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Six Cabinet Confirmation Hearings Begin on Capitol Hill; Obama Attempts to Sell Federal Bailout Plan
Aired January 13, 2009 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Hey, guys, that's right. Back to the Hill. Barack Obama makes one last lobbying trip before becoming president. Selling his plan for the federal bailout fund.
And Hillary Clinton faces fellow senators. Secretary of state is the job at stake. We've got live coverage of those confirmation hearings.
It is Tuesday, January 13th. I'm Heidi Collins. You are in the CNN NEWSROOM.
Fast and furious on Capitol Hill today with six Barack Obama Cabinet choices set for confirmation hearings. Peter Orszag and Robert Nabors are up first. They are the choices for director and deputy director for the Office of Management and Budget.
Also, as we've been mentioning, secretary of state nominee Hillary Clinton appears before the Senate Foreign Relations Committee for her confirmation.
More on that in just a moment.
And in about an hour from now, three more confirmation hearings get under way. Shaun Donovan for secretary of housing and urban development, Steven Chu for energy secretary, and Arne Duncan for secretary of education.
Hillary Clinton's confirmation hearing, though, starting less than 30 minutes from now. We're going to bring all of that to you live, of course, and we are watching for her arrival there on Capitol Hill.
Some of those live pictures coming in to us right now.
Meanwhile, our foreign affairs correspondent Jill Dougherty is already on the Hill for us this morning.
So, Jill, what is the rundown for the Clinton hearing today? What are we going to see?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, you know, what really is going to happen is there are kind of two sides to it. Obviously, the question du jour is foreign policy. And you're going to have the senator laying out her ideas, which, of course, are the ideas of the Obama administration on how they want to approach foreign policy. And then you have the other subject that is sure to come up, although things are supposed to be very smooth and that's the question of Bill Clinton, his international connections, his foundation, and possible conflict of interest.
But let's look at some of the issues internationally. They were talking about smart power, what is that? Well, essentially, it's diplomacy leading backed up by military power.
And just a while ago, we got some of the prepared statement by Hillary Clinton from the transition officials and she's going to be talking about renewing American leadership through diplomacy, precisely that. Foreign policy, she's going to describe as a marriage of principles and pragmatism, not rigged ideology.
Also, America is back, you could say. She's going to say America cannot solve the most pressing problems on its own. But the world cannot solve them without America.
And then, finally, Heidi, one of the more interesting ones. Almost reminds you of the -- during the campaign when they had that "I wake up at 3:00 a.m." with the phone call. Senator Clinton will say, "I don't get up every morning thinking about threats and dangers. We face every challenge. But with every challenge, comes opportunity in the face of promise and possibility in the face of adversity and complexity."
So a more positive focus on those threats out there -- Heidi?
COLLINS: Yes, no question about that. We will be watching very closely.
Sure do appreciate it. Jill Dougherty for us there on Capitol Hill.
Thank you, Jill.
And of course, you can see that Clinton confirmation hearing live right here on CNN. As we said, it is scheduled to get under way at 9:30 Eastern so we will also be watching for her arrival coming up probably any minute now on Capitol Hill.
Spending the balance. One week to go until Barack Obama becomes president but he and his team already lobbying lawmakers about the remaining $350 billion in that federal bailout fund.
And the House Financial Services Committee holding a hearing today later on those so-called TARP funds. Chairman Barney Frank has introduced a bill to require the next installment be spent according to stricter standards.
We've been talking about this for several days. In fact, covering those bailout funds story for us, Suzanne Malveaux, she's at the White House, and Brianna Keilar on Capitol Hill for us this morning.
So let's go ahead and begin on Capitol Hill now with Brianna Keilar.
And Brianna, I think you have a story first, then we'll turn on the backside here.
(BEGIN VIDEOTAPE)
BRIANNA KEILAR, CNN CORRESPONDENT (voice-over): $350 billion down, $350 billion to go. In asking Congress to make the rest of the Wall Street bailout funds available, President-elect Obama acknowledged anger at how the first set of money was spent.
BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: I think many of us have been disappointed with the absence of clarity, the lack of transparency, the failure to track how the money has been spent, and the failure to take bold action with respect to areas like housing, consumer credit so that we can maintain credit flow, small businesses.
KEILAR: Democrats want assurances from the Obama team that homeowners facing foreclosure will get help and won't be left out, while financial institutions grab taxpayer money. They want those companies to follow strict rules.
SEN. KENT CONRAD (D), BUDGET COMMITTEE CHAIRMAN: That they can't take that money and go buy other healthy financial institutions, that they can't provide bonuses to their executives, that they can't use this money in a way that simply is not effective, and that does not assure that there is more credit available to businesses across America.
KEILAR: Congressional Democratic leaders are trying to avoid a scenario where enough Democrats join Republicans in a vote to deny the funds. A situation that would force Obama to use his veto pen just days after taking office.
Barney Frank, chairman of the House Financial Services Committee, is trying to provide cover for Democrats to back the president-elect's request by pushing a bill of bailout safeguards.
