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Good afternoon. Our guest today was born in Chicago, Illinois, and indeed lived in the same suburb, Park Ridge, Illinois, that I did. So I'm told that it's the first time, in the 85th anniversary of this institution, that the presider and the speaker lived in the same community, namely, Park Ridge, Illinois. So I'd like a hand for Park Ridge, Illinois. (Laughter, applause.) She came to her current post in Washington along a path that included undergraduate studies at Wellesley; a JD from Yale Law School, where she met a fellow student named William Jefferson Clinton; then on to the faculty of the University of Arkansas Law School; national service, upon appointment by President Jimmy Carter, on the board of the Legal Services Commission; and 12 years as first lady of Arkansas. On November 7 th, 2000, she was the first First Lady to ever be elected to the U.S. Senate and is the first New Yorker to serve on the Armed Services Committee. In that connection, in 2004, she was the only senator to be asked by the Department of Defense to join the Transformation Advisory Group of the Joint Forces Command. As first lady, as you all know, she traveled broadly. And perhaps the most memorable trip and speech was at the UN World Conference for Women in Beijing, China. As a senator, she has traveled twice to Iraq, Afghanistan, Pakistan and Kuwait on fact-finding trips, as well as in more than a half-dozen other countries around the world. If I were to pick only one indication of how highly regarded Senator Clinton is by her New York constituents, I would cite her favorability rating of 65 percent on the job she's doing, which is about as high as these numbers ever get in these politically polarized times. Hillary Clinton is the author of a number of very best-selling books, including her autobiography, "Living History," and "It Takes a Village and Other Lessons Children Teach Us." Hillary, your extraordinary track record on yours an author is the envy of some of the rest of us struggling authors. (Soft laughter.) In this connection, I asked Chairman Greenspan recently how he explained what why he got an advance on his book that was over 80 times what I got on my last book. "Pete," he said, very dryly, "it is really rather simple. It is yet one more example of how well the market really works." (Laughter.) Hillary, if I were to ask you that question, I'm sure you would have a more benign and politic explanation. (Soft laughter.) We will all begin with a statement by the senator, which will be followed by questions from the floor. This meeting will be on the record and webcast live on the Council's website, www.cfr.org. And before giving the podium to Senator Clinton, I would ask you to turn off all your electronic devices, except for your hearing aids and pacemakers. (laughter)s Richard Haass is prone to say. Senator Clinton, it's a great honor to welcome you back again to the Council on Foreign Relations, which, I might add, like you, is headquartered in New York. Senator Clinton. (Applause.) Thank you, Pete. Thank you very much. Well, it is a great privilege and honor to be back here at the Council. And I want to thank Pete for that kind introduction. It's another "small world" story. I had no idea he'd ever lived in Park Ridge, Illinois. And I want to congratulate you, Pete, on the recent renaming of the Institute for International Economics in your honor. That's a great tribute to the wonderful service that you have provided to the public over many years at the Council and government and now at what will be known as the Peterson Institute. I last spoke here in December 2003. Richard Haass was just settling into his new job. Saddam Hussein had been captured the weekend before. At that time, I advanced the idea espoused by the Council that American internationalism is essential in the service of American interests. Three years later, the Council is flourishing under Richard's leadership. I cannot say the same about our foreign policy. I return today one week before an historic midterm election to argue with even greater urgency that our country desperately needs a foreign policy built on bipartisan consensus and executed with non-partisan competence. When the votes are counted, the White House and the Congress must work together to forge that policy and ensure its execution. You all know the litany of threats and challenges: the metastasizing threat of terrorist networks, recruiting troops, setting up training camps, amassing weapons; a regime in North Korea openly testing missiles and nuclear weapons; an activist, expansionist Iran pursuing its own nuclear arsenal; a resurgent Taliban in Afghanistan; and an emerging civil war in Iraq. Russia and China pursuing their own interests, often at odds with such global imperatives as nuclear nonproliferation and ending genocide in Darfur. Oil has never been more important in funding unstable, anti-American governments, and yet we have failed to make the investments necessary to move more rapidly to alternative fuels, a policy that is now as important to our national security and our Mideast strategy as to our economy and environment. The lost opportunities of the years since September 11 th are the stuff of tragedy. Remember the people rallying in sympathy on the streets of Tehran, the famous headline: "We are all Americans now." Five years later, much of the world wonders what America is now. As we face this landscape of failure and disorder, nothing is more urgent than for us to begin