Jimmy Carter, in apparent reversal, voices opposition to pot legalization

President Carter issued a statement Friday proclaiming that he does not favor marijuana legalization, despite previous statements that appeared to indicate that he favored state laws that allowed the possession and use of the drug.

“I do not favor legalization. We must do everything we can to discourage marijuana use, as we do now with tobacco and excessive drinking,” Carter said, according to a release from Project SAM. "We have to prevent making marijuana smoking from becoming attractive to young people, which is, I’m sure, what the producers of marijuana … are going to try and do.”

The group, Smart Approaches to Marijuana, opposes legalizing the drug, but instead believes those arrested for marijuana use should be sent to treatment facilities rather than jails. According to the group, Carter believes those caught with the drug should be given a warning hearing and screened for future use, but not have a permanent record kept.

“I said this 35 years ago … that I didn’t want to make it so that a person could possess … or smoke marijuana with impunity, but that they could be chastised, offered treatment, etc.," Carter said. The statement seemed to contradict a response Carter gave last year in Georgia, when he was asked if he favored legalization.

“I’m in favor of it. I think it’s OK,” Carter said during a forum. “I don’t think it’s going to happen in Georgia yet, but I think we can watch and see what happens in the state of Washington, for instance around Seattle, and let the American government and let the American people see does it cause a serious problem or not.”

But in his more recent comments, Carter said he was concerned with the potential implementation of laws legalizing pot use passed in November.

“I hope that Colorado and Washington, as you authorize the use of marijuana, will set up very strict experiments to ascertain how we can avoid the use of marijuana,” Carter said. “There should be no advertising for marijuana in any circumstances and no driving under the influence. We need to avoid the use of marijuana, particularly among young people.”

Project SAM was created by former Rep. Patrick Kennedy (D-R.I.) and conservative author David Frum.

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Hospitals twist prescription assistance program for their own benefit

By Adam J. Fein, president, Pembroke Consulting, Philadelphia - 04/29/13 03:00 PM ET

In 1992, Congress acted to help indigent and uninsured patients gain better access to prescription drugs. It authorized the 340B drug discount program, which lets eligible hospitals and other providers purchase outpatient drugs and receive discounts from pharmaceutical manufacturers.

But today, 340B discounts have left needy patients behind. Health Resources and Services Administration (HRSA), the government agency that oversees the 340B program, has developed the program with a tangle of regulations, non-public private letters, clarifications, and “Frequently Asked Questions.” Aggressive hospital strategies, all technically legal, have stretched the program’s goals beyond recognition. Hidden rebates from pharmaceutical manufacturers are instead subsidizing the operations of highly profitable, multi-billion dollar health systems.

The limited government oversight and foggy regulations let a 340B hospital profit from everyday outpatient prescriptions — drugs that are dispensed by your local pharmacy and are already fully paid by your insurance company. Thus, economic status and degree of need are irrelevant to a hospital’s ability to profit from a 340B prescription.

Hospitals grab these 340B rebates through a convoluted process. First, the hospital and its software vendors secretly match personal information from your retail prescription to their internal patient databases. If it is profitable, they convert the prescription to a 340B claim. Then, the retail pharmacy turns over its third-party and consumer payments to a 340B hospital. The hospital pays a fee to the pharmacy and submits a rebate claim for the retail prescription.

What’s more, the hospital benefits without your or your payer’s knowledge. Under existing regulations, the process is entirely permissible. However, it certainly wasn’t considered or intended in the original legislation.

This behavior sharply accelerated after a 2010 regulatory change, which lets hospitals build external networks of community pharmacies. HRSA projects that nearly one-quarter of the country’s 60,000 retail community pharmacies will be part of a 340B network. The biggest player is Walgreens. More than 4,000 of its drugstores act as 340B contract pharmacies.

Unfortunately, we can’t even detect the full scope of this practice. The National Council for Prescription Drug Programs (NCPDP), which set electronic communication standards for pharmacy care, allows easy identification of an individual prescription’s status under the 340B drug pricing program. This voluntary standard is purposely ignored by most hospitals and pharmacies.

Senator Charles Grassley (R-Iowa) has requested that the largest North Carolina hospitals provide details about their use of the 340B program. His work has exposed the small fraction of hospital 340B profits that now target indigent and uninsured patients.

Consider Duke University Health System, which has annual revenues of $2.5 billion and operating profits (revenues minus expenses) exceeding $500 million. Responding to Senator Grassley, Duke disclosed 340B pharmacy profits of $292 million — a 53 percent gross profit margin. Without these discounts, Duke's pharmacy profit margin would drop to 24 percent — comparable to that of a typical outpatient pharmacy. Only 1 in 20 patients served by Duke’s 340B pharmacy is uninsured. The remaining 95% have prescription costs paid by Medicare, Medicaid, or private insurance.

Today’s Congress should improve oversight and tighten 340B participation requirements.

To ensure that the program’s funds are being used appropriately, Congress should require that hospitals fully disclose how they use their 340B pharmacy profits. By allowing hospital’s to retain and then spend all 340B pharmacy profits, neither Medicare nor patients benefit from 340B drug discounts.

To limit abuse and increase transparency, hospitals and pharmacies should also be required to comply with established industry standards for identifying 340B prescription claims. Hospitals’ use of contract pharmacy networks should be scrutinized to be consistent with the program’s true intent.

It’s time to modernize the 340B program and help the neediest patients access valuable medicines.

Fein is president of Philadelphia-based Pembroke Consulting, Inc. He blogs at Drug Channels.

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PRISM

(Difference between revisions)It has long been known that any cell phone conversation containing key words like "bomb" or "airplane" triggered NSA surveillance programs.It has long been known that any cell phone conversation containing key words like "bomb" or "airplane" triggered NSA surveillance programs.The documents detailing this leak were released by [[Edward J. Snowden]], a former defense contractor, and IT specialist on June 6th, 2013, after the whistle blower informed [[The Guardian]] newspaper of the UK. The documents leaked included a 41 slide PowerPoint presentation on the mechanisms and morally questionable motives of PRISM. The documents also revealed the identities of the various companies actively releasing user information to the United States government. The leak of PRISM resulted almost immediately in outrage from various countries. From the Netherlands, Sophie in 't Veld, MeP, called it a violation of International Law. Sharp criticisms of hypocrisy came from the People's Republic of China, claiming that while the United States accused China of espionage, the United States was conducting global espionage on a massive scale. The German Commissioner for Data Protection and Freedom of Information has decried the program as "monstrous", and even the United Kingdom has stated it has concerns about the legality, and scope of Prism.

PRISM is a (formerly secret) program of the National Security Agency and the FBI to "tap directly into the central servers of nine leading U.S. Internet companies, extracting audio and video chats, photographs, e-mails, documents, and connection logs".[1] Discovery of the program, intended to track foreign targets, dismayed some Americans concerned that it might be used for domestic political advantage. Some others worried that its effectiveness in countering anti-US espionage or terrorism, might be diminished.

It has long been known that any cell phone conversation containing key words like "bomb" or "airplane" triggered NSA surveillance programs.

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The documents detailing this leak were released by Edward J. Snowden, a former defense contractor, and IT specialist on June 6th, 2013, after the whistle blower informed The Guardian newspaper of the UK. The documents leaked included a 41 slide PowerPoint presentation on the mechanisms and morally questionable motives of PRISM. The documents also revealed the identities of the various companies actively releasing user information to the United States government.

The leak of PRISM resulted almost immediately in outrage from various countries. From the Netherlands, Sophie in 't Veld, MeP, called it a violation of International Law. Sharp criticisms of hypocrisy came from the People's Republic of China, claiming that while the United States accused China of espionage, the United States was conducting global espionage on a massive scale. The German Commissioner for Data Protection and Freedom of Information has decried the program as "monstrous", and even the United Kingdom has stated it has concerns about the legality, and scope of Prism.

? U.S., British intelligence mining data from nine U.S. Internet companies in broad secret program, Washington Post, June 6-7, 2013

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Press Briefing by Press Secretary Jay Carney, 4/26/2013

The White House

Office of the Press Secretary

James S. Brady Press Briefing Room

11:56 A.M. EDT

MR. CARNEY:  Good afternoon -- or good morning -- or good noon to you all.  Thank you for being here.  As you know, we had a long and eventful day yesterday, but it is great to be back with you.  I have no announcements to make, so I will go straight to your questions.

Josh.

Q    Thanks, Jay.  If President Assad sees the White House say we've concluded that they have used chemical weapons and then say, well, but we're not 100 percent sure, we're going to kind of hold off while we figure it out completely -- doesn’t that give Assad reason to doubt that the U.S. is serious when we say, don't cross this line, or else?

MR. CARNEY:  No.  Because what the White House has said is that it has been assessed by our intelligence community with varying degrees of confidence that the Syrian regime has used chemical weapons on a small scale in Syria, specifically the chemical agent sarin.  This assessment is based in part on physiological samples.  Now, we are working to establish credible and corroborated facts to build on this intelligence assessment in order to establish a definitive judgment as to whether or not the President's red line has been crossed, and to inform our decision-making about next steps. 