REP. BARNEY FRANK (D), FINANCIAL SERVICES COMMITTEE CHAIRMAN: I will say that members, you've got the Democrats side. Have a great deal of confidence in the new president and in the people he's appointed, but in this case, we are Reaganites. We intend to trust, but verify. And we're going to verify in advance. We're going to put some requirements in there.
(END VIDEOTAPE)
COLLINS: And Brianna Keilar joining us now live from Capitol Hill.
There you are, Brianna. It appears, obviously, that there's a whole lot at stake today. Also important to keep our eye on the timeline of what we expect to happen.
KEILAR: Yes. In fact, Barack Obama is heading here to Capitol Hill this afternoon to meet with Senate Democrats. And that's because Democrats in the Senate and the House -- there's some resistance here, obviously, to releasing the second part of the TARP.
Both the House and the Senate are expected to vote. The Senate expected to vote first on Thursday.
A motion to deny these funds, it could pass the House. That seems more unlikely in the Senate. And just really to shore up any support that he has, President-elect Barack Obama, that's why he's here today, really making this sell, trying to talk to Democrats about what he's going to do, conditions he's going to put in place, help for homeowners, obviously, that he's going to put in place, to try to win them over, and make sure that there isn't this veto showdown that we've been talking about.
COLLINS: Yes. No question about it.
All right. Thanks so much, Brianna. Appreciate that. Live from Capitol Hill this morning.
As we've been saying, President-elect Obama making his case with Senate Democrats today for how he wants those remaining bailout funds spent.
Our Suzanne Malveaux with that story now from the White House.
So, Suzanne, what exactly -- what more do we know about this meeting today?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Heidi, what we know is that Barack Obama, essentially, really wants to reassure lawmakers that there's no reason to block this money from going forward. He is trying to prevent something, a messy political situation.
If they block this, then essentially he would have to veto, either he or President Bush. President Bush and Barack Obama are of the same mind when it comes to this money, that it's important to get it out there to address the financial crisis. They believe that the bailout money will actually do that.
There are a lot of lawmakers, as you know, who are really very skeptical. How is this money going to be used? Well, Barack Obama wants to tell them, yes, some of this money would be used to help make sure that people stay in their homes. Yes, there is going to be some accountability here. There is going to be some transparency here.
There's going to be limits on kinds of salaries that top level executives would make, for instance. So these are the kinds of details these things that people have been asking and talking about in the past couple of weeks that he is actually going to address.
It's also, obviously, one of his last times before he becomes the president to reach out to his colleagues at -- on the Senate side, obviously, and to wish them well and to certainly hope to set a tone here, if you will, of working together.
We've seen of the last couple of weeks this is not necessarily a Congress and his fellow Democrats that are just going to simply go along and get along here. And he wants to make sure he is setting a tone that is appropriate -- Heidi?
COLLINS: Yes, obviously, those challenges are already there. In fact, when you talk about working together, Suzanne, we did have, just a few minutes ago, some tape of White House Chief of Staff Josh Bolten and incoming Chief of Staff Rahm Emanuel.
Apparently, they met this morning and discussed some issues of homeland security.
MALVEAUX: This is really a very fascinating exercise that's taking place right here at the White House. They typically do this four times a year involving the administration. This is the first time that they are actually including those from the Obama team and what they are doing, it's a scenario.
They are going to sit down in the situation room, cabinet level officials from this administration and people from the Obama team, and lay out a hypothetical terrorist attack. It's a scenario of what would happen if a terrorist attack targeted several American cities on this day. What would you have to do?
And that is what they are actually going to be tasked to talk about, to go through this hypothetical scenario so that it's an orientation. This is going to last for hours here at the White House as people from Obama's team, essentially, are sitting beside their counterparts, getting the scenario and getting this kind of information.
What would be your responsibility, what would be your job? It's all a part of the transition, a smooth transition.
COLLINS: Yes.
MALVEAUX: But it's a fascinating thing. We're going to -- probably get a picture at least to see these individuals all together, getting this kind of briefing.
COLLINS: Yes. Today, they're going to do that. Any significance for doing -- this exercise today?
MALVEAUX: The only significance is that they -- they're going to do it before essentially this administration leaves.
COLLINS: Yes.
MALVEAUX: No significance in terms of any kind of credible threat or anything like that at all.
COLLINS: OK.
MALVEAUX: It's really a hypothetical. It's something that they plan in advance and they're going to sit down with them and say here's what I would do as the cabinet member, you know? The Treasury secretary or the secretary of state. COLLINS: Sure.
MALVEAUX: Here's what you need to do. So...
COLLINS: Wow.
MALVEAUX: For instance, we know that Hillary Clinton is up on the Hill, but she would have a representative from her office, from her agency here today being briefed in terms of what she would have to do if there was a terrorist attack on several American cities on this day.
COLLINS: All right. Well, fascinating. Certainly hope to hear more reporting on this throughout the day. Sure do appreciate that.
Suzanne Malveaux, thanks so much.
MALVEAUX: Sure.