again to rebuild a bipartisan consensus to ensure our interests, increase our security and advance our values. It could well start with what our Founders had in mind when they pledged a decent respect for the opinions of mankind in the Declaration of Independence. I think it's fair to say we are now all internationalists and we are all realists. This administration's choices were false ones. Internationalism versus unilateralism; realism versus idealism. is there really any argument that America must remain a preeminent leader for peace and freedom, and yet we must be more willing to work in concert with other nations and international institutions to reach common goals? The American character is both idealistic and realistic. Why can't our government reflect that? I want to suggest three principles I believe should underlie a bipartisan consensus on national security and consider how they apply to some of the most difficult challenges we face. First and most obviously, we must, by word and deed, renew internationalism for a new century. We did not face World War II alone, we did not face the Cold War alone and we cannot face the global terrorist threat or other profound challenges alone, either. A terrorist cell may recruit in Southeast Asia, terrorist threat or other profound challenges alone, either. A terrorist cell may recruit in Southeast Asia, train in Central Asia, find funds in the Middle East and plan attacks in the U.S. or Europe. We can stop a deadly disease anywhere along the line as it hopscotches from continent to continent or we can wait until it arrives at our own doors. We can deal with climate change together now or excuse its calamitous consequences later. We can turn our back on international institutions or we can modernize and revitalize them, and when needed, get about the hard work of creating new ones. Second, we must value diplomacy as well as a strong military. We should not hesitate to engage in the world's most difficult conflicts on the diplomatic front. We cannot leave the Middle East to solve itself, or avoid direct talks with North Korea. When faced with an existential challenge to the life of our nation, President Kennedy said, "Let us never negotiate from fear, but let us never fear to negotiate." Direct negotiations are not a sign of weakness, they're a sign of leadership. Third, our foreign policy must blend both idealism and realism in the service of American interests. If there's one idea that has been floated about over the last six years that I would like to see debunked, with all due respect to some of the political scientists in the room, it is this false choice between realism and idealism. Is it realist or idealist to stop nuclear proliferation? Is it realist or idealist to come together on global warming? Is it realist or idealist to help developing nations educate their children, fight diseases and grow their economies? And is it realist or idealist to believe we must turn around the ideology underpinning terrorism? Strategies with respect to all of the problems we face require a mix of both, and each requires building that consensus approach that we then have to do the hard work of bringing others to our side. We cannot achieve any of the solutions that we need to be pursuing without American leadership, and we cannot achieve any of them alone. American foreign policy exists to maintain our security and serve our national interests. And in an increasingly interdependent world, it is in our interests to stand for human rights, to promote religious freedom, democracy, women's rights, social justice, and economic empowerment. But reality informs us we cannot force others. nations and peoples. to accept those values. We have to support those who embrace them and lead by example. At our best, Americans have always lived in a creative tension between idealism and realism; between our clear-eyed insistence on seeing the world as it actually is and our deeply held desire to remake the world as it ought to be. This administration has abandoned that tension for a simplistic division of the world into good and evil. They refuse to talk to anyone on the evil side. And some have called that idealistic. I call it dangerously unrealistic. At the end of the day, you have to question whether this administration has led with our values or used our values as a cloak to justify its ideology and unilateralism. Something is wrong when our pursuit of idealistic goals has turned a good portion of the world against us. Earlier this year, a progressive and conservative, Anatol Lieven and John Hulsman, wrote a book together called Ethical Realism. You don't have to accept all of their policy proposals to learn something from the common ground they found. They remind us of a time when America's leading Protestant theologian, Reinhold Niebuhr, cautioned us against believing that God was on our side; of a time when President Dwight David Eisenhower rejected rhetoric about a preemptive attack on the Soviet Union by asking, among other things, the practical question of how we would occupy the vast country if we won; of a time when the editor of Foreign Affairs invited a little-known diplomat named George Kennan to publish an article, an anonymous article, that established the bipartisan foundation of our Cold War foreign policy. In every era we wrestle with how to reconcile the pragmatic with the moral elements of our strength and what we choose to do with both. We got it right, mostly, during the Cold War, when realists and idealists together built