring. they will instead wait for clear signs of an increase in demand before making permanent hiring decisions. as a result, we would expect the short-term increases in the level of job hiring will be driven by new businesses or by actual demand. our latest manpower employment survey surveys over 20,000 u.s. hearing is therefore that can survey. 12% of those companies said they would increase their staff in the first quarter. 72% of the employers expected no change in their hiring. why is that important? in the 42 years of the survey, the number has never been that

high. that number of companies really stuck in the middle of the stabilization waiting for a sign for them to be able to take on. a normal number in this category would be somewhere around 50% of the companies. this was the first time we've seen a number this large. additionally the national survey data from the survey showed that employers in mining, durable manufacturing information, government are expecting hiring in the first quarter versus the fourth quarter of 09. a slight increases are also expected a nondurable good manufacturing, transportation, utility, professional and business services. employers in sectors that he would imagine and construction, wholesale, retail and some of the preliminary indications may be softer second quarters as well. using the seasonally adjusted data regions interstate motter quarter over quarter growth with the highest growth coming from the south in the midwest. and you can see why that is a cousin of the growth in manufacturing jobs right now is what we are really seen as where growth is coming from.

a major trend emerging from this downside was the number of unemployed workers who will be forced to find new jobs outside their industry expertise. in our company, we have labeled these people appeared their industry migrants, very similar to migrants coming into the industry. as we called and they face challenges including how to adapt old skills to the new demand in the marketplace and how to represent those skills in a brand-new light. an example of this, would be what we would call basically a form and in an auto company on the shop floor, possibly having problems getting into a manufacturing environment, but a different kind of manufacturing environment. another one of these major challenges worker phase is the lack of mobility exacerbated by the housing crisis, very similar to what dr. berner had referred to. this inability is slowing down the employment. the inability to help homeowners get out from underneath her negative equity problems means that many jobless are unable to

take jobs in different locations when in fact there are available jobs. we believe that any initiative that the government implements to address the level of unemployment and foster job creation should focus on three specific areas: the individual job seeker, companies and potential new businesses. so what can be done to assist in the individual employment? training programs again as dr. berner mentioned, these are very good track records and also have challenges associated with them. workforce develop programs and other skills of ritual and that i may suggest specifically focused on these potential industry migrants. to enable them to leverage their existing skills, but move them into different industries. what do we do to assist corporations? corporations are more specific than ever about their hiring needs. this is the conundrum. there are people say i have the skills of their company saying your skills are good enough for me. that skills mismatch is

critical. they have to have softer skills, flexibility, adaptability, intellectual curiosity and interest in lifelong learning, things wouldn't have to have before. the velocity of change in these requiring skills, all citizens and particularly industry migrants will need to develop them. tax credits? incentives for them to increase the size of their workforce will put needed money in the hands of businesses. however, companies have gotten smarter. and that from this recovery going forward, hiring decisions will be based -- made based on demand for the products and services and goods, offering incentives will not create new jobs in my opinion your brother they will subsidize the cost of growth of companies that they would've hired anyway. this use of taxpayer monies in the incentive program is well intended. yet at the same time will create a tax break for companies which is good. but if you look at the long-term

core, it is not getting it to job creation. businesses create new jobs. one of the biggest is dodges of any initiative is getting to the end citizen and how that and citizen can participate in those programs. iran's will provide the stupid people with access to start up capital, grants, access to using the fdic owned real estate. it will create jobs. in conclusion i'm suggesting three specific actions that should be considered to address the three areas of focus i just spoke about. one, a targeted investment aimed at new business creation. develop a comprehensive program breaking down the silos within government to support entrepreneurs to set up an established new businesses. a new pipeline of businesses must be there in order to replace the continued product efficiency. a program targeted at unemployment in the homeowner again as dr. berner talked about, we need to create a more

flexible and fluid labor market and therefore we need to be able to have people continuing to pay their mortgages so they are not strapped in their city when there's a job in another city. a targeted program to address, soft skills. development of these industry migrants populations. this is an opportunity to develop in training curriculum and programs to workforce investment boards, industry migrants require assessment skills, skills transfer training and soft skills training. all of these can introduce a likelihood of this migrants moving to other industries. manpower has been in the business of jobs and job training business for over 60 years. we've seen the economic ups and downs. it's clear this recession is by far the most severe in this downturn. and a privilege to share some of the thoughts we get a feel from on the ground in those actions that are presented this committee. we consider that partnerships between government and industry is critical for this to move very quickly. it is also critical that we get it right and right mean

systemically so that we're not solving this 18 months from now again. i am the employees that manpower are ready to assist in getting america back. thank you. >> thank you very much for that testimony and awesome questions when we get to the question part. our third and final witness is kevin hassett, director of economic policy studies, a senior fellow at the american enterprise institute. his research areas include the u.s. economy tax policy in the stock market. he previously was a senior economist at the board of governors of the federal reserve system and a professor at the graduate school of business of columbia. and also, served as a policy consultant to the treasury department during the presidency of george h.w. bush in the clinton administration. not your hassett, thank you for being here. >> senator, thank you for having me. it's a pleasure to be here in the room.

i turn on my microphone. is it working? the microphone is not working. >> and think it works. just thought a little closer. >> how about that? there we go. terrific, thank you. it is really an honor to be here before this committee which as you can see, looking at my fellow panelists is a long tradition of inviting people who do the unbiased truth and aren't here to make political points, but rather sell to think about about where we are and what we need to do. you know, senator, testimony was barely walk and after listening to my two predecessors, a lot of the things they said are things that i agree with explicitly in my testimony. and so what i'll do is go to the parts of my testimony that offers slightly different or alternative perspective and not emphasize the areas of agreement. and so i'll begin with a brief overview of our current economic situation can't discuss what i see is the most pressing

challenges for employment and growth and then describe a policy change that i think would address the current challenges, especially those challenges in the u.s. labor market. the headline of my testimony is as absolutely courier that the recession is over, although that's really not commonly discussed although it is certainly expected by most economists. i think in the end the date of the endpoint for the drop of the recession will be probably sometime in july of last year. but even though the recession is over, as was the case in the previous two recessions, we begun with something that looks a little bit like a jobless recovery. the labor market is still terrible and it's improving far too slowly although it may have very subtly turns a corner lately. the fact is that we're coming out of what economists now call the great recession. but i think we need to amend that is a think about our policy challenges because it was a great recession for whites. but it's been a recession for

blacks. it is startling and disturbing in an urgent call for action. i think also that the great depression for blacks is not over. so we are starting to see some signs of improvement in labor markets, but if you decompose this statistics and look at the different experience of whites and minorities come you find the minorities are really trailing in a way that challenges policymakers. and so, i think that looking at the economy, were clearly out of the recession. we've had a tremendous growth quarter, but that growth, a lot of it came from inventories and traditionally inventory spikes are followed by week quarters that they tend to be negatively correlated. that means there's a downside risk at the beginning of this year. and ample room for caution. and i think that given that, and

given the state of the labor market that we would be wrong not to think about additional measures to take. now, before i go on to the specific proposals that i would urgently encourage you to consider, i'd like to talk a little bit about what we did last year because i think it's crucial to not repeat what we did last year for reasons that i go to invest in my testimony. now the cbo report released just this week provided estimates of the impact of the stimulus and they offer broad ranges in the report when estimating the economic effects which are intended to encompass most economists use and thereby reflecting uncertainty involved in such estimates. as we know, senator, they were fairly favorable giving ranges well above 1 million or 2 million jobs. my view is that the cbo report is incorrect. and i make these observations here sir not to make political

points about what we did last year, but rather just to emphasize that it's crucial that we look elsewhere now. now, why do i disagree with the cbo report? well, the cbo analysis relies on large-scale casein for castles that were mostly discarded by the economics profession a long time ago. the cbo analysis concludes that we should get -- that we got lots of jobs created and that the broad range of economists use would support that. but i disagree. that's not my read of the literature. a sign of our cbo analysis comes from the comparison of their broad range to the analysis of the wall street journal article written by robert barros. he has been one of the primary contributors to the macro economic literature that strives to estimate effects from observed economic data, rather than assume the effects as is often done by the keynesian models.

