SECRETARY KERRY'S PRESS AVAILABILITY IN SHARM EL-SHEIKH, EGYPT

FROM:  U.S. STATE DEPARTMENT
Press Availability in Sharm el-Sheikh
Press Availability
John Kerry
Secretary of State
Sharm el-Sheikh, Egypt
March 14, 2015

SECRETARY KERRY: Good morning to all. I want to thank President al-Sisi and Foreign Minister Shoukry for their warm welcome here and for the tremendous work that the Egyptian Government has been doing with respect to the conference itself but equally importantly the larger issue of development and the reforms and initiatives that are necessary to really kick development off in Egypt at this point.

The United States, as I’ve said previously – I said last night – is committed to strengthening the partnership with Egypt. And we’ve been working hard at that over the last years. How Egypt develops in the coming years, how it succeeds, and how it recharges its economy will not only affect, obviously, the near 90 million people who are in Egypt, but it will also have a profound impact on the entire region. It is strategically important to this region and to all of us who are looking for stability and for a better standard of living and greater inclusivity and participation by citizens. It is important to make certain that Egypt can move along the road to development and to the full achievement of its democratic aspirations. And that’s something the United States will remain committed to.

So I came here today – came here over this weekend to this conference to reiterate the support of President Obama and the Obama Administration and the people of the United States for Egypt as it undertakes significant reforms and works toward the economic transformation that all the people of Egypt are hoping for.

Over the past few days, I have met with a range of American business leaders in order to discuss the specific concerns that they have raised with my economic team both in Washington as well as here in their visits. And I had a very candid and constructive conversation with President Sisi and Foreign Minister Shoukry about how to will improve the business climate, specific steps that, in some cases, they’ve already made the decision and need implementation and in other cases will still need further legislation.

But all of these things are key to attracting new investment. Everybody knows that money, capital, behaves in fairly predictable ways. And those who make decisions about investment look for certainty. They look for confidence. They look for the knowledge that, if they invest, what they’re investing in will be a transparent and accountable transaction.

The Egypt Economic Development Conference underscores, I think, in the breadth of the numbers of people who were here – the high-level participation says a lot about the deep well of support for Egypt, the shared hopes for Egypt, which are really reflected in that. And also, it underscores the challenges that Egypt faces as it works to meet the democratic aspirations of its people.

We also discussed the importance of respect for human rights and for Egypt’s security and stability, including a free press, a free speech and assembly, and due process under the law. And there is no question that Egypt is stronger when all of its citizens have a say and a stake in its future, and that includes a strong and active and independent civil society.

President Sisi and Foreign Minister Shoukry and I also continued our conversation about the important role that Egypt is playing in the coalition against ISIL and the challenges of extremism, violent religious extremism that is manifested in many ways in the region. We have all been deeply shocked and saddened by the recent terrorism attacks, including of those in Egypt and the grotesque murder of 21 Egyptian Copts in Libya.

The United States supports Egypt’s efforts to combat the threat of terrorism in the Sinai and throughout the country. And these atrocities that we have all witnessed around the world simply cannot be rationalized, they cannot be excused, they must be opposed, and they must be stopped.

Now I also met, as I think many of you know, with President Abbas and King Abdullah and President Sisi in a side meeting to the conference. And particularly at this week’s conference, which underscores the powerful connection between investments in business and investments in peace, we discussed efforts to develop a healthy, sustainable, and private sector-led Palestinian economy, one that could transform the fortunes of the Palestinian people and all of their neighbors in the region.

Before I take your questions, let me also just say a word quickly about the P5+1 talks with Iran. From the beginning, these talks have been tough and they’ve been intense, and they remain so. And we’ve made some progress, but there are still gaps, important gaps, and important choices that need to be made by Iran in order to be able to move forward.

Now I want to be very clear. Nothing in our deliberations is decided until everything is decided. And the purpose of these negotiations is not just to get any deal; it is to get the right deal. President Obama means it when he says, again and again, that Iran will not be permitted to get a nuclear weapon. As you all know, Iran says it doesn’t want a nuclear weapon, and that is a very welcome statement that the Supreme Leader has, in fact, incorporated into a fatwa. And we have great respect – great respect – for the religious importance of a fatwa. And what we are effectively trying to do is translate that into legal language, into everyday language within the framework of a negotiated agreement that everybody can understand, which requires everybody to have certain obligations and ultimately be able to guarantee that Iran’s program, its nuclear program, will be peaceful now and peaceful forever.

Now sanctions alone can’t achieve that. We need a verifiable set of commitments. And we need an agreed-upon plan that obviously provides the access and the opportunity to be able to know what is happening so that you can have confidence that the program is, indeed, peaceful. That’s what we’re negotiating about. And we need to cover every potential pathway – uranium, plutonium, covert – that there might exist towards a weapon, and only an agreement can do that.

So what’s the alternative? In previous years, when U.S. policy was not to talk to Iran and insist at the same time that they could have no nuclear program whatsoever, the number of centrifuges skyrocketed. Every time negotiations have broken down in the past, Iran’s nuclear program has advanced. Only the joint plan, which Iran agreed to and fully implemented, has actually succeeded in freezing Iran’s program for the first time in nearly 10 years, and even rolled it back in some cases. And they agreed to that, because they have an interest in proving that their plan is peaceful.

The comprehensive plan will lock in, with greater specificity and breadth, if we can arrive at it, the ways in which Iran will live up to its international obligations under the NPT for the long term. So we continue to be focused on reaching the right deal, a deal that would protect the world, including the United States and our closest allies and partners, from the threat that a nuclear-armed Iran could pose. We still don’t know whether or not we will get there, and that’s why I will travel to Lausanne in Switzerland tomorrow in order to meet with Foreign Minister Zarif and once again engage in talks to see if we can find a way to get that right deal.

As I have said previously, it may be that Iran simply can’t say yes to the type of deal that the international community is looking for. But we owe it to the future of everybody in the world to try to find out. If we cannot get to a diplomatic agreement, make no mistake, we obviously do have other options. But those options will mean no transparency, they will mean no verifiable set of commitments, and they don’t close off Iran’s potential pathways to a nuclear weapon for nearly as long as a negotiated agreement can, if it’s the right agreement. And so we will return to these talks, recognizing that time is of the essence, the clock is ticking, and important decisions need to be made.

And with that, I would be very happy to answer a few questions.

MS. HARF: Great. Our first question is from Margaret Brennan of CBS. And I think we have mikes coming to you.

