Saturday, January 19, 2013

Americans Prefer Cockroaches, Traffic Jams and Nickelback To Congress

As the nation braces itself to hit the debt limit as early as February 15, Congress is as gridlocked as ever. Republican lawmakers are now suggesting they will resist raising the debt ceiling, risking a government shutdown and a default on U.S. credit. The last fight over the debt ceiling in August 2011 led to an unprecedented downgrade of U.S. credit and billions of wasted taxpayer dollars.

Americans were paying attention during 2011's fight, and their approval rating of Congress plunged to an all-time low soon after the credit downgrade. A record 82 percent of respondents said at the time they disapproved of the job Congress was doing. Now, on the verge of another debt ceiling crisis, that number has risen to 85 percent.

Public Policy Polling decided to figure out just how much Americans hate Congress by asking respondents to compare their feelings about their lawmakers to a list of other unpopular things. The results were not pretty:


Congress did beat out North Korea, Lindsay Lohan, the Ebola virus, gonorrhea and the Kardashians.


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New tax increases unlikely to encourage investment

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Perhaps appropriately, the “American Taxpayer Relief Act of 2012” (the “Act”) started off passing the Senate in the dark wee hours of January 1, 2013, and was ultimately signed by the President by autopen from Hawaii on January 2, 2013. This “fiscal cliff” legislation, with great political and press drama, may have kept the country out of a self-created fiscal/political tax ditch, but the country is still on the edge of the real fiscal cliff.

There are many problems with the Act, but one raises particular concern. The 2013 tax adversely impacts the most successful of the closely held businesses operating as limited liability companies, S corporations, or other pass-through tax entities. Additionally, though not discussed herein, because deficit spending was not addressed, no solution to the country’s fiscal problems has been reached. We are still peering over the edge of a fiscal cliff, with spending cut issues, debt ceiling issues and undoubtedly more tax issues to be dealt with before March 1, 2013.
 
Individuals with pass-through tax entity income
 
According to the Congressional Research Service, pass-through tax entities (principally S corporations and LLCs) represent over half of the business income in the United States. These are now the predominate form of closely held business and a source of much of the current job growth. Such business income, even when retained in the business, is included in the owners’ individual taxable income.
 
The active owners of pass-through entities are classified as self-employed, and the passive owners who provide capital for the business are investors with investment income. The Act increases the income tax rate to 39.6 percent on individual taxpayers (including owners of pass-through entities on the income remaining in the business) with adjusted gross income (“AGI”) above specified thresholds (generally $400,000 or $450,000).
 
This 39.6% increase also interfaces with other increases effective in 2013 to raise the tax burden further. For example:
 
a) the phasing out personal exemptions and phasing down itemized deductions for taxpayers with income above $250,000 (individuals), $300,000 (married filing jointly and surviving spouses), $275,000 (head of households) or $150,000 (married filing separately) which is simply a back door rate increase;
b) a new .9 percent increase in the self-employment tax for self-employment income in excess of $250,000 (married filing separately) and $200,000 (individuals);
c) an increase in the capital gains tax rate to 20 percent for taxpayers in the 39.6 percent bracket; and
d) the new 3.8 percent tax on investment income for taxpayers in the 33 percent bracket.
 
Compare this to the rates for publicly traded C-corporations. The maximum C corporation tax rate of 35% is currently the highest in the developed world and a recognized impediment to U.S. global competitiveness. The Act raises the non-corporate business tax rate for successful pass-throughs from the 35 percent maximum (the same as corporations) to:
 
i. a new maximum of 39.6 percent (not including the 2013 additional .9 percent self-employment tax increase and the additional taxes resulting from phased down itemized deductions and loss of personal exemptions) for all active individual owners, and
ii. 39.6 percent plus the new 3.8 percent tax on investment income (total 43.4 percent) for investor owners reaching the specified income thresholds.
 
For the successful active pass-through owners with sufficient AGI, the new 2013 increase of 4.6 percentage points is a 13 percent increase in the marginal rate  (4.6 percent divided by 35 percent) and for investors the combined 4.6 percent income tax and 3.8 percent investment tax is a 25 percent increase in the marginal tax rate (8.4 percent divided by 35 percent). It is impossible for this to have a positive effect on the financial health of the affected businesses, and likely results in less expansion, slower growth, and diminished hiring capacity.
 