i should note that bear was his to win a nobel prize and his work is not out of the mainstream. it's been followed by the work of many others who have been made similar findings. the key point is that there'll estimated that spending multiplier the used was about .4%, pretty small. the multiplier for your two would be about .6%, a little bit bigger. but both of these estimates fall well short at the bottom of the range that cbo multipliers because the cbo chose to ignore the literature that relies on x. rather than jamesian speculation. i believe that the correct decision for policymakers as we now look ahead to what to do is to adopt skepticism concerning these effects and openness to different approaches. i guess the last point for my testimony that i'd like to emphasize is that it's worth adding that we need to be

particularly wary of big job creations precisely at this moment. one recent businesses hard labor and have excess capacity when times turn sour. as the economy recovers, they're able to ratchet up production without making new hires, even if the stimulus did have an outsized effect on output, one would not expect a large impact on hiring at the beginning of a recovery. but lurch of creation claims just don't add up. so what should we do it for not going to do what we did last year? well, i highlighted number of things in my testimony was i'm going to have to give a helicopter view of as a running out of time. the first thing is i think we should recognize we have a serious opportunity if we can get our house in order. as mr. berner emphasize, uncertainty about future policy in about the course of u.s. prices in the value of the dollar, you certainly have a having a depressing effect on the u.s. economy. the goodness is there than many countries countries in the past that circumstances similar to our own. the literature suggests that

those companies that get their house in order by having something like the bipartisan commission that was proposed in the senate recently to reduce the deficit in the long run. well, they seem even near-term economic oomph. in part, i believe, because the uncertainty about what is going to be has been removed. the first thing we need to think about is not to sharply cut back government spending for example in this year, which is certainly have some negative effects on the economy. but rather recognize that with a near-term opportunity to remove the uncertainty about future policy by getting our house in order on the long run. such a fiscal consolidation i believe would be very beneficial policy going forward. it would give people room or reason for confidence as they make their plans about the future. the second policy that i emphasize in my testimony is something known as job sharing on the witches really a smart

and clever idea that's been floating around for years and perfected somewhat by some european nations. and again as a running short, i'll summarize it in this way. right now we have unemployment insurance and a safer lazy person off, then they'll have a reduction in with us today in the person was laid off will have some unemployment churns. doc sharing is kind of a fractional unemployment insurance. and you can reduce the workers hours by 20% of the negative 20% of their unemployment insurance. the experience of such programs is really remarkable in some european nations like germany they've had a gdp decline very similar to our own to get the on employment rate is barely, but all in many analysts attribute to the to the job sharing program. i think would be very cost effective to adopt one now and it's important to note that it's not too late, even if we are in the first stages of a recovery. the fact is that each month,

4 million or so jobs are created and destroyed and so there is job creation out there, but there's still a lot of job destruction out there. if we can use job sharing to slow job destruction, say even 10%, that my dad up as much as 400,000 in that job numbers that you see on the topline employment report. i then go on to discuss the idea of creating jobs directly, which is not something i would naturally choose to do it fast, but given the state of the labor market, we need to really be creative about how we do it. and the good news is that a few programs that we seem that have tried to create jobs directly have done so at astonish the cost effective way compared to things like the economic stimulus. and so, for example, one jobs program that h.r. 4564 seeking to extend me be created jobs at a rate of 10,000 to $20,000 a job which is even by optimistic estimates, if week sent

president obama's numbers, about one 10th the cost of creating jobs to the stimulus. in the final thing that i mentioned that if we want to get people reason for optimism we can reserve uncertainty to fiscal consolidation, but we've also got to get america's businesses a break. the rest of the world has been reducing its corporate taxes for years in the idea is that now the average for oecd trading partners is about 10% below what our current corporate tax rate is. and so conquer big multinational firm deciding where to locate your activity, are you for too located in the u.s. we have to pay 10% more for taxes or choose another location as lower taxes? the literature on this his career. than the revenue costs a really extreme from having a high rate and you can reduce the rate without losing much revenue if at all. indeed, even if references that are listed in my testimony that suggest that the cost of

reducing the corporate tax rate might actually be nonexistent. it might actually raise revenue because we are on the wrong side of the corporate tax curve. that section opportunity right now. were looking for something to do that won't cost much revenue because we don't have much revenue to give and the corporate tax area is one that both is harming our competitiveness and two can be fixed without having a big budget cost. thank you very much for attention, senator. >> thank you all very much for your excellent testimony. let me at this point but an article in the record that relates to some of the same issues that your hassett and the rest of you testified that this is an article entitled stimulus arithmetic by j. bradford delong, professor of economics at uc berkeley, discussing

dr. barrows analysis of the american fiscal stimulus act and its effect on jobs. let me start, dr. berner, with a few questions to you. i think her testimony was very useful, particularly in that you organized it in terms of short-term and the long-term. and that is obviously the reality that were faced with here and trying to make policy for the country here in the weeks ahead and the months ahead one big debate that i think i hear all of you taking a position on is we've got some here in the senate who are taking a position that we should not be spending any more for unemployment insurance, any of these job creation initiatives, payroll tax holidays, these

types of things unless we offset spending by cuts elsewhere. or buy a guess presumably by increased taxes. but somewhere other, we need to pay for any continuation of the job creation that we have a lot today for the job maintenance provision that we have a lot today. i guess i would eat understood, if i'm understanding your position, your berner, i would be that it's not the right policy in the short-term. that's probably the right policy in the long-term. as did nation would be to keep in mind here about what we do now versus what we do with regard to the long-term deficit and fiscal situation in the country. is that accurate or not? be my guest, senator, that is accurate.

they are two things important. and the short-term overall same is we need to be smarter about the way we implement programs in the way we use taxpayer money to implement them. overall interested in getting the maximum bang for the buck out of those programs. income support for example is really important in a period of great stress for american families and workers. but, as they suggest my testimony, for example, it might better be paired with training and other things that would make it more project did in use. and cat in and mr. joerres also talked about ways we can spend our money more effectively and short-term programs. i think what we're talking about here, and here's where i would join dr. hassett in this. we need a credible plan to get our fiscal house in order. and we haven't seen i get. and i think markets would dry

great benefit from that. it not only would reduce some uncertainty, but i think that people would understand that while it's going to take some time because we've got difficult problems to solve and the challenges to address, a credible plan to resolve our fiscal problems over time i think would be beneficial to markets and the economy. >> said the deficit reduction commission that the president is establishing is the right thing to be doing for the long-term, but continued support for job creation initiatives now is also the right thing to be doing? is that what i understand? >> it is, senator. it's the right thing to be doing as long as we do it in a way that is both creative and were rated the most bang for our buck. >> this suggestion that.your hassett is making for work sharing, job sharing, is that

something you've looked into dr. berner? does that make sense of a policy option we have to explore or adopt? >> senator, i have it looked into that, but it does sound like something we could have explored. after all, i don't think we ought to leave any. in the appeal of what dr. hassett is talking about is that if you have people who have their hours significantly cut back, that there is a level of income support there for those people that built sonata mattock stabilizer into the system so that we don't reduce ours, we also reduce spending and create a pattern for consumers where we get into saving a precautionary way if there's a lot of uncertainty out there. so that sort of support, you know, could be useful. but i think we have to also look at the other kinds of creative

ways to both support demand and to get our economy going to support job creation. >> mr. joerres, did you have thought that many these questions that i've just posed to dr. berner about what short-term policies make sense for us to consider here in congress? >> well, anytime you can get somebody back to work instead of sitting at home makes a big difference. so whether it be some form of job sharing or the industry that wherein, mix the two men is not a difference because there's an awful lot of research that says a lot for your unemployed come eat it too situation, even if you just do comparisons between us and europe, on what is the long-term unemployment rate. a lot of that has to do with not getting people back to work fast enough. the way i would look at it is there are two ways could we get this way, forms of safety net that must be employed now because freddy. where you have just eaten out. safety net programs do not

