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I am supposed to get this thing started but there is a hell of a conversation going on up here and I don't want you to pay any attention to it. Good morning I am Sidney Harman and it's my pleasure to introduce the morning. I do so by reminding you of quite impressive comment made some decades ago about the by the wonderful poet Robert Frost who said that the human mind is an astonishing instrument It turns on automatically when we get out of bed in the morning and it does not turn off until we get to the office. Robert Frost never met either of these two guys. Theirs hasn't turned off since the day of their birth. Those of you who were here a year ago heard Karl Rove in what I recall is an absolutely stunning presentation. Weaving all through material of great consequence but weaving through with wit, with knowledge and with remarkable tolerance with those among us who didn't agree with him for a damn minute. The guy is indisputably one of the brilliant minds and great charmers of the earth so be careful with him this morning. He will undoubtedly seduce you as he has time and again seduced me. A few weeks ago at a book party at Karl's home for Walter's absolutely magnificent new treatise on Einstein, we were chatting and this guy charmed me by telling me that Walter had suggested that I had something to do with the origin of the book. Reminded me that Walter had come to my office some years ago destitute, penniless, desperate for employment and thus he waited for me I kept him waiting a few hours of course. He saw hanging on the wall a precious gift to me by my precious Jane, a letter by Albert Einstein to a student who had written complaining of the dismal treatment. He saw Einstein receiving from the journalists of the day. And Einstein's reply translates essentially into this - be of good spirit my boy. Dogs have been baying at the moon for eons the moon is still there. I suggested to Karl Rove that he ought to pay attention to that and yes it was pandering of a sort but it's inescapable in the presence of really one of the significant and dominant intellects of our day. He and our resident polymath Walter Isaacson are about to engage in a conversation. And I am going to get the hell out of the way. Thank you Sidney thank you very much. Now I think that's the point of the ideas festival we are having like instead of a poetry slam it's a charm slam where you get Bill Clinton and Karl Rove to see who can charm the people on the other side most easily. So yeah I am betting on Clinton, my money is on Clinton, he was pretty good. But I do thank you for coming. I know it's a long trip and I know you are not exactly coming into the heart of the base, or whatever here Aspen and it's very kind of you to come. So yesterday I am driving in and I had come over Freemont Pass and our Independence Pass and I on the way I stopped for a cup of coffee in Twin Lakes and I walk in at the Nordic the Nordic inn I am a Nordic, I am a Norwegian, so anything that says Scandinavian the Nordic peoples - we stick together. So, I go in and try and get a cup of decaf and the owner comes out, and he says, "You won't remember me, my name is Charles Grady". He said, "I was the last Democrat State Representative from East Dallas, before you all ran us out. Glad it came to Pretcon County. And we had a - kind conversation about mutual friends, most of whom were defeated Democratic politicians in Texas. So I said, well he is making the while he is having somebody roasted up some decaf, I said, can I use your facility? He says, "Yeah right around there," so I go use the facilities, I am coming back. There is guy at the front desk there, and Grady is telling him he says, you won't believe who is here, he said, Karl Rove is here. The guy says, "I would like to hit that son of a bitch". And Grady says, "He is right behind you." I knew I was getting close to Aspen. So I get checked in last night and I am still on Washington time, so we got dinner at the Malik's and its going to be a little while. So I go to the down the front desk to see if they got a snack bar you know, someplace you get a candy bar or something and of course they don't. And I got the $9 little thing, one chip, one thing, I don't know. So I am walking down, there is guy in the Land Rover the very expensive Land Rover. It has got the car full of people, takes one look at me, scowl on his face and says, "Go home". So, as he was driving off, I yelled at him, I am. I was born in Denver and the first place I have ever lived is about 20 miles away from your Cocomo well it's was no longer here. It's Cocomo Colorado, its south of the Climax Mine, or it should be north of the Climax mine, it's now about 200 feet under the surface of the tailing spot. I wanted to run after the guy and ask when the hell did you come to Aspen, I was here in 1951. Who would say, go home yourself, go back to whatever, wealthy enclave on the far eastern coast of the United States, or far western coast, you fly from on your jet. Unfortunately I didn't figure that all out until afterwards I mean I just didn't I am born here, don't be so mean to me. Yeah, well you saved it for us; in fact your dad was a geologist here. Rove when you grew up in this area; tell us a little bit about your connecting area and your father. Yeah. My Dad was a hard rock geologist at Colorado School of Mines, and started off working Uranium projects for the U. S. Geological Survey when he was in school, on the western slope out here in Frontera and Grand Junction and down in the San Juans. And then, when I was grown up we lived here until I was ten, about nine and a half or ten and then moved to another we lived in Cocomo, Golden on Nevada and then we moved to the great metropolitan area of Sparks, Nevada. But he was a hard rock geologist and spent a lot of his time here. Well, let's leap right in; when you were talking to Colin Powell you heard what he said here. Next year, are we going to be with rolling troops from Iraq and redefining that mission? My sense is Yes, we will be redefining the mission because the goal of the surge was to get us to a place where we could redefine the mission. To take it to something close toward Baker Hamilton says which is you know, "Our goal is to be in a place where the United State's Principle role is to help protect the territorial integrity of Iraq, to hunt down Al-Qaeda and Jihadist elements, to assist and train the Iraqi army and to provide force protection to our assets there. And the object is how do you get there? And we were getting there in 2005 and 2006 until the Samarra bombing. In which set off a way of a sectarian violence that plunged Baghdad into disarray and made it impossible