In addition, the rewards for investing (in C corporations or pass-throughs) are diminished for many successful individual investors and active business owners. When the 3.8 percent tax on investment income for taxpayers with AGI in excess of $250,000 is combined with the new capital gains tax, a married taxpayer filing a joint return will have a long term capital gain tax of 15 percent, 18.8 percent or 23.8 percent depending on whether her AGI is below $250,000, between $250,000 and $450,000 or over $450,000.
 
Dividends are taxed in the same manner as long term capital gains. For taxpayers in the 39.6 percent bracket, the marginal tax increase on capital gains and dividends is 58.7 percent (8.8 percent divided by 15 percent)! Short term capital gains are taxed as investment income and for taxpayers in the 39.6 percent the effective rate is 43.4 percent. (a 24 percent increase from 2012 - 8.4 percent divided by 35 percent). These massive increases are hardly a recipe to encourage investment in U.S. business (corporate or pass-through) or for the operators and investors in pass-through entities to take additional risk (hiring people and otherwise trying to expand the business) for reduced after tax reward.
 
Griffith practices law as a partner at Waller, where he leads the firm’s tax practice.


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Mexican Restaurant Defends Racist Shirts As ‘Witty And Comical’

On Monday, ThinkProgress reported about a Mexican restaurant in Columbia, South Carolina whose employees wear T-shirts (pictured below) showing a wooden trap with tacos as bait and the caption “HOW TO CATCH AN ILLEGAL IMMIGRANT”.

Now, Taco Cid issued an equally offensive response on its website, flagged by the Palmetto Public Record. The eatery defended the shirts as “witty and comical,” arguing that “Taco Cid and it’s [sic] employees are not racist.” The restaurant insists that the shirts, which show a pair of tacos under a trap and singles out “ILLEGAL IMMIGRANTS,” contain “NO racial nor hate remarks towards any specific ethnic group.”

But it also goes on to articulate a false political argument, claiming that undocumented workers cause everyone to “pay more in taxes in support of their illegal activities.” In 2010 alone, unauthorized immigrants paid $11.2 billion in state and local taxes and pump billions in purchasing power into the economy. This output and spending generates jobs and opportunity.

Taco Cid finished the rambling statement with a plea for those who are offended by its views not to come enjoy their tacos: “If you do not agree with our views on ILLEGAL immigrants, please do not visit our establishment.”

See the full statement below:

Judging by the Taco Cid’s reviews on Yelp, many people are taking the restaurant up on their plea to stay away if they don’t agree with the racist shirts. Nine of the ten reviews gave Taco Cid one star, in large part due to the shirts. “Racist shirts and the food sucks, too,” wrote Corvus S. User K.G. followed up with, “The racism’s world class! Awareness of tax policy, immigration law, and social justice is disappointing, along with an embarrassing level of self-awareness.”

The restaurant posted on its website that it will no longer advertise in the Columbia Free Times after its reporter, Corey Hutchins, first tweeted a picture of an employee wearing the racist shirt. They write that Hutchins “has acted in a reckless and slanderous way towards Taco Cid.”

Taco Cid is now selling the racist shirts to the public on their website.


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Florida Governor Inflates Cost Of Medicaid Expansion By 2,600% To Avoid Implementing Obamacare

Florida Gov. Rick Scott (R)Internal email messages uncovered by Health News Florida reveal that Gov. Rick Scott (R-FL) is knowingly citing inaccurate cost estimates to justify his refusal to expand Florida’s Medicaid program. Though the governor’s office is fully aware that the numbers are wrong, Scott continues to use them anyway, the documents show.

Florida, which has one of the highest rates of uninsurance in the nation, could extend health coverage to about one million low-income residents by accepting Obamacare’s optional Medicaid expansion. But the governor — an ardent Obamacare opponent — has repeatedly said that expanding Medicaid would just be too expensive, claiming it would cost the state $26 billion over the next 10 years.