necessarily in a novel thought cases do not create jobs here at but if we serially look at this between safety net than creating jobs, were going to do with haven't s-curve environment where you're really going to have a drop off again. there has to be some parallels and ordered to do that. to your point earlier, this all cost monies were going to have to make some choices between are we interested in true long-term systemic job creation, which is really new businesses filling in the slack of mature business is continuing to enhance efficiency. i have 5000 employees, and there were 24500. there's another business that has to come up underneath that that is employing 500 people. i would suggest to be very clear about safety net services, short-term job creation or really more short-term job preservation and a longer-term programs in order for us to start this pipeline of new jobs

coming. >> all right. dr. hassett, maybe you could just comment on the general question that i posed to dr. berner. as i understood your testimony, you say we have a near-term opportunity to get our long-term house in order and that the deficit reduction commission, or at least that's one way to try to begin to address that problem. and you believe that's a good step to be taking. >> yeah, i'm not sure the deficit reduction commission although i have a great deal of respect who have been in charge of setting it up. the fact is that we've got to have choices to make. as you know, senator, there have been many more failed commissions in the past unsuccessful ones and i wish were a little more ambitious in this regard. i also think would highlight the part of my testimony there is a chart for this, that it looks at

the u.s. debt situation, external debt situation and points out that we really are pushing the envelope in terms of our debt. and again, i'm not sure to point fingers at who's to blame. it certainly is something that started about a decade ago that we begin running a bigger deficits. but the fact is that right now our external debt relative to gdp is worse than the external debts we stuff our latin american countries that have defaulted over the last few decades. and so, you know, if you were to say the u.s. is like another latin american country, then i guess i would respond to that, you wish. actually would be a big improvement from where we are. i think given that his circumstance would need to be wary of expanding things without wondering how were going to pay for them. we got to tie them so they have in all this year. for example, if you can find, and i know this is something that politicians often referred to but never really exists or

never really happens. lots and lots of money we can save from reducing waste three years from now, that there is some program were going to cancel. the present value of that counts about all of our job programs, then i think the panelists would all agree that would be a policy that would have a significantly better effect than one that's just added to the uncertainty about how we're going to fix this mess. in the good news and in some sense is there a twist on it that to think of it is good news but if you're a person who likes me likes to watch the sort of medical mystery style tv shows. if somebody shows up and it got a knife them, then it's good news in the sense you take the knife out, so them up and they go home. the somebody comes in and of high fever and you don't know why, it could be really bad news. the fact that we have some nice enough that we know how to take out and sew up here and so we can fix this thing. it's not a mystery how and i

think the question is how do we generate the political will. it's not how to design the policy. >> let me also ask, your endorsement of direct job creation, i think it's very interesting. because again, we get into a real ideological discussion around here whenever we try to appropriate money for direct job creation. and folks take the position, that's a terrible thing, that the government expanding. we shouldn't be doing that, we should be doing some other indirect action or some job, some tax provision to invent someone else to create jobs instead of directly crated jobs. i understand you to be saying the direct job creation seems to be a more successful way to get jobs created at a reasonable cost. am i understanding to write?

>> thank you for pointing that out, senator. i would add that the thought that started leading me in this direction was that if we had expand the stimulus last year hiring people and pay them a medium wage of $38,000. with the original sin is estimated 21 million jobs. i think with the new higher cbo number of climate do something like 23. and i'm not saying that is something we really would've wanted to do but it puts in perspective the notion of one is the multiplier? regis actually create the job correctly, then it turns out to be a lot more cost effective than to design the big public works program that could decrease create jobs. i think that in addition, the idea that creating jobs correctly means the government is incorrect because i think one could easily envision that a program that i would probably want by calling to the right of me to design, where we arranged for firms that hire unemployed to get a fraction of the salary for the first few months for

that person in terms of weight sharing or something contribution. if you did that, then the firms would have access to the cheaper labors of their profits would go up which would make them want to buy machines and so on. we give someone back into the labor force before they're lost forever as my colleague on the panel mentioned. if people stay out of the workforce for a year or two, then very often they have a hard time ever returning. we've got to send a lifeline to these folks. and i think that given all these concerns, especially focused on private job creation, it seems like the people of both parties should agree that it's a much more cost effective way to create jobs than anything else or many of the other things on the table. >> dr. berner, i'd be interested in your comment on this proposal that doc your hassett has about reducing rates and indicating that we are at a competitive disadvantage because of the top marginal corporate tax rate,

here been so much higher than it is in many oecd countries. my impression is that while the tax rate is higher, the effective taxes paid by corporations are not out of line for corporations operating here versus corporations operating in europe. am i wrong about that? do you have any thoughts on this? or is this something you looked into? >> senator, i have not looked into that comparison but i think your intuition is correct because many of our largest corporations are global in scope and they think about their tax liability in a way that they structure it into a global perspective. my testimony, identify something else but on a cross-country comparison basis i think it's really important. and that is the role of health care in the workplace. anything that's one area where we are out of line with other

countries. even though those benefits are a tax deduction, because they're kind of compensation for employees, nonetheless, they do represent in my view a fixed cost, that when hours are reduced, still persists. they put our cost structure out of foreign, our compensation cost structure out of line with those of other countries. and a different approach to the way do we deal with health care in the health care benefit provisions, i think would make a smart competitor. so i think that's really important issue. >> let me try to radical view of things here. it's sort of three of our problems. one is short-term job creation a second is unlimited in uncertainty for the long-term. and third is getting our fiscal house in order for the

long-term. if those are the three big challenges, it would seem to me that a major reform of our health care system accomplishes all three or holds out promise for progress on all three because it does hold out promise for job creation in the near term. there are direct jobs being created in the proposals we've been talking about. one of the uncertainties i think he referred to in your testimony, dr. berner, that businesses look at is the uncertainty about what's going to happen with health care reform. and i believe cbo and most economists are in agreement that over the long-term if we can't reduce the growth in the cost of health care, we can't get this that problem fixed. we can't get our fiscal house in order. so, it would seem that doing something significant on health

care ought to be a priority as it has been for the president. do you agree with that, dr. berner? >> i do strongly agree with that, senator. you know, those three things importune health care are cost, access and quality. and many people view them as in conflict with each other. i actually think that if we do it right, then we can actually achieve a lot of those objectives. in the object is that you just mentioned, namely reduce the cost of health care for businesses and for consumers, improve the quality, increase the access and because that's such a big part of our fiscal problem, going forward and is only growing over time under current law that 60 night is imperative right now to get our fiscal house in order. >> mr. joerres, due to her perspective on whether or not this is an important policy

initiative for us to try to deal with or whether we can put this off and do it down the road bikes with your thoughts? >> well, because of the complexity is difficult to put off and hold on the road. having said that, in the u.s., we over 200,000 clients, many of them small, medium-sized businesses than in their exact words is i'm not hiring a person until i find out what that is. >> till i find out what? >> what that health care costs -- >> with health care costs are going to be associated with the hiring. >> a small medium-sized diseases are not going to make a move until they absolutely have to than they could do the math because when you take ten people and move to 12 and put an additional 30% burden on top of a pay rate or 10%, it's too much money for them. what they are doing is holding out and stopping. what we need to address is this process of addressing such a complicated issue during a period of time when you want hiring is creating a stumbling block. and that stumbling block

actually after something this past still will require some time of digesting. and then picking it down to what is my word and cost of her pay is going while. so while it needs to be addressed for the long-term health, affordability of jobs, movement of jobs, health care is also a lot of that. the more we allow for portability jobs back and forth, the more vibrant our economy will be. the challenges where in the middle of a time where we're really vapor locking small businesses and they are saying, i'm not moving a muscle i have two. and i think that becomes the biggest issue right now. >> senator, if i could just add. mr. joerres has pointed out something very important and that is there a lots of americans that are seen in their jobs just to keep the health care benefits. that frustrates the mobility that we have in our workforce, the dynamism of our economy. you know, i think that when you make policy, you have to consider that that's going to be

an important benefit to health care reform and it's going to actually make our workforce and our labor markets much more efficient and dynamic industry of labor ability. >> there is some very good examples of that. it's a smaller sample, but if you're just setting what happens in singapore between the portability of health care in your pension scheme, it allows a high velocity of what is required in a smaller environment. even a larger environment, what is happening is that talent is to move quickly and companies need to move talent. without the portability of pension scheme without the portability of health care you are really shortening the ability to really create a robust economic job creation environment. >> dr. hassett, did you have a perspective on this? >> thank you, senator. i think i understand that the political clock in the economic clock on the know, harmony and sometimes they're not. and i understand that health care was address this year.