But the President himself raised this issue, raised the profile of this issue, the seriousness of the prospect that the Assad regime would use chemical weapons or transfer them to a terrorist group last year, and the President has made clear from the beginning that this issue is gravely serious.  Now that we have a growing body of evidence that suggests that we can say with varying degrees of confidence that he has in a limited way, or that the regime has in a limited way likely used weapons, we need to build on that. 

It is absolutely the correct thing to do to take the exceptional work that our intelligence community does and continue to build information and put together a credible set of facts that can be corroborated that’s based on firm evidence that can be reviewed.  And that is what we are endeavoring to do. 

We are, of course, very much supportive of a United Nations investigation into this.  The President led -- the United States led in calling for that investigation, and we continue to press for that investigation to proceed unhindered.  We are also working independently and with our allies and with, most importantly, the Syrian opposition to assess credible reports of the use of chemical weapons, and to build evidence to support the assessments that have been made thus far.

Q    And considering the seriousness of the implications, how much urgency do you feel to get to a definitive conclusion?  If this investigation that you were just speaking about, for instance, were to run on for a number of months, is that something that President Obama would be comfortable with?

MR. CARNEY:  The President wants the facts.  And I’m not going to set a timeline because the facts need to be what drives this investigation, not a deadline. 

The situation in Syria is and has been grave.  The Assad regime has the blood of its own people on its hands.  There has been enormous loss of life and enormous disruption.  And you have seen us in a leadership role significantly increase our aid to the Syrian people through humanitarian assistance; significantly step up our assistance to the opposition, including nonlethal assistance directly to the Syrian military council as part of the opposition.  And that is in reaction what we have seen in Syria.

But it is I think instructive to look at the past for guidance when it comes to the need to be very serious about gathering all the facts, establishing chain of custody, linking evidence of the use of chemical weapons to specific incidents and actions taken by the regime.  And that’s, of course, what we will do because that’s the responsible thing to do.

Q    And on Tuesday, from the podium you said that the U.S. had “not come to the conclusion” that there had been one of these attacks.  But we’ve since learned that the White House has -- the administration has known about this for a number of weeks.  So how do you square those two statements?

MR. CARNEY:  What I said -- you’re talking about conclusion versus varying degrees of confidence that weapons were used.  I talked about conclusion in the context of crossing the red line. And what I’m saying today, and what the White House said in the letters that were sent by the Director of our Office of Legislative Affairs to two senators on Capitol Hill, is that we are continuing to work to build on the assessments made by the intelligence community; that the degrees of confidence here are varying; that this is not an airtight case. 

And that is entirely the responsible thing to do, as I think many observers of this, with a little historical perspective, have made clear in the last 24 hours.

Q    Jay, yesterday a senior administration official told reporters on a call that all options remained on the table, which I think you’ve said before, too.  What does that mean now in the context of these letters?  And how far away would the United States be from making a decision regarding military force?

MR. CARNEY:  Well, the second part of your question goes to timelines, and I'm not going to set any because we need to be about the business of assembling a credible set of facts -- assembling the evidence, assembling corroborative information.  And that is what we're doing.  And we are pressing for a United Nations investigation into this as well.

On the first part, all options remain on the table.  The President has been clear about this.  I have, as you noted.  And that remains the case.  I'm not going to speculate about what action we might take should we firmly establish that the red line has been crossed, but it is absolutely the case that all options remain on the table.

Q    So what are the next steps then as you work on getting more information?  Will there be more outreach to Russia and China about this in terms of diplomacy and getting them on board? What does the United States do next as you're looking for this evidence?

MR. CARNEY:  Well, we work with our allies who have been working on this issue.  We work with the Syrian opposition, who have obviously been helpful and can be helpful in providing evidence of chemical weapons use.  We work with the United Nations and press for a thorough United Nations investigation.  We also continue to provide significant assistance to the opposition and to the Syrian people who have been displaced and are in need of humanitarian aid because of the violence in Syria. 

So it's a multifaceted approach that is obviously focused in one sense on this issue of chemical weapons use, but is also, more broadly, about our policy of helping the Syrian people rid themselves of the Assad regime and put themselves in a position for a better future.

Q    And on one other topic, what does the White House think of the FAA legislation?  And when will the President sign it?

MR. CARNEY:  Well, obviously it has to arrive here before he can sign it, so I don't have a timetable for that.  The President would sign this if it's passed.  And it will be good news for America's traveling public if Congress spares them the unnecessary delays that we've seen that resulted directly -- as the Secretary of Transportation warned two months ago from this podium, would take place if the sequester were implemented. 

The furloughs were unavoidable.  And you had a lot of Republicans in particular who insisted that flexibility existed, that this administration and the FAA itself could implement, and we made clear that that's not what the law said.  And as I said the other day, you had members of Congress who collectively wrote the law, voted for the law, but had not read the law.  And what the action taken by Congress now -- an act of Congress that is underway to fix this specific and narrow problem with the FAA -- proves is that it requires Congress to act to deal with this. 

The problem is that this is just a Band-Aid solution.  The funding associated with the furloughs at the FAA is I think $253 million.  That's one-half of 1 percent -- one-half of 1 percent of the sequester.  And it would be a welcome development if members of Congress, if Republicans who celebrated the sequester as a political victory -- a home run, a tea party victory -- would show even a portion of the concern they showed about these real problems with flight delays for the families whose children have been kicked off of Head Start, for the seniors who have lost access to the Meals on Wheels program, for communities hard hit by the cuts across the board -- mindless cuts in our defense budget, communities that depend on defense industries and on military spending. 

We haven’t seen that.  It would be welcome if we did, because the point of the sequester was that it was mindless, it was written in a way never to become law, written by and agreed to by both parties so that it would never become law because it would have these effects.  It was designed to be terrible and onerous.  And lo and behold, whether it was a tactical political victory for the tea party or not to embrace it, these effects are happening.

Step back and look at the big picture and you still see the CBO estimate of 750,000 jobs that would be lost if the sequester were to run its full course, the fully half a percentage point of GDP that would be cut from our growth. 

Congress has the power, as it did in this narrow case -- Congress has the power to do the responsible thing, work with the President towards a balanced deficit reduction plan that invests in our economy, helps it grow, eliminates the sequester entirely, replaces it with sensible deficit reduction, which was always the plan, and then we can move forward together as a nation.  That remains within Congress’s power to do.  And that’s why the President has been engaged with lawmakers of both parties in conversation about how we can find common ground and move forward on these specific budget issues.

Q    Jay, how is it fair or right or just that these kids on Head Start get their cuts, that these cuts go into effect at the Defense Department, and it’s tough luck, but when a bunch of business travelers start belly-aching because their flights are delayed because of these furloughs at the FAA, that they get one of the fastest pieces of legislation to move through Washington in recent memory?  How is -- why doesn’t the President take a stand against that?

MR. CARNEY:  You could have thrown in members of Congress who need flights home also.  But the fact is the delays --

Q    Why doesn’t the President stand up against that?

MR. CARNEY:  The delays are a problem for not just business travelers and members of Congress, but for many Americans, and that’s a real negative consequence of the sequester.  But your point is excellent.  And we call on Congress to show as much concern for others who are being harmed by -- other Americans, hardworking, middle-class families   who are being hurt by this; hardworking communities that depend on defense industries and should not have been dealt this blow of arbitrary cuts that cause furloughs and layoffs and job terminations because Congress decided -- the Republicans decided -- and they said it publicly, you know what, everything we said about how terrible this sequester is going to, never mind; it’s a victory; it’s a tea party victory.

Q    So why is the President making an exception, then, for the air travelers?

MR. CARNEY:  The President believes it’s good news to eliminate this problem.  But as I’ve said and he believes, this is a Band-Aid covering a massive wound to the economy.  This is $253 million out of an $80-plus billion-over-seven-months problem.  And Congress should do the responsible thing and stop dealing with these issues from crisis to crisis, and simply engage in a discussion about how we can eliminate the sequester entirely through balanced deficit reduction. 

In the end, this is a choice between special interest tax breaks, closing loopholes in the tax code that the well-off and well-connected enjoy but average Americans can’t and don’t, on the one hand, versus these harmful and unnecessary cuts on the other.  And if they would move forward with the kind of balanced deficit reduction that was under discussion late last year that includes revenue earned through tax reform along the lines that Speaker Boehner openly talked about late last year, and couple that with tough choices and entitlement reforms that also produce savings, we can get somewhere productive here for the economy and for the American middle class.

Q    And just to follow up on Syria.  Yesterday White House officials said on that conference call with reporters that there is a need to be careful, because look what happened with Iraq and the weapons of mass destruction that didn’t exist in Iraq.  But in Syria, you do have some evidence that chemical weapons were used on the people there.  Isn’t there a concern that you might be showing leniency when it comes to the use of weapons of mass destruction?