As Health News Florida reports, however, that figure from Florida’s Agency for Health Care Administration (AHCA) is inflated because it doesn’t take into account the full amount that the federal government will reimburse states for choosing to expand Medicaid. A more accurate analysis found that expansion would cost the state around $1 billion:

But those numbers are based on a flawed report, state budget analysts say. A series of e-mails obtained by Health News Florida shows the analysts warned Scott’s office the numbers were wrong weeks ago, but he is still using them. [...]

The Act says the federal government will pay the lion’s share of the cost for new Medicaid eligibles if a state agrees to expand its program — a decision the Supreme Court left up to the states. The federal contribution for the new eligibles would be 100 percent between 2014 and 2016, then would taper after that to 90 percent by 2020 and stay there.

But the AHCA report assumes the federal match for the new patients would be much lower, about 58 percent. It came up with that by averaging the match amount over the past 20 years. The report doesn’t say why the authors made that assumption. [...]

As Health News Florida reported on Dec. 21, the AHCA estimates were huge in comparison to a study released by the Urban Institute and Kaiser Family Foundation, two neutral research groups that specialize in Medicaid studies. Their study estimated that if Florida agreed to expand Medicaid, about 1 million uninsured people would gain coverage at a 10-year cost to the state of around $1 billion.

According to the email chain that Health News Florida obtained, state officials began calling the AHCA’s $26 billion cost estimate into question as early as December 20. One member of the House Health Care Appropriations Subcommittee even pointed out that, since the health reform law specifies that the federal government will help fund Obamacare’s Medicaid expansion, it would actually break Florida state law to expand Medicaid without using the federal dollars mandated for that purpose.

Nevertheless, Scott has continued to repeat his false claim that Florida can’t afford to provide its low-income residents with the health coverage they need. Scott met with U.S. Health and Human Services Secretary Kathleen Sebelius on Monday to express his concerns about what expanding Medicaid would mean for his state’s bottom line. “Growing government, it’s never free,” Scott explained to reporters. “It always costs money.” Just not as much money as Scott says it does.


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Over the cliff and into a permanent one

By A.B. Stoddard, columnist, The Hill - 01/08/13 02:41 PM ET

The Hill's A.B. Stoddard takes your questions on the "fiscal cliff" deal and the prospects for gun-control legislation in the 113th Congress.

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Statement by the Press Secretary on the visit of President Hamid Karzai of Afghanistan to the White House

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For Immediate Release January 07, 2013 Statement by the Press Secretary on the visit of President Hamid Karzai of Afghanistan to the White House

President Obama will host President Hamid Karzai and his delegation at the White House for bilateral meetings on Friday, January 11. President Obama looks forward to welcoming the Afghan delegation to Washington, and discussing our continued transition in Afghanistan, and our shared vision of an enduring partnership between the United States and Afghanistan.

Blog posts on this issue January 08, 2013 1:52 PM ESTHappy Birthday, Stephen Hawking

On Professor Hawking’s 71st birthday, we’d like to share a never-before-seen video from his visit to the White House.

January 07, 2013 4:25 PM ESTPresident Obama Nominates John Brennan as CIA DirectorPresident Obama Nominates John Brennan as CIA Director

President Obama announces John Brennan as his nominee for the next head of the Central Intelligence Agency.

January 07, 2013 4:19 PM ESTPresident Obama Wants Chuck Hagel to Run the PentagonPresident Obama Wants Chuck Hagel to Run the Pentagon

The President asks Sen. Chuck Hagel to serve as Secretary of Defense.

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Health Insurers Raise Some Rates by Double Digits

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

 In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

Under the health care law, regulators are now required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal Web site, healthcare.gov, along with regulators’ evaluations.

The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.

New York, for example, recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to under 10 percent. California can review rate requests for technical errors but cannot deny rate increases.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

Critics, like Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.

“This is business as usual,” Mr. Jones said. “It’s a huge loophole in the Affordable Care Act,” he said.

While Mr. Jones has not yet weighed in on the insurers’ most recent requests, he is pushing for a state law that will give him that authority. Without legislative action, the state can only question the basis for the high rates, sometimes resulting in the insurer withdrawing or modifying the proposed rate increase.