COLLINS: Live from the White House this morning.
Back to the bailout funds for a moment. From the political to the practical. Is the massive rescue plan working now and what could be done to make it work even better? We'll talk about it in a moment with our money team.
(COMMERCIAL BREAK)
COLLINS: Braving the elements. Heavy snow and biting cold slamming cities across the nation. We will show you who got hit the hardest.
(COMMERCIAL BREAK)
COLLINS: In fact, brutally severe weather slamming across cities all across this country. Here's a look now at what it was like in Chicago last night. Heavy snow and bitter cold. Winter weather advisory actually in effect today. More than 300 flights have now been canceled.
Iowa wasn't spared either. Just a sea of white there. They've been hit with more than a foot of snow since the weekend and there is also the deep freeze. Temperatures expected to hover at 12 below zero.
In Wisconsin, temperatures are expected to drop far below zero as well. Officials have recommended closing schools because of the record windchills.
Rob Marciano is standing by to talk a little more about this. There is also a blizzard watch, Rob, in the Midwest? Yikes. Look at all that. It's like frozen tundra behind you.
ROB MARCIANO, CNN METEOROLOGIST: Yes, a lot of white on the map. You know, the amount of snow pack that's across the U.S. is pretty impressive for this time of year. Places like Chicago, places like Detroit have seen three times the amount of snow they typically see at of this time in the season.
So it has been on the fast track, to say the least, as far as winter on the way here and we've got a lot of snow painted on the map for today, although it's not going to be, you know, a tremendous amount as far as feet of snow.
It's these little pulses of energy that keep coming out of Alberta. The problem with this, not so much how much snow they bring, but how much cold they bring in behind the snow.
(WEATHER REPORT)
MARCIANO: Certainly that -- if your kids aren't bundled up properly...
COLLINS: Yes.
MARCIANO: ... they can get frostbite within a minute's time, so it's...
COLLINS: No question about that. I mean we joke about snowfall and, you know, how to get around it but this is no joke. I mean it is dangerous (INAUDIBLE) a lot of these places. So we'll stay on top of that today.
Thank you, Rob.
MARCIANO: All right.
COLLINS: Appreciate it.
MARCIANO: You bet.
COLLINS: Holding them accountable. Some Congressional leaders are asking for stricter regulations now on spending the remaining half of that $700 billion financial bailout.
CNN's Christine Romans is live in New York to talk a little bit more about this.
So the second chunk of money now, Christine, and where it needs to be spent, a lot of discussion here.
CHRISTINE ROMANS, CNN CORRESPONDENT: A lot of discussion, Heidi. And frankly, three big questions here for Congress and this new administration. Can they do any better on the second $350 billion of the bank bailout money than they did with the first half? Do they know what they're doing? Does anyone know what they're doing and how can you assure oversight on such a big amount of money?
It's a-- huge job way back when they passed the overall $700 billion, you'll recall, Heidi, we sat here and talked about how in the world can they ever watch every dollar go out of the treasury and make sure that it does what it's intended to do.
We know the banks have received a lot of money. They don't have to have any kind of accounting to the government what they are doing with it. There will be a lot of strings attached this time around but you have to hope that Washington can do a better job of accounting for taxpayer money in this bailout than they did the first time around.
Secondly, you've got Ben Bernanke, the Fed chairman, here this morning, Heidi, and he's is in London in a speech talking about how he thinks the new administration stimulus spending a lot of money to get the economy going again or at least to blunt the effects of the recession. He thinks it can work but he points out that there's still work to be done.
He says, "Obama's economic plans are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system."
He goes on to say, Heidi, that we might need to do more capitalization or recapitalization of the banks. We might have to see more money and more attention into the actual financial architecture. So a reminder from the Fed chief that we're not out of the woods yet, quite frankly, and he says the financial -- the global financial system is still under incredible stress at this point -- Heidi?
COLLINS: Yes, I feel like it's a good reminder, but then part of me says, you know, I can't believe we have to remind anyone of that. But...
ROMANS: You're right.
COLLINS: ... you never know so we are trying to stay on top of it here, of course, with CNN and you.
Thank you, Christine. Appreciate it.
ROMANS: You're welcome.
COLLINS: Meanwhile, Hillary Clinton on Capitol Hill, as you know. We're just minutes away now from the start of her confirmation hearing for secretary of state. We will take you there live just as soon as it gets under way.
(COMMERCIAL BREAK)
COLLINS: A live picture now of the White House where three of President Bush's closest foreign allies will receive the Presidential Medal of Freedom today.
America's highest civilian honor will be awarded to Britain's Tony Blair and Australia's John Howard. Both men sent troops to Iraq and defied public opinion to keep them there. And Colombian president, Alvaro Uribe, who's waged a tough fight against narco- terrorists.
That will be happening a little bit later on today.
Just stop. An appeal from the United Nations secretary-general to Israel and Hamas. Ban Ki-moon is headed for the region and meetings tomorrow with various leaders. For now, though, the fighting seems to have actually intensified with Israel tightening its grip on Gaza City. Hamas, though, remains defiant declaring, quote, "We are closer to victory than ever."