MR. CARNEY:  Absolutely not.  And the fact is that we do have some evidence and we need to build on that.  We do have varying degrees of confidence that -- in the assessments that are being made that chemical weapons were used in a limited way, but we need to build on that.  And the precedent you cite I think is a significant one, and it simply stands to reason that the assessments that we make, the intelligence community makes, are extraordinarily valuable and they do excellent work, but they are building blocks towards a broader objective here, which is the accumulation of concrete evidence -- evidence that can be corroborated, evidence that can be presented and reviewed, and then acted on if the conclusion is that a red line has been crossed.

I want to move around a little bit because I noticed that for several times in the last few weeks, we’ve spent about 45 minutes in the front row here.  Yes.

Q    On Syria, just to follow up -- first of all, what exactly does “varying degree of confidence” mean?  And second is, there are several claims on the ground that the chemical weapons were used.  Has the U.S. government in any way been able to investigate any of these claims on the ground with the rebels?  And the last question is, just yesterday, again, there were some senators who started calling for a no-fly zone in the country. Have these new developments changed enough your views to take additional steps?

MR. CARNEY:  Well, I'd say a few things.  We are, of course, working with the Syrian opposition on this effort.  I'm not going to get into specific reports and our assessments of the specific reports of instances of use -- the use of chemical weapons, but simply to say that the Syrian opposition is a key component in an effort to gather more information and establish facts and answer questions about chain of custody and things like that.

Secondly, I think the comments that you refer to coming from Capitol Hill go to the question of responses.  And we're in the process here of gathering evidence to establish whether or not a red line has, in fact, been crossed -- establish in a way that is corroborated and verifiable and reviewable.  And that’s a very important task.

We are not in a static position here.  We, as I mentioned earlier, have been significantly increasing and broadening the scope of our assistance to the opposition, as well as, as you know, committing significant resources to the humanitarian effort for the Syrian people.  And we are working both with the United Nations but with friends and allies and partners who are concerned about the Syrian problem to help bring about a change there that allows the Syrian people a chance at a better future  -- a future that obviously has to exclude a tyrant who has been killing his own people now for two years. 

Ari.

Q    In the wake of the Texas and Boston explosions, some Democrats have been making an argument about the role of government, and the President hasn't.  And I wonder if he believes that more regulations could prevent what happened in Texas; that more funding for first responders would make it easier to deal with things like what happened in Boston.  And if he does, why hasn't he made that argument?

MR. CARNEY:  Well, I think that we have to step back for a moment and note that, regarding the tragic explosions in West, Texas, that’s a matter under investigation.  We do not know concretely what the cause was.  That is under investigation.  The response by first responders in Boston I think has been noted to have been remarkable, and justifiably so.  So I'm sure that a lot of evaluations, as is wholly appropriate, will be made as time passes about lessons we can learn in each instance -- obviously very distinct events -- but in each instance.  And that’s the way it should work.

But I don’t think we’re at the stage yet that your question suggests in terms of making those judgments.  The President is focused on, as he was yesterday, grieving with the families of victims of the fertilizer plant explosion.  That was an incredibly powerful service that he attended, and if you didn’t join us or didn’t watch it, it really is worth doing because it was incredibly powerful.  And not least because of the remarkable bravery and commitment to community that these almost entirely voluntary first responders demonstrated by running towards a situation that all of them had to know was one that would put them at great risk on behalf of their fellow citizens.  And he met with families, and he met with local and state officials to talk about that. 

And we’re obviously in still the early phases of investigating everything around the Boston incident.  So the questions are certainly valid, but I don’t have specific responses for you now.

Q    Do you think it’s somehow inappropriate or distasteful to use these tragedies to make an argument about the role of government?

MR. CARNEY:  I mean, I haven’t had that discussion with him. I just think that the focus now is on the areas that I just discussed.

Jon.

Q    Jay, did the President mean it when he said use of chemical weapons would be a game changer in Syria?

MR. CARNEY:  Yes, he did.

Q    So what does that mean?  And what’s a red line?  What are we talking about here?

MR. CARNEY:  The President made clear that the use of or the transfer to terrorist groups of chemical weapons by the Assad regime would be crossing a red line.  And he retains all options to respond to that.

Q    Including military force, including military strikes in Syria?

MR. CARNEY:  All options.  All options.  And there are many tools that a President has available to him in this kind of situation.  So they include all options, including the ones you mentioned, but there are many other options. 

And that’s not to suggest one direction or the other; simply to say that often the discussion -- when people mention all options are on the table, everyone just talks about military force.  And it’s important to remember that there are options available to a Commander-in-Chief in a situation like this that include but are not exclusive to that option.

Secondly, I'm not going to speculate about actions the United States may take should it be firmly established that a red line was crossed, but I will confirm that he was very serious about that.  He obviously went out of his way to make that point from this very podium because of the seriousness of it, and I think it demonstrates the fact that the United States is focused in particular on this issue, and appropriately so.

Q    Given that he got here in the first place as somebody who questioned intelligence and called for resisting the clamor to go to war over intelligence about weapons of mass destruction in this same region, does it make him a little more skeptical about the intelligence he's receiving now, a little less likely to take it at face value?

MR. CARNEY:  He has enormous faith in our intelligence community, but he also believes that the proper use of intelligence in a case like this is to have it be a component of, but not the only source, of your decision-making process.  It's not -- as I was saying before, this is an important building block towards gathering the evidence that needs to be gathered in a situation like this. 

And the precedent you mentioned is a significant one, but it's simply -- setting aside that one precedent, it's important just to acknowledge that assessments are not -- they're based in part on facts, but they're not solely facts.  They're the judgments of professionals.  They are not in and of themselves policy decisions.  And that is what the President -- a President makes the kind of decisions that are made in this situation, and he or she makes them based on -- should make them based on a broad array of information. 

Major.

Q    To continue that conversation, I know you believe, and you said the President believes, that the red line is a reasonable standard and that factual evidence must be behind it to support it.  I'd like you to address some concerns that the Syrian opposition has expressed, that some in Congress have expressed, that the volatility and the chaos in the civil war itself may make it practically impossible to obtain that kind of definitive proof, making the red line more rhetorical than practical.

MR. CARNEY:  The fact is we have some evidence.  That is what is reflected in the letter that was sent to two senators, reflected in the conversations that some of you had with government officials yesterday.  And we have been able to gather some evidence that undergird the assessments that are being made. But we are not done with the process by any means.  We are building on that.  And we are able to not just press for a United Nations investigation, which is essential, but to work with our friends and allies and the Syrian opposition to procure, share, and evaluate additional information associated with reports of the use of chemical weapons so that we can establish the facts.

So the answer to your question is the concerns that you've mentioned are real, but it’s also the case that we are able to work with our friends and allies and the Syrian opposition to gather more facts to help establish a set of facts and evidence that can be corroborated.  And that’s what we're setting about to do.

Q    Will the President commit to, if, in fact, the red line is crossed, whatever happens will be done multilaterally, not unilaterally?

MR. CARNEY:  I will not speculate about what action he might decide to take in the event that that assessment is made.  That’s too many steps forward.  I will simply say that he will --

Q    He won't commit to doing it in concert with allies?  The United States may act unilaterally?

MR. CARNEY:  Well, obviously, as a general principle -- the United States retains the ability to act unilaterally as a general principle.  But on this case, I'm not going to make a speculative judgment about what decision he might make should that assessment and that decision or conclusion be reached. 

Q    Is the FAA legislation -- now that the administration has endorsed and looked at this process that seemed to take some unexpected turns -- a model for resolving other issues related to sequestration?

MR. CARNEY:  No, because of the point --

Q    How many --

MR. CARNEY:  I'm not going to attach a number, how many times you can do it.  But the fact is it's a drop in the bucket. It's a Band-Aid over -- I think it's kind of a gross metaphor -- but a big wound.

The fact is this is a small amount of funding compared to the overall sequester.  It's $253 million.  There was an ability, because of unobligated funds available, that could be transferred only through an act of Congress -- not through administrative action, because it was not legal otherwise.  And this is a one-off case, if you will.  And the question points to the overall problem here, which is that the sequester itself cannot be finessed.  It is having negative consequences around the country.

Q    I understand the practical, governmental curiosity that people who are feeling the effects of sequestration might have.  If someone were to present to the administration something that could deal with access to cancer funding, as an example -- as an illustrative example only -- that found money or that was a one-time Band-Aid thing, would the administration be open to that?  I'm saying there will be creative people in Congress who will try to find ways to deal with individual things, and I'm trying to figure out if that's a worthwhile endeavor for them.

MR. CARNEY:  A worthwhile endeavor would be a decision to eliminate the sequester entirely.  The effort expended --

Q    But absent that?

MR. CARNEY:  -- should be expended on that because that would deal with the whole problem and the broader impact of the sequester on our economy and on job creation. 