The California insurers say they have no choice but to raise premiums if their underlying medical costs have increased. “We need these rates to even come reasonably close to covering the expenses of this population,” said Tom Epstein, a spokesman for Blue Shield of California. The insurer is requesting a range of increases, which average about 12 percent for 2013.

Although rates paid by employers are more closely tracked than rates for individuals and small businesses, policy experts say the law has probably kept at least some rates lower than they otherwise would have been.

“There’s no question that review of rates makes a difference, that it results in lower rates paid by consumers and small businesses,” said Larry Levitt, an executive at the Kaiser Family Foundation, which estimated in an October report that rate review was responsible for lowering premiums for one out of every five filings.

Federal officials say the law has resulted in significant savings. “The health care law includes new tools to hold insurers accountable for premium hikes and give rebates to consumers,” said Brian Cook, a spokesman for Medicare, which is helping to oversee the insurance reforms.

“Insurers have already paid $1.1 billion in rebates, and rate review programs have helped save consumers an additional $1 billion in lower premiums,” he said. If insurers collect premiums and do not spend at least 80 cents out of every dollar on care for their customers, the law requires them to refund the excess.

As a result of the review process, federal officials say, rates were reduced, on average, by nearly three percentage points, according to a report issued last September.


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Hungarian Court Tosses Out Voter Registration Requirement

In the United States, ten states plus the District of Columbia allow voters to register to vote on election day — effectively removing the registration requirement as an obstacle to the fundamental right to vote. In the overwhelming majority of states, however, activists and political campaigns often have to race to register voters before a deadline. And conservative politicians have even raised artificial barriers to registration in an effort to reduce the franchise.

It does not have to be this way, however. To the contrary, a constitutional court in Hungary just struck down the conservative government’s attempt to impose an American-style voter registration system on its electorate:

[Prime Minister Viktor] Orban’s Fidesz-Christian Democrat alliance approved a new voting system in November in one of the most hotly contested steps of a flurry of reforms that included a new constitution and a swathe of laws that critics say entrench Fidesz’s power.

Mindful of the practice of the European Court of Human Rights, the Constitutional Court has established that for those with Hungarian residency the registration requirement represents an undue restriction on voting rights and is therefore unconstitutional,” the court said in a statement.

It added that voter registration for Hungarians outside the borders was justified.

The changes would have required 8 million domestic voters to register in person or online at least two weeks before elections in 2014. Voters currently only have to turn up at polling stations on election day to be identified from an existing state-run database and cast their vote.

Automatic or mandatory voter registration systems are increasingly common in modern democracies. They are now the rule in Australia, Chile, Denmark, Finland, Germany, Israel, Italy, Norway, Switzerland and the United Kingdom. Admittedly, such a system would be more difficult to implement in the United States, where voter rolls are maintained by many state governments rather than one central government, but same day registration achieves many of the benefits of automatic registration by similarly ensuring that registration will not be an obstacle to voting.


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Remarks by the President in Nomination of Secretary of Defense and CIA Director

The White House

Office of the Press Secretary

East Room

1:15 P.M. EST

THE PRESIDENT:  Good afternoon, everybody.  Please have a seat.  As President and Commander-in-Chief, my most solemn obligation is the security of the American people.  Over the past four years, we’ve met that responsibility by ending the war in Iraq, and beginning a transition in Afghanistan; by decimating the al Qaeda core and taking out Osama bin Laden; by disrupting terrorist plots and saving countless American lives. 

Among an outstanding national security team, I am especially grateful to Leon Panetta, who has led the CIA and our military with incredible skill.  Leon, after nearly five decades of service, you have more than earned the right to return to civilian life.  I’ll have much more to say about Leon’s distinguished service in the days ahead.  Today, I simply want to convey both to you and to Sylvia the eternal gratitude of the entire nation.  Thank you so much, Leon.

I also want to thank Michael Morell, who has earned the admiration of all of us who’ve worked with him across government and here in the White House.  In moments of transition, he’s guided the CIA with a steady hand as Acting Director -- not once, but twice.  And he is a consummate professional.  As I said, everybody in the White House who works with him, everybody across agencies who works with him considers him truly to be one of our most outstanding national security team members.  And so, Michael, on behalf of all of us, thank you and Mary Beth for your continued service.  