for the government to take steps towards to reconciliation and even to control its own territory. So the surge is in effort to get to a place it not a the goal is not an infinite number of American troops there for an infinite number of years. The goal is to get the country stabilized in place where we can begin bringing U.S. combat troops home and reconfigure into a different mission. So, even if they don't have a good political stability under the Maliki Government, it's a bad time to say, "Let's focus on the Baker Hamilton mission, which would mean perhaps what one-third of the troops. Well, - look, first of all, Baker Hamilton; read the report carefully - Page 72 for example says, "We could support a surge of troops if it was necessary and thought by the Commanders on the ground to be prudent to stabilize Baghdad." Because the Baker Hamilton Commission recognizes that, you cannot have the kind of stability we want in Iraq, if the capital city that's one quarter of the population is unstable, and the purpose of surge was to do two things, one is to take Anbar which six months ago people were declaring was lost, and to make it not lost, and to stabilize Baghdad, so that the government who had the space with which - in which it could take steps for political reconciliation. And you know, the troops have now been there for three weeks, all of them have been there for three weeks. The major operations have been under way for two weeks we got a lot of time yet to go before we know what is going to happen. Petraeus says September is the point at which he think he will have the first inkling of what the long term ramifications are, but we know - we already know a couple of things, we know, first of all that the level of violence against our troops in the level of IEDs - BIG IEDs going off against the civilians is up, we know that the sectarian deaths are down, whether those are long term trends, or what the reactions is going to be in August or September, October, we have yet to see. But they were starting to see some things. And Anbar is probably were receiving most remarkable turn around, who would have thought six months ago that Anbar which was considered to be lost, we now see the vast majority of the Sunni tribes, joining with the central government of Baghdad, in an effort called the awakening, and what's the Sunni tribes are staffing up the police and providing personnel for the military also in Anbar and outside Anbar in order to confront the foreign fighters in their midst. You know, I was reading Secretary Bob Gates and then President Bush's July 4 speech, both of which seemed to be pretty clear that we are now thinking what is the post sort of strategy. What was the President, what was his main message on July 4, because it got many different reporting on this ? Well then, look, he has been saying this saying about, our goal is not to have troops there indefinitely in the combat mission that we are in today, but to get to a point where our mission, our foot print is smaller, and our mission is been redefined. He has been saying that for months, but July 4 attempt was to say on a day where not too many players where out there, at a international guard base in in West Virginia, to say in essence that and instead they picked up on the paragraph that said there will be lot more sacrifice called for the months ahead as we could - But the main point is that we actually will be drawing troops there by next year probably. Well, aspirationally our goal is to put it into different place; I am not going to say when the date is that American troops - troop levels begin to go down. But the the goal is to do exactly that - to put ourselves in a place where the US combat foot print is smaller, I mean the idea is the surge doesn't last indefinitely, the object of the surge is to clear and allow the Iraqis the time to get everything in their to properly hold and to do enough damage to the infrastructure of the enemy, that it is hard for the enemy to come back. And you know - I am sorry, who is the enemy specifically Al Qaeda - You got you got essentially three, you got Al-Qaeda in Iraq which is, our intelligence is that, 80 to 90 percent of the bombs going off are AQI. So the object is to get after them in order to deal with that, then there are Sunni insurgencies there at war with the government, and the object is to take on both. Now some of those groups that had problems with the government like the 1920 brigade, have now said ok, there is now a political space, - we can now operate in, so we will now turn on those that are not willing to play inside that political space. And the third frankly are just criminal elements. I mean there is you know, there is a lot of some of what we see over there is just, you know okay. There is a middle class Iraqi, lets go grab them, and hold them ransom or there is a enterprise under way, lets go steal it, there is- Do we have a fourth problem, which is all the wacky Shia militia, who are extremist Shia? Well I had put them on that, in the third group, because, I mean, from the beginning, one the interesting things is this began with Maliki coming to the President in Amman, Jordan saying, I need help in order to take on the Shia Militia and the and the foreign fighters, the Shia Militia because the absence of what he calls the one gun policy, there ought to be one centralized security force in the country, not competing armies of private Militias. This is making it difficult for us to establish control, create political reconciliation and take on foreign fighters whose objective is the end of regime - If you are Maliki's campaign manager, may be you should be, because ha is having the promise, are you sure we can get his - he can get his act together. Well first of all, let's let's be clear about this. How long is this guy been in power, one year and less than two months and They could have invaded Iraq by then no I mean it's a while. Well, but he is been in - he is been in well may be, but he is in a country which does not know democracy and has no democratic tradition. So you are saying, yes you have faith in Maliki. Yeah, you know you got to, if you - if otherwise your option is to say we should either just walk away and let whatever happen, happen or we ought to do, what was done during the Vietnam war, when you know the US government in the mid 60s expressed this satisfaction with leadership in Vietnam and - and unilaterally made the decision of replacing an elected government. And I am not sure we necessarily - want to go down on that path again. Immigration, you ended last year with the great preparation, I think it was the need for an immigration reform comprehensive and why that it is at the soul of - this