Given how Congress deliberates and the disagreements that exist on a variety of narrow, specific issues, you can imagine how little would be accomplished if that were the path that were chosen.  The right path is simply to come to the agreement on principle that everybody used to agree on, which is that the sequester should never be implemented and we need to eliminate it, and we need to eliminate it through balanced deficit reduction.  That was the way it was designed.  That was the charge given to the super committee -- avoid this terrible thing by coming up with a bipartisan agreement on deficit reduction.

Q    But related to Jim's question, if someone were to come to the administration with a solution for food stamps, for example, or Meals on Wheels, the administration would say, forget about it? 

MR. CARNEY:  I'm not going to speculate about that because it's not remotely practical.  I would certainly welcome and be pleasantly surprised by concern on the part of Republicans for kids who have been thrown off of their Head Start programs, or seniors who aren't receiving their Meals on Wheels.  That would be a positive step.  But the fact is the way to deal with this problem is to rid ourselves of it entirely through responsible governing.  And that is what's been absent on Capitol Hill of late.

Q    But given Congress's willingness to pass this FAA bill, is there concern in the White House that this is the approach Congress is going to take going forward, just slicing off these individual pieces?

MR. CARNEY:  I think I've tried to address this.  It is not credible to imagine that you can mitigate the damage done to our economy in a piecemeal, Band-Aid fashion.  We are pleased that we can take this action to alleviate the problems caused for Americans traveling at our airports.  But this is a Band-Aid solution.  It does not solve the bigger problem.  And it is impractical to expect that all of the negative consequences of sequester can be solved this way. 

The right way to do it, the responsible way to do it, the way that I think Americans across the country when they have time to even consider this issue in their busy lives would want Congress to take is to simply eliminate the sequester, to go about deficit reduction in a responsible way; to concede that when you called it -- “you” being random Republican member of the House -- a tea party victory, you weren’t really thinking about how it hurt average Americans.  You were thinking about politics inside the Beltway.  You were thinking about whether or not you’re going to have a primary, or how this would affect your stature in the leadership.

And that’s not what the American people sent you here to do. They sent you here to solve problems in a common-sense way.  And instead, by allowing the sequester to be implemented, Congress has caused problems for average Americans -- at airports, in the homes of middle-class folks who are struggling to get by, in military communities around the country -- Congress has caused problems, made things worse unnecessarily by adopting a policy they themselves decried only a few months ago.

Q    How soon after the President signs the bill will the controllers and the FAA be back -- controllers be back at work?

MR. CARNEY:  I would have to ask you to check with the FAA. I’m not sure how that process will work.

Bill.

Q    At the risk of piling on, I think the problem you're having is that aren’t you contradicting yourselves and aren’t -- and sending the wrong message by saying the sequester is bad, we’ve got to address it across the board, but we’ll sign this one bill carving out this one exception?  And aren’t you inviting more exceptions?

MR. CARNEY:  Bill, I appreciate the question, but there is no way for this practically to be done except in a broad action by Congress to eliminate the sequester.

Q    Why would he sign this bill?  That’s my question.

MR. CARNEY:  Because this is causing unnecessary harm to travelers around the country, and this is a specific case where an act of Congress could take unobligated funds from one account and apply them, a relatively small amount compared to the size of the sequester, to address these furloughs.

But it is exactly what I’ve been saying -- a Band-Aid solution that does not solve the bigger problem.

Q    But don’t you accept that somebody is going to come down the road tomorrow with another -- it could be small business, it could be farmers, it could be, as Major said, cancer patients -- somebody else is going to come up with another -- the same argument.

MR. CARNEY:  Bill, they may.  What I’m saying is that this is not the answer.  We’re very concerned about the effects that these furloughs would have on air travelers, so much so that the Secretary of Transportation came here two months ago and warned the American people about it.  It was very amusing to me to hear members of Congress say, the administration blindsided us, they didn’t say this was happening -- and then, fortunately, some very worthy producers at television stations found the video of the Cabinet Secretary telling the American people, and Congress, and you that this would happen.  And it behooves the members of Congress to read the laws they pass -- preferably before they pass them, but sometimes after.

Wendell.

Q    Some analysts think that the limited use of chemical weapons in Syria were -- two occasions last month suggest that perhaps it was ordered by one of Assad's generals, not Assad himself.  And that suggests that all of the chemical weapon stocks may not be in Assad's control.  Is that, too, a red line? 

MR. CARNEY:  I'll say two things about that.  One is we still believe, based on the information that we have, that the stockpiles of chemical weapons in Syria are under the control of the Syrian regime.

Two, because of that, Assad is responsible for the disposition of those chemical weapons.  And it is his responsibility, first and foremost, not to use them or to transfer them to terrorist groups, but to secure them and make sure that they are not used by anybody else.

So that’s all I can really say about it.  That’s our assessment at this time.

Q    Senator McCain says that this push for proof may be an excuse not to act at all.  How do you respond to that?

MR. CARNEY:  I think that it is the responsible thing to do. It is what the American people want and expect their leaders in Washington to do on a matter of such seriousness, to ensure that we have gathered all the facts; that we build on the quality work done by our intelligence community, and work with our allies and the Syrian opposition as well as the United Nations to assemble a credible set of facts that can be corroborated and can be reviewed before we make decisions about whether a red line has, in fact, been crossed, and before we make decisions about what action to take if that’s the case.

Q    Jay, there are bipartisan calls for action on -- Senator Dianne Feinstein has said the red line has clearly been crossed.  They seem to think that this intelligence is more reliable than the White House at this point.  Why is there a discrepancy?  Why can Senator Dianne Feinstein say with such clarity that she believes a red line has been crossed, and yet the White House --

MR. CARNEY:  Well, I think you can ask individual lawmakers for their assessments and what they're based on.  What I can tell you is that our intelligence community, which is providing the same information to members of Congress, assesses with varying degrees of confidence that the Syrian regime has used chemical weapons on a small scale in Syria, specifically the chemical agent sarin, and this assessment is based in part on physiological samples, as we talked about yesterday.

Now, we are working to establish credible and corroborated facts to build on this intelligence assessment.  That is the right and responsible thing to do.  That is what we should and I think the American people would expect us to do in a circumstance like this.

Q    Just to go back to Major's point -- Syria hasn't even let U.N. inspectors in, so how do you expect to get this answer?

MR. CARNEY:  Again, we call on the Assad regime to cooperate with the United Nations investigation that they said they wanted, but we are not relying on the United Nations alone.  We are working with our allies and our partners, and we are working with the Syrian opposition to gather information and facts to assess credible reports of the use of chemical weapons, and we will continue to do that.  That is, again, the right path forward.

Q    Where does Russia factor into this?  I know you were asked about this, but is that part of the strategy moving forward, to try to get Russia engaged at this point so the United States doesn’t have to get engaged?

MR. CARNEY:  We have made clear in the past about our disagreements with Russia on the matter here and on Syria in general.  There have been Security Council votes that reflect our profound disagreements with the Russians on this.  But we continue to discuss with the Russians and others the nature of the Assad regime, the brutal assault that Assad has waged against his own people, the massive harm done to the Syrian people, and the issue --

Q    Well, is Russia the last, best option? 

MR. CARNEY:  I'm not going -- again, we will continue to work with the United Nations and members of the Security Council, but we will also proceed, as I just described, with allies and partners and the Syrian Opposition in our investigation here into the reports of -- the credible reports of chemical weapons use.

Q    And just one on immigration, Jay.  Representative Goodlatte has said he plans to introduce immigration reform in pieces.  Would the President support that approach?

MR. CARNEY:  I’m not going to speculate about bills that haven’t been written or submitted.  I will say that the President has made clear for quite some time that we need to reform our immigration system in a comprehensive way, and that includes enhanced border enforcement.  It includes improving our legal immigration system.  It includes holding businesses accountable. And it includes a clear path to citizenship.  And those are sort of the four corners of what a comprehensive immigration reform bill would look like.  It is also reflected in the legislation proposed by the Gang of Eight in the Senate. 

These principles are very important.  And I think that it -- we have seen this effort for a while here now in Washington, and we have seen it move forward but not succeed yet.  But I think what has become abundantly clear to everyone here who has followed it or worked on it, it will only get done if it is done in a broad, comprehensive, and bipartisan way.

The President spoke about this yesterday at the ceremony at the George W. Bush Presidential Library and Museum.  He credited, appropriately, President George W. Bush for his support for comprehensive immigration reform.  And I think that reflects the fact that a consensus or a bipartisan consensus was building, and at this time is growing even more in Washington and across the country behind the need to do this.  And the President will continue to work with the Congress to try to get this done.

Zach, and then Donovan.

Q    Jay, it’s true that many Americans are affected by the flight delays.  It seems that people of means -- businessmen, members of Congress -- will be most affected, traveling all the time.  So what I don’t understand is why the President didn’t say, okay, Republicans are agreeing to this, but you’re going to have to do something for the very poor being affected by the sequester.  If you’re going to fix this for people who fly, we’re going to demand that something be done for Head Start, for seniors, for -- something for the most vulnerable who are affected, too.