but i agree that it was probably the wrong time and that health care is best folded into the fiscal consolidation. we need to build a process for fiscal consolidation and it won't work about addressing health care. i think many of the facts about our long objectives even the way to correct this policies those facts are unassailable. i like to make one last on this corporate issue. you are correct that if we look at corporate taxes in the u.s., that the actual raw number, the sort of average tax that a firm will pay is not the highest honors. if the corporate tax rate that is. that's precisely because there is the laffer curve in the data. the firms are rocket scientists that locate their scientist in profit jurisdictions. they move them around to reduce their tax rate and that involves moving stuff out of the u.s. and so that's why we lowered our rate. we should expect to lose a lot of revenue because it sort of

offset revenue already. it's just going to someone else. as a real opportunity to make us a more attractive place to do business without losing a lot of revenue at the corporate tax. i think would be wrong to ignore it. >> i want to jump in on that because 85% of our businesses outside the west is going to 95%. $20 billion in our company, 2 billion right now are in the united states. fact is outsourced jobs. our two largest competitors are swiss-based company and a dutch-based company. in our current environment, we have $120 million deficit a disadvantage because of taxation between those two. that means i have to do 120 million more of productivity in order to just maintain a competitive position with two european companies. under those jobs have been not short. and of those jobs are coming back in growing markets in vietnam, and china and others. so when i look at taxation,

taxation within the minimizing effective tax rate can be done very and much more effectively in a manufacturing environment through the use of transfer pricing. that is not done within the services industry. i recognize that as now this is about, but it's a very serious issue. >> all right. well -- i'm informed that chair maloney is on her way back on the will be here in about 15 minutes and would like us to recess for a short period and then she would like to ask him questions. a few folks have the time on your schedule, we would put the committee and recess at this point and she will reconvene the committee. thank you all for being here. i think this is very useful testimony.

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>> called back into order and i regret and apologize we had hearings right in the middle of it and i'll be looking at the tapes of this hearing and hearing your testimony. mr. braley is on his way back and will be here in a moment. but i'd like to ask of the witnesses something i always ask at the monthly hearings at the bureau of labor statistics tiered and do you see any bright spots for job growth in our economy? anyone who would like to get any positive news about job growth in our economy. >> i think i can do that. and as that mentioned earlier and in some of your remarks, there is a very traditional flow what happens in the economy. and when there's some uncertainty but demand, were the ones who come back first. the amount of people that we are adding on a weekly basis and the

addition of people that are out on assignment, that we are adding a weekly basis as this is a clear recovery. the majority of those jobs are going to manufacturing and are spread across the entire u.s. we've not seen a growth rate like this since night 93. so yes, it's happening. we, like you, have questions about a sustainable? how long is it? visit inventory replenishment? some of those. i would say right now or field of a hundred offices in the u.s. are feeling like wow, it might be over, we are on our way. >> well, could you tell us some of the things we could do for the people that have been unemployed or underemployed for a long period of time? do you have any ideas in that area? >> it's something we worked on for a long time. we have organized problems in the underemployed and unemployed we spend a lot of time on training and development in order to put them in jobs. what we have found is that work

readiness is becoming more and more of a difficult issue and of course work readiness for the longer of long-term unemployed unemployed -- >> that's important, mr. joerres because 40% of the unemployed have been unemployed for over a year. in their skills are deteriorating and this is a problem. do you have any ideas for programs to put in place to reduce the long-term unemployed? >> well, the programs unfortunately that we have seen in a fan fortunately that they weren't and with good efficacy, but they take time. and that is to get them back into some type of training. training that is tied to a job, not training that is just for training fake. so the things that we've done in that area, work very closely to a community level with the workforce investment board to save, where the jobs? where the people? and try to do surgical training updates to get people into a job quickly. >> would anyone else like to testify the green shoots bright spot that they see in the

economy now? >> sure. i think that we are starting to see some advanced indicators. we do actually a survey of all of our industry analysts work. and hiring plans and i think this echoes what mr. joerres with same. hiring plans reported by those companies are up back where they were before the recession began. >> a while. >> those are hiring plans another not materialized yet into action. and i think the discrepancy between the plans of the action has something to do with the insurgency point you made in that we referred to in our testimony. but just coming to, you know, the issue you raise about the long-term unemployed, and both of our prepared remarks, mr. joerres and i referred to training. in the history of training programs is to some extent a checkered one. but i think the importance of training can't be denied. the importance of education, so

there's a short-term component and a long-term component to that era and the short-term, for example, i propose that we paired the unemployed who are getting income support, which is very much needed with a pool of unemployed, for example, newly minted our students, perhaps in teachers who have been laid out and get them together in a training program that can give people some basic job skills. and that way you are giving people important things to do while they are looking for a job. and i think we all agree that when you have long spells of joblessness, that arose the chance that your going to get an new job. roads are a skills and of the road durability to find a new job. all those things are really important. >> dr. hassett, do you see any bright spots? >> yeah, thank you, ms. maloney. i think an interesting chart that is in question and answers we always follow up periods of those. i'd be happy to include is one

that shows the one of the geographic distribution of recovery. there is some states that are actually starting to really look solid again in other states that are still in deep trouble. in particular, one correlation that i've seen in some of the work i've done is that if you want to organize them, the states that have the real estate market such a reason most about are the places that still are even going in the wrong direction and maybe aren't even seeing recovery yet. so there are some -- >> where are we seeing recovery? which states in which regions? >> once it becomes to mind. i wish i had a chair with me. once a third member was texas seems to be pretty well. maybe mr. joerres has some other detail on that. the other thing i would say it's a bright spot is the opportunity that motivates me to be so psyched by john cherry is that there's always a lot of job creation and destruction going on. that number you see in the paper report is very often, one 10th

or one 20th of the job growth in a month. in november there were more than 4 million jobs created that more than 4 million jobs destroyed. the destruction was still winning. anything is important to remember our economy is the place or there is always replacement and destruction going on and what we need to scrape the circumstances were the creation can overwhelm the destruction. >> thank you. my time is expired. mr. braley. >> tradepoint. thank you for calling this hearing. mr. joerres, i was just on teleconference participating in an economic outlook conference on the panel, if your reseller representative mr. carcass. so apparently a lot of people are interested in what manpower has to say these days. i agree with you. i think the corporate tax rate the u.s. has to shoulder does present a competitive and internationally proposals to raise $120 billion more on top of our u.s. companies that are trying to sell american around

this world compete i think will be even more damaging to us. dr. hassett, i'm not an economist. chamber of commerce executive by trade and work for small businesses and it seems to me that economic models on the stimulus are outdated. they seem to be 1 dollar a government spending generate this much of output. buy.com small businesses consumers, their behavior is modified because they know increase spending leave to doubt any taxes. the business community, small, medium and large for the top under cap-and-trade health care spending taxes international tax provisions and they are frightened by it. the uncertainty is one let's not predict the market, try to predict the marketing you guys, i'm not going to do it. i'm holding my money. i think that is affecting those older economic models.

my question to you is, you know, thinking about the study that john coven and others did in examining the forecast of christina romer and others on the stimulus, they were using sort of the old keynesian forecasting model and the ones that sort of deal with those expectations, rational expectations of people, businesses, consumers and others. do you think, looking at the cbo, who does a terrific job on things, the base under extensive research in macroeconomics, with the cbo fiscal multipliers used to high? what were their estimates of the stimulus impact perhaps a little larger than you see? >> thank you, mr. brady. and i'm a big fan of the cbo and especially a fan of its current director, who i think has been in a tradition going back to alice rivlin what we expected directors. the infrastructure buildup to analyze the think this kind of been there since day one.