country is about - what happened? Politics got on the way it is still - it seem more important than we do this and we better as a country face up to the problem that we have. And look, understand the strong emotions about this. Understand the lot of people wake up and say I am worried about America not being in America. I understand people who say I don't like people who came here illegally and why should they get something. And I know people saying we should not repeat the mistakes in 1986. When we passed a immigration reform law that basically said if you came here and you are illegal and you want to be a citizen, raise your right hand. You know what happened between last year and this is that the McCain-Kennedy got defeated and then some of the opponents of McCain-Kennedy took a sober look after the election and said is this a problem that we need to confront. And if so, what is it that we most care about in this battle and some of those opponents came forward in effects - ironically you know congress is a formal institution but lot of this happens informally part of this sort of sounding each other out back and forth took place during a hunting trip in which two of the opponents of it said we were opposed, we were opposed to McCain-Kennedy because we were worried about the future flow. How do you remove the magnet - the attraction for future flow of illegal immigrants? You can't remove it entirely but having a temporary work of program you can only remove the magnet by making it impossible for somebody who is illegal to get hired. So we are willing to engage in discussions about a grand compromise in which we get border security, temporary worker, resolving the status of the 12 million or 8 million, whatever the number is, and as long as a component that is employing verification in a way that makes it likely that we will not have this repeated again 10 years from now. And thus began all the discussions about the - that ended up in the grand bargain in which you know for months Secretary Chertoff and Secretary Gutierrez et quietly with a wide variety of people on the hill democrats and republicans just to had to - basically serve as honest brokers, provide facts, increase the conservation and we came together with this piece of legislation. They did and we backed them in doing so. And frankly you know you can take any single element of this thing and be unhappy about it. But taken altogether as a package, it put America in a very positive new direction on immigration. First of all it locked into place these things that were doing up all the security, which I want to come back to in a minute. Secondly, it created the temporary worker program where willing workers could be matched with willing employers for jobs that Americans are not doing. And believe me; we are getting tougher on the border, so this is getting harder for people to get here. And as a result we are seeing some impact on our labor market. In the early nineties as I said last year, you could get yourself a coyote for a 100 or 150 bucks to get you cross the Texas-Mexico border. Today it is now $2500. Last year it was between a range of about 1500 and I think 2200 and it's continued to escalate. October of 06', at Count Texas, in Oklahoma for Ag labor reporting statistics as one market and they give an annual number October - over October, October of 2006 over October of 2005. There are 23 percent fewer farm labors in Oklahoma and Texas than they were in 2005. And wages were 7 percent higher. Now, I don't think there are one quarter fewer farm workers because we are growing one forth one quarter of fewer cows and crops. It's getting that much harder to get across the border, so willing worker, match with the willing employer and temporary worker program. Employer verification, which was the which was one of the elements that allowed us to bring across people across from no to yes and what employer verification said was look, we have a lot of very good corporate citizens in America trying to do the right thing. But it is impossible for us to do this with a system we now have in place. A woman came to me with a landscape of a company and said I had 12 or 13 people here - don't count on me to be an expert in document fraud and we saw a clear example of this in the Swift meat packing plant case. One of the things that we done as administration is we said we are going to have a policy of deliberately after people who knowingly hire illegal aliens. Now Swift did not knowingly hire illegal aliens but we stumbled on to the back end of a process that was involved in providing fraudulent documents to people to get a job with Swift. Now Swift was a good corporate citizen. Then an HR department that asked the right questions they had lawyers advising them so they went up right to the line, they did every thing they possibly could to advertise widely for workers as broadly as possible and give training programs and so forth, so that there was no excuse for it somebody wanted a job that paid 16 18 20 bucks an hour and little towns across the America where they had plants - they had a chance to apply. And yet, we went in and went through five of their plans, between a quarter and 40 percent of their workers were illegal. And they were able to get jobs because they showed up, the driver's license, birth certificates and other documents which to the eye of a very highly trained Human Resources department look like legitimate documents. So the employee verification part of this was really, really important and then finally the issue of resolving the - the situation of the 12 million, we didn't repeat the mistake 86' which said, you know raise your hand, you are now citizen of the Estados Unidos. We said if you want to become the US citizen, you got to serve us. And the first thing we going to do is, we going to take your 10 finger prints and while you are sitting there, we are going to check those ten finger prints .This may surprise, you know how many finger print checks are done every day in America? On average 3.2 million. So doing a couple of 100,000 more fingerprint check because its all electronic, just put it on the pad, takes a picture, runs it against the database so that we can find out, did you do something bad while you be there. We going to give you a card and over the next two months we are going to then do more back round checks on you and if you then want to stay in the United States as a temporary worker, you pay a fine and a processing fee, and you pay an impact fee, fee to help relief, some of the local governments at the cost of health and education. You get the stay for four years. At the end of four years, if you want to stay another four years, you have to pay another fine and