MR. CARNEY:  The President does insist that Congress take action to eliminate the harm by the sequester.  And the harm -- so you’re suggesting we should hold hostage American travelers to Congress’s refusal to act?

Q    Well, I want to know why you’re not using that leverage.

MR. CARNEY:  The fact is, Zach, we support an effort here underway in Congress to take care of this problem.  And we are highlighting, as I am today, the fact that it is a Band-Aid solution that deals with one-half of 1 percent not even, of the sequester, and that the responsible and right thing to do by Congress is to address the entire sequester and the harm that it’s doing to families across the country and communities that depend on defense industries by eliminating -- by reversing themselves and their folly when they declared it a -- they, the Republicans, in this case -- declared it a victory, a great thing for them politically and the tea party.

I don’t think Americans who have suffered under this, either because they’ve been laid off or furloughed, feel that way.  And I’m sure that families who have been dealing with the fact that their child is no longer in Head Start [don’t] feel that way.  I’m sure that Americans who have been delayed in airports for hours [don’t] feel that way -- unless they’re just devoted tea party members, so even as they’re sitting on the tarmac for three hours they can say, well, this feels like victory.  I doubt it. 

So the Congress needs to do something about it.  They need to take action.

Q    Why not wait a week or two more and see -- and say to Congress, we’re not going to sign this bill unless you do something that really protects the most vulnerable ones in society and then we can deal with people who are --

MR. CARNEY:  We’re calling on Congress to do that.  We’re not going to -- I think you’re imagining leverage here, Zach, that is about political gamesmanship.  We’re about trying to get stuff -- getting things done here on behalf of the American people.

Donovan.

Q    Thanks, Jay.  Two quick questions on Syria, following on -- you said earlier that the administration really is trying now to build a case that --

MR. CARNEY:  Well, let me clarify.  We’re trying to find out if there is, in fact, a credible, verifiable case.

Q    Right.  And so who would that case be presented to?

MR. CARNEY:  Again, you’re getting -- you’re taking me beyond where we are, speculating about what the next steps would be.  Most importantly, we have to take the evidence that we have and the varying degrees of confidence that we have about the assessment that chemical weapons have been used, and build on that.  And that’s what we’re going to do.  And that’s what we’re going to do not just alone, but working with our allies and partners and the Syrian opposition, and as we, in concert with that action, work to press the United Nations’ investigation forward.  What happens after that obviously depends on what conclusions are made and what facts are gathered. 

Q    Okay.  And then you said also that the administration believes that Assad has custody and full responsibility for the weapons.  So any verified use of the weapons, no matter who used them would be -- he would be the responsible party.  Is that correct?

MR. CARNEY:  Without getting into a specific instance that is speculation at this point, it is a fact that he is responsible for the stocks of chemical weapons that are under control of his regime.  But, again, I don’t want to speculate about the judgments we would make based on verified use of chemical weapons that we’ve been able to verify and have a set of credible facts to back up because we’re still in the process of gathering those facts.

Q    But you’ve done physical tests --

MR. CARNEY:  We have said that we have physiological samples.  But we do not have all the information we need to be more than -- to have more than just varying degrees of confidence that this has happened.  And we need to be able to have a credible set of facts that are corroborated and that are reviewable, and that is obviously what we’re trying to establish now.

Q    Thanks, Jay.

MR. CARNEY:  Victoria, one more in the back.

Q    There are about 100 detainees in Guantanamo on a hunger strike now.  It’s a bit of a mess.  Senator Dianne Feinstein is saying that the low-level Yemenis should be repatriated.  Do you agree with that?

MR. CARNEY:  Well, I can tell you that we continue to monitor the hunger strikers at Guantanamo closely.  And this is something obviously that the Defense Department has the most specific information on.

Here at the White House, the President remains committed to closing the detention facility at Guantanamo Bay.  Some progress has been made under this administration and under the previous administration.  However, Congress has enacted and renewed legislation in order to foreclose our ability to close the detention facility -- legislation which restricts our experienced counterterrorism professionals from exercising their best judgment as to what the most appropriate disposition is for the individuals held there. 

We, as you know, have been -- there was a process and continues to be a process that assesses the detainees at Guantanamo, and that process is ongoing.  But a fundamental obstacle here to closing this detention facility -- which is so clearly, the President believes and his predecessor and numerous others, including military leaders, believe is in our national security interest to do -- the obstacle remains at Congress.  But we’re going to continue to press forward in trying to deal with this problem.

Q    Well, Senator Feinstein is saying that with the change in leadership in Yemen, it would be okay now to send those Yemenis back to that country because there is much stronger leadership against al Qaeda.  How do you feel about that?

MR. CARNEY:  Well, I think those are assessments that are made by professionals who look at both the situation in Yemen and at the detainees.  But I don’t have any new information or announcements to make regarding those detainees.

Q    Jay, any week ahead?

MR. CARNEY:  I do have a week ahead -- thanks.  The schedule for the week of April 29th, 2013 is as follows:  On Monday, the President will deliver remarks at the National Academy of Science’s 150th anniversary. 

On Tuesday, as part of the Joining Forces initiative, President Obama, Vice President Biden, First Lady Michelle Obama and Dr. Jill Biden will make a significant employment announcement for veterans and military spouses.  This event will take place here at the White House. 

On Wednesday, the President will attend meetings at the White House. 

On Thursday morning, the President will depart Washington, D.C. for his visit to Mexico and Costa Rica.  This trip is an important opportunity to reinforce the deep cultural, familial and economic ties that so many Americans share with Mexico and Central America.  While in Mexico, the President looks forward to meeting with President Peña Nieto.  The President welcomes the opportunity to discuss ways to deepen our economic and commercial partnership and further our engagement on the broad array of bilateral, regional and global issues that connect our two countries.

On Friday afternoon, the President will depart Mexico for Costa Rica.  While in Costa Rica, the President looks forward to the opportunity to meet with President Chinchilla as well as heads of state of the other Central American countries and the Dominican Republic who the President has graciously offered to host.  The trip will be an important chance to discuss our collective efforts to promote economic growth and development in Central America and our ongoing collaboration on citizen security. 

On Saturday afternoon, the President will depart Costa Rica and return to Washington, D.C. 

On Sunday, the President will deliver the commencement address at the Ohio State University.  He will return to Washington, D.C. later that day. 

Thanks, all.

Q    Jay, can I get a quick follow?

MR. CARNEY:  Sorry, all done.

END  
12:45 P.M. EDT

The IT Training and Certification Partnership will enable thousands of service members to earn industry-recognized information technology (IT) certifications before they transition from military service.

President Obama announces Anthony Foxx as his nominee for the next Secretary of Transportation.

The President praised advances in science, engineering, infrastructure, innovation, education and environmental protection that can be attributed to the 150 years of work by the brilliant and committed scientists who have been elected and volunteered to serve their country.

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New Health Exchanges Unlikely to End Insurance Monopolies in Some States

This story comes from our partner Stateline, the daily news service of the Pew Charitable Trusts.

In Alabama, if you get your health insurance through your employer and you lose your job, you quickly realize there aren't a lot options for purchasing coverage on your own. Blue Cross and Blue Shield of Alabama has had a virtual monopoly in the state since the Great Depression, and today it covers a whopping 89 percent of Alabamians.

In part, Blue Cross and Blue Shield is dominant in Alabama simply because it has been there for so long -- it sold its first policy in 1936 -- and potential newcomers have found it difficult to convince hospitals and doctors to give them favorable prices so they can compete with the entrenched carrier. But it also has to do with Alabamians themselves: On average, residents of the state are poorer and less healthy than other Americans, making them more expensive to cover and thus less attractive customers.

The lack of competition in nearly a dozen states could present problems when the insurance exchanges that are part of the Affordable Care Act launch in October. The exchanges are supposed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans. The idea is to generate competition between insurers that will lead to lower premiums.

Individuals and businesses with up to 100 employees will be able to shop on the exchanges, and people who can’t afford coverage on their own will get government subsidies to help them pay their premiums. About 26 million low-income Americans are expected to receive subsidies to purchase health insurance through the exchanges.

Top 10 states with the least competitive commercial health insurance markets:

1. Alabama2. Hawaii3. Michigan4. Delaware5. Alaska6. North Dakota7. South Carolina8. Rhode Island9. Wyoming10. Nebraska

SOURCE: American Medical Association, 2012 market concentration analysis

But in states with a dominant insurance carrier, competition and lower prices may not arrive for quite some time.

A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 70 percent of local markets nationwide. And in 30 states, a single insurance company covers more than half the people who purchase insurance individually, according to the Robert Wood Johnson Foundation.

The dominance by a single insurance company is particularly pronounced in Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming and Nebraska.

In general, multiple insurance companies are eager to compete in states that have a large number of health care providers and a lot of people who can afford to pay premiums. A relatively young and healthy population is also an attraction. In states that don’t have those characteristics, competition can be sparse.