CNN's Paula Hancocks is actually keeping watch from the border. She's been reporting there for several days now.
Israeli really seems to be on the move in Gaza City once again, Paula?
PAULA HANCOCKS, CNN CORRESPONDENT: That's right, Heidi. Yes, we've certainly seen a reduction in the number of air strikes that Israel has been carrying out but it appears that it's -- the activity on the ground, which is more significant now.
Our sources are saying that they are fairly close to the center of Gaza City. They're edging in. And of course, this is where many of the Hamas militants and the other militants have retreated to as Israel has been moving forward.
And certainly many areas, the more residential areas. This is where Israel believes Hamas is still firing rockets from. And we have still seen at least 14 rockets this Tuesday. So they are still managing to get the rockets into Israel. No casualties, though.
But as the Israel troops are moving deeper into these densely populated areas, we are seeing the death toll increase. Palestinian medical sources say 910 Palestinians have been killed so far since 27th of December. And according to those sources, at least a third of those are children and a similar situation with the number of wounded. Well over 4,200. Again, a third of those are children -- Heidi?
COLLINS: All right. Paula, we know you're watching this very, very closely from where you are. Thanks so much.
Paula Hancocks live from the Israeli-Gaza border there.
The big board ready to spring to life. The opening bell just ahead. We will be there for all of the rings and dings.
(COMMERCIAL BREAK)
COLLINS: On Wall Street, earnings from the fourth quarter are starting to come in. And Fed chief Ben Bernanke is speaking for the first time since slashing interest rates last month.
Susan Lisovicz is at the New York Stock Exchange now with a look at how Wall Street is set to react to all of this.
Hi there, Susan. A lot of people have been saying the Fed has kind of done pretty much everything they can at this point.
SUSAN LISOVICZ, CNN CORRESPONDENT: That's right. But it has -- the cavalry coming with president-elect talking about a big stimulus plan and that was something that Ben Bernanke was talking about, Heidi. Stocks, meanwhile, set to fall for the fifth straight session. The Fed chief was not in Washington. He is in London today. And he said the global economy will recover. Well, he was less certain about as to when.
Last month, you may recall, the central bank took a highly unusual step of lowering rates to a target range of zero to a quarter percent. Still the Fed chief says more action is needed. He threw his weight behind that stimulus plan but said even more federal money, believe it or not, may be needed to bail out banks.
We also have more signs that corporations all around the world are struggling in this global recession.
Alcoa kicking off the quarterly earning season by posting a bigger-than-expected loss of nearly $1.2 billion. Alcoa got hit by a drop in aluminum prices. Why is that? A big drop in demand. Supply and demand for commodities.
Overseas, there are reports of Sony may post its first annual operating loss in 14 years. Sony, of course, is one of Japan's top brands, so the Nikkei stock index there plunged nearly 5 percent in response. This coming just weeks after Toyota forecast its first annual operating loss in 70 years.
We got a report at the top of the hour showing the trade deficit narrowed to its lowest level in five years in November. That's a good thing. Why is that? Because of declining imports and sharply lower oil prices.
Crude trading this morning around $38 a barrel. And yes, another sign of a huge drop in demand worldwide. There is the opening bell. We are expecting sort of a flat open. Del Monte Foods ringing the opening bell. What do they make? Well, they make lots of people food and pet food, too, believe it or not. Heidi, they make things like Meow Mix, who knew that? There's the --
COLLINS: Well, now, we do.
LISOVICZ: News you can use, what can I say? I'm basically waiting for some numbers on my screen. That's what I'm doing. I'm tap dancing.
COLLINS: I know you are. And you're doing a great job at it. Well, as you said we are expecting for today a mixed open so we will keep our eye on that.
LISOVICZ: We're seeing a little bit of weakness in the first few seconds of trading. We'll use to it. As I said, this could be the fifth straight day of selling off. Back to you, Heidi.
COLLINS: All right. We'll check in on those closing numbers several hours from now. Susan Lisovicz, thanks a lot. Appreciate it.
LISOVICZ: You're welcome. COLLINS: We want to give you a live look now. The Senate Foreign Relations Committee hearing room, the confirmation hearing of course for Senator Hillary Clinton getting ready to begin any time now. She is the nominee for secretary of state. Let's bring in some of our team coverage now for the hearing this morning.
CNN foreign affairs correspondent CNN's Jill Dougherty and CNN's senior congressional correspondent Dana Bash.
Dana, let's go ahead and begin with you. Obviously, a big, big day for Hillary Clinton.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: A big day for Hillary Clinton and, you know, just in terms of the atmospheric, Heidi, I think we've talked about this so with other people coming before these confirmation hearings. Hillary Clinton is a part of this club. And because of that, she is going to probably get a very respectful reception.
And she's also somebody who actually, despite the fact that she is polarizing around the country, she has very good relationships inside the Senate. She was known as a senator, as a workhorse and somebody who, you know, worked across the aisle with Republicans as well.