QUESTION: Mr. Secretary, thank you. With the deadline for a deal so close, do you believe that a deal is within reach? And given the recent comments by the Supreme Leader as well as some of U.S. allies, do you think that the GOP letter has undermined the diplomacy and made reaching of an agreement that much harder?

SECRETARY KERRY: Well, the deadline is approaching. As you all know, we have set the end of the month as the deadline. And so we will be going into this understanding that time is critical. I can’t tell you whether or not we can get a deal or whether we’re close. And one reason I can’t tell you is because we have heard some comments from the Supreme Leader regarding the letter that was sent by the 47 senators. And until I engage in those conversations, I cannot gauge on a personal level that reaction – though I can tell you from common sense that when the United States Senate sends a letter such as the 47 senators chose to send the other day it is a direct interference in the negotiations of the executive department. It is completely without precedent, and it is almost inevitable that it will raise questions in the minds of the folks with whom we are negotiating as to whether or not they are negotiating with the executive department and the President, which is what the Constitution says, or whether there are 535 members of Congress.

Let me make clear to Iran, to our P5+1 counterparts who are deeply involved in this negotiation, that, from our point of view, this letter – the letter was, in fact, incorrect in its statements about what power they do have. It was incorrect in its assessments of what type of agreement this is. And as far as we are concerned, the Congress has no ability to change an executive agreement per se. So we will approach these negotiations in the same way that we have approached them to date, not affected externally but looking at as this Administration, according to President Obama’s instructions, to get the right deal that will accomplish what we need to for the security interest of the United States, our friends and allies in the region, and for the long-term security of everybody who cares about nonproliferation.

MS. HARF: Great. Our --

SECRETARY KERRY: And with respect --

MS. HARF: Go ahead. Sorry. Go ahead, sir.

SECRETARY KERRY: No, no. That’s it. Thank you.

MS. HARF: Okay. Our next question is from Ronda Abulazin of Al Arabiya. Go ahead.

QUESTION: Mr. Secretary, welcome. You came here with – okay, can you hear me now? You came to Egypt with a very strong message in support of its – reform its economy, its security. However the United States is still holding part – a big part of its military aid to Egypt, which is very crucial for its fight – Egypt’s fight against terrorism, whether in Sinai or to protect its border. So when will the United States release the military aid? And does it include F16?

My other part of the question, the war against ISIL in Iraq. The scene there looks very – really bizarre. Did the Iraqi prime minister allow the contribution of Iranian Qods brigade and Hizballah without the U.S. knowledge, especially that the U.S. is providing military counsel on the ground and military operation room? Thank you.

SECRETARY KERRY: Thank you very much. With respect to the aid and assistance, I really expect a decision very soon. We look at this conference as a very important step, mostly because this conference is focused on private sector contributions and private sector engagement in the future of Egypt. We applaud those countries who have put very significant amounts of money on the table in order to help Egypt over the hump, if you will, over these hurdles of the immediate budget crisis. And it’s a very important part of the overall effort to sustain and kick into higher gear Egypt’s economy.

But in the long run, unless Egypt transforms its economy with more private sector investment, creating long-term jobs and opening up new capabilities, you will just keep repeating the cycle of emergency assistance and aid. So we think the most important thing that we can do is help provide access to those companies and help to leverage the relationships that can create jobs for the people of Egypt.

Now we’re already doing that. Last year, before this conference, 160 American businesspeople, representing some 70 companies from the United States, came to Cairo. I think President Sisi spent about two hours with them, and they had long conversations about what Egypt’s needs are. Out of that have come a number of deals, which will create jobs in Egypt. I know General Electric, for instance, signed deals with respect to the Suez and other provision of power – other deals were made.

But in addition to that, we are providing economic assistance in the hundreds of millions of dollars that will be directed to small business enterprises and to new startups, because we want to see a sustainable economy grow in Egypt. Right now, the United States of America is providing over 20 percent of all foreign direct investment in Egypt. It’s a total of about $2.2 billion. And it is the number-two largest foreign direct investor in Egypt. So I hope that will share with the people of Egypt and the government a sense of our commitment to this. And we have top executives who are here, part of this conference, in order to try to grow the private sector entrepreneurial component of job creation in Egypt.

With respect to Iraq and the question of --

QUESTION: (Off-mike.)

SECRETARY KERRY: I said the decision – I think we’ll come – that’s what I said, very soon, very soon.

With respect to Iraq, we absolutely have known of Iran’s engagement in the northeastern parts of Iraq and, indeed, we’ve had conversations with Prime Minister Abadi about it. He doesn’t hide it, and we’re not blind to it. We know that Iran has been engaged. We know that General Soleimani has been on the ground. We know that they have an interest. We understand that. And we fully understand some of their engagement with some of the militia. At the same time, they are deeply opposed to Daesh. And while we are not coordinating with Iran – we do not have conversations with Iran about this – we work through the Iraqi Government. We do so with the knowledge that they are also opposed to Daesh and are working for Daesh’s defeat.

Now going forward, I would also note that part of this operation in Tikrit also involves significant participation by Sunni tribes and Sunni participants from the region. And the governor in Salah al-Din province was well aware of what is happening and of this whole-of-government initiative, whole-of-coalition effort, to continue to press the fight against Daesh. And even while the fighting in Tikrit is taking place, there are several other fights taking place nearby which involve significant Sunni participation, U.S. support, and others.

So what we made clear some months ago when we first announced the coalition, lots of countries will make lots of different kinds of contributions, and every country can make some kind of contribution, and all of us are committed to the defeat of Daesh. And the sooner that can happen, the better.

Now the real measure of the Tikrit operation will not be just in the clearing; it will be in how people are treated afterwards. It will be in whether or not there is a inclusivity or whether there is, in fact, a breakdown into a kind of sectarian division. So we’ll watch that carefully. We will work with the Government of Iraq very carefully to do our best to minimize or avoid that. But we are not surprised at all by the participation such as it has been with respect to the Tikrit operation itself.

MS. HARF: Great. Our final question is from Lesley Wroughton, Reuters. Go ahead.

QUESTION: Thank you. Mr. Secretary, do you want to see the Israeli-Palestinian process restarted after next week’s election? With the center left holding a solid lead in the election, does that brighten for you the prospects when it comes to moving forward on the Middle East peace process? When – do you expect that after the politics of the election has passed a new spirit can be brought to this process?