Alabama ranks 45th in the nation in overall health status, and 46th in median household income, according to the United Health Foundation and the U.S. Census Bureau, respectively. Over the decades, a few major insurance carriers have tried to dip their toes into Alabama, but most pulled out after just a few years.

In other states, there are different reasons for the lack of competition. In Wyoming, for example, the problem is that the state has relatively few health care providers and people have to travel long distances to get care.

Wyoming has only 18.7 physicians per 10,000 people, ranking it 47th in the U.S., according to the Kaiser Family Foundation. By comparison, New York has 34.8 physicians per 10,000 people, Maryland has 35.3 and Massachusetts has 39.7. The national average is 25.7. (Kaiser Health News is an editorially independent program of the Foundation.)

Blue Cross Blue Shield of Wyoming dominates the market. Do Wyoming consumers want more choices? "Sure they do," said Tom Hirsig, Wyoming's insurance commissioner. But Hirsig said it's a huge challenge for new carriers to develop provider networks in Wyoming. "My sense right now is that the individual market inside the exchange is not going to be stacked with lots of competition."

A shortage of hospitals is the problem in Rhode Island, where there are just 11 hospitals owned by two companies. Health Insurance Commissioner Christopher Koller said Rhode Islanders would like other options, but he isn't sure they’ll have them when the state’s exchange launches in October.

Big Changes

The vast majority of Americans get health insurance coverage through their employers. Millions of low-income Americans qualify for Medicaid, and seniors can sign up for Medicare. But for people outside of these groups, there are few good options when it comes to health insurance.

Many of these Americans pay high premiums if they are sick or middle-aged -- if they can find coverage at all. They also run the risk of purchasing policies that don't cover certain medical conditions or limit the total dollar amount of claims. That's why so many of them go without insurance altogether.

The health insurance exchanges are designed to change that. The policies that are included on the menu will have a uniform set of benefits and pricing structures that will be easy for people to understand and compare.

In addition, the new health law will make it illegal to deny coverage to people who have pre-existing conditions. It also will a mandate a minimum set of benefits; prohibit lifetime caps on claims; and require insurance companies participating in the exchanges to spend at least 85 percent of their revenue on health care.

The hope is that this new pool of previously uninsured people will attract insurers to enter new markets, creating competition where none exists now. Poor states across the South and West have the largest share of uninsured people, and thus hold the greatest potential for insurers to cash in on the $350 billion the federal government plans to spend over the next 10 years to help low-income people buy insurance.

Furthermore, the exchanges should allow smaller companies and non-profits to market their products more effectively, challenging entrenched incumbents. "When you go online, the Blue of Alabama won't look so much bigger than the next plan," said Andy Hyman of the Robert Wood Johnson Foundation. The exchange is meant to be an "equalizer," Hyman said.

What's Wrong With Monopolies?

Carriers that dominate a particular state often argue that they hold onto their position by keeping prices down. "There are lots of national carriers out there who would provide a product that is less expensive than what is in the market, if they could," said Kim Holland, director of state affairs for the Blue Cross and Blue Shield Association. "We’re not so naïve as to think that if we don't price our products correctly our customers won't find another alternative."

Some economists note that in some cases, a dominant carrier can use its heft to negotiate the best prices with hospitals and then pass along those savings to consumers. In some markets, dominant insurers are akin to utilities, explained Paul Ginsburg, director of the Center for Studying Health System Change. "You don't necessarily need more than one," he said.

Ginsburg said large carriers are likely to get better prices from hospitals and doctors, because providers can’t do without them. "I suspect that consumers have actually benefitted from high [market] concentration. It's really a bigger problem for physicians," he said.

Despite having the least competitive health insurance market in the country, Alabama's individual premium prices compare favorably with neighboring states and are below average for the nation.

But the AMA, which represents doctors, disputes the idea that big insurers always secure the best prices for consumers. They point to national studies showing that when insurance companies merge and acquire smaller companies, their profits go up and so do their premiums.

Exchange Experience

Two states, Massachusetts and Vermont, already have exchanges, and offer a glimpse of what the future might hold.

When Massachusetts launched its exchange in 2007, new players did not immediately burst into the market. One new carrier, Centene Corporation, joined the exchange to offer a limited network of providers for Medicaid beneficiaries. But competition in the individual market remained relatively unchanged.

But Massachusetts already had a relatively competitive market, so existing carriers competed with each other to create new, lower-cost plans in response to market demand -- and pressure from state officials to keep costs down. Despite the emergence of low-cost plans, however, average premium prices have continued to rise.

Earlier this month, Vermont became the first state in the nation to publish preliminary health insurance rates for its exchange. Not unexpectedly, the tiny state of only 626,000 residents did not attract any new insurance companies. And the price of the plans offered on the exchange? They cost about as much as what Vermonters were paying before.

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Remarks by Tom Donilon, National Security Advisor to the President At the Launch of Columbia University’s Center on Global Energy Policy

The White House

Office of the Press Secretary

Introduction

Thank you, Jason.  During your time at the White House, the President and our team counted on your deep knowledge of energy, climate and national security.   Thank you also to Columbia University.  You chose well in Jason and there could scarcely be a more timely moment for a Center like this one.   Finally, a special thanks to Dan Yergin, who has made an unparalleled contribution to how we understand and talk about energy.  Dan, I look forward to our discussion today.  But, I want to tell you that I think I should be interviewing you.  Congratulations also on hiring David Sandalow, who has been an important part of our team at the Department of Energy for the past four years, as your inaugural fellow. 

It is a bit unusual for a National Security Advisor to address an energy conference like this one.   So let me begin with a straightforward proposition:  energy matters profoundly to U.S. national security and foreign policy.   It matters because the availability of reliable, affordable energy is essential to our economic strength at home, which is the foundation for our leadership in the world.  It matters because scarce resources have driven both commerce and conflict since time immemorial—and still do today.   It matters because energy supplies present strategic leverage and disposable income for countries that have them.  It matters because the challenge of accessing affordable energy is one shared by people and businesses in every country in the world—in young democracies, emerging powers and developing economies; in allies and adversaries alike.  It matters because disruptions in supply anywhere can have economic impacts that are global. 

Energy shapes national interests and relations between nations.  It shapes politics, development and governance within nations.   And it shapes the security and stability of the climate and environment.   For all these reasons and many others, increasing global access to secure, affordable and ever cleaner supplies of energy is a global public good and a national interest of the United States.

Finally, at this moment in history, energy matters to those of us entrusted with U.S. national security because the United States is reaching an inflection point in the story that Dan Yergin has so expertly told.  We are in the midst of two changes that have presented themselves with great speed:  first, the substantial increase in the supply of available, affordable energy inside the United States – which is having important impacts on U.S. economic growth, energy security and geopolitics.  Second, a transformation in the global climate, driven by the world’s use of energy, that is presenting not just a transcendent challenge for the world but a present-day national security threat to the United States.  Both push us toward the same longer-term endpoint: the comprehensive transformation of the world’s energy economy toward cleaner, more sustainable energy solutions.
Today, I want to talk first about the changes underway and why they matter for U.S. national security.  Then, I want to explain how we intend to work, domestically and internationally, to seize the opportunities this moment presents and meet its challenges head on.

What We Are Seeing:  A Transformational Moment

Let me begin with a brief discussion of the changing context.   The current optimism about the U.S. and global energy picture is a relatively new development.  

In the 1940s, 50s and 60s, America was largely self-sufficient in oil production.  But in 1970, U.S. oil production peaked at over eleven million barrels per day, unable to keep up with growing U.S. demand.  In his Pulitzer-winning book, The Prize, Dan Yergin tells the story of the day in 1972 when the Texas Railroad Commission ended its decades-long practice of rationing oil supplies.  There was no more surplus oil left to ration.  The United States needed to consume it all.  This was a negative turning point whose implications for U.S. power in the world became painfully clear during the Arab oil embargo the following year.  Suddenly, the United States thought of itself as an energy poor nation, dependent on oil and subject to events beyond our shores.  That mindset held for nearly forty years. 

When President Obama took office, the energy picture looked decidedly different than it does today.  Indeed, forecasters said that the U.S. would need to double its imports of liquefied natural gas (LNG) over the next five years.  There was renewed talk of “peak oil.”  Nearly every prediction about our energy future made five years ago has been turned on its head.  U.S. innovation and technology are allowing us to tap unconventional energy resources.  Total U.S. oil consumption peaked in 2005 and has been declining since—a trend the President’s energy efficiency initiatives, including new fuel efficiency standards and investment in new energy sources, will only deepen.   