As these leaders know, the work of protecting our nation is never done, and we’ve still got much to do:  Ending the war in Afghanistan and caring for those who have borne the battle; preparing for the full range of threats, from the unconventional to the conventional, including things like cyber security; and within our military, continuing to ensure that our men and women in uniform can serve the country they love, no matter who they love.

To help meet the challenges of our time, I’m proud to announce my choice for two key members of my national security team -- Chuck Hagel for Secretary of Defense and John Brennan for Director of the Central Intelligence Agency.

Chuck Hagel is the leader that our troops deserve.  He is an American patriot.  He enlisted in the Army and volunteered for Vietnam.  As a young private, and then a sergeant, he served with honor, alongside his own brother.  When Chuck was hit by shrapnel, his brother saved him.  When his brother was injured by a mine, Chuck risked his life to pull him to safety.  To this day, Chuck bears the scars -- and the shrapnel -- from the battles he fought in our name.

Chuck Hagel’s leadership of our military would be historic.  He’d be the first person of enlisted rank to serve as Secretary of Defense, one of the few secretaries who have been wounded in war, and the first Vietnam veteran to lead the department.  As I saw during our visits together to Afghanistan and Iraq, in Chuck Hagel our troops see a decorated combat veteran of character and strength.  They see one of their own.

Chuck is a champion of our troops and our veterans and our military families.  As a leader at the VA, he fought to give our veterans the benefits they deserved.  As head of the USO, he devoted himself to caring for our troops.  Having studied under the GI Bill himself, he helped lead the fight for the Post-9/11 GI Bill so today’s returning heroes can get their education, too.  Having co-chaired my Intelligence Advisory Board, he knows that our armed forces collect, analyze, and depend on good intelligence.

And Chuck recognizes that American leadership is indispensable in a dangerous world.  I saw this in our travels together across the Middle East.  He understands that America stands strongest when we stand with allies and with friends.  As a successful businessman, he also knows that even as we make tough fiscal choices, we have to do so wisely, guided by our strategy, and keep our military the strongest fighting force the world has ever known.

Maybe most importantly, Chuck knows that war is not an abstraction.  He understands that sending young Americans to fight and bleed in the dirt and mud, that’s something we only do when it’s absolutely necessary.  “My frame of reference,” he has said, is “geared towards the guy at the bottom who’s doing the fighting and the dying.”  With Chuck, our troops will always know, just like Sergeant Hagel was there for his own brother, Secretary Hagel will be there for you.

And finally, Chuck represents the bipartisan tradition that we need more of in Washington.  For his independence and commitment to consensus, he’s earned the respect of national security and military leaders, Republicans and Democrats -- including me.  In the Senate, I came to admire his courage and his judgment, his willingness to speak his mind -- even if it wasn’t popular, even if it defied the conventional wisdom.

And that’s exactly the spirit I want on my national security team -- a recognition that when it comes to the defense of our country, we are not Democrats or Republicans; we are Americans.  Each of us has a responsibility, Chuck has said, to be guided not by the interest of our party or our President even, but by “the interests of our country.” 

So, Chuck, I thank you and Lilibet for agreeing to serve once more in the interests of our country.

Now, when I’m on the subject of patriots, let me say a few words about John Brennan.  In John Brennan, the men and women of the CIA will have the leadership of one of our nation’s most skilled and respected intelligence professionals -- not to mention that unique combination of smarts and strength that he claims comes from growing up in New Jersey.  (Laughter.)  

A 25-year veteran of the CIA, John knows what our national security demands -- intelligence that provides policymakers with the facts, strong analytic insights, and a keen understanding of a dynamic world.  Given his extensive experience and travels -- which include, by the way, traveling through the Arabian Peninsula where he camped with tribesmen in the desert -- John has an invaluable perspective on the forces -- the history, the culture, the politics, economics, the desire for human dignity driving so much of the changes in today’s world.   

Having held senior management, analytic, and operational positions at the agency, John is committed to investing in the range of intelligence capabilities we need -- technical and human.  He literally built -- and then led -- the National Counterterrorism Center.  And he knows the risks that our intelligence professionals face every day.  John has lost colleagues and friends -- heroes whose stars now grace that memorial wall at Langley. 