In terms of what we can expect in terms on the issues here, look, I think it's important to remember politically that Hillary Clinton, obviously, ran against Barack Obama in a very tough fight. And one of the biggest differences that she highlighted between the two of them was on the issue of national security. Not just the 3:00 a.m. ad, that infamous ad that she ran suggesting that Barack Obama isn't ready to be commander-in-chief, but also on how he would deal with some of the world's toughest characters, like Ahmadinejad.
She really highlighted the fact that she thought that he would sit down with him without conditions. I just ran into, Heidi, a Republican senator who is going to be questioning her and said, look, that is something that I want to know.
This Republican senator said I want to know from Hillary Clinton whose foreign policy is going to win here? Is it going to be the approach from Barack Obama that he stated during the primary, or is it going to be Hillary Clinton's? That is one interesting thing that we are going to see. The other is Bill Clinton. And the fact of the matter is he still has an issue with many of these senators with regard to the contributions his foundation has gotten from foreign governments and foreign entities.
COLLINS: Dana, I don't want to interrupt you, but we are seeing some live pictures that I know you may not have access to at this moment. But Hillary Clinton has just walked into the room. And I also believe that I see Chuck Schumer there, Dick Lugar and John Kerry as well. John Kerry, of course, the chairman of the Senate Foreign Relations Committee. We do expect to hear from all three of those men prior to hearing from Hillary Clinton as well. You know what, Dana, just quickly, curious, we did see Chelsea Clinton just a few minutes ago. Will the former president be in this room today?
BASH: You know, our Jessica Yellin did some reporting on this last night. And said, the answer is no. Bill Clinton will not be there, but obviously her daughter is there to support her. And it is certainly not a surprise that Bill Clinton isn't there. Not just because of the distraction that he might be in terms of the spotlight, but much more importantly because of the issue I was just mentioning because of the fact that his ties to foreign governments and foreign entities with regard to the money, the millions and millions that he got as part of his foundation, that will very likely be a big focus here in this hearing. And it's something that she wants to try to put behind her.
COLLINS: Any idea how long this confirmation could last today?
BASH: You know, they usually last, you know, two to three hours. You know, one of the senators I was just talking to was lamenting the fact that he is worried that he's not going to get very much time. You know, it's important to note that some of the senators who used to be on this committee like Senator Barack Obama are no longer there. People were actually defeated, and we're not going to see as many on the panel as we normally would.
But I actually just want to talk about the pictures we're seeing. You know, we are talking about the clubby atmosphere. There you see it. There you see Senator Clinton, you know, shaking hands. This is still officially on paper. This is still her home. She is still a member of the body that she is going to be appearing before. So you actually see that there as she begins to get ready to take her place.
COLLINS: Right. All right, Dana, thanks for that. And also, several points that Hillary Clinton wants to hit I'm sure during this hearing. In fact, CNN Foreign Affairs correspondent Jill Dougherty is standing by a little bit more on that. Some of the issues of foreign policy?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: You know, Heidi, really, the theme that they are stressing is smart power. So what is smart power? Smart power really is a focus more on diplomacy and less on military. It would be really diplomacy leading the way, backed up by the military.
And her transition officials have actually released some of the prepared statements that she is going to be making. And they're interesting to watch. You were mentioning that 3:00 a.m. commercial or Dana was during the election campaign. And there was almost a reference to that. She is going to, according to these prepared remarks, say I don't get up every morning thinking about threats and dangers that we face because danger and threats can bring opportunity.
So there is a kind of a different spin on that. Not a focus on the threats that the Bush administration, you might say, focused more on this will be what are the opportunities out there amidst those threats.
Also, you're going to see Senator Clinton talking a lot more about working with other countries, working with the allies, a foreign policy. She is going to say, a marriage of principles and pragmatism, not ideology. That would be another swipe.
COLLINS: All right. Very good. Jill, we sure do appreciate that. We want to take a moment now to go ahead and listen in as Chairman John Kerry begins his opening statements right now. The confirmation hearing of Senator Hillary Clinton.
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY (D), MASSACHUSETTS: For the first time in American history, one of our members will be sworn in as president and another one as vice president. Before any of the newer members of our committee get too excited about future prospects, let Dick Lugar, Chris Dodd and myself, and perhaps even Hillary will join in this in saying, trust us, it ain't automatic.
(LAUGHTER)
KERRY: For me, it is a particularly special and personal privilege to be sitting here. Having testified before Chairman Fulbright in 1971 and having worked closely with the chairman since who have set a strong example for this committee's ability to contribute to our security. And this morning, we should remember one chairman in particular.
Last week, Dick, Chris, Sheldon and I attended memorial services for Claiborne Pell in Rhode Island. Now, President Clinton, who first met Chairman Pell when she was a college student interning on this committee, spoke movingly at the funeral. And today, I know we all join together in expressing our gratitude for Chairman Pell's exemplary service.