too often in washington, proof proceeds by induction if you remember your past that if something is true today as it was true yesterday. and if we adopt the model the 70's that tells us how policies could affect the economy, then it's very unlikely that the government agency will ever stop using the same darn model. the fact is the lurcher has moved on. when much ago was turned to think of the most good way i could describe this. but the place where the big large macro models were really developed push perhaps the farthest was the university of pennsylvania. larry carr and get a nobel prize for it. i'll pretend it was a close friend and mentor of mine designed the model for the federal reserve that was large keynesian macro model. those are developed in the 70's. i started graduate school in the mid-80's. when i was in graduate school at the university of pennsylvania, they didn't teach these models. because already they had been rejected by the literature. and yes, these are the models that creating the sound bites. i think though that that does

not mean that we think that it hurt growthlast year or though we know precisely that the stimulus was a failure and made things worse. but it does mean that we should have a great deal of skepticism that we know what the right thing to do is. and so, especially going forward, i think that we've seen some success with the programs that highlight in my testimony in which to try to dress up against more than i think in a tuple about what the models say, especially when the model predictions are so at odds with what we see in the literature. >> you know, my gut feel is that the economy has changed, that those models aren't as reflective. and i think stimulus is almost always arrived after the recession has peaked and is slow. and i think today we downplay the economic boost from lower it in the after-tax capital, lower corporate income tax on a permanent basis or businesses

can count not a gimmick but where they can count on, you know, that rate of return and the ability to invest. her thoughts? >> i think that you're right, mr. brady. and the way i like to think about it is not that the stimulus again made the economy worse last year. i think that there's no question that growth was higher luster because of the stimulus had to of been. the question is how much? but the problem is that if we see when we consider the job measures i mentioned my testimony could accreted jobs or maybe one 10th cost of the stimulus. when you consider that you consider we spent an enormous amount of money on it and prepare the broke and policies that the corporate tax academy people optimistic about the long run has somewhat of a squandered opportunity. >> i appreciate all the panelists tonight. >> thank you. dr. berner, do you agree with dr. hassett on the cbo model used to simulate the effects of the stimulus?

>> well, thank you for her question, congresswoman. as a former model builder and when he ran the forecasters at the federal reserve, i just point out that we are constantly changing our methodology and constantly adapting it to reflect new considerations for the structural change in the economy, globalization and a variety of other things. in the models that we used and we don't rely exclusively on models because i'm old enough to use judgment and experience as my key model. .. give the number one

thing you think we could do? of course it is a combination of things, but if you had one thing, what would it be? >> jeffrey joerres talked about the role of small business, and new business is what we really mean by small business. when we think about what their main problems are, small businesses are telling us we'll think about what were the problems are with small businesses are telling us in the surveys we have the problems are poor sales, access to credit and cost of employee health care so we need to continue to use policies that improve the functioning of our financial system that get people access to

credit on reasonable terms. we need to address in the short run in overtime the cost of health care and reduce uncertainty around that and we need to have policies that will continue our ability to access to global markets because that is the key source of growth i indicated in my testimony exports and access to global markets are going to be a driver for the economy. >> mr. joerres? >> i would really like to do to. and one, because i think where we are right now is a critical spot so i do not want to underestimate what we need to do in some form of what we call safety net or stop something's happening now. that is not job creation, that is stopping the slide and i think we need to do that. i've spoken before -- >> how do we stop the slide? >> some ways giving additional

disability what will be coming and not coming and we have limited opportunity to do that. it is difficult to be able to say we have long-term and short-term objectives but in order to do that it comes down to confidence, hiring is a confidence and demand goes to don't come by and we are starting to see the demand that is the demand inventory replenishment, the demand start to level off, don't do the to but i feel confident in saying the demand man of level off after there's a certain amount of inventory replenishment if we give confidence they are not going to give any more -- any type of thing that is going to get in the way of expanding the business. small business must create jobs to backup the efficiency will be driven out of the job deterioration in the large businesses. >> dr. hassett. >> thank you, mrs. maloney. i hate to waffle and say to them is that reducing the corporate rate is urgent if we want to

create the context that's necessary for long-term growth to a client but i feel if we were to adopt the job sharing proposal we could see a response right now right away. i would expect the reduction in the corporate we will have benefits spread out over many years. i think the job sharing program can slow immediately for a generous one and we could see the turnaround labor markets a few months after the proposal. >> thank you. mr. brady? >> is that uncertainty among your client's real? do businesses look at -- again efforts like of the target tax credits are sincere efforts to try to help, all small businesses are not responding to that. is that uncertainty initio with your clients and their ability to be higher and higher and by that new warehouse and make an

expansion plan? >> it is the number one discussion we have with our clients is amount of uncertainty. business is growing so when the business is growing at a pace of uncertainty is overcome by demand of course it will do that because the demand is tepid the uncertainty it is what is driving for them so what they are looking at is tax rate, what is the burden on top of an additional person and i can't emphasize enough in our organization where we have 30,000 people five, six, seven, eight, 10% more people the math works out. i've got ten people adding an additional person and i don't know if that person plus the other hand i have on staff are going to have additional 50% increase in perham over the cost of pay. that slows them down. >> looking at job opportunities it seems to me some of the customers little sight the united states because other

regions are recovering faster than the loss. it's important not to just buy american but some sell americans sometimes we can do it with the company from here, other times they have to have their headquarters here in the presence overseas to sell our goods and services. today there's almost an attitude of benedict arnold if you are out, large and out there competing the company expands into another state we say get them, way to go. a company that expands to another country to get the customers somehow is viewed by some as some bad act. almost every study shows those jobs create stronger headquarters here. a lot of research development technology. we have an energy company that has a project and algeria has 40 workers on site and 400 houston monitoring of reading services tied so it is a huge help.

shouldn't we be encouraging rather than discouraging companies finding new customers in every quarter? is it outsourcing of jobs or looking for opportunity to sell more product and services? >> i think it would be easy to talk about my specific situation. we are headquartered in milwaukee, 62-years-old we've had three ceos each one dornan milwaukee so we think bill waukee is a good place. >> 90% of the business of the $20 billion is outside of the u.s.. six to seven years from now it will be 96 to 90% of business while the u.s. is growing. the chinese market is growing fast. none of this is outsourcing three we are putting thousands into china, vietnam, the middle east and abu dhabi. because the success the last ten years are growing from

$8 billion to a 22 billion-dollar business. we built a brand new building in milwaukee has 400,000 square feet than employees 1200 people. the mayor was in favor of it and we have reenergize a park downtown. we couldn't have done that without expansion overseas. second point, the two largest competitors on a global basis of our foreign companies. the tax rates are between eight to 15% less than ours which put us at a disadvantage annually of $120 million of taxes we paid more than competitors. >> my guess is there isn't that big a margin you've got to compete in a pretty tight market. i would imagine with your competitors. >> 3.5% margin. we do a lot of work for a little money but we love what we do. >> thank you for your story. we need more of you by the way. >> that is an amazing story.

congratulations on your success. dr. berner, greece and its financial problems are very much -- i just came from the floor. everyone is discussing it and looking at it and we are all concerned, and i concerned that the potential impact to the united states if increase in such a defaulting on its debt. dr. berner i know you previously reported the impact to the u.s. of slow growth in the european union is relatively small. i believe you said one percentage point reduction in growth in europe would shave only .2 percentage points off of u.s. growth but you were worried about financial contagion of. can you speak about the crisis in the european union increase and financial contagion? >> yes i can, congressman. i think the big problem is that you have the potential for

what's happening increase to spill over into other countries and the periphery of europe portugal and spain for example and it's important for greece to be able to refinance and over a long period of time because they have a huge fiscal problem the difficulty of rolling over the debt on terms they can afford and the just postpone adoption of tenure debt this week as you may have heard so they can cool off and get better terms of the debt. one way or another they are likely to get assistance from other partners in the european union. that will come with strings attached course because the other members of the european don't want to pay for the mistakes greece made but one way or another that assistance is we do have to, or else has been