For the last four years, as my Advisor for Counterterrorism and Homeland Security, John developed and has overseen our comprehensive counterterrorism strategy -- a collaborative effort across the government, including intelligence and defense and homeland security, and law enforcement agencies. 

And so think about the results.  More al Qaeda leaders and commanders have been removed from the battlefield than at any time since 9/11.  Their communications, recruiting, training, finances are all under enormous strain -- all of which makes it harder to plan and carry out large-scale attacks against our homeland.  And our entire team, including our exceptional Director of National Intelligence, Jim Clapper, will remain relentless against al Qaeda and its affiliates. 

In all this work, John has been tireless.  People here in the White House work hard.  But John is legendary, even in the White House, for working hard.  (Laughter.)  He is one of the hardest-working public servants I’ve ever seen.  I’m not sure he’s slept in four years.  (Laughter.)  When I was on Martha’s Vineyard, John came and did the press briefing -- this is in summer, it’s August, he’s in full suit and tie.  And one of the reporters asked him, don’t you ever get any down time?  And John said, “I don’t do down time.”  (Laughter.)  He’s not even smiling now.  (Laughter.) 

There’s another reason I value John so much, and that is his integrity and his commitment to the values that define us as Americans.  He has worked to embed our efforts in a strong legal framework.  He understands we are a nation of laws.  In moments of debate and decision, he asks the tough question and he insists on high and rigorous standards.  Time and again, he’s spoken to the American people about our counterterrorism policies because he recognizes we have a responsibility to be [as] open and transparent as possible.

And so, John, you’ve been one of my closest advisors.  You’ve been a great friend.  I am deeply grateful for your extraordinary service.  I’m even more grateful for Kathy’s willingness to put up with you.  And I’m grateful to both of you for your willingness to take this assignment. 

Today, I can say to the men and women of the CIA:  In Director John Brennan you will have one of your own; a leader who knows you; who cares for you, deeply; and who will fight for you every single day.  And you’ll have a leader who has my complete confidence and my complete trust. 

As I said, the work of defending our nation is never done.  My number-one criteria in making these decisions was simple -- who is going to do the best job in securing America.  These two leaders have dedicated their lives to protecting our country.  I’m confident they will do an outstanding job.  I urge the Senate to confirm them as soon as possible so we can keep our nation secure and the American people safe. 

And so, Chuck and John -- congratulations.

And with that, I want to invite each of these leaders on stage to say a few words, starting with Mr. Leon Panetta.

SECRETARY PANETTA:  First of all, let me express my deepest gratitude to the President for giving me the honor and the privilege of serving in your administration these last four years as Director of the CIA and now as Secretary of Defense.  I have been extremely proud to be part of your national security team, Mr. President, and to be proud of what it has accomplished in your first term. 

Looking ahead to the second term, I want to commend President Obama on his decision to nominate Chuck Hagel as the next Secretary of the Defense.  And let me also add, as former Director of the CIA, to commend the President for his choice of John Brennan.  I have had the opportunity to work with John on counterterrorism issues these last four years.  He knows the CIA.  He will be a strong leader of that great intelligence agency. 

I've also known Chuck for a long period of time as well, and I had the opportunity to work with him closely -- particularly in his capacity as Chairman of the President's Intelligence Advisory Board.  I greatly appreciate the work he has done to strengthen our intelligence enterprise.  It has been extremely important to our ability to improve our intelligence capabilities.  And as Secretary of Defense, I also benefited from his work when he served on our Defense Policy Board. 

Chuck Hagel is a patriot, he's a decorated combat veteran, and he is a dedicated public servant.  I believe his experience, his judgment, his deep understanding of the security issues facing this country make him the right choice to be Secretary of Defense.

As for me, after close to 50 years of serving the American people -- began in 1964 when I served as a first lieutenant in the United States Army, and then in both the legislative and executive branch positions in Washington -- the time has come for me to return to my wife Sylvia, our three sons, their families, our six grandchildren, and my walnut farm -- (laughter) -- dealing with a different set of nuts.  (Laughter.) 