fee, you stay four more years. And then if you want to adjust your status and get in the line to get a green card, you have to go to a US council that's outside the United States, pay another processing fee to pay the whole cost of the whole project and then wait up to five years to get your green card in order to then become a citizen. During this whole process at the beginning, you have to demonstrate the you either have an English proficiency or you are involved in a class to help you learn, to read, write, speak English and at the end of the process before you could become the United State's citizen you have to show that you can read write and speak English and take a civics text that is more than where is the capital of the United States A. Washington, B. Buffalo, C. Aspen. Now, this was a good bill. It had flaws and I could point to you know there are things that we didn't liked or things that everybody didn't like but to put us on a rational course. It also did a couple of other things that were really important to the future of the country. We have an immigration system today that says there is a priority for you coming into the country, based on whether you are related to somebody already here. If you are an uncle or an aunt or a mom or a dad or a brother or sister, niece or nephew, you get more points and get a higher priority. This dial of the system away from that is to say that the priority is now on the three Es. You have education, employment history or English skills that would indicate that you would be a positive contribution to the society. We still kept family in there but rather than being dialed dominantly towards family, we moved it so that it was more towards - majority was now towards the three Es. The other thing we got is a system in which people who want to become US citizen wait for ever to become US citizen. And as part of the grand bargain we said that everybody who stand in the line today is going to be processed in the next eight years. Because some of those people who will have to wait 20 and 30 years to come into the United States legally for system continues as it was. Now, it's a good system, but it is - I really admit a contentious and enormously you know you know, its something that is deeply emotional to people. Now, I will also suggest to you that it is based on the lack of information about that the thing that scares them the most. And that is what is being done to secure our borders. I have heard an unusual experience a last couple of months going around the country doing some - mostly Republican Party things to sort of you know relieve the sentiment. You know a sort of a let them be heard about it and of course I always I have the ugly question about immigrations. So I got an - I want to participate in a little mental exercise with me. I want you to think about last year. And I want you to get fixed in your mind the number, of people that you think we apprehended at the border and return back outside the United States of America. Now I suspect that you are not the normal audience that I have been talking to recently about this so you might have this slightly different number but everybody get fixed on the number. Anybody want to suggest to me what your number is? 10,000 50,000 a million three, in fact one should go to slide - Karl has brought some power points. Look at the screens on each side. Let's go to let's go to slide 12. Last year we had - Is that up on the screen please? No its not, can you put it up on the screens there - alright. Last year we had a million 3, then we apprehended and we trying to cross the border. Nearly a million of them were Canadians and Mexicans who get apprehended and returned literally into the same day or within 24 hours. We also returned 280,000 people who had to go through some formal removal process. 95,000 of them had committed another crime. We put a special emphasis on seeking out aliens inside the United States who have committed a crime. So we got kicked out 95,000 of them. We got 81,000 who are OTMs, I love emigration link - OTMs are others than Mexicans - That's it's up on that screen there so don't worry about the other screen. I think that's best we are going to do. Is it? I draw your word picture. Don't worry about that - there are 81,000 - Sidney donated the visual system as well the audio system. There are other 81,000 that are OTMs - other than Mexicans. That's actually their official terming. Other than Mexican yeah yeah. Now the reason is because if you are a Canadian or a Mexican we have the legal authority to basically toss you back across the border. If you are an OTM we have to have an agreement in place with your host your home country as to how we will process you out out of the country. This is the group that here to for has been subject to catch and release. If we caught you, we released you and we gave you a little piece of paper and said here is your immigration court hearing please show up. And for the last 30 years, 92 percent of them have not shown up. And I am not sure it's in the interests of the United States to retain the other 8 percent and there we had 37,000 37,000 that had previously previously had a so called removal order against them. This might surprise you, the people who are illegally in the United States today, one third of them came here legally, I came here on a visa an overstay so this latter category are people who overstayed their visa . We knew when their visa was up; at some point long after their visa was up we went to court and sanctioned them so we had a formal removal order waiting form. Now I think you know when I go out most of the people are most concerned about these issue have absolutely no idea like the fellow here in the front row did of what the number is, they had no idea. I get a 1000, I was at a group of talk radio for guys and when anyone goes through this exercise and then ask him I say lets start who is got - you know anybody you know 10,000 we got to have half a million and started who and the guy who said half a million and the numbers a million three and these are the guys talking about the issue so there is a lot. Well that may be a problem in a way how did you stoked up that talk radio divisiveness partisanship and now it comes back to bite us. Yeah that was my plan in 1988, you know yeah I personally stoked it all but I have got a vast army of talk radio hosts that we have personally recruited; I have engineered the financing for them. I actually also did that without Frank because I thought that there was a new nice countermove to get him at But you know my point that the that some how we gotten into a- you said this was a Yeah I got CNN to hire Lou Dobbs, that was my most permitted maneuver of it; I