SECRETARY KERRY: Well, let me just say that the position of the United States, with respect to the long expressed hopes of Republicans and Democrats alike, of many presidents over the last 50 years or more, has always been for peace. And President Obama remains committed to a two-state solution and remains hopeful that when there – whatever choice the people of Israel make, that there will be an ability to be able to move forward on those efforts.

I’m not going to say anything more whatsoever about any aspect of that because there is an election in, what, three days, three and a half, four days, and I don’t want any comment I make misinterpreted in any way by anybody. And therefore, I will simply reiterate the longstanding commitment of the United States to peace and our hopes that the choice that the people of Israel make will not only meet their needs domestically and their hopes in their country, but obviously meet the hopes for peace, which I think everybody shares.

MS. HARF: Thank you very much.

SECRETARY KERRY: Thank you, all. Thank you very much, everybody. Appreciate it. Thank you.

QUESTION: One question on --

SECRETARY KERRY: Did you have one? One more.

QUESTION: (Off-mike.)

MS. HARF: Okay. Wait, wait. Okay. We can do one more, if Secretary has some time. We’ll do Dalia Ashraf of Al Nahar TV.

SECRETARY KERRY: Dalia? Who’s Dalia?

MS. HARF: Sorry. Dalia.

SECRETARY KERRY: This is Dalia here?

QUESTION: Yes, of course. Egyptians felt yesterday in your speech to the American Chamber of Commerce that you that expressed more U.S. support for Egypt. Can you explain this change?

SECRETARY KERRY: That I did what?

QUESTION: More support, more American support for Egypt. Can you explain this? In your speech yesterday --

SECRETARY KERRY: That I expressed --

QUESTION: Yeah.

SECRETARY KERRY: -- more support for Egypt?

QUESTION: Yeah.

SECRETARY KERRY: Well, we are supportive. I was very clear about our hopes for Egypt to move down the road of the democratic process, to continue to make progress in its internal relationship with the people of Egypt. We’ve always expressed that. But we’ve also expressed the connection of jobs and of economic opportunity to help provide stability and help provide the basis for all the other aspects of civil society to be able to come together. The stronger the economy, the more opportunity there is, the more that young people coming out of university can find a future that they want here, the stronger Egypt will be. And what I expressed yesterday was our commitment to the continued steps to move towards a full democratic process, a respect for rights, a respect for speech, as I mentioned earlier, the full participation of people in the society, at the same time as they are making very serious commitments to the social fabric and the economic opportunities that actually strengthen that social fabric.

So that’s really what I was talking about. It’s the link to those businesses. It’s why what I just said about America being the number-two nation in foreign direct investment in Egypt is so important, because that’s how you build the capacity of the society to embrace all of these other hopes and aspirations that the people have.

MS. HARF: Okay. That really is it, guys. Thank you very much for coming.

SECRETARY KERRY: Thank you.

READOUT OF PRESIDENT OBAMA'S CALL WITH UKRAINE'S PRESIDENT-ELECT PETRO POROSHENKO

FROM:  THE WHITE HOUSE 

Readout of the President’s Call with President-elect Petro Poroshenko of Ukraine

President Obama called President-elect Petro Poroshenko of Ukraine today to congratulate him on his victory and offer the full support of the United States as he seeks to unify and move his country forward.  The President stressed the importance of quickly implementing the reforms necessary for Ukraine to bring the country together and to develop a sustainable economy, attractive investment climate, and transparent and accountable government that is responsive to the concerns and aspirations of all Ukrainians.  The United States will continue assisting Ukraine in these efforts.  The two leaders agreed to continue their conversation during the President’s upcoming trip to Europe.

NSA REMARKS BY PRESIDENT OBAMA

FROM:  THE WHITE HOUSE 
Remarks by the President on Review of Signals Intelligence
Department of Justice
Washington, D.C.
11:15 A.M. EST

THE PRESIDENT:  At the dawn of our Republic, a small, secret surveillance committee borne out of the “The Sons of Liberty” was established in Boston.  And the group’s members included Paul Revere.  At night, they would patrol the streets, reporting back any signs that the British were preparing raids against America’s early Patriots.

Throughout American history, intelligence has helped secure our country and our freedoms.  In the Civil War, Union balloon reconnaissance tracked the size of Confederate armies by counting the number of campfires.  In World War II, code-breakers gave us insights into Japanese war plans, and when Patton marched across Europe, intercepted communications helped save the lives of his troops.  After the war, the rise of the Iron Curtain and nuclear weapons only increased the need for sustained intelligence gathering.  And so, in the early days of the Cold War, President Truman created the National Security Agency, or NSA, to give us insights into the Soviet bloc, and provide our leaders with information they needed to confront aggression and avert catastrophe.

Throughout this evolution, we benefited from both our Constitution and our traditions of limited government.  U.S. intelligence agencies were anchored in a system of checks and balances -- with oversight from elected leaders, and protections for ordinary citizens.  Meanwhile, totalitarian states like East Germany offered a cautionary tale of what could happen when vast, unchecked surveillance turned citizens into informers, and persecuted people for what they said in the privacy of their own homes.

In fact, even the United States proved not to be immune to the abuse of surveillance.  And in the 1960s, government spied on civil rights leaders and critics of the Vietnam War.  And partly in response to these revelations, additional laws were established in the 1970s to ensure that our intelligence capabilities could not be misused against our citizens.  In the long, twilight struggle against Communism, we had been reminded that the very liberties that we sought to preserve could not be sacrificed at the altar of national security.

If the fall of the Soviet Union left America without a competing superpower, emerging threats from terrorist groups, and the proliferation of weapons of mass destruction placed new and in some ways more complicated demands on our intelligence agencies.  Globalization and the Internet made these threats more acute, as technology erased borders and empowered individuals to project great violence, as well as great good.  Moreover, these new threats raised new legal and new policy questions.  For while few doubted the legitimacy of spying on hostile states, our framework of laws was not fully adapted to prevent terrorist attacks by individuals acting on their own, or acting in small, ideologically driven groups on behalf of a foreign power.

The horror of September 11th brought all these issues to the fore.  Across the political spectrum, Americans recognized that we had to adapt to a world in which a bomb could be built in a basement, and our electric grid could be shut down by operators an ocean away.  We were shaken by the signs we had missed leading up to the attacks -- how the hijackers had made phone calls to known extremists and traveled to suspicious places.  So we demanded that our intelligence community improve its capabilities, and that law enforcement change practices to focus more on preventing attacks before they happen than prosecuting terrorists after an attack.