I want to deeply thank my family for giving me the fullest measure of love and support during my many absences from home throughout my long career in public service.  But I will leave Washington with a very deep sense of pride in what we have accomplished during these last four years being on the President's national security team. 

As both Director of the CIA and as Secretary of Defense, I have always believed that our fundamental mission is to keep America safe, to keep America secure.  And because of the outstanding dedication of our intelligence and military professionals, America is safer and more secure than it was four years ago, and we have reached a turning point after more than a decade of war.

And on that, as we’ve reached that turning point, we’ve developed a new defense strategy for the 21st century.  We have, with John’s leadership, decimated al Qaeda’s leadership and weakened their effort to attack this country.  We have brought wars in Iraq and we will bring the war in Afghanistan to an honorable conclusion.  We’ve opened up opportunities for all Americans to serve in our military.  And we continue to strongly support our forces, their families, and our wounded warriors.  These are some of the achievements that I am proud of.

Let me close by expressing my profound gratitude to the outstanding team of military and civilian staff and leaders that I’ve had the honor to serve with at the Department of Defense and at the White House.  In particular, let me deeply thank the outstanding men and women in uniform, who I’ve had the privilege to serve and to lead, those who put their lives on the line every day on distant battlefields for this country.  Their sacrifices teach us that freedom is not free; a strong democracy depends on a strong defense.  But you can also not have a strong and stable defense without a strong and stable democracy.

As we continue to confront strategic challenges and fiscal austerity, my hope for the future is that the sense of duty our servicemembers and their families exhibit every day inspires the leaders of this nation to have the courage to do what is right, to achieve the American Dream, to give our children a better life, and to build a more secure future.

SENATOR HAGEL:  Thank you, Mr. President.  I’m honored by your trust and your confidence in me, and not unmindful of the immense responsibilities that go with it.  I want to also acknowledge my wife, Lilibet; my daughter, Allyn; and our son, Ziller, who is in Chicago today, we hope, back attending his first day of classes at DePaul University.  (Laughter.)

And to my friend, Leon Panetta, thank you for your extraordinary service to our country over so many years in so many capacities.  You are one of the premier public servants of our time.  To follow you at the Department of Defense will be a most challenging task, but I will try to live up to the standards that you, Bob Gates and others have set for this job and this nation. 

Let me also express my deep appreciation and congratulations to my friend, John Brennan, and to also acknowledge the President's confidence and trust in John Brennan.  Thank you, John, for your service and what you will continue to do for our country.  To Mike Morell -- who I have gotten to know over the years not just serving on the Senate Intelligence Committee, but also, as the President has noted, the privilege of co-chairing the President's Intelligence Advisory Board with former Senator Dave Boren -- thank you, Mike, for your continued service.

Mr. President, I am grateful for this opportunity to serve our country again and especially its men and women in uniform and their families.  These are people who give so much to this nation every day with such dignity and selflessness.  This is particularly important at a time as we complete our mission in Afghanistan and support the troops and military families who have sacrificed so much over more than a decade of war. 

I'm also grateful for an opportunity to help continue to strengthen our country and strengthen our country's alliances, and advance global freedom, decency, and humanity as we help build a better world for all mankind.  I will always do my best.  I will do my best for our country, for those I represent at the Pentagon, and for all our citizens.  And, Mr. President, I will always give you my honest and most informed counsel.  Thank you very much. 

ACTING DIRECTOR MORELL:  Mr. President, thank you for your very kind remarks, and thank you for the trust that you placed in me when you asked me to be Acting Director twice. 

I have had the honor of knowing and working with John Brennan for the last 20 years.  We have worked particularly closely the last three years.  John Brennan is a intelligence professional with deep experience in our business, a public servant with extraordinary dedication, and a man of deep integrity.  With Senate confirmation, I know that he will be an outstanding Director of the Central Intelligence Agency. 

As the President noted, John started his career at CIA and spent nearly a quarter century.  So this is a homecoming for John. 

John, on behalf of the talented and dedicated men and women of CIA, it is my deep honor to say, welcome home.