the institutions and policies serving our interests and our values. We got it drastically wrong when a small group of ideologues decided we didn't need those institutions or alliances or diplomacy or even the respect of other nations. These principles would force a sea change from the current administration's policies. If you look at the dangerous situations we face today in Iraq, Afghanistan, Iran, North Korea, the proliferation of deadly weapons, the prosecution of the war on terror, you will see the same mistakes repeated over and over: the mistaken belief that alliances, international institutionsll of that is irrelevant to American interests; the mistaken belief that diplomacy, even if backed by force, is synonymous with weakness; the mistaken belief that our military's experience in war planning, our intelligence community's objective analysis, and our diplomats' experience in negotiations could be dismissed and replaced with ideological, wishful thinking; and in Iraq, the mistake of waging a preemptive war based on faulty intelligence, fanciful scenarios and bluster has turned out to be a one-time-only doctrine with no deterrent effect. We need to return to patient diplomacy backed by military strength and informed by American values. Let me start with Iraq because in human terms this has been a horrible month. We mourn the loss of more than 100 American service members and many hundreds more Iraqis. In political terms, we have finally reached the point of complete absurdity. The administration announces it will propose timetables or benchmarks and the Iraqi prime minister denounces them. President Bush says we are adjusting tactics, but Secretary Rumsfeld insists we are staying the course. The administration tells Iran and Syria they're responsible for helping to keep the peace, but won't talk with them about how to do it. We continue to deny evident reality proceeding with few or no allies and precious little direct communication with people who matter. No wonder the American people think we are adrift. We need a fundamental change in course, and I believe there are three basic parts to that. First, we need to press consistently, privately and publicly the Iraqis to become serious about achieving an internal reconciliation and political solution and present real consequences for their failing to do so. Only the Iraqi government can take action to create the conditions for a political settlement. Instead, the government in recent days seems to be going out of its way to rebuff our efforts to move in that direction. American credibility is held hostage by an Iraqi government that will not fulfill its pledge to seek a political resolution of the rights and roles of the Sunni minority and to determine how oil revenue is allocated. For several years, actually since the summer of 2003, I have pushed the idea that we should establish in Iraq an oil trust guaranteeing that every individual Iraqi would share part of the country's oil wealth every year. Instead, the oil distribution remains unsettled. Sunnis have no incentive to stop fighting. Kurds have no incentive to operate within Iraq, and Shi'ites have no incentive to stop participating in militias and internecine conflict. Guaranteeing every Iraqi a share of the oil revenues at the individual level is one way to try to begin to move beyond the impasse and to give Iraqis some reason to believe, number one, we aren't there for oil, we aren't there to support big oil, we aren't there to line the pockets of the new Iraqi elite and fatten their Swiss bank accounts and to give the Iraqis also some reason to feel positive about their national government. Second, we do need what many of us have been calling for now for months, even years at this point: a public international conference of the parties in the region. the Turks, the Saudis, Egyptians, the Emirates, the Jordanians, but also the Syrians and Iranians. We need to put everybody on the record as to whether they will make public commitments to respect Iraq's sovereignty and to further the task of Iraq's stability. Instead of fearing to negotiate, we should fear what happens if we never attempt to negotiate a regional commitment to a stable, unified Iraq. And also, Iraq's neighbors should fear that as well. They would bear the brunt of an all-out civil war, including millions of fleeing refugees, and new bases for regional terrorist operations. And thirdly, we do need to begin, I had hoped by the end of this year, a phased redeployment. I joined with Senators Levin and Reed and the Democratic leadership in the Senate and the House in proposing a phased redeployment of U.S. troops from Iraq during this year, 2006, that would also include a change in the mission of U.S. forces to one of training and supporting Iraqi troops and targeting counterterrorism, as well as protecting American operations and personnel and facilities. You know, Richard Holbrooke in his recent article is right; we really have three choices. We muddle along, not necessarily going forward, but as my chairman on the Armed Services Committee, John Warner, has said, moving sideways. We begin some kind of sensible, prudent de-escalation, or we escalate. And we can't do any of those in the absence of either the full-hearted attempt on the political reconciliation front, the oil allocation front and the regional parties being involved. But however we proceed, it is time to insist that the Iraqis take the lead and demonstrate to the Iraqi people first and foremost that the United States will not be in