It is hard to overstate the transformation America’s intelligence community had to go through after 9/11.  Our agencies suddenly needed to do far more than the traditional mission of monitoring hostile powers and gathering information for policymakers.  Instead, they were now asked to identify and target plotters in some of the most remote parts of the world, and to anticipate the actions of networks that, by their very nature, cannot be easily penetrated with spies or informants.

And it is a testimony to the hard work and dedication of the men and women of our intelligence community that over the past decade we’ve made enormous strides in fulfilling this mission.  Today, new capabilities allow intelligence agencies to track who a terrorist is in contact with, and follow the trail of his travel or his funding.  New laws allow information to be collected and shared more quickly and effectively between federal agencies, and state and local law enforcement.  Relationships with foreign intelligence services have expanded, and our capacity to repel cyber-attacks have been strengthened.  And taken together, these efforts have prevented multiple attacks and saved innocent lives -- not just here in the United States, but around the globe.

And yet, in our rush to respond to a very real and novel set of threats, the risk of government overreach -- the possibility that we lose some of our core liberties in pursuit of security -- also became more pronounced.  We saw, in the immediate aftermath of 9/11, our government engaged in enhanced interrogation techniques that contradicted our values.  As a Senator, I was critical of several practices, such as warrantless wiretaps.  And all too often new authorities were instituted without adequate public debate.

Through a combination of action by the courts, increased congressional oversight, and adjustments by the previous administration, some of the worst excesses that emerged after 9/11 were curbed by the time I took office.  But a variety of factors have continued to complicate America’s efforts to both defend our nation and uphold our civil liberties.

First, the same technological advances that allow U.S. intelligence agencies to pinpoint an al Qaeda cell in Yemen or an email between two terrorists in the Sahel also mean that many routine communications around the world are within our reach.  And at a time when more and more of our lives are digital, that prospect is disquieting for all of us.

Second, the combination of increased digital information and powerful supercomputers offers intelligence agencies the possibility of sifting through massive amounts of bulk data to identify patterns or pursue leads that may thwart impending threats.  It’s a powerful tool.  But the government collection and storage of such bulk data also creates a potential for abuse.

Third, the legal safeguards that restrict surveillance against U.S. persons without a warrant do not apply to foreign persons overseas.  This is not unique to America; few, if any, spy agencies around the world constrain their activities beyond their own borders.  And the whole point of intelligence is to obtain information that is not publicly available.  But America’s capabilities are unique, and the power of new technologies means that there are fewer and fewer technical constraints on what we can do.  That places a special obligation on us to ask tough questions about what we should do.

And finally, intelligence agencies cannot function without secrecy, which makes their work less subject to public debate.  Yet there is an inevitable bias not only within the intelligence community, but among all of us who are responsible for national security, to collect more information about the world, not less.  So in the absence of institutional requirements for regular debate -- and oversight that is public, as well as private or classified -- the danger of government overreach becomes more acute.  And this is particularly true when surveillance technology and our reliance on digital information is evolving much faster than our laws.

For all these reasons, I maintained a healthy skepticism toward our surveillance programs after I became President.  I ordered that our programs be reviewed by my national security team and our lawyers, and in some cases I ordered changes in how we did business.  We increased oversight and auditing, including new structures aimed at compliance.  Improved rules were proposed by the government and approved by the Foreign Intelligence Surveillance Court.  And we sought to keep Congress continually updated on these activities.

What I did not do is stop these programs wholesale -- not only because I felt that they made us more secure, but also because nothing in that initial review, and nothing that I have learned since, indicated that our intelligence community has sought to violate the law or is cavalier about the civil liberties of their fellow citizens.

To the contrary, in an extraordinarily difficult job -- one in which actions are second-guessed, success is unreported, and failure can be catastrophic -- the men and women of the intelligence community, including the NSA, consistently follow protocols designed to protect the privacy of ordinary people.  They’re not abusing authorities in order to listen to your private phone calls or read your emails.  When mistakes are made -- which is inevitable in any large and complicated human enterprise -- they correct those mistakes.  Laboring in obscurity, often unable to discuss their work even with family and friends, the men and women at the NSA know that if another 9/11 or massive cyber-attack occurs, they will be asked, by Congress and the media, why they failed to connect the dots.  What sustains those who work at NSA and our other intelligence agencies through all these pressures is the knowledge that their professionalism and dedication play a central role in the defense of our nation.

Now, to say that our intelligence community follows the law, and is staffed by patriots, is not to suggest that I or others in my administration felt complacent about the potential impact of these programs.  Those of us who hold office in America have a responsibility to our Constitution, and while I was confident in the integrity of those who lead our intelligence community, it was clear to me in observing our intelligence operations on a regular basis that changes in our technological capabilities were raising new questions about the privacy safeguards currently in place.

Moreover, after an extended review of our use of drones in the fight against terrorist networks, I believed a fresh examination of our surveillance programs was a necessary next step in our effort to get off the open-ended war footing that we’ve maintained since 9/11.  And for these reasons, I indicated in a speech at the National Defense University last May that we needed a more robust public discussion about the balance between security and liberty.  Of course, what I did not know at the time is that within weeks of my speech, an avalanche of unauthorized disclosures would spark controversies at home and abroad that have continued to this day.

And given the fact of an open investigation, I’m not going to dwell on Mr. Snowden’s actions or his motivations; I will say that our nation’s defense depends in part on the fidelity of those entrusted with our nation’s secrets.  If any individual who objects to government policy can take it into their own hands to publicly disclose classified information, then we will not be able to keep our people safe, or conduct foreign policy.  Moreover, the sensational way in which these disclosures have come out has often shed more heat than light, while revealing methods to our adversaries that could impact our operations in ways that we may not fully understand for years to come.

Regardless of how we got here, though, the task before us now is greater than simply repairing the damage done to our operations or preventing more disclosures from taking place in the future.  Instead, we have to make some important decisions about how to protect ourselves and sustain our leadership in the world, while upholding the civil liberties and privacy protections that our ideals and our Constitution require.  We need to do so not only because it is right, but because the challenges posed by threats like terrorism and proliferation and cyber-attacks are not going away any time soon.  They are going to continue to be a major problem.  And for our intelligence community to be effective over the long haul, we must maintain the trust of the American people, and people around the world.