His commitment to bipartisanship and multilateralism remains the guidepost by which this committee will continue its effort. I'm privileged also to follow in the most recent footsteps of two respected chairmen and good friends. Vice President-elect Biden and I first ran for office together in 1972. We grew up together in politics. I know Joe and his family well, as many of the members of this committee do. I value his friendship and the country will come to value the wisdom and strength which he brings to the vice presidency. The committee is grateful for his leadership.
I also have the good fortune, as chairman, to have beside me as ranking member the senior-most Republican in the Senate, a Nobel Peace Prize nominee for his groundbreaking nonproliferation work, and a trusted, thoughtful voice in our national security dialogue.
Senator Lugar, I look forward to working with you in the same cooperative way that Senator Biden did and others have in the past, and I know that that will characterize the work of this committee as we go forward, and I could not have a better partner. And I thank you for that. If we do our job correctly, as we begin a new Presidency and a new Congress, we stand on the brink of a new era of American diplomacy with great potential for significant, if not transformational steps forward across the globe. And I look forward to working with Secretary Clinton to seize that potential.
In the last seven years, we have spent the treasure of our nation-young American soldiers first and foremost, and billions of dollars-to fight terrorism. And yet grave questions remain as to whether or not we have chosen our battles correctly, pursued the right strategy and defined the right goals. That we are engaged in fighting a global insurgency is beyond doubt. But our task is to define the method and means of our response more effectively, and no challenge will be greater in the days ahead than to get this right.
Pakistan and Afghanistan are definitively the front line of our global counterterrorism efforts. Having visited several times recently, it is clear that no amount of additional troops will succeed absent the effective instruments of a functioning state. We face a gargantuan task, and to be successful, I believe we must fundamentally redefine our approach. We went into Afghanistan to deny al Qaeda sanctuary. Our goals must be defined by our original mission, by the regional security context, and by the tribal, decentralized nature of Afghan society. I'm eager to hear Senator Clinton's thoughts on the road ahead in Afghanistan.
Nor should anyone believe that Iraq is a completed task. Despite the Status of Forces Agreement that sets out a schedule for reduction of US forces, Sunni-Shia tensions, the unresolved status of Kirkuk, the distribution of oil revenues, and setbacks to political reconciliation, each threaten to upend our fragile progress, and they will require active diplomatic engagement by Secretary of State Clinton and the rest of the Obama Administration with Iraq's government and particularly with its neighbors.
Iraq, as well as Iran, Syria, the West Bank and Gaza, all require an approach that recognizes the interconnectedness of each of our challenges. We look forward to working with the Administration and with Secretary Clinton on a significantly expanded and vigorous diplomatic effort.
In the age of catastrophic terrorism, it is also urgent that I know Senator Lugar joins me in expressing this, urgent that we restore America's leadership on nonproliferation. Whatever our differences, we must reengage with Russia on nuclear security, specifically the START treaty. It is my hope that we will embrace deep reciprocal cuts in our nuclear arsenals-and I'm eager to hear Senator Clinton's thoughts on this matter. Consistent with our security needs, I believe we should set a goal of no more than 1000 deployed warheads - and that goal should be just the beginning. We should also lay the groundwork for ratification of the Comprehensive Nuclear Test Ban Treaty.
The last eight years have resulted in increased suspicion of our motives abroad-especially in the Muslim world, where we must do much more to reduce the prevalent and costly perception of an assault on Islam. It is vital that we redouble our efforts to find common ground, including through interfaith dialogue.
We must integrate all of the disparate elements of our national power into a single unified effort. And I agree with Secretary Gates that we need a State Department with more resources and greater capacity to deal with 21st-century challenges in conflict zones and weak and failing states.
I was heartened to hear Senator Clinton signal her desire to radically improve our diplomatic capacity and finally give the State Department the tools it needs to put civilian functions back in civilian hands-and she can count on our support in that effort. She can also count on our support in efforts to re-engage with Latin America and recognize how crucial renewed and expanded relationships with Russia and China are to our overall goals.
I believe, Madame Secretary-designate, that China offers us extremely important opportunities for a more productive partnership and we need to approach that relationship with greater respect for and understanding of our common interests.
Before turning to Senator Lugar, let me just say one thing about global climate change. Many today do not see global climate change as a national security threat. But it is, profoundly so. And the consequences of our inaction grow more serious by the day.
In Copenhagen this December we have a chance to forge a treaty that will profoundly affect the conditions of life on our planet itself. The resounding message from the recent Climate Change Conference in Poland was that the global community is looking overwhelmingly to our leadership. This Committee will be deeply involved in crafting a solution that the world can agree to and the Senate can ratify. And as we proceed, the lesson of Kyoto must remain clear in our minds: all countries must be part of the solution.
Each of these challenges present major opportunities for a new Administration and for Secretary Clinton. After the polarization of the last eight years, diplomacy must be directed domestically as well.
Senator Clinton's record in the Senate shows her to be an alliance-builder in the finest traditions of this body. She has repeatedly sought out the best people, the best ideas, and the common ground upon which solutions could be found.