MR. BRENNAN:  Mr. President, it is indeed a tremendous honor to be nominated to be the Director of the Central Intelligence Agency.  The women and men of the CIA are among the most dedicated, courageous, selfless and hardworking individuals who have ever served this country.  At great personal risk and sacrifice, they have made countless invaluable contributions to our national security and to the safety and security of all Americans.  Most times, their successes will never be known outside the hallowed halls of Langley and the Oval Office.

Leading the agency in which I served for 25 years would be the greatest privilege as well as the greatest responsibility of my professional life.  Mr. President, I want to thank you for your confidence in me, but even more for your confidence and constant support to the CIA and to those who serve in the intelligence community.  They need and deserve the support of all of their fellow Americans, especially at a time of such tremendous national security challenges.

If confirmed as Director, I will make it my mission to ensure that the CIA has the tools it needs to keep our nation safe, and that its work always reflects the liberties, the freedoms and the values that we hold so dear.

I’m especially proud to stand here today with such patriots as Leon Panetta, Chuck Hagel and Michael Morell.  It was a tremendous honor to serve with Leon over the past four years, and I very much look forward to the opportunity and privilege to serve with another of America’s great patriots, Chuck Hagel.

And I am especially proud and touched to be able to stand here today with my close friend and colleague, Michael Morell, who epitomizes what it means to be an intelligence professional.  Michael’s leadership at the CIA, as well as his 32-year career, has been nothing short of exemplary.  Michael, I very much look forward to working with you in the weeks, months, and years ahead.

And I also look forward to working with Congress, as our national security rests on the ability of the executive and legislative branches of our government to work as a team.  While the intelligence profession oftentimes demands secrecy, it is critically important that there be a full and open discourse on intelligence matters with the appropriate elected representatives of the American people.  Although I consider myself neither a Republican nor a Democrat, I very much look forward to working closely with those on both sides of the aisle.

Finally, and most importantly, to my wife Kathy; to my children Kyle, Jaclyn, Kelly; to my parents in New Jersey, a shout-out -- (laughter) -- Owen, who is 92 and my mom, Dorothy, who is 91; my brother Tom and my sister Kathleen and my Jersey roots:  I could not be where I am today without their love, their patience, their understanding and their support.  And there is no way that I can ever repay that, except to say I think I’m going to need it for a little bit longer.  (Laughter.)

So again, Mr. President, I am deeply grateful for this opportunity.  It will be bittersweet to leave all of my close colleagues and friends here at the White House and at the national security staff, who I have come to work with and respect so deeply over the last four years.

But if confirmed by the Senate, I will consider it to be the honor of my life to serve as the 21st Director of the Central Intelligence Agency.

THE PRESIDENT:  Well, these are four outstanding individuals.  We are grateful to all of them.  I want, in particular, to thank Mike Morell and Leon Panetta for their extraordinary service.  And I just want to repeat, I hope that the Senate will act on these confirmations promptly.  When it comes to national security, we don’t like to leave a lot of gaps between the time that one set of leaders transitions out and another transitions in.  So we need to get moving quickly on this.

The final point I will make:  One of the reasons that I am so confident that Chuck Hagel is going to be an outstanding Secretary of Defense and John Brennan is going to be an outstanding Director of the Central Intelligence Agency is they understand that we are only successful because of the folks up and down the line in these respective institutions -- the folks on the ground who are oftentimes putting their lives at risk for us, and are oftentimes at great remove from Washington and its politics.

To have those who have been in the field, who have been in the heat of battle, who understand the consequences of decisions that we make in this town and how it has an impact and ramifications for everybody who actually has to execute our national security strategies, that’s something invaluable.  It will provide me the kinds of insights that I need in making very difficult decisions, but it will also mean that these folks are going to be looking out for the people who work for them.  And that’s something that, I think, in these leadership positions is absolutely critical.

So I’m looking forward to working with these two gentlemen.  They are going to be outstanding.

Thank you very much, everybody.  (Applause.)

END
1:42 P.M. EST

On Professor Hawking’s 71st birthday, we’d like to share a never-before-seen video from his visit to the White House.

President Obama Nominates John Brennan as CIA Director

President Obama announces John Brennan as his nominee for the next head of the Central Intelligence Agency.

President Obama Wants Chuck Hagel to Run the Pentagon

The President asks Sen. Chuck Hagel to serve as Secretary of Defense.

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