This effort will not be completed overnight, and given the pace of technological change, we shouldn’t expect this to be the last time America has this debate.  But I want the American people to know that the work has begun.  Over the last six months, I created an outside Review Group on Intelligence and Communications Technologies to make recommendations for reform.  I consulted with the Privacy and Civil Liberties Oversight Board, created by Congress.  I’ve listened to foreign partners, privacy advocates, and industry leaders.  My administration has spent countless hours considering how to approach intelligence in this era of diffuse threats and technological revolution.  So before outlining specific changes that I’ve ordered, let me make a few broad observations that have emerged from this process.

First, everyone who has looked at these problems, including skeptics of existing programs, recognizes that we have real enemies and threats, and that intelligence serves a vital role in confronting them.  We cannot prevent terrorist attacks or cyber threats without some capability to penetrate digital communications -- whether it’s to unravel a terrorist plot; to intercept malware that targets a stock exchange; to make sure air traffic control systems are not compromised; or to ensure that hackers do not empty your bank accounts.  We are expected to protect the American people; that requires us to have capabilities in this field.

Moreover, we cannot unilaterally disarm our intelligence agencies.  There is a reason why BlackBerrys and iPhones are not allowed in the White House Situation Room.  We know that the intelligence services of other countries -- including some who feign surprise over the Snowden disclosures -- are constantly probing our government and private sector networks, and accelerating programs to listen to our conversations, and intercept our emails, and compromise our systems.  We know that.

Meanwhile, a number of countries, including some who have loudly criticized the NSA, privately acknowledge that America has special responsibilities as the world’s only superpower; that our intelligence capabilities are critical to meeting these responsibilities, and that they themselves have relied on the information we obtain to protect their own people.

Second, just as ardent civil libertarians recognize the need for robust intelligence capabilities, those with responsibilities for our national security readily acknowledge the potential for abuse as intelligence capabilities advance and more and more private information is digitized.  After all, the folks at NSA and other intelligence agencies are our neighbors.  They're our friends and family.  They’ve got electronic bank and medical records like everybody else.  They have kids on Facebook and Instagram, and they know, more than most of us, the vulnerabilities to privacy that exist in a world where transactions are recorded, and emails and text and messages are stored, and even our movements can increasingly be tracked through the GPS on our phones.

Third, there was a recognition by all who participated in these reviews that the challenges to our privacy do not come from government alone.  Corporations of all shapes and sizes track what you buy, store and analyze our data, and use it for commercial purposes; that’s how those targeted ads pop up on your computer and your smartphone periodically.  But all of us understand that the standards for government surveillance must be higher.  Given the unique power of the state, it is not enough for leaders to say:  Trust us, we won’t abuse the data we collect.  For history has too many examples when that trust has been breached.  Our system of government is built on the premise that our liberty cannot depend on the good intentions of those in power; it depends on the law to constrain those in power.

I make these observations to underscore that the basic values of most Americans when it comes to questions of surveillance and privacy converge a lot more than the crude characterizations that have emerged over the last several months.  Those who are troubled by our existing programs are not interested in repeating the tragedy of 9/11, and those who defend these programs are not dismissive of civil liberties.

The challenge is getting the details right, and that is not simple.  In fact, during the course of our review, I have often reminded myself I would not be where I am today were it not for the courage of dissidents like Dr. King, who were spied upon by their own government.  And as President, a President who looks at intelligence every morning, I also can’t help but be reminded that America must be vigilant in the face of threats.

Fortunately, by focusing on facts and specifics rather than speculation and hypotheticals, this review process has given me -- and hopefully the American people -- some clear direction for change.  And today, I can announce a series of concrete and substantial reforms that my administration intends to adopt administratively or will seek to codify with Congress.

First, I have approved a new presidential directive for our signals intelligence activities both at home and abroad.  This guidance will strengthen executive branch oversight of our intelligence activities.  It will ensure that we take into account our security requirements, but also our alliances; our trade and investment relationships, including the concerns of American companies; and our commitment to privacy and basic liberties.  And we will review decisions about intelligence priorities and sensitive targets on an annual basis so that our actions are regularly scrutinized by my senior national security team.

Second, we will reform programs and procedures in place to provide greater transparency to our surveillance activities, and fortify the safeguards that protect the privacy of U.S. persons.  Since we began this review, including information being released today, we have declassified over 40 opinions and orders of the Foreign Intelligence Surveillance Court, which provides judicial review of some of our most sensitive intelligence activities -- including the Section 702 program targeting foreign individuals overseas, and the Section 215 telephone metadata program.

And going forward, I’m directing the Director of National Intelligence, in consultation with the Attorney General, to annually review for the purposes of declassification any future opinions of the court with broad privacy implications, and to report to me and to Congress on these efforts.  To ensure that the court hears a broader range of privacy perspectives, I am also calling on Congress to authorize the establishment of a panel of advocates from outside government to provide an independent voice in significant cases before the Foreign Intelligence Surveillance Court.

Third, we will provide additional protections for activities conducted under Section 702, which allows the government to intercept the communications of foreign targets overseas who have information that’s important for our national security.  Specifically, I am asking the Attorney General and DNI to institute reforms that place additional restrictions on government’s ability to retain, search, and use in criminal cases communications between Americans and foreign citizens incidentally collected under Section 702.

Fourth, in investigating threats, the FBI also relies on what's called national security letters, which can require companies to provide specific and limited information to the government without disclosing the orders to the subject of the investigation.  These are cases in which it's important that the subject of the investigation, such as a possible terrorist or spy, isn’t tipped off.  But we can and should be more transparent in how government uses this authority.

I have therefore directed the Attorney General to amend how we use national security letters so that this secrecy will not be indefinite, so that it will terminate within a fixed time unless the government demonstrates a real need for further secrecy.  We will also enable communications providers to make public more information than ever before about the orders that they have received to provide data to the government.

This brings me to the program that has generated the most controversy these past few months -- the bulk collection of telephone records under Section 215.  Let me repeat what I said when this story first broke:  This program does not involve the content of phone calls, or the names of people making calls.  Instead, it provides a record of phone numbers and the times and lengths of calls -- metadata that can be queried if and when we have a reasonable suspicion that a particular number is linked to a terrorist organization.