While the committee still has some questions with respect to the fundraising activities of the Clinton Foundation, I am pleased that Senator Clinton will have an opportunity today to address them beyond the ways in depth at they have already been addressed.. I understand that Senator Lugar will be speaking to this issue in greater detail, and we look forward to hearing senator's responses.
Let me just say personally that in the year 2000, I had the privilege of joining the then-First Lady and her Husband on the first visit by an American President to Vietnam, after the normalization of relations. I have seen Senator Clinton's diplomatic acumen up close. I saw her immense curiosity, her quick and impressive grasp of detail, her authoritative approach -- all of which will serve her well in this new undertaking.
Hillary Clinton has shown the intelligence to navigate the complex issues we face, the toughness and tireless work ethic this job will require, the stature to project America's world leadership, and the alliance-building, at home and abroad, that will be vital to our success in the years ahead.
As Senator, Hillary has earned the respect of her colleagues -- Democrat and Republican alike, and we are honored here to welcome her here today, to our Committee for confirmation as America's next Secretary of State.
Senator Lugar?
SEN. RICHARD LUGAR (R), RANKING MEMBER, FOREIGN RELATIONS COMMITTEE: Mr. Chairman, I congratulate you on taking the gavel. We wish you every success, and we appreciate the very gracious comments you have made about previous chairmen. And I join you especially in your tribute to our former colleague, Senator Pell, and whose life we celebrated together last week.
It is a great pleasure to welcome Senator Clinton to the Foreign Relations Committee. Those of you who have served with her during the past eight years can attest to her impressive skills, her compassion, and her collegiality. I have enjoyed the opportunity to work with her in the Senate, and I look forward to the prospect of much more frequent collaboration when she is Secretary of State.
I also want to congratulate Senator Kerry on the assumption of chairmanship of this Committee. My first hearing as Chairman of the Committee in 1985 was one of the proudest moments in my career, and I am sure Senator Kerry is feeling the gravity as well as the joy of this historic occasion. Now I want to thank him and his staff for their graciousness during the last several weeks. It's been a pleasure to work with them. I look forward to all that we can achieve together under Senator Kerry's Chairmanship.
I have frequently said that the foremost criteria for selecting a national security cabinet official should be whether the nominee is a "big-leaguer" who has achieved extraordinary accomplishments, is well known to the world, understands both process and policy, and can command global respect. In Senator Clinton, President-elect Obama has boldly chosen the epitome of a big-leaguer.
Her qualifications for this post are remarkable. Her presence at the helm of the State Department could open unique opportunities for U.S. diplomacy and could bolster efforts to improve foreign attitudes toward the United States. She has longstanding relationships with many world leaders that could be put to great use in the service of our country. Her time in the Senate has given her a deep understanding of how United States foreign policy can be enriched by establishing a closer relationship between the Executive and Legislative Branches. She is fully prepared to engage the world on a myriad of issues that urgently require attention.
During the last six years, this Committee has held more hearings than any other Committee in the Senate, though we have tried to come to grips with issues involving Iraq, Afghanistan, Iran, North Korea, Russia, the Middle East peace process, Africa, the Western Hemisphere, the NATO alliance, non-proliferation, foreign assistance reform, the State Department budget, and numerous other priorities.
All of these challenges will continue to occupy Senator Clinton as Secretary of State. I would highlight several other points to which I hope the Secretary will give very high priority in addition to ongoing crises that will press for her attention.
First, it is vital that the START Treaty with Russia be renewed. When the Senate gave its consent to ratification to the Moscow Treaty in 2002, it did so knowing that the U.S. could rely on the START Treaty's verification regime. It provides important assurances to both sides. At the time, this Committee was assured that extension of START was a very high priority. Unfortunately, little progress has been made and the treaty will expire in eleven months. In other words, the conceptual underpinning of our strategic relationship with Russia depends upon something that is about to expire. Such an outcome will be seen as weakening the international nonproliferation regime.
Second, energy security must be given a much higher priority in our diplomacy. Earlier this month Russian Prime Minister Vladimir Putin ordered a cut-off in natural gas supplies that struck allies across Europe. And this dispute is only the most recent example of how energy vulnerability constrains our foreign policy options around the world, limiting effectiveness in some cases and forcing our hand in others.
I look forward to supporting President-elect Obama in taking the necessary steps to dramatically reduce our domestic dependence on oil. Yet domestic reform alone will not be sufficient to meet the global threats to our national security, or economic health, or climate. In my judgment, energy security must be at the top of our agenda with nearly every country. Progress will require personal engagement by the Secretary of State.
Third, eradicating global hunger must be embraced as both a humanitarian and national security imperative. Precipitous food price increases that occurred in 2007 and 2008 created havoc in many parts of the world, causing riots in some 19 countries, and plunging an additional 75 million people into poverty and increased vulnerability to malnourishment. Nearly 1 billion people are presently food insecure.
It is predicted that the world's population will grow to such an extent that by 2050, current food production will need to double in order to meet demand. There is no reason why people should be hungry when we have the knowledge, the technology, and the resources to make everyone food secure. The United States is uniquely situated to help the world feed itself, and has the opportunity to recast its image by making the eradication of hunger a centerpiece of U.S. foreign policy.