To understand just how significantly and quickly the landscape has shifted, consider a few statistics: 

Domestic oil and natural gas production has increased every year President Obama has been in office. We now produce seven million barrels of oil per day, the highest level in over two decades. The International Energy Agency has projected that the United States could be the world’s largest oil producer by the end of the decade. Of course, we recognize that these are early days and prediction is a risky business.In 2005, sixty percent of U.S. oil was imported.  Today the number is forty percent and falling—a dramatic move towards fulfilling the President’s goal of cutting our oil imports in half by 2020. Today the United States is the top natural gas producer in the world. Our natural gas production has grown by one-third since 2005, driven by the increase in shale gas, which now accounts for forty percent of our natural gas output.  The domestic price of natural gas has dropped from over $13 per million Btu in 2008 to around $4 today.   Natural gas imports are down almost sixty percent since 2005, and we are exporting more natural gas by pipeline to Mexico and Canada. U.S. energy-related greenhouse gas emissions have fallen to 1994 levels due in large part to our success over the past four years in doubling electricity from renewables, switching from coal to natural gas in power generation, and improving energy efficiency.

New opportunities are also emerging globally.  The Western Hemisphere is poised to be a major energy supplier in the decades ahead.  The Americas have been responsible for half of the growth in incremental oil supply over the past five years, and BP predicts that the Americas will account for almost two-thirds of the growth in global oil supply between now and 2035.  That also means more supplies from relatively more stable nations with greater commitment to the rule of law and open markets.   When the President travels in early May to Mexico and Central America, energy will be among the issues discussed.  

The nature of global energy demand is also shifting to reflect the changes in global economic growth.  Demand across Asia, the Middle East and Latin America is surging.  This year may well mark the first time in history that oil demand from developing economies surpasses that of developed nations. Last December, Chinese net oil imports exceeded those of the United States for the first time.  China alone has accounted for half the growth in global oil demand since 2000 and became the world’s largest energy consumer by 2009.  Coal met about forty percent of developing economies’ energy demand, but over seventy percent of China’s energy needs in 2011.

We are just beginning to understand and appreciate the geostrategic impacts of these changes to the U.S. and global energy landscape, but let me set out a few that I see:

First, the new U.S. energy posture and outlook will directly strengthen the nation’s economy.  There are not a lot of iron laws of history.  But one is that, as the President has said, a country’s political and military primacy depends on its economic vitality. Our strength at home is critical to our strength in the world, and our energy boom has proven to be an important driver for our economic recovery—boosting jobs, economic activity, and government revenues.  Take the example of North Dakota, where unemployment has dropped to near 3 percent, the lowest in the country, and the state has a $3.8 billion budget surplus, largely due to increased unconventional gas and oil production in the state.   IHS CERA estimates that shale gas supported direct and indirect employment for 600,000 Americans in 2010, a number that could double by 2020. 

America’s natural gas boom is helping to spark a domestic manufacturing revival.  Manufacturers in energy-intensive sectors have announced up to $95 billion investments across the U.S. to take advantage of low-cost natural gas.   The largest investments announced have been in the chemicals sector which uses natural gas as a feedstock, but there have also been major announcements in other industries like steel, plastics, and glass.  For the first time in over sixty years, the United States is exporting more refined petroleum than it is importing.   The reduction in energy imports has a positive impact on our trade balance, helps lower domestic and global energy prices, and allows a greater share of the money Americans spend on energy to remain within the U.S. economy. 

Furthermore, as a result of the Administration’s historic investments in clean energy, tens of thousands of Americans have jobs and America is now home to some of the largest wind and solar farms in the world.

Domestic economic developments like these improve U.S. standing and send a powerful message that the United States has the resources, as well as the resolve, to remain the world’s preeminent power for years to come. 

Second, America’s new energy posture allows us to engage from a position of greater strength.  Increasing U.S. energy supplies act as a cushion that helps reduce our vulnerability to global supply disruptions and price shocks. It also affords us a stronger hand in pursuing and implementing our international security goals.

For example, the United States is engaged in a dual-track strategy that marshals pressure on Iran in pursuit of constructive engagement to address the world’s concerns about Iran’s nuclear program.  As part of the pressure track, the United States engaged in tireless diplomacy to persuade consuming nations to end or significantly reduce their consumption of Iranian oil while emphasizing to suppliers the importance of keeping the world oil market stable and well supplied.   The substantial increase in oil production in the United States and elsewhere meant that international sanctions and U.S. and allied efforts could remove over 1 million barrels per day of Iranian oil while minimizing the burdens on the rest of the world.   And the same dynamic was at work in Libya in 2011 and in Syria today.

Third, the development of a more global natural gas market benefits the U.S. and our allies.  We have a strong interest in a world natural gas market that is well supplied, diverse, and efficiently priced.  Increased U.S. and global natural gas production can enhance diversity of supply, help delink gas prices from expensive oil indexed contracts, weaken control by traditional dominant natural gas suppliers, and encourage fuel switching from oil and coal to natural gas. 

A decade ago, market analysts forecast that the U.S. would need to import large volumes of natural gas by pipeline and LNG. Since then, domestic production has reached historic highs and domestic natural gas reserves have almost doubled. Gas supplies originally destined for the United States are being redirected to other countries.   

Many of our allies have expressed interest in the potential of the United States as a global natural gas supplier. The Department of Energy is currently reviewing at least seventeen applications to export U.S. LNG to non-Free Trade Agreement countries. It will conduct a comprehensive review of all relevant factors to determine whether each non-FTA LNG export project is deemed to be consistent with the public interest.

Global demand for natural gas is projected to rise by one-fifth over the coming decade. Burning natural gas is about one-half as carbon-intensive as coal—which makes it a critical “bridge fuel” as the world transitions to even cleaner sources of energy.

Fourth, reduced energy imports do not mean the United States can or should disengage from the Middle East or the world.   Global energy markets are part of a deeply interdependent world economy.  The United States continues to have an enduring interest in stable supplies of energy and the free flow of commerce everywhere.   

We have a set of enduring national security interests in the Middle East, including our unshakeable commitment to Israel’s security; our global nonproliferation objectives, including our commitment to prevent Iran from acquiring a nuclear weapon; our ongoing national interest in fighting terrorism that threatens our personnel, interests and our homeland; our strong national interest in pursuit of Middle East peace; our historic stabilizing role in protecting regional allies and  partners and deterring aggression; and our interest in ensuring the democratic transitions in Yemen, North Africa and ultimately in Syria succeed. 

Which brings me to my fifth point: though it is typically discussed in terms of its energy, environmental or economic implications, the changes to our climate that we are seeing are also a national security challenge.  

The national security impacts of climate change stem from the increasingly severe environmental impacts it is having on countries and people around the world. Last year, the lower 48 U.S. states endured the warmest year on record.   At one point, two-thirds of the contiguous United States was in a state of drought, and almost 10 million acres of the West were charred from wildfires. And while no single weather event can be directly attributed to climate change, we know that climate change is fueling more frequent extreme weather events. Last year alone, we endured 11 weather-related disasters that inflicted a $1 billion or more in damages – including Hurricane Sandy. 

Internationally, we have seen the same: the first twelve years of this century are all among the fourteen warmest years on record.  Last year, Brazil experienced its worst drought in five decades; floods in Pakistan affected over five million people and damaged or destroyed over 460,000 homes; severe flooding across western Africa and the Sahel impacted three million people across fifteen countries--to give just a few examples among many. 

The fact that the environmental impacts of climate change present a national security challenge has been clear to this Administration from the outset. The President’s National Security Strategy recognizes in no uncertain terms that “the danger from climate change is real, urgent, and severe.  The change wrought by a warming planet will lead to new conflicts over refugees and resources; new suffering from drought and famine; catastrophic natural disasters; and the degradation of land across the globe.”

The Department of Defense’s 2010 Quadrennial Defense Review, issued by Secretary Robert Gates, warned not only that climate change “may act as an accelerant of instability or conflict, placing a burden to respond on civilian institutions and militaries around the world” but also of the potential impacts of climate change on our operating environment, and on our military installations at home and around the world. A National Intelligence Assessment in 2008, multiple Worldwide Threat Assessments produced by the Director of National Intelligence, and numerous expert analyses have reached similar conclusions.  This underscores the need – for the sake of our national security -- to reduce the greenhouse gas emissions that drive climate change and to ensure that we are as prepared as possible for the impacts of climate change.

U.S. Policy

These are a few of the changes we are seeing and what they mean for U.S. national security.  Let me now turn to what we are doing about it. 

First and foremost, the United States is leading at home, which is where our energy and climate policy begins.  The United States is pursuing an “all of the above approach” to develop new sources of energy, expand oil and gas production, boost renewable power generation, support growth in nuclear power and increase energy efficiency, while also working to reduce reliance on imported oil. 

I do not believe that the dramatic and fast-paced energy changes we have seen in the United States in recent years were as likely to have begun elsewhere first.  It is not just that the U.S. has a substantial unconventional resource base.  Many other countries have promising shale deposits.  The reason that development has succeeded in the U.S. is because we have the right balance of an open investment climate, innovative entrepreneurial spirit, environmental safeguards, infrastructure and skilled service companies.  The U.S. shale experience demonstrates the powerful results that a complex resource base, combined with open markets, wise early government investments in key technologies, a vibrant private sector, access to capital, a predictable investment climate, and responsible regulatory structure can deliver.