franklin was fond of saying came together, so that is the real problem that the europeans have and because of the fiscal consolidation and increased cost of financing the debt that will spill over into the core and increased cost of funding for european banks all of that is going to slow down the european economy petraeus we have been pessimistic about europe to begin with and these developments make up some more pessimistic about prospects for europe but one of the things we talked about earlier namely coming up with credible plans to fix fiscal problems is also important here. if greece and the european union conflict these problems that are prevalent now and the periphery of europe and do them in a way that we instill confidence in investors bringing down the cost of debt for greece, for its

people, for the banks in europe, that is going to reinvigorate the greece economy and european economy. the key is to come up with a credible plan to do that. as we think about to the question as we think about the potential for this current agent if he will to spill over into other economies the point is people are drawing parallels between what is happening in greece and they are singing where is the next increase. it's kind of like during the financial crisis people were saying after bear stearns where is the next bear stearns. and there are some parallels there so we need to think about the way that while there are differences between what is happening in greece in europe and the united states and the rest of the world there are parallels and the threat that draws them together is lawmakers around the world me to think

about how they are we to deal with fiscal problems and to articulate how they will come up with the game plan to do that in a week effect we instill confidence among investors. >> can you tell whether the impact of the reduction in the export sector would be spread across the u.s. or whether certain sections of the country will be particularly susceptible to reduction of exports to europe or decrease? in particular i am concerned about the greek american community that i represent and concerned may have a burden on them and bear a disproportionate share of this burden. >> congresswoman i haven't really done the work on that so i would be pleased to get back to you if i can to try to uncover the answer to that. >> in addition can you estimate the impact to implement of new york city of the financial

contagion and the e.u. spreads to the u.s.? >> that's a difficult task but i will do my best to get back to you on it. >> mr. joerres, you mentioned gross, and i am amazed, 92, 96% in foreign markets, do you have offices in greece? >> yes, we do. >> can you tell what is going on on the ground information on employment with your organizations and employees? >> our operation increase is no doubt feeling the effect of this. as things have kind of grind it to a halt as companies are needless to say concerned about what might be happening. i can also say in markets like france, italy and germany into the netherlands, the belgian market, they are not on the ground feeling at all. we are still seeing improved trends what is happening is conversations are not here house would like others do as a result of getting the money or not.

we think that the employment numbers within europe will have more effect down than what they had. there's no doubt about it. >> thank you. my time is expired. >> thank you. dr. berner, exports are one result of successfully selling american products and services throughout the world and as you pointed out one of five manufacturing jobs is tied to that and service companies like mr. joerres with a huge surplus and has huge economic impacts. we are looking at three trade agreements in the colombia, panama and in south korea. we see other countries stepping in ahead of us from canada, the e.u. and others to get ahead at another competitive disadvantage. do you support the passage of the trade agreements and opening

those markets for the u.s. service and production companies? >> mr. brady, thanks for the question. i support in general the idea that we should have free and open trade and also the idea that it has to work both ways so that when we open our markets to companies and other countries and other countries we also want to make sure we have access to their markets and intellectual property agreements and other things that make sure we have a level playing field to the extent that is possible in which our companies can compete, and so it does work both ways. >> i think it's important, you know we are such an open economy in the united states, panama and colombia for xm will have a one-way street. it's duty free but we have obstacles when we try the two-way trade and clearly agree this like that that gives the chance to compete on a level

playing field in every other case has worked beautifully. we doubled or tripled exports we have turned the trade deficit into a trade surplus and even have and in the factory surplus with nafta countries as well. let me ask you this on the on related exports but sort of to your view of going forward i noticed in your testimony you're gdp growth percentages are higher than the of blue-chip this year but lower next year and much lower next year than what the white house forecast. is there a reason for that? i know there's always a range but is there a reason uzi significantly lower economic growth next year than omb? >> yes, there is a reason. and to make it explicit, until

recently we had been assuming the bush tax cuts with some sick as scheduled on january 21st, 2011. if that is not the case, and some of the tax cuts are extended, we would see faster growth in the forecast. in addition we are thinking the treasury borrowing needs will come by and with a return of private credit demands as the economy comes back and that will result in a significant increase in interest rates. the combination of the two things, sohn said of the tax cuts as well as rise of interest rates would give slower growth. >> continuing the tax cuts to boost the economy -- >> it would have a modest positive effect. i would say however as i did in the testimony the most important policy decisions that are out there right now are also much

taxes but foreclosure mitigation and coming up with a credible plan to do something about our fiscal situation. if we were to do that and our forecast for long-term interest rates u.s. treasury rates would be somewhat lower you would see that right away it would have a beneficial impact on growth succumbing up a plan that is credible would make material difference to the old look. speaking like a pact with the bush tax cuts are good for america? tankink tebeau i will stop. dr. hassett, a consumer demand. hard to know what families are thinking about. obviously looking at their own worried about their jobs and lots of things going through. the thing i hear and it may be in tangible from the economic issue but could get and spending is the number-one concern of consumers. does that make on the decisions

a family makes on purchasing a new tv set or making an economic decision? >> sure. thanks for the question mr. brady. there's a great deal of scholarship in the area fit respect to milton friedman the recent tiberi tax cuts like the ones we observed last year don't have a really big effect is the people know they are going to have to pay with heave become future higher taxes and so they're skeptical about the fact to take a dollar from them this year and give it next year that you're making them better off and indeed like a deck of the are not skeptical and think they are better off they will regret it next year when they get the tax so it's not clear that this is a plan that argues for the policy even if you disagree with it. the fact is though if you look at the numbers of the future taxes associated with things like the stimulus they are mind boggling so for example the stimulus last year up along small taxpayers, the 110 million or so, the cost of just the

stimulus, we are not talking the but the deficit, it's about $8,000 a taxpayer, will get less. but remember about half the taxpayers don't pay taxes so that means if you are someone who pays taxes and actually had a positive number on the tax return when you mail it to the irs, then you for number is expected to be double that so if you are someone who paid taxes and build for the stimulus may be about 16,000. if we raise the money for the stimulus according to the distribution of income tax we now observe, than for people with incomes in the 100 or 200 or 500,000-dollar range, the small businesses may be that have more money, their bills for just the stimulus are enormous. for someone with an income between 200,500,000 stimulus bill will average about $41,000. if we did factor in the debt we have to pay off, then we are talking about future tax liabilities that are mind boggling. and i think that american

consumers should expect those taxes if we don't see big reduction of governor spending they should expect those taxes and should wisely plan accordingly and one reason why we see a spike in the savings rate and lower consumption i believe this expectation of the future taxes. some of them are as mr. berner referred to people caught the expiration of the bush tax cuts. >> so people may not know the amount they're going to open they know someone is going to pay. >> they know that taxes are going up and are consuming accordingly. >> i would like dr. hassett and dr. berner to react to a proposal that one of my constituents put forward to the new york city partnership and his idea was to take the unemployment which many economists say is important not only in terms of helping the

unemployed families but this money is plowed back into the economy driving more goods and spending and services. but to take the unemployment and tying it to the job training and job hiring, give it to a business that will hire unemployed and have on employment from through the business, could you -- or mr. joerres, any of you, could you comment on this idea or any new ideas you might have on how we could help job development in our country? >> congresswoman, thanks for the question. as i indicated in my testimony, that is one of the four things that i thought would be very helpful, and specifically, if we look at training programs, and it we all agree that the education and training, training and job skills are extremely important, if you care training with income support, which we all agree is so necessary to help americans workers and families in this time, that that

is a way to give them the skills they need to require to look for jobs to people to perform and jobs when the jobs are available and we have the skills mismatch in america that is profound. i read the other night for example microsoft built a development facility in british columbia because they couldn't find the skilled workers needed in the united states at the right price and also they ran out of room under the h-1b visa program and that is one little anecdote that supports the idea that we need to improve the skills of american workers and may be doing that to do through the income support on the insurance programs would help. it would also help i think to look at college students, unemployed teachers come retirees, people who have experience and skills who can

treat others in basic job skills to link them up in a partnership that would help them acquire those skills. >> any other comment? >> we have a fair amount of experience in this as we have many that work with several across the united states as well as other countries. what we found is when there is a disconnect between the job training programs and finding the job it is much less efficient. when those are two different organizations with what you are doing is training for government dollars if i can be so bold in other words getting $15 to give a person in resonate and separating them from the job you have a much lesser rate to finding it. when you can connect the ability to find corporations that almost sponsor or take on the individual as they are going through the training program, the efficacy of that person making it through the program is dramatically improved. because many times you don't