thought that was really- Let's not go there. I kept him from having to all right let's move on to other contentious issues. Walter can I say one other thing lets go to the next slide just for the This this shows it - I asked this to be tracked if you don't measure, you can't solve it. So we started tracking in 04', the gap between those of we caught on OTMs and those that we removed. And it was big and pretty consistent. So we tried an experiment in 2005 at DHS called Operation Texas Hold 'Em, because Brazilians came Brazilians came across the border primarily in the lower Rio Grande valley sector of the border and also to a lesser extent the Loredo, but that's virtually - every Brazilian who enters the US illegally comes there. So we said okay, we are going to take what ever amount of resources are necessary and grab every Brazilian and we are not going to let a single one of them go and we are going to do what ever is necessary in a way of extraordinary resources to house them hold the hearing and process them out of the country and see if this doesn't have result back in back in Brazil. So the message is you come up, you get down the plane from Rio, you get yourself to Mexico city, you get on to the bus to the border, you hire the coyote, you get across the border, they grab you and you no longer - you know what they called your immigration hearing notice in Brazil, a Permiso, a permission slip. So no longer will you get the permiso, instead you'll get put in a cell, you'll get processed and put on a plane back to Rio. You know, we did this. And it cost a lot of money. But what we found is that six weeks later apprehensions of Brazilians coming across the border in Texas had dropped 90 percent. Now the reason wasn't that they were getting lot smarter in getting across, it was that the message got out; we are going to get caught and get returned. So this we then began we had been putting resources into it. We got 40 percent more beds to hold these people 7700 more beds to hold people, plus when we came into office it took 93 days to process them out of the country, it now takes 19. So if you have got 40 percent more beds and you process them through there four times as fast you are suddenly able to get to this place, you'll see the gap that the solid line are the apprehensions, the dotted line are the releases I am sorry, are the detentions. Top line is the guys we arrested, the dotted line are the ones that we held on to, and as you can see the week of ironically enough July 17th of last year they crossed and we literally now if you are an OTM, you don't get released, you get processed back to the country from which you came. Now it's costing us a lot of money to do that, cost us $97 a day for three squares and the cost of supervising, not the capital cost; but just the cost of clean bet sheets, three squares a day and whatever resources we have to put, particularly if you are family, we got to make certain your kids were getting some kind of education and attention, we got to provide some modicum of healthcare to you. So it gets it's costly. But it is really vital that we do this in order to have people have confidence that we are serious about controlling the border. Because if we don't, if people think that we got this and we've had this for 30 years, Republicans and Democrats alike have tolerated this. And it has been collusive in people's attitude towards the border, just is people gets it has not given people confidence that their government is on their side when it comes to border. But this isn't enough to solve the problem. We better work on all the other problems so there is assimilation, resolving the status of the people here illegally, worker-employer verification and temporary worker program, or this is all not going to matter. Because there is going to be years you don't have amount of resources to control the border, that people are desperate to feed themselves and there is a job in United States of America that allows them to feed their kids, just to earn. Last year when we talked about the Valerie Plame Wilson case, you said you know it's still under adjudication, hard to talk about. I think Scott McClellan at one point came out and said, you had nothing to do with any of this. But it turns out you did and another did, what was . No. Actually what he said was, I didn't have anything to do with revealing her name. And look this is still in a civil case which is motions are pending on. But my contribution to this was to say to a reporter, which is a lesson about talking to reporters, the words, "I heard that too." And . Well, there were lot of people in the administration putting her name out, it seems. And they were doing it to discredit Joe Wilson. And it seem like a consorted effort and nobody came - I disagree. - well, why didn't you come forward and say, yeah I said it and here is why I said it. I did. No, I mean, publicly before Matt Cooper gets Because the FBI said don't say anything about this. All right, but okay. It seems like a lot of people kept quite in the administration having put her name forward causing a whole rigamarole that probably could have been prevented. Yeah. I don't agree with you a whole lot. In fact the record pretty well shows that it is that it is one used her name. Scooter or Armitage? Armitage. And Scooter uses it after the story has already been largely picked up and written by Novak. Why did people put her name out? Look look, here is a guy who goes and says in his article, the Vice President of the United States sent me the Vice President of the United States raised questions, so I was sent apparently at the insistence of the Vice President to go check it out and I came back and reported. I would only recommend you read the July 11th Statement by the Director of the CIA who says, "He was not sent at the direction of the White House or the Vice President, he was not sent at the direction of the Director of CIA. He did not come back and give a written report. He came back and gave a verbal report which was considered be neither conclusive nor just positive. In fact he didn't come back is proving that Iraq had tried attempted acquire Uranium Yellow Cake from Niger. He came back with a previously or unknown incident where they tried to do exactly that." But why didn't you all just openly say that instead of, - We did We did, in fact that's my conversation with Bob Novak is largely about that. And my only contribution is when he says, "I've talked to, she is she had something to do with it". And I said, "I've heard that too." And Matt Cooper saying -? Matt Cooper, I don't remember the conversation with Matt Cooper, but even his own notes of it are, it is an off the record conversation on Friday morning