Iraq permanently, that American troops will not be put in the crossfire of a civil war. Phased redeployment will get the attention of the Iraqi leadership. In my meetings with members of that leadership, there has been a mixed message, at best. "We are a sovereign nation," they tell me. "We make decisions now, and by the way, we're not ready for you to leave." It is time for us to force the Iraqi government to face up to that contradiction and to begin to do more to resolve their own political situation and make it clear that American forces will not be there to prop up their denial and refusal to deal with the problems at hand. Now we talk a great deal, as we must, about Iraq, and not enough about Afghanistan, where our failures have squandered much of what our military accomplished and limited the reach and positive impact of President Karzai's moderate democratic government. Three years ago, when I was here, I told the Council about meeting an American soldier in Afghanistan who greeted me with these words: "Welcome to the forgotten front line in the war on terror." Well, today we have senior NATO military officials predicting that the country could fall back to the Taliban in six months. Use of suicide bombings and other terror tactics is on the rise. Afghanistan is now responsible for 87 percent of the world's opium production. And a quote making the rounds in Kabul sums the situation up nicely. A Taliban commander supposedly boasted to his captors that "you have watches, but we have time." To prove him wrong, we need to give our Afghan allies time. Yet all we seem to do is check our watches. Convinced first that we had all the answers, and then that we could subcontract out counterinsurgency to our allies, we seem to have gone on autopilot. Inattention and false optimism are not only endangering all that we accomplish there, they are costing lives. It is a great and brave thing that our allies from Canada, Britain, the Netherlands and other NATO countries have done by sending troops to Afghanistan. But Afghanistan and NATO need us as a leading partner to help with security, to root out corruption, to find alternatives to opium and to improve the security situation with Pakistan. We know the general area where the leaders of the Taliban and probably the leaders of al Qaeda are. It is a failure of our policies on all fronts that five years later, they are sending waves of fighters into Afghanistan from their safe havens. The stakes are unbearably high for Afghanistan, for Pakistan, for the countries, northern neighbors in Central Asia, for the reach of al Qaeda and for our own credibility and leadership. We should begin by responding to our NATO commanders' call for more troops in Afghanistan, where on a per-capita basis we have spent 25 times less than we spent in Bosnia and deployed one-fiftieth as many troops. In Iran as well, this administration outsourced its policy to the British, the French and the Germans. Meanwhile, the Iranian so-called moderates we ignored were pushed out of power and the extremists went merrily forward. Now we are left hoping that those same moderates we wouldn't talk to can regain control. Hope is not a policy. U.S. policy must be unequivocal. Iran must not build or acquire nuclear weapons. Iran's president has made a series of incendiary, outrageous comments, questioning the Holocaust, calling for Israel to be wiped off the map. We know that a nuclear Iran poses a direct threat to its neighbors in the region, with Israel as its chief target. It also poses a significant threat to the United States by combining access to nuclear materials and technology with support for terrorists, whose aim is to attack and kill Americans. We have to keep all options on the table, including being ready to talk directly to Iranians should the right opportunity present itself. Direct talks, if they do nothing else, lets you assess who's making decisions, what their stated and unstated goals might be. And willingness to talk sends two very important messages: first, to the Iranian people that our quarrel is with their leaders, not with them; and second, to the international community that we are pursuing every available peaceful avenue to prevent Iran from becoming a nuclear power. We also need to be willing to use the tools available to us in working with the Israelis and the Palestinians. In part because the administration chose to disengage at crucial moments, we are now at a very discouraging place. There is no reliable partner on the Palestinian side and still no willingness to take a clear stand of acceptance toward Israel. In the aftermath of the Palestinian elections that gave rise to Hamas, we need to continue to insist that any Palestinian government recognize Israel's right to exist and cease terrorism. However, there are reports from the region of discussions between the Israeli government and President Abbas and of a possible dissolution of the Hamas government. As events unfold, we need to be prepared, in close coordination with our Israeli ally, to resume America's indispensable role in finding a just and lasting resolution. In North Korea, we got some potentially good news this morning. This administration has adopted a narrow and, you know, sort of self-reinforcing world view that doesn't look at the facts and that rules out some of our best tools for defusing threats before they threaten us. We had six years of policy with no carrots, no sticks and only bad results, and we basically left negotiations to the Chinese and left Kim Jong Il home alone with no inspectors watching his plutonium. Now we have fewer options and a much more difficult task. We have U.N. sanctions, though they're not as tough as I would want; we need to enforce them. We have the six-party talks, and apparently, based on what we heard this morning after intensive discussions that included direct talks between Ambassador Chris Hill and the North Koreans, we are going to revive the six-party process. We can't take anything off the table. We've had troops in South Korea for 50 years for a reason. But I have thought for a long time we made a mistake not talking directly to North Korea. North Korea's neighbors have long supported direct U.S.