need a resonating can get the job. so i would suggest we put the training programs in place we also have to say you have to have banaa on who are these companies that are going to go? i'm sure you've heard many times, and the companies are saying you're not giving me the skills you're meeting, you're not doing this to read what we've done this companies that will get in the game and tell us and bring these people away through. so i would ask for a connection between job training and job placement as opposed to a handoff because that handoff is a very dangerous handoff. >> sounds like a very good bipartisan effort. dr. hassett. >> in fact in the break, and member of the staff and all i were discussing a very related point that the unemployment insurance program that we have this kind of designed for the old fashioned economy where people took a break in august or something and got leadoff, and

now we've got economy that requires removing between jobs a lot of times and search costs are high and important factor for the firms and so long and it's urgent that we redesign the program alive for things like job sharing for the unemployment insurance program and i would encourage you to consider having a hearing where you ask the best mind of people who spent their careers study it for proposals because as we analyze the sort of low hanging fruit right now, given the terrible job market it seems like all of them are kind of mutations of revising the unemployment insurance. >> i'm sorry, i have such an anecdotal evidence here that is compelling. we have about 2500 accountants on one of our organizations that we owned. there are people who have been unemployed in the finance industry. we've been able to find them jobs, put them in jobs the with the contract jobs in other words it might work for three months.

they've refused those jobs because if they take the job, their unemployment compensation goes away at the are not sure what his way to happen. when in fact 70% of all of the people we put out on assignment gets hired by the competing are placed in so there is something wrong here and not having the handoffs write the the individuals listed in this poor position of either sitting at home working on job boards and getting paid or possibly improving skills. it's almost like a job sharing environment he could consider not just job sharing that ways of splitting the on and planas dollars they might be getting less paid for by than getting work experience and then getting hired. >> just to follow their art to spikes into a reemployment from the workers who are on an implied insurance, there's one at the beginning and one near the end and it is exactly because of that once you are in the and if you take the job you are giving up a big spell of

unemployment insurance that is costly and people tend to be cautious with jobs when they get into this bill. >> thank you. my time is expired. mr. brady? >> decreed a lump-sum for workers where they can continue their training or retraining, take job opportunities if they got a full-time job they were not penalized for the money they were given in fact they were even part-time jobs as long as they were continuing education and skill building. we need to be innovative like that. the time when the business investment is scarce why aren't we repatriating more of our investments back to the u.s.? because of our tax code in 2005 we pushed for provision success when american jobs creation act to address stranded profits, tax code 35% to bring it back swing

proposed to lower it to a minimal 5% and let that investment flow back to the united states to be even with restrictions $300 billion came through that year. today it is regenerated. we have six to $800 billion in profits outside the united states too expensive to bring back. why are we not learned the gate again to bring back that type of investment? it is the size of the stimulus outside the united states waiting to find a home. right now finding a home in another country. are the kawai aren't we -- i know the government can't invest that. it's got to go straight in the marketplace in decisions that the companies and hopefully the workers but if any of you have thoughts on why we would not be encouraging bringing back those investments. >> i won't speak from a political view because unless i

don't have that i can speak from a mathematical view our largest operation in the world as france where we produce $78 billion a year in that organization generating somewhere between two and injured 50 to $300 million. we've never repatriated the cash because it is a pure cfo, chief financial officer calculation. the only time we will use that cash is one we are able to use the cash to buy assets in the same the nomination. in other words zero denominator. two weeks ago we bought a company in houston for $431 million. a good i.t. contacting staffing company had decided to use half cash, have stock because we can't get the cash back out from france in order to put it back into that. so this is just pure math. this is not about who's tax code. when we look to the transaction like this we look at it from the efficacy of the dollars and return to shareholders.

>> the one thing i would add is the reason this is happening is our tax policies are out of whack. it is a sign, symptom and something that happens when our corporate tax rate is so high people have to locate their profits overseas in order to compete, and so the problem i have with this proposal, and it's not one that i've ever come out and combat by of to problems with it, one is that it's south and we need to fix the problem in the first place. the second problem is a temporary holiday creates uncertainty and doubt when is the next time that's going to make people of repatriate in the interim. >> bring the gate down. >> as an economist it is obvious that's the right answer and i understand budget constraints rather than focus on that what i would do is focu on reducing the tax rate.

>> great. thank you. >> thank you. one effort where we do have bipartisan efforts is effort to cut the debt and currently about 12 trillion or about 85% of annual gdp, and i want to know how are we comparing to other countries? do you know what percentage of annual gdp and debt greece, france or england or spain have, anyone who can answer that? >> congresswoman, i don't have the statistics right in front of me, but i think what is important is that our debt is growing rapidly. as you know at the end of fiscal year 2008, our debt held by the public referred to the gross debt statistics, the debt held by the public which is now about $7.2 trillion was then 48% of collis hari 41% of gdp at that

time and here we are in 2010, and by the end of this fiscal year it will be about 61% of gdp. so it's risen rapidly obviously because of the recession. other countries have gone through recessions. the point here is that we are just on the cusp as you know of seeing a major increase in our deficits and whether you look at the cbo forecast suggested for the realistic assumptions, the administration's forecast looking in deficits, 546 percentage of gdp for quite some time to come. so, our guess is that by in the next ten years we will be looking in debt held by the public at 87% of gdp. there's no magic threshold of my few although economists think there is. canada think it is 90% for exit with his recent book where

investors start to question the fiscal stability of your policies. personally i think they are already starting to question that. we haven't seen it in our interest rates. they are loath, and they are low because other countries are in many cases in worse shape so they look to us still is the broadest, the cheapest and most liquid financial markets in the world and benchmark against which others are judged. we want to maintain the status and we have to think sri owsley about making the tough choices to get the fiscal house in order. >> in making those tough choices have much can we reduce the deficit by cutting discretionary spending say by 10%. >> as you know the discretionary spending is not the real story. >> how much by cutting government spending is actually discretionary and how much as mandatory such as medicare. >> welcome the right now, if we

look over the next ten years and we take medicare, medicaid and social security will account for half of all federal outlays and they are growing very rapidly and medicaid portion of that assumes state and local governments will get back on their feet and be able to pay their share of medicare. if they aren't, what we will see is the federal government being asked to pick up increasing share of the town which will make medicaid grow even faster and that is the fastest growing health care plan that we have so the percentage will rise even further. >> on that note, the state and local governments are facing enormous budget shortfalls. we have had states come to the federal government and ask for bailouts and total support to hit at the same time, thus swelling ranks of the unemployed are putting further pressure on the budget and i would like to

hear your ideas about to problems. the short run a problem and the states and local governments and the potential impact on employment and how do we deal with the long run problem of these budg problems and the state's? as you said, if medicaid doesn't -- can't be assumed by the states, then it's a tremendous, tremendous pain or tremendous problem going forward. your comments further on these two points? >> well, from the federal perspective we obviously have a system, fiscal federalism which isn't working. and medicaid is one of the key issues on that system. so we all know that when we go into a recession, particularly the deepest recession we've had in 70 years, the ranks of medicaid grow dramatically and that puts enormous burden on the state's that they can't pay. in my state, your state, the state of new york for the simple

it is 50 present eight mississippi it's only 22 at the state level. either way it's an enormously growing on support to the burdens of the grant to the state and local government for assistance or to offset the cost of medicaid have been necessary without making cuts to those programs. but in the longer run part of health care reform it seems to me hastert inhofe fixing the way that we share medicaid and the way the medicaid program is in fact designed. at the state and local level, we have enormous fiscal problems that need to be addressed. they obviously are the government there is the state and local level and the tremendously barry by states. there's 50 different kinds of problems in 50 states and thousands of different problems

in local government as well. alternately the tough choices are going to have to be made because like it or not we've been making promises for health care for pension benefits and other promises and they haven't been funded and they can't be kept and we are going to have to make a lot of tough choices around those areas as well. >> i could listen to this panel all day long. all of you have been inspiring and insightful and you've given a great deal to think about. but i am told it is impossible to get back to new york. the planes are not running and if we don't watch all the trains won't be running so we have to call an end to this. i hope he will come back to testify again. you have given a tremendous session today and the truth is we will have a slow land long climb to get out of where we

need to go in terms of creating jobs in this economy but we are beginning to see glimmers of opportunity and uncertain strategies and certain sectors and this will help us on an upward trend toward future growth. my goal is to work with my colleagues in a bipartisan way to develop and enact effective policies that will create jobs immediately and in the long-term that insure we are getting the most value for the dollar's and helping our economy moved permanently in the right direction. i want to think all of you for the tremendous work you do in your lives to help employees and move our economies forward and we appreciate your time today. thank you very much. >> thank you for having us. >> thank you for being here. [inaudible conversations]