Why is this necessary?  The program grew out of a desire to address a gap identified after 9/11.  One of the 9/11 hijackers -- Khalid al-Mihdhar -- made a phone call from San Diego to a known al Qaeda safe-house in Yemen.  NSA saw that call, but it could not see that the call was coming from an individual already in the United States.  The telephone metadata program under Section 215 was designed to map the communications of terrorists so we can see who they may be in contact with as quickly as possible.  And this capability could also prove valuable in a crisis.  For example, if a bomb goes off in one of our cities and law enforcement is racing to determine whether a network is poised to conduct additional attacks, time is of the essence.  Being able to quickly review phone connections to assess whether a network exists is critical to that effort.

In sum, the program does not involve the NSA examining the phone records of ordinary Americans.  Rather, it consolidates these records into a database that the government can query if it has a specific lead -- a consolidation of phone records that the companies already retained for business purposes.  The review group turned up no indication that this database has been intentionally abused.  And I believe it is important that the capability that this program is designed to meet is preserved.

Having said that, I believe critics are right to point out that without proper safeguards, this type of program could be used to yield more information about our private lives, and open the door to more intrusive bulk collection programs in the future.  They’re also right to point out that although the telephone bulk collection program was subject to oversight by the Foreign Intelligence Surveillance Court and has been reauthorized repeatedly by Congress, it has never been subject to vigorous public debate.

For all these reasons, I believe we need a new approach.  I am therefore ordering a transition that will end the Section 215 bulk metadata program as it currently exists, and establish a mechanism that preserves the capabilities we need without the government holding this bulk metadata.

This will not be simple.  The review group recommended that our current approach be replaced by one in which the providers or a third party retain the bulk records, with government accessing information as needed.  Both of these options pose difficult problems.  Relying solely on the records of multiple providers, for example, could require companies to alter their procedures in ways that raise new privacy concerns.  On the other hand, any third party maintaining a single, consolidated database would be carrying out what is essentially a government function but with more expense, more legal ambiguity, potentially less accountability -- all of which would have a doubtful impact on increasing public confidence that their privacy is being protected.

During the review process, some suggested that we may also be able to preserve the capabilities we need through a combination of existing authorities, better information sharing, and recent technological advances.  But more work needs to be done to determine exactly how this system might work.

Because of the challenges involved, I’ve ordered that the transition away from the existing program will proceed in two steps.  Effective immediately, we will only pursue phone calls that are two steps removed from a number associated with a terrorist organization instead of the current three.  And I have directed the Attorney General to work with the Foreign Intelligence Surveillance Court so that during this transition period, the database can be queried only after a judicial finding or in the case of a true emergency.

Next, step two, I have instructed the intelligence community and the Attorney General to use this transition period to develop options for a new approach that can match the capabilities and fill the gaps that the Section 215 program was designed to address without the government holding this metadata itself.  They will report back to me with options for alternative approaches before the program comes up for reauthorization on March 28th.  And during this period, I will consult with the relevant committees in Congress to seek their views, and then seek congressional authorization for the new program as needed.

Now, the reforms I’m proposing today should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe.  And I recognize that there are additional issues that require further debate.  For example, some who participated in our review, as well as some members of Congress, would like to see more sweeping reforms to the use of national security letters so that we have to go to a judge each time before issuing these requests.  Here, I have concerns that we should not set a standard for terrorism investigations that is higher than those involved in investigating an ordinary crime.  But I agree that greater oversight on the use of these letters may be appropriate, and I’m prepared to work with Congress on this issue.

There are also those who would like to see different changes to the FISA Court than the ones I’ve proposed.  On all these issues, I am open to working with Congress to ensure that we build a broad consensus for how to move forward, and I’m confident that we can shape an approach that meets our security needs while upholding the civil liberties of every American.

Let me now turn to the separate set of concerns that have been raised overseas, and focus on America’s approach to intelligence collection abroad.  As I’ve indicated, the United States has unique responsibilities when it comes to intelligence collection.  Our capabilities help protect not only our nation, but our friends and our allies, as well.  But our efforts will only be effective if ordinary citizens in other countries have confidence that the United States respects their privacy, too.  And the leaders of our close friends and allies deserve to know that if I want to know what they think about an issue, I’ll pick up the phone and call them, rather than turning to surveillance.  In other words, just as we balance security and privacy at home, our global leadership demands that we balance our security requirements against our need to maintain the trust and cooperation among people and leaders around the world.

For that reason, the new presidential directive that I’ve issued today will clearly prescribe what we do, and do not do, when it comes to our overseas surveillance.  To begin with, the directive makes clear that the United States only uses signals intelligence for legitimate national security purposes, and not for the purpose of indiscriminately reviewing the emails or phone calls of ordinary folks.  I’ve also made it clear that the United States does not collect intelligence to suppress criticism or dissent, nor do we collect intelligence to disadvantage people on the basis of their ethnicity, or race, or gender, or sexual orientation, or religious beliefs.  We do not collect intelligence to provide a competitive advantage to U.S. companies or U.S. commercial sectors.

And in terms of our bulk collection of signals intelligence, U.S. intelligence agencies will only use such data to meet specific security requirements:  counterintelligence, counterterrorism, counter-proliferation, cybersecurity, force protection for our troops and our allies, and combating transnational crime, including sanctions evasion.

In this directive, I have taken the unprecedented step of extending certain protections that we have for the American people to people overseas.  I’ve directed the DNI, in consultation with the Attorney General, to develop these safeguards, which will limit the duration that we can hold personal information, while also restricting the use of this information.

The bottom line is that people around the world, regardless of their nationality, should know that the United States is not spying on ordinary people who don’t threaten our national security, and that we take their privacy concerns into account in our policies and procedures.  This applies to foreign leaders as well.  Given the understandable attention that this issue has received, I have made clear to the intelligence community that unless there is a compelling national security purpose, we will not monitor the communications of heads of state and government of our close friends and allies.  And I’ve instructed my national security team, as well as the intelligence community, to work with foreign counterparts to deepen our coordination and cooperation in ways that rebuild trust going forward.

Now let me be clear:  Our intelligence agencies will continue to gather information about the intentions of governments -- as opposed to ordinary citizens -- around the world, in the same way that the intelligence services of every other nation does.  We will not apologize simply because our services may be more effective.  But heads of state and government with whom we work closely, and on whose cooperation we depend, should feel confident that we are treating them as real partners.  And the changes I’ve ordered do just that.