when I know that no Novak's column has been written, it's going to be published, and that the CIA is coming out with a statement its says Joe Wilson was not sent at the direction of the CIA or the CIA Director or the Vice President, it was just positive, not conclusive , in fact added to the case, didn't attract from the case, and was suspect because of the methods that he used to collect the data, and I am to trying to tell Matt Cooper by his own notes, you are not to be right, don't get ahead your self on this, don't be writing about this thing for Time Magazine. Were you involved in the discussions about commuting Libby's prison sentence? What do you think of it? No and look, I think the President the President's statement I thought was absolutely hit the right tone which was respectful of the decision that he was guilty of misleading the grant jury but with it no under align offence excessive in its application of the penalty. We have heard a lot about energy this week, both in terms of energy security like why have we allowed the price of oil to go from $10 a barrel to $70 or $80 and we are sending all of that money to Ahmadinejad and Saudis and people are going to use it against us and also about the carbon and what it is doing to our problems of global warming. Is there a sense that you could do something dramatic in this next year to really try to reduce both our dependence on foreign oil more than the Twenty in Twelve plan Twenty In Ten, and reduce the emissions of Carbon. Yeah, let's take the fuel first. Yes there is something and let me see here what which one should I send you to why don't you to go to -. Let's go to slide five. Twenty In Ten is the proposal that the President laid out in the State of the Union Address, which a Supreme Court decision then said we had authority under existing authority, which we didn't think we had, but they said we do have to an essence put the Twenty In Ten largely in place by regulatory structures. Twenty In Ten basically aims to reduce our petroleum use by 20 percent in the next 10 years. And the object is that 20 percent represents about the percent of our oil supply that we get from our Persian Gulf. Now that the reason that the oil prices are high is that the world demand is high, particularly because of the escalation of demand in china and India. And the world production is relatively flat and if demand is rising, then you are going to get an increase in price. Twenty In Ten is there are four lines over there. The yellow line at the very bottom represents what the current CAFE standards mandated under law would lead to. Now there is an odd thing in CAFE standards. Under the law the department of transportation is allowed to regulate CAFE standards for light trucks. And we do have a aggressive reform of light trucks which I think is now been in place for two and a half years, which is having a significant impact on improving CAFE among light trucks. CAFE for passenger cars is figured in a different way and is set by Congress. Congress literally plucks a number out of the air and puts it in and it's a say Fleet-Wide number. And as a result it has a bunch or weird perversions in it that work to the disadvantage of US companies and to the advantages of foreign companies and drive fleets towards the production of smaller vehicles to offset the big vehicles and it has all kinds of distortions. What we would like to do is take and apply to passenger cars what we do with light trucks, which is our reformers to say, we are not going to allow you to have a Fleet-Wide number. What we are going to say is is that there gone be bins based on weight. So that if you got a light truck that's a small light trucks you are going to have to be forced to make fuel savings compared to all other small light trucks. And if you got a big Honker you got a have fuel efficiency improvements versus all other big Honkers. So we look at the fuel efficiency standard of vehicles in a like weight class and say you got to have constant improvement in each one of these bins towards an annual target of in this instance nearly four percent. We want to do that for other vehicles as well, for passenger vehicles, so that if you got a small car or a mid-range car or a luxury car, you don't get evaluated on the basis of the entire fleet mix. So if you are able to sell a bunch of small cars it allows you to have no improvement in the big car or if you have got no big cars it allows you to have a smaller improvement in your little car, instead we are going to say, we are going to compare all of these weights of passenger cars to each other and require there to be four percent improvement per year. Now that's a long way of saying we want to get something we haven't yet gotten. If we leave things the way they are the fuel standards are going to improve along that yellow line. If the fuel standards are go up as are now currently written under the House Bill, they would be on the line on the extreme right. That is to say you can see that it takes a lot longer to get I am sorry it's the red line as you can see it takes a lot longer to get from where we are to where they want to be which is 35 miles per gallon, you get there about 2025. Under the Senate Bill which is bio fuels only, you get from where we are today to 36 by 2022. If you take the President's proposal of Twenty In Ten and do the reform that requires improvement in all weight classes for all classes of vehicles, you get to 35 in 2015. Now that may shock some of you to think that, the President should that be arguing for lower standards taking longer, but we think that technologically this is possible and doable but only if we change the way by which we monitor and measure the standard and instead of saying, Toyota gets to compete with a fleet definition that is much narrower than GM and GM has to find a way to make lots of cheap small cars and give them away in order to hit the Fleet-Wide number, instead everybody is got to improve in every class, you actually get here faster by doing that. Now we don't have the authority to do to do the CAFE standards into Twenty In Ten, but we do have the ability to do all those the stuff that we want to do with setting standards for renewable and alternative fuels which will allow us which is going to be a principle driver in allowing us to get to 20 percent reduction of where we would otherwise be in 10 years. I understood the general theory of relativity; I am having trouble with this which is why not -. Green green is Bush. I will make it simple Walter, green is Bush, it is better, orange is Senate and not as good, and red is the House and not good at all, not acceptable. That's why I didn't understand it. Why not something simpler, just saying