[inaudible conversations]

is really defense minister ehud barak is in washington this week for meetings with secretary clinton, joseph biden and others. he spoke at the washington institute about iran and other security issues. this is one hour and ten minutes.

good morning. i am the executive stricter of the washington institute for middle east policy. it is a great honor to welcome our guest today, to welcome this is barak and welcome all of you at this very special event, horse third annual memorial lecture on middle east security. this was established by members of our board of trustees for three years ago after the passing of our good friend and longtime associate. he was one of the intellectual founders of this organization and among the many people he creased throughout his life with friendship and advice i'm proud to count myself among that number.

it is a great testament i believe to his memory that we've been able to convene this event. it is no small event in washington as you can see by looking and around the room by being able to convene this and offering him by bringing to cut their the leading lights of israel's national security establishment. every year to talk about the key challenges, the key opportunities facing israel and the broader middle east. today we will hear shortly from our guest. he is the third former chief of staff the israel defense ministers of the road to participate in this event after the last two years and we are very grateful to you for being here today. before i turn to my formal introduction of the guest, let me take a moment to welcome

sarah, his wife and their daughter. a few comments from hadar. >> friends and guests come it is the third year we are gathering here in the institute for the annual lecture in memory of my late father. as always i moved by the fact so far from israel people remember my father and come to participate in this defense. we are honored today to have general barak, the minister of defense as the speaker. general barak and my father were friends for many years. my father highly appreciate his

wisdom and of the libyan military and security fields. i remember one occasion when i was a younger girl, barak, who was then a young officer came to meet my father. after he left, my father said i assure you this young officer will become one day the chief of staff of israel's army. [laughter] he was happy to see barak reaching higher positions. on behalf of the schiff family, i want to thank minister barak for taking time off his hectic schedule and coming to speak to us. many thanks to the dear friend of my father and our family who does his best to keep the tradition of the zeev schiff lecturer memorial to be held every year. thank you. [applause]

>> thank you. indeed, if zeev schiff salles promise and the young ehud barak, then he knew what he was talking about because zeev had amazing ability to identify not just what was going on that what was likely to happen in the israeli politics and security. >> [inaudible] [laughter] >> it is one of those truisms' of washington and discussing middle east policies we say that we are across roads in the middle east. i think it is also a truism for the next line to be why the speaker and this time i really mean that come at this time i really do mean it. i do believe that at this moment for america in the middle east and america's friends in the middle east for most of whom is

the state of israel we are at a great moment of the threat and opportunity of risk and challenge not least posed by the rise of radicalism and extremism manifestative course by what the challenge posed by the islamic republic of iran but not the nuclear post. the region is a crossroads you we are honored a person who plays such a critical role in helping his nation navigate through the turbulent waters of the middle east is with us to offer his views on israel, 2010 strategic threats and strategic opportunities. ehud barak, is as everyone in this room knows that the very pinnacle of the national security establishment.

he is most decreed a soldier and has served in the defense forces his entire professional life rising to become chief of staff and then shortly after retirement was called directly into political life to serve in the cabinet eckert deployment, interior minister, foreign minister elected to be prime minister and now serving as the defense minister, a rock foundation in israel's difficult security environment. mr. barak, we're delighted you're here today and on behalf of the washington institute and in memory of zeev schiff we welcome you to the podium. thank you. [applause] >> the schiff family the belief

of the washington institute distinguished guests, it is an honor for me as minister of defense of israel to address you at this conference in memory of zeev schiff who in his life and in his deeds was wealthy of the title journalist commentator and security person. the years that have passed since he was taken have only deepened the professional vacuum the discreet in public beyond in the absence of one who was a guiding light. time shows how much we need people like him in journalism and the same time security work. as a military commentator zeev didn't hesitate all the criticisms both the idea of and the political defense echelon of israel he was steadfast in his opinions and did not hesitate on

things that were pleasant. sometimes hard things, tough writing called his perception of the world concerned folds and failures which needed to be corrected. but everything was always done with the realization with a desire to influence and change things for the better. everything was for the security of the state. it is clear that at all times the good of the state was utmost for him. he was a patriot and a gentleman. responsibility was prominent in every line and word he wrote. his concept of responsibility in journalism was also for most and what he decided not to write.

i can attest to this personally that there were times when i knew as a commentator and a journalist zeev gave up on major scoops in following the journalistic prestige just in order to protect the security of the state of israel. the subject i was asked to speak on today is the challenges and opportunities in the year of 2010. i'm sure those few who knew and loved zeev like we do would like to hear what he would have said and i will hear what matters of the beginning such as 2010. it seems to me he would have quoted saying the wisdom will

increase. you are missed by all the fuss and even more so today. 2010 reflect shows us collection of opportunity as well as challenges. a variety of sweat and the opportunities. we are facing this allowance all around our borders -- tetralogy of sweat starting to loom over the horizon hamas and gaza, hezbollah and lebanon and the jihad, iran and so on the only

superpower on earth the agenda is overbuilt with both domestic and foreign strategic challenges and israel finds itself at the focal point of historic struggle on two levels. the challenges presented by nuclear, military proliferation and wrote and failing states and on another level we see islam now tufty date and tough struggle between the radicals. the consequences of this struggle on its two levels will shape the geopolitical landscape for the next decade.

i prefer to start with opportunities other than script and it was already set up the region that in the middle east the pessimist was an optimist experience. [laughter] i prefer the option of chilean observation that the pessimist sees the difficulty in every opportunity like the optimist sees the opportunity in every difficulty i prefer the churchill version attitude towards events. clearly opportunities here and i do believe that the israeli leadership is at the uppermost responsibility in trying to reach peace with our neighbors. both in order just to have it come to normalize the

neighborhood and also in the absence of agreements the risk of to to read reading into a vacuum then violence are significantly increased. but we have to identify and look honestly into the basic effects of our neighborhood. the middle east is not the midwest. neither western europe. we would love to have the canadians as our neighbors but you got them. [laughter] and we have to live with wherever -- a person cannot choose his parents and a nation cannot choose its neighbors. and we are living in a tough neighborhood. those of you, and i see here a few individuals served lifetime careers in the region is a

neighborhood where there is no mercy for the week, no second opportunity for those who cannot defend themselves. israel is strong in deterring, israel is the strongest nation 1,000 miles around. jerusalem but we are realistic and open. there will be no peace in the middle east before the other side of the neighbors and rivals will realize israel cannot be defeated by the use of force, cannot be attributed through terror and cannot be dragged through political naivete into diplomat tricks. those alternatives will be open.

they will choose it over making peace rate is only when a strong self-confidence israel will be ready out of the strength to stretch the arm to which peace and will find the same kind of attitude on the other side we will have peace. i say we have to stand firm on our 2 feet from open without a drop of self delusion that the realities of the neighborhood, but having one hand preferably the left hand looking for any window to find opportunity for peace while the other pointing finger to the trigger ready to pull it when it is ultimately an

accessory. the strong issues as well. we are trying to nurture the cohesive society, a strong sense of solidarity. we are navigating quite successfully through the economic crisis that is a major issue for the whole world. we are moving forward in culture and science and technology. israel is a super power in several areas of science and technology from a renewable energies the processing of water and nanotechnology. life sciences especially stem cells, medical devices, remote learning as well as