Finally, to make sure that we follow through on all these reforms, I am making some important changes to how our government is organized.  The State Department will designate a senior officer to coordinate our diplomacy on issues related to technology and signals intelligence.  We will appoint a senior official at the White House to implement the new privacy safeguards that I have announced today.  I will devote the resources to centralize and improve the process we use to handle foreign requests for legal assistance, keeping our high standards for privacy while helping foreign partners fight crime and terrorism.

I have also asked my counselor, John Podesta, to lead a comprehensive review of big data and privacy.  And this group will consist of government officials who, along with the President’s Council of Advisors on Science and Technology, will reach out to privacy experts, technologists and business leaders, and look how the challenges inherent in big data are being confronted by both the public and private sectors; whether we can forge international norms on how to manage this data; and how we can continue to promote the free flow of information in ways that are consistent with both privacy and security.

For ultimately, what’s at stake in this debate goes far beyond a few months of headlines, or passing tensions in our foreign policy.  When you cut through the noise, what’s really at stake is how we remain true to who we are in a world that is remaking itself at dizzying speed.  Whether it’s the ability of individuals to communicate ideas; to access information that would have once filled every great library in every country in the world; or to forge bonds with people on other sides of the globe, technology is remaking what is possible for individuals, and for institutions, and for the international order.  So while the reforms that I have announced will point us in a new direction, I am mindful that more work will be needed in the future.

One thing I’m certain of:  This debate will make us stronger.  And I also know that in this time of change, the United States of America will have to lead.  It may seem sometimes that America is being held to a different standard.  And I'll admit the readiness of some to assume the worst motives by our government can be frustrating.  No one expects China to have an open debate about their surveillance programs, or Russia to take privacy concerns of citizens in other places into account.  But let’s remember:  We are held to a different standard precisely because we have been at the forefront of defending personal privacy and human dignity.

As the nation that developed the Internet, the world expects us to ensure that the digital revolution works as a tool for individual empowerment, not government control.  Having faced down the dangers of totalitarianism and fascism and communism, the world expects us to stand up for the principle that every person has the right to think and write and form relationships freely -- because individual freedom is the wellspring of human progress.

Those values make us who we are.  And because of the strength of our own democracy, we should not shy away from high expectations.  For more than two centuries, our Constitution has weathered every type of change because we have been willing to defend it, and because we have been willing to question the actions that have been taken in its defense.  Today is no different.  I believe we can meet high expectations.  Together, let us chart a way forward that secures the life of our nation while preserving the liberties that make our nation worth fighting for.

Thank you.  God bless you.  May God bless the United States of America.  (Applause.)

END

DEPUTY AG COLE'S REMARKS AT DRUG POLICY REFORM CONFERENCE

FROM:  U.S. JUSTICE DEPARTMENT 
Deputy Attorney General James M. Cole Delivers Remarks at the Office of National Drug Control Policy Drug Policy Reform Conference
~ Monday, December 9, 2013

Thank you Gil for that introduction, for your partnership, and for your tireless work on drug prevention, drug treatment, and criminal justice strategies to break the cycle of drug use and crime.  It is an honor to be among this dedicated and diverse group of professionals, policymakers and community leaders whose work promotes public health and safety.  The agenda for this conference is both important and timely.

At the Department of Justice, we have undertaken a number of initiatives that address the law enforcement, public safety, and public health aspects of drug policy reform.  Law enforcement plays an indispensable part in protecting communities from drug-related crime and violence.  We know that there are dangerous people out there, running drug organizations and committing murders as part of the drug trade.  Those individuals need to be incarcerated for the crimes they commit.

But there are also lower level drug defendants.  Many suffer from their own drug abuse issues, and fall into a vicious cycle of drug abuse, criminal behavior, incarceration, and release.  Too often, this cycle repeats.  But recognizing that these lower level drug defendants don’t present the same public safety risks as the more serious criminals, our approach to dealing with the problems posed by drugs should not be one-size-fits-all.  Instead, we should look to provide a range of responses that include the chance to overcome an addiction, provide the opportunity to get help before going to prison, and provide an off-ramp from the vicious cycle of drugs and crime.

This approach could result in the avoidance of a criminal conviction in the first place or it could positively affect the defendant’s ability to successfully reintegrate into society in years to come.  It shifts the paradigm by providing treatment and services to individuals who are motivated and truly want to turn their lives around.  The advantages to this approach are many: we not only assist individuals and their families, but we gain the ability to improve public safety and public health, directly benefiting our citizens and our society and more efficiently using taxpayer dollars.

Together with our state and local law enforcement partners in the field -- whose tireless work keeps our communities safe -- we continue to make real inroads in protecting public safety.  Even within limited budgets, we have been able to focus our efforts on prevention and reentry, as well as enforcement.  For example, through the Justice Reinvestment Initiative, the Department has brought state leaders, local stakeholders, private partners, and federal officials together to reform corrections and criminal justice practices.  In recent years, no fewer than 17 states – supported by the Department, and led by governors and legislators of both parties – have directed funding away from prison construction and toward evidence-based programs and services that are designed to allow states to provide drug treatment and reduce recidivism.  And the results are telling:  many participating states have seen drops in recidivism rates and prison populations, while still maintaining public safety.

We are doing the same thing in the federal system because it has become clear that the trajectory of the federal criminal justice system, left unaltered, is unsustainable.  Dollars are finite and the increasing costs of the federal prison and detention population drain funds from other enforcement priorities.  They take dollars away from the Department’s prevention and recidivism reduction programs, and limi our capacity to fund other pressing criminal justice and national security priorities, such as hiring more agents and prosecutors or providing support to state and local partners to help in the fight against violent crime.  Put simply, if we don’t find a way to reduce the federal prison population, public safety is going to suffer.

To try to address this problem, earlier this year the Department embarked on a review of its criminal justice policies.  We made some specific changes to existing policy and strengthened our commitment to our prevailing goals.  We modified the Justice Department’s charging policies so that certain low-level, non-violent drug defendants who have no significant ties to large-scale organizations, gangs, or cartels, will no longer be charged with offenses that impose mandatory minimum sentences.  Instead, these low-level drug defendants will be charged with offenses for which the accompanying sentences are better suited to their individual conduct.  By reserving the most severe prison terms for serious, high-level, or violent drug traffickers or kingpins, we enhance public safety.

The Department is also promoting and strengthening its diversion programs – such as drug treatment initiatives – to provide more effective alternatives to incarceration for some individuals.  This summer, the Department issued a “best practices” memorandum to encourage more widespread adoption by prosecutors of programs such as drug courts, specialty courts and other treatment courts.