-North Korean talks on security matters. In the past, such engagement has prevented the development of plutonium bombs and the testing of long-range missiles. Kim Jong Il needs to hear a single, unified message: choose between nuclear weapons and aid from South Korea, China and the international community; you cannot have both. Right now, we seem to be relying. too much for my taste. on China's goodwill to restrain North Korea. At the end of the day, Pyongyang will have to hear this message directly from us. The common strand that draws these crises together is the threat that sophisticated terrorists, operating out of Afghanistan or Iraq or somewhere else, will be able to acquire nuclear weapons or materials. For 40 years, the U.S. provided bipartisan leadership in building a network of treaties and expectations that kept global nuclear ambitions in check. Countries like Brazil and Argentina and South Africa and Kazakhstan and Ukraine and Belarus elected not to develop nuclear weapons or even gave up weapons they had, giving terrorists fewer opportunities as a result. Today we face intense extremist efforts to buy or steal either a bomb or the material to make one, and it doesn't have to be very big. We also are seeing increased interest in peaceful uses of nuclear power on the part of many legitimate states. In response, we need to modernize the nonproliferation treaties and related agreements. Last year we had the chance to start talking about what a stronger regime would look like at the Non- Proliferation Treaty Review Conference. But while other countries sent foreign ministers or senior ambassadors, the administration sent a mid-level official, a clear signal it just wasn't interested. Our influence has already been eroded by our abandonment of the Comprehensive Test Ban Treaty, and the administration's interest in developing two new small nuclear weapons, including the robust nuclear earth-penetrator, the so-called bunker-buster. The wholesale abandonment of nonproliferation efforts is a serious mistake. The more countries that have fissile material, the more opportunities for it to go astray. American experts, like those working at the Council, have made innovative proposals for a 21 st century NPT. When the Senate resumes, I'll be asking my colleagues who chair the Armed Services and Foreign Relations Committees to hold joint hearings on the future of a nonproliferation policy with the aim of creating a new blueprint for our shared security. And we have to increase our efforts on preventing terrorist groups from obtaining nuclear weapons or materials. You know, Sam Nunn and Ted Turner, through the Nuclear Threat Initiative, have said over and over again we aren't doing enough to get every last bit of weapons-grade material under safeguard. I will be introducing a bill, based on their ideas, which would create a senior White House adviser for countering nuclear terrorism; require a yearly report that would specify every site with nuclear material or weapons. And we would do what we have to do working in concert with other nations to try to make that material as safe as it can be. Now, here in New York we don't need anyone to tell us we're in a war against terrorists who seek to do us harm. Strategically, it is also true that the world is watching us. We are unlikely to make headway facing the challenges that I've discussed, and many others, if we are seen as losing ground to the terrorists. On September 12 th, 2001, when the Bush administration could count on the goodwill of the entire world, they had strong support from both parties and the determination of the American people to sacrifice for a common cause. That call to sacrifice never came. Five years later, the administration has failed to transform our national security institutions. The people who promised less government have, instead, given us the largest and least competent government we've ever had. As a result, our frontline fighters in the war against terrorists often lack the tools they need. The administration has ordered our military to fulfill missions for which it is not sized, equipped or funded. I've joined with other Democrats and Republicans in proposing that we expand the Army by 80,000 troops, that we move faster to expand the Special Forces, and do a better job of training and equipping the National Guard and Reserves. The administration has failed embarrassingly when it comes to homeland security. Last week the Council's own Stephen Flynn awarded them three D's or F's and four C's out of nine grades on homeland security. That's not good enough. The administration has failed to create a culture of prevention within the FBI. Last December, the 9/11 commission gave administration efforts at the FBI a C, and said, "Unless there is improvement within a reasonable period of time, Congress will have to look at alternatives." The