With these issues in mind, it is especially important that we move forward with Senator Clinton's nomination. President-elect Obama has expressed his confidence in her, and he deserves to have his Secretary of State in place at the earliest opportunity.
The main issue related to Senator Clinton's nomination that has occupied the Committee has been a review of how her service as Secretary of State can be reconciled with the sweeping global activities of President Bill Clinton and the Clinton Foundation. To this end, the Obama transition and the Clinton Foundation completed a memorandum of understanding outlining steps designed to minimize potential conflicts of interest.
I share the president-elect's view that the activities of the Clinton Foundation and President Clinton himself should not be a barrier to Senator Clinton's service. But I also share the view, implicitly recognized by the Memorandum of Understanding, that the work of the Clinton Foundation is a unique complication that will have to be managed with great care and transparency.
The core of the problem is that foreign governments and entities may perceive the Clinton Foundation as a means to gain favor with the Secretary of State. Although neither Senator Clinton, nor President Clinton has a personal financial stake in the Foundation, obviously its work benefits their legacy and their public service priorities. There is nothing wrong with this, and President Clinton is deservedly proud of the Clinton Foundation's good work in addressing HIV/AIDs, global poverty, climate change and other pressing problems.
But the Clinton Foundation exists as a temptation for any foreign entity or government that believes it could curry favor through a donation. It also sets up potential perception problems with any action taken by the Secretary of State in relation to foreign givers or their countries.
The nature of the Secretary of State post makes recusal from specific policy decisions almost impossible, since even localized U.S. foreign policy activities can ripple across countries and continents. Every new foreign donation that is accepted by the Foundation comes with the risk that it will be connected in the global media to a proximate State Department policy or decision.
Foreign perceptions are incredibly important to U.S. foreign policy, and mistaken impressions or suspicions can deeply effect the actions of foreign governments toward the United States. Moreover, we do not want our own government's deliberations distracted by avoidable controversies played out in the media. The bottom line is that even well intentioned foreign donations carry risks for U.S. foreign policy.
The only certain way to eliminate this risk going forward is for the Clinton Foundation to forswear new foreign contributions when Senator Clinton becomes Secretary of State. I recommend this straightforward approach as the course most likely to avoid pitfalls that could disrupt United States foreign policy or inhibit Senator Clinton's own activities as Secretary of State.
Alternatively, the Clinton Foundation and the Obama transition have worked in good faith to construct a more complex approach based on disclosure and ethics reviews that will allow the Foundation the prospect of continuing to accept foreign donations deemed not to have the appearance of a conflict of interest. The agreement requires, among other measures, the disclosure of all Foundation donors up to this point, an annual disclosure of donations going forward, and a State Department ethics review process that would evaluate proposed donations from foreign governments and government entities.
All of these are positive steps. But we should be clear that this agreement is a beginning, not an end. It is not a guarantee against conflict of interest or its appearance. And for the agreement to succeed, the parties must make the integrity of United States foreign policy their first principle of implementation. For this reason, the requirements for transparency in the Memorandum of Understanding should be considered a minimum standard.
I am hopeful the Clinton Foundation and the Obama Administration will go further to ensure that the vital business of United States foreign policy upon which the security of our country rests, is not encumbered by perceptions arising from donations to the Foundation. If there is a slightest doubt about the appearance that a donation might create, the Foundation should not take it. If there are issues about how a donation should be disclosed, the issues should be resolved by disclosing the donation sooner and with as much specificity as possible. Operational inconveniences for the Foundation or a reduction in some types of donations that have been accepted in the past are small prices to pay when balanced against the serious business of United States foreign policy that affects the security of every American.
With this in mind, I have suggested several additional transparency measures that could be embraced by the Clinton Foundation and the Obama administration going forward. Because time is limited, I will not discuss each one now, but I have provided a background sheet Attachment A that outlines these measures. My understanding is that the Clinton Foundation has already accepted the fourth item listed. The willingness of all parties to voluntarily implement these additions would strengthen the commitment to transparency and at least partially mitigate the risks inherent in foreign contributions.
I believe that every member of this Committee will seek ways to support Senator Clinton's work as Secretary of State. I am certain every member wants her to succeed. We have the opportunity through the leadership of President-elect Obama and Senator Clinton to establish a new foreign policy path that will greatly benefit the security and prosperity of the United States. And I look forward to our discussion with our esteemed colleague today. I applaud her willingness to take on the role of Secretary of State at a very difficult moment in history.
I thank you, Mr. Chairman.
KERRY: Thank you, Senator Lugar. And let me just say that for the record, first of all the attachment will be made for the record with the statement. And secondly, I think it's fair to say that Senator Lugar is not speaking from a partisan's perspective, but I think he is really expressing the view of the community as a whole, and we look forward to having a good discussion about this. If I could just say to my colleagues that what we're going to do is -- I wanted to take my personal privilege to let Senator Dodd say something because he has to go chair a hearing.