let's have higher tariffs on foreign oil, that a company that from you know, Venezuela or Saudi Arabia, Iran, why not have Carbon taxes and why not take that money and plough it back to the people, whether it's a Montana Ranch or whatever it gets hard - let the market take care of it and charge people who pollute- Yeah, look, the market is taking care of a lot of this by having sustained higher energy prices. Well, that's sending the money to Ahmadinejad. Yeah, well frankly tell me how we are not going to be sending money to Ahmadinejad if we well, first of all we don't buy from Iran, incidentally. Well, it's on the world market. Yeah, there you go there you go. I wanted you to make that admission so I can use it against you later on. But look you know, there is no way if you going to say we are going to have higher energy prices, brought about by a carbon tax or by a tariff and then we are going to try and sort it out so that the fact that it applies less to somebody who lives in a highly congested metropolitan area with relatively well developed metropolitan transit authorities is going to have less an impact than somebody lives in a more rural part of the country. And we are going to somehow try to figure out how we can ameliorate all that, you know it is just not easy to do. You know I was with you last night, so I have an absolute authority that you were not in the Park singing along with the Al Gore Climate Change Concert. We are the world -. How much do you worry about climate change, is it over blown, is it a real worry? Yeah it's a real worry. The question is you got to buy an insurance policy, we don't know you know, I have labored through the inter governmental panel on Climate Change Report, not just the very short introduction but the all god damn 800 pages of the thing or what ever it was. Yeah. There is a lot we don't know. We are putting lot of money into climate science. We put $37 billion into climate research since we came into office. We put more and the United States put more into climate research that the rest of the world combined. And there is a lot that we don't know. But we got to do our view is what we ought to do it's prudent to begin to reduce the growth rate to stabilize and eventually aim by the middle of century to be a in a position where we can began to reduce. And we need to do this in a way in which all of the players are at the table. One of the problems with Kyoto was all the players were not at the table. And we have got to do in a way that we don't impede economic growth because economic growth is the way that we are going to be able to put in place the technologies necessary to deal with greenhouse gas emissions. And you don't think green technology will promote economic growth in this country compared to other countries? Oh I look, look I -. That's a Tom Freeman argument in Florida. I am going to point is that Greenspan who I think this fixes as an accounting question. But look I am not going to be nobody suggest look, if it was economically at advantageous for everybody to adopt these technologies today they would be adopting them, because in essence efficiency means that you are using what you got, the energy source, a heck of a lot more efficiently, means you are using more of it using less of it to get more out of it. If you are actually paying for all the cost of emitting CO2 -? What is the cost? The cost is the future generation. Well we don't know what the future cost is. So the question is do we say, okay we got to put the brakes on economic growth, we got to put the brakes on drive bringing people up out of poverty in the developing world, we got to change dramatically the way that we do things here in America and impose it upon people because we are fearful of what might be 50 or 100 years out, or do we begin to take prudent steps now. We are in the prudent steps camp. For example, look one of the big worries we have got is China. The economy is one fifth as largest as United States and this year will pass us in order to be the world's biggest emitter of green house gases, think about that. One fifth our size and they are putting out more green house gases than we are. Were you leveling off on green house gas -? Yeah, in fact thank you for asking that question. I owed it to you, after the Valerie Plame discussion. Thank you. Let's start first with I think Greg Easter book, if you haven't read some of his stuff I highly recommend it to you. It is really important to get the right frame for thinking about the environment, the America. So I have stolen a Greg Easter book chart that was bastardized by the EPA. Chart one. Now this sort of a complicated chart, it has as its starting period, 1980 or it should be 1970. And the object here is to check the relative change in certain things to each other. The top line there is the the grey line at the very top is the change in the gross domestic product, which over these since 1970 has a risen a 185 percent in the real terms of United States. The second line is vehicles mile travel, we all driving far too much, 167 percent improvement. I can say this as somebody who has a car I bought a brand new car, March 2001, I have driven 37,889 miles on it. So I am driving less than you. And that makes me better, morally superior, because I am greater than you. The red line is energy consumption. We have increased our energy consumption by 47.5 percent. We have increased our population by 45 percent. So our population and energy consumption have gone up roughly together. Our CO2 emissions have gone up 41.5 percent. Our what's call criteria air pollutant emissions, think of it as pollution, has gone down 52 percent. So we have shown over this period of time despite the fact that the economy has grown pretty dramatically the population has grown pretty well. We are driving a heck of a lot more. At least when it comes to pollution we have done a much better job of reducing the bad stuff that's come into our air. Now what about CO2? Well, first let's take a look at the decade of the 90s because in the decade of 90s when the world starts to begin you get serious about measuring this. Number 2. Now this is the change in CO2 emissions from 1990 to 2000. Now Russia is the only country in the world that has significant reductions. And that's because economy goes to hell on hand basket. Now the EU 27, the broader definition of EU which includes most of the former Soviet Block, also has a decline, but again driven by the same thing. That a lot of particularly you know geeky, heavy industrial plants that used to sustain the Soviet regime now go away. But as you can see between 1990 and 2000 the United States is down there with a 17.7 percent increase in emissions while our economy