FBI still has only 33 Arabic-speaking agents, and none is assigned to counter terrorism. The agency's top counterterrorism job has turned over six times in five years. And we have yet to see the completion of reform in the intelligence community and the restoration of morale. The 9/11 commission package envisioned a Director of National Intelligence who actually directed the intelligence community. We don't have that. We're still living in a need-to-know culture instead of a need-to-share one. The administration's supposed new standards on interrogation and torture have left our CIA personnel, and even our military, unsure of what is legal to do, what they're authorized to do, what their country wants them to do. Now, during the Cuban missile crisis, President Kennedy had at his side Llewellyn Thompson, former ambassador to Moscow, who understood the Soviets and even lived with Premiere Khrushchev. We don't have that expertise any longer inside our government when it comes to the threats we face from Islamic extremism. When we need to look beyond our intelligence community, as we did during the Cold War, we challenged a generation of universities and students to serve their country. We should do the same today. Learn the languages that we need, understand the cultures of the societies where our biggest threats are incubating. Our military commanders make a point of telling us we cannot win the war against terrorism through military means alone. As the new Army and Marine manual counterinsurgency puts it, "the best weapons for counterinsurgency do not shoot." Pete said when he introduced me that I work as a member of the U.S. Joint Forces Command Transformation Advisory Group. One of the common themes of our work there is that we don't have enough civilian capacity to manage pre- and post-crisis situations. The world has changed, but our civilian institutions and preparation for public service has not kept up. I recently introduced legislation, along with Senator Specter, to create public service academy, a West Point for public service, that would send a message about the importance of civilian preparedness and response at home and abroad. It could become a place where we teach critical languages and put a high priority on learning about those cultures we so poorly understand today. You know, finally it comes down to whether we can win the war on terror, not just the battles, and that requires we face squarely our long-term challenge of putting the U.S. on the side of dignity and progress and making it clear we do oppose tyranny and violations of human rights. And in that fight, our only realistic weapons are our values and ideals. We need to start by addressing the troubled conditions terrorists seek out. I have focused on support for global education because I think it provides an alternative in places where the only schools are also incubators of religiously fueled extremism, and it returns immediate health and social gains and reinforces our basic value of equality. I introduced legislation for our country to take the lead in education for all to aim at giving every child in the world access at least to primary education by 2015. We've done a good job talking about democracy, but we sure haven't done a comparable good job in promoting the long-term efforts that actually build institutions after the elections are over and the international monitors have gone home. We have to give citizens more tools, and we should be talking more about the successes of this administration. you know, the relief efforts after the tsunami and the earthquake in Pakistan, the global AIDS program, the Millennium Challenge Grants. They're seldom emphasized, and they often seem to run counter to the basic ideological arguments the administration is making. This month, I was one of 34 members of the Senate to vote against President Bush's Military Commissions Act. On the floor of the Senate, I recounted a choice that General George Washington made 230 years ago. New York City and Long Island had been captured. Washington and the Continental Army had retreated across New Jersey to Pennsylvania suffering tremendous casualties. Here in New York, American prisoners, often held in the hulls of boats, anchored in the harbor off of Brooklyn were suffering unspeakably at the hands of the British. The cause of American independence was in doubt. Then, Washington won the Battle of Trenton capturing nearly 1,000 prisoners of war, and he had to decide what to do with them. The order he gave should still speak to us. "Treat them with humanity and let them have no reason to complain of our copying the brutal example of the British Army in their treatment of our unfortunate brethren." America was born out of faith and certain basic principles and out of an understanding that it matters deeply; in fact it matters for our survival, that we hue to those principles at home and in the eyes of the world. There can be no mercy for those who perpetrated 9/11 and other crimes against humanity, but we have to pursue justice in a way that lifts up our values, the rule of law and sets an example we can point to with pride, not shame. That is an utterly realistic brand of idealism that has been with us since our beginnings. The administration's experiment has failed. We cannot go backwards; we must go forward building that new consensus and risking a new bipartisanship. I cannot speak, of course, for the administration, but I know that my Democratic colleagues are ready to do so. Thank you very much. (Applause.)