Under President Obama, the United States has also made unprecedented investments in clean energy, research and development, and renewable fuels.  The President put in place historic new fuel standards for cars and light-duty trucks that will nearly double the efficiency of our fleet; doubled the amount of power produced by wind, solar, and geothermal; and boosted the efficiency of buildings and our industrial sector.   He has also called for the creation of an Energy Security Trust that will support new research and development of cost-effective advanced transportation technologies, and he is leading domestic and international efforts to support the safe use of nuclear power.
It is important to note that America has achieved a significant reduction in our greenhouse gas emissions.  Last year energy-related U.S. emissions fell to their lowest levels since 1994—a remarkable twelve percent below where we stood in 2005.  Even as our economy recovers, we are determined to keep moving toward our target for 2020: to bring greenhouse gas emissions approximately seventeen percent below 2005 levels.

In that spirit, the President will not hesitate to use existing tools and authorities to further reduce greenhouse gas emissions, increase the preparedness and resiliency of our communities to climate change, and accelerate clean energy deployment. 

Second, we are working to manage potential causes of energy-related conflict.

For example, the promise of offshore energy resources is contributing to tensions in the South and East China Seas that will test East Asia’s political and security architecture.  While the United States has no territorial claims there, and does not take a position on the claims of others, the United States firmly opposes coercion or the use of force to advance territorial claims.  We have consistently made clear our position that only peaceful, collaborative and diplomatic efforts, consistent with international law, can bring about lasting solutions that will serve the interests of all claimants and all countries in this vital region. 

The Arctic is another place where the potential for new supplies of energy and new shipping routes could lead to rising tensions.  So far, that has not been the case and the United States looks forward to meeting with our partners in the eight-country Arctic Council next month, which we value as a forum for open and collaborative dialogue among littoral states on a range of Arctic issues.  The United States will promote productive dialogue to address international disputes in the region as they arise on issues from transportation to resource claims.  As ice caps melt, shipping routes open and energy supplies are made more accessible, the United States will work to ensure open access and transit, rules-based resolution of territorial disputes and adherence to the highest environmental standards.

To put ourselves on the strongest possible footing to prevent energy-related conflict, the United States must take the long overdue step of ratifying the Law of the Sea Treaty.  Every businessperson I speak with, every military leader, the Joint Chiefs of Staff and many, many others all come to the same conclusion:  ratifying the treaty will only strengthen America’s hand economically, diplomatically, and in terms of our security. 

Another example is Iraq.  After the U.S. has invested significant blood and treasure, we have a strong interest in seeing a peaceful and prosperous country emerge.  Key to that will be the successful development of Iraq’s energy resources.  This is a good example of where energy diplomacy matters.  Iraq’s energy sector has the potential to deepen internal and regional divisions, but it can also help unify the country.  And so we are working to help Iraq expand its oil production, build out its export infrastructure, and diversify its energy transportation routes.

Over the past two years, Iraq’s crude oil production has grown 25 percent to three million barrels per day, surpassing Iranian output and reaching levels not seen in over two decades.  We envision Iraq fulfilling its tremendous oil supply potential, with multiple existing and potential export routes, including from Basra to Ceyhan.  Getting there will require active diplomatic engagement and an agreement among Iraqis to share export revenues equitably, as set forth in their constitution, so that all Iraqi citizens benefit from their natural resources.  It is a long-term vision, but one that is essential for Iraqi stability, our own national security, and the future stability of global energy markets. And the United States will support this vision as a central priority in our partnership with Iraq.

Third, we are building on the unique diplomatic, regulatory and technical capacity of the United States to help other nations increase energy supply, build capacity and strengthen the institutions that enable international cooperation.  We are working to help develop supplies across the Western Hemisphere, where the use of conventional and new technologies in the United States, Canada and Brazil and Colombia is making an essential contribution to growing global energy supplies. 

Through bilateral and multilateral initiatives, technical and regulatory exchanges and trade and investment, the United States is helping countries accelerate this trend responsibly.  Last year, for example, the United States signed an important Transboundary Hydrocarbons Agreement with Mexico to develop our shared oil and gas resources in the Gulf of Mexico in an environmentally safe and responsible way.   

We have actively engaged countries such as Poland, Ukraine, Jordan, China, Colombia, Chile and Mexico to exchange lessons on developing unconventional energy resources.  We are sharing best practices on issues such as water management, air quality, permitting, contracting, and pricing—because countries and companies have seen from the U.S. experience that creating the right policy and investment environment is critical to successful development.  We are also working with countries in Africa, such as Mozambique and Tanzania, to help them establish responsible, sustainable ways to develop and manage their newfound energy resources.  

The United States does not view our energy security in zero-sum terms, and we are working with our partners around the world to ensure that they do not either.  For example, China will be increasingly reliant on imported oil and natural gas through this decade and beyond.   That means secure, affordable and cleaner supplies of energy is a goal we share with Beijing—and one we are working to fulfill through regulatory, technical, and industry exchanges led by the Departments of Commerce, Energy, and State.

As emerging economies consume an ever greater share of global energy, the International Energy Agency and other institutions will have to modernize to reflect evolving energy market realities. As major consumers, China, India and Brazil have a common interest in healthy and more transparent markets that function efficiently and effectively. It is critical that these countries are brought closer to the IEA and participate in coordinated responses to energy supply disruptions and reporting on energy markets.

But we should think about the modernization of the IEA more broadly.  When the IEA was established in the 1970s, oil was not a globally traded commodity. There was no financial market in oil.  Gasoline prices were heavily regulated.  Disruptions in supplies tended to show up as physical disruptions with long lines at gas stations. The global energy market has changed dramatically since then:  oil is now traded globally. There is a financial market that dwarfs the size of the physical market.  Gasoline prices are deregulated.  And disruptions in supply are more likely to show as price spikes than physical shortages.  The policies and practices of an IEA for the 21st century should reflect these changes as well.

Fourth and finally, we are working with other nations to reduce global greenhouse gas emissions, prepare for the climate impacts it is too late to avoid, and bring about a global conversion to cleaner sources of energy. 

When it comes to climate change, action at home is necessary but insufficient.  We have to galvanize action from others.  Here, too, there is progress to report.  In Copenhagen in 2009, President Obama and other world leaders negotiated a climate agreement that for the first time included international emission reduction commitments from each of the world’s largest greenhouse gas emitters.  Under the agreement reached at Durban in 2011, we are working to negotiate a robust new international climate agreement by the end of 2015 that would take effect in 2020 and commit all of the major carbon polluting countries to take ambitious action. 

Alongside global talks, the Administration has looked for creative ways to convene key stakeholders to take concrete actions together.   Through the Major Economies Forum, we launched a new Clean Energy Ministerial where a group of nations representing more than three-quarters of global GHG emissions collaborate on deploying clean energy technologies and enhancing energy efficiency.  By the same token, the United States led in assembling the Climate and Clean Air Coalition of nations working to achieve targeted reductions in short-lived climate pollutants that account for over thirty percent of current global warming.   And we have worked to address climate change by leading global efforts to encourage countries to phase out harmful fossil fuel subsidies.

As we look forward, we are fortunate to welcome into the Obama Administration one of the most experienced and impassioned climate diplomats America has ever had: John Kerry, who already has launched a new process to ensure that climate change will be a central part of our Strategic and Economic Dialogue with China later this year.

Even as we work through all available channels to mitigate climate change, we are also working to prepare for the climate impacts it is already too late to avoid.  The United States is building greater climate resilience at home and helping developing nations withstand the impacts as well.  The U.S. intelligence community continues to study where and how climate-fueled security challenges may emerge.  The Defense Department is funding research projects and factoring climate change into analysis and planning, recognizing the challenge it presents for mission-critical infrastructure and military installations, capabilities, and readiness.

Conclusion

Energy and climate are critical elements of U.S. national security.  These issues have risen to the top of U.S. diplomatic agendas around the world: with Europeans considering their energy future; with China and other emerging powers addressing their growing needs; and with major energy consumers and producers, old and new.  How the United States manages these changes to our energy economy and to our climate will be an important measure of U.S. leadership for many years to come. 

There is a vigorous debate underway among international relations experts and commentators about so called “declinism” – the notion that America is a power on the wane. It is a proposition that I reject in the strongest terms.  In his most recent book, Strategic Vision, one of my predecessors, Zbig Brzezinski, presents what he calls “America’s Balance Sheet,” where he tallies America’s strategic assets and liabilities.  Many of our assets are well known:  economic and military strength, an unrivaled network of alliances spanning two oceans, favorable demographics and geography and unparalleled innovators and educators – all that ensures that the United States remains a global leader into the 21st century. 

When President Obama took office, America’s energy future would have been typically listed among the liabilities – and let’s be clear: an essential transition to cleaner sources of fuel still lies ahead.  But after years of talking about it, we are poised to control our own energy future. Under President Obama’s leadership, we are moving the U.S. energy position from a liability we manage into an asset that secures U.S. strength at home and leadership in the world.

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