is growing 38 percent. Europe passed a 25 percent increase in its economy and a one percent increase. Now that's the decade of the 90s. What we begin to set in place starting with the 1990 Clean Air Act and other things that begin to have an impact and we also have investments in technology that begin to have an impact, let's go to number 3. This is the trend in CO2 emissions from 2000 to 2004. Russia grows its economy by 26 percent and gets a 1 percent increase in CO2. Ours economy grows 9.6 percent and has a 1.7 percent, as you can see the rest of the world isn't doing as good as the US is doing at that point. And a large part of this is because it's not just the Clean Air Act and Clinton administration policies; it's also by and large the investment of private industry and new technologies that make the use of the energy more efficient. Now I don't have the slide for this or actually I do. Let's go to slide four. This is 2005 and 2006 which I didn't put on a on a chart. No, four. 05' we slowed the growth even further and in 06' the United States of America is the only major industrial country in the world that see an absolute decline in the green house gas emissions, 2006, we are the only country in the world. Since 1990 CO2 emissions have increased an average about 1.1 percent annually, that's while our economy has been growing at over that period of time, a larger rate. 2005, CO2 emissions were 0.6 and we have grown the economy at 3.2 percent and then in 06' they decreased 1.6 percent and we had economic growth at 3.3. Now it's not just because of the polices and it's not just because of the investment. It also has do with weathering patterns. But nonetheless it does show that there is a reasonable and prudent policy which will allow us if applied universally, to stabilize and then begin to reduce green house gas emissions without hurting the economy. Now what we got to do is to we laid the predicate for this a couple of years ago with the Asia-Pacific Partnership where we said, let's get together with Australia, Japan, China, Korea, India and anybody else in the basin that wants to participate with us and let's talk about ways that we can attack climate change problems by reducing barriers to the transmission of technology, whether it's the barrier of a tariff or the barrier of a lack of resources or whatever the barrier is, to getting these technologies that produce green house gases emissions into the hands of people who need them in order to use the fuel that they got more efficiency. How can we make this a good business decision for people to begin doing, and we have been working at that in the Asia basin for last three years. The interesting thing about G8 is - G8 said let's restart the Kyoto process. We said no, why don't we take the model that we have of cooperation progress in the basin and make international. Let's get everybody all the major emitters to use that same process that says, we will set a national goal for stabilization and ultimate reduction and we will examine those polices that keep us for adopting technologies that will allow us to do that. Why don't we publicize that is the question. I just did I just did. It is. Well, why didn't we find some versions of a Kyoto like agreement in which we could have said we are doing this, so we could -. Well, that's our object. Our object is we have our first meeting this fall, the G8 bought off on this much to their disagree and they had to have some thing in this well something but we got it our first meeting this fall with all the major polluters, all the major emitters, they are not called polluters because we don't not everybody agrees that it's a pollutant, they agree that as an emission, so we got all the major emitters together for the conference this fall and look I know how tough the work was in the Asia partnership, but I also know that it has set in motion a whole series of things that are going to be very positive with regard to if you get people focused on the question of efficiency, how are we using the energy that we got efficiently? Suddenly it causes the Chinese to say, you know what, is it worth us to have a giant German diesel sitting behind every production plant because our transmission grid is so bad. Is it does that makes sense or does it makes sense to put some money into making the transmission grid better. And suddenly you go it is making sense; and some of these decisions take decades. UK is now getting in to a place where UK is stabilizing and may surely be able to flat line and reduce its green house gas emissions. And you know why, because in the 1970s Margaret Thatcher broke the back of the Coal Union and said I am putting Britain on a path to nuclear power. Why aren't we getting on a path to nuclear power? We are, we have 21 or 22 license applications in process to bring back nuclear power. We have got a major project involved in funding the next generation of nuclear power plants and we are looking at ways to reduce the amount of stuff that comes out of nuclear power plants by removing the polices adopted on under Carter that prevented reprocessing, so what we can do is take the spent nuclear fuel, reprocess it, use it again, take out more of the energy, reprocess it again, it have something to do with the book he wrote, E=MC2, and reduce the amount of stuff that we actually got at the end we got to store. And look we are also doing clean coal. I can't remember all the numbers, but look we got hundreds of years at coal and we are and most of our power, 50 percent of our electric power comes from coal. So that the question is what can we do to make that stuff burn cleaner. You are talking like carbon sequestration? Carbon sequestration, but we also look, there are a whole bunch of coal plants today that exist, that if retrofitted would put out a lot less gunk. That's where our biggest bang for the buck is. And what we have done is we issued that we think the approximate cost of that and industry agrees is approximately $10 billion. And under the Energy Bill we passed several years ago, we got the ability to put out tax credits. We put out last year, $1billion in tax credits, this year we'll put out $650 million more to offset part of the $10billion that industry is putting in, to again make their plants more efficient which thereby has less noxious mercury in mercury and less green house gases, while at same time they burn their burn their fuel more efficiently. So and we are trying to make this a good economic decision. We recognize that tax credits are a distortion of the system. But you know most of our emissions come from automobiles, but the emissions that we can do something about in a rapid fashion are the power plants and industrial facilities.