And to make sure these programs are a top priority, every U.S. Attorney now must designate a Prevention and Reentry Coordinator in his or her district to ensure that this work is done.

In addition, the Bureau of Prisons has expanded capacity for its Residential Drug Abuse Program, which provides important treatment to inmates.  This expansion will provide more non-violent inmates with the opportunity to deal with their drug and mental health issues that are so often at the root of criminal behavior, so they can successfully re-enter and become productive members of society.  

Our reforms also include changes in the Department's framework for considering compassionate release requests.  We expanded the medical criteria that can be considered and announced new criteria including allowing consideration for elderly inmates and certain inmates who are the only possible caregiver for their dependents.  

And finally I want to talk about the Federal Interagency Reentry Council.  Created by the Attorney General, it brings together over 20 federal departments and agencies to focus an all of government approach to helping those coming out of prison.  This collaboration works to reduce barriers to housing, employment and education and increase access to healthcare and treatment for those re-entering society.  And this collaboration has borne fruit – not only by increasing the chances of successful re-entry for those leaving federal prison, but also helping incarcerated veterans get back on track, assisting children of the incarcerated, and reducing the unnecessary collateral consequences of a conviction.  Across the federal government, we are partnering to strengthen communities, reduce recidivism, and improve public safety.

This morning, I’ve discussed several steps the Department has taken to build upon successes and make changes to our criminal justice system.  In light of our limited resources, we have had to take a hard look at our policies and our priorities, and have recommitted to maintaining public safety in a manner that is both smart and efficient when battling drug related crime and the conditions that breed it.

As we move forward with these and other reforms, we will continue to stand and work alongside you, drawing upon your experience, relying on your expertise, and depending on your engagement to refine and strengthen each new proposal.  Today’s conference -- and the exchange of ideas it will foster among our Nation’s drug policy experts -- is a necessary and important step in this process.

Thank you.

PRESIDENT OBAMA'S REMARKS DURING NOMINATION OF DR. YELLEN AS FED CHAIR

FROM:  THE WHITE HOUSE
Remarks by the President in Nominating Dr. Janet Yellen as Chair of the Board of Governors of the Federal Reserve System

State Dining Room

3:16 P.M. EDT

     THE PRESIDENT:  Good afternoon.  Over the past five years, America has fought its way back from the worst recession since the Great Depression.  We passed historic reforms to prevent another crisis and to protect consumers.  Over the past three and half years, our businesses have created 7.5 million new jobs.  Our housing market is rebounding.  Manufacturing is growing.  The auto industry has come roaring back.  And since I took office, we’ve cut the deficit in half.

I think everybody understands we’ve still got a lot of work to do to rebuild the middle class, but we've made progress.  And we shouldn’t do anything to threaten that progress -- for these hard-won gains have made a difference to millions of Americans.  And, in part, we can thank the extraordinary grit and resilience of the American people; in part, we can thank the dynamism of our businesses.  But a lot of it also has to do with the choices we’ve made as a nation to create more jobs and more growth.  And one of the most important contributors to this whole process has been the Federal Reserve, under the strong leadership of Ben Bernanke.

For nearly eight years, Ben has led the Fed through some of the most daunting economic challenges of our lifetime.  For some time now he’s made it clear that he intends to finish his service as chairman at the end of his term, which is this January.  So, today I just want to take a minute to pay tribute to Ben for his extraordinary service.  But I also want to announce my choice for the next chair of the Federal Reserve, one of the nation’s foremost economists and policymakers -- current Vice Chairman Janet Yellen.

After I became President, I was proud to nominate Ben for a second term.  And while the Fed is, and must always be, independent, I want you to know, Ben, I'm personally very grateful to you for being such a strong partner in helping America recover from recession.

Perhaps it’s no surprise -- as the son of a pharmacist and a school teacher -- that Ben Bernanke is the epitome of calm.  And against the volatility of global markets, he’s been a voice of wisdom and a steady hand.  At the same time, when faced with a potential global economic meltdown, he has displayed tremendous courage and creativity.  He took bold action that was needed to avert another Depression -- helping us stop the free fall, stabilize financial markets, shore up our banks, get credit flowing again.

And all this has made a profound difference in the lives of millions of Americans.  A lot of people aren't necessarily sure what the chairman of the Federal Reserve does, but thanks to this man to the left of me, more families are able to afford their own home; more small businesses are able to get loans to expand and hire workers; more folks can pay their mortgages and their car loans.  It’s meant more growth and more jobs.

And I’d add that with his commitment to greater transparency and clarity, he’s also allowed us to better understand the work of the Fed.  Ben has led a new era of “Fedspeak” and been a little more clear about how the system works.  And that is good for our democracy.

And I have to tell you, as I travel around the world, the job of the Fed chair is not just our top monetary policymaker.  The world looks to the American Fed chair for leadership and guidance.  And the degree to which Ben is admired and respected, and the degree to which central bankers all across the world look to him for sound advice and smart policymaking is remarkable.  He has truly been a stabilizing force not just for our country, but for the entire world.  And I could not be more grateful for his extraordinary service.

And so, Ben, to you and your wife Anna, and your children Joel and Alyssa, I want to thank you for your outstanding service.  Thank you so much.  (Applause.)

Now, as I’ve said, the decision on who will succeed Ben is one of the most important economic decisions that I’ll make as President -- one of the most important appointments that any President can make -- because the chair of the Fed is one of the most important policymakers in the world, and the next chair will help guide our economy after I’ve left office.

I’ve considered a lot of factors.  Foremost among them is an understanding of the Fed’s dual mandate -- sound monetary policy to make sure that we keep inflation in check, but also increasing employment and creating jobs, which remains our most important economic challenge right now.

And I’ve found these qualities in Janet Yellen.  She’s a proven leader and she’s tough -- not just because she’s from Brooklyn.  (Laughter.)  Janet is exceptionally well-qualified for this role.  She’s served in leadership positions at the Fed for more than a decade.  As Vice Chair for the past three years, she’s been exemplary and a driving force of policies to help boost our economic recovery.

Janet is renowned for her good judgment.  She sounded the alarm early about the housing bubble, about excesses in the financial sector, and about the risks of a major recession.  She doesn’t have a crystal ball, but what she does have is a keen understanding about how markets and the economy work -- not just in theory but also in the real world.  And she calls it like she sees it.

Janet also knows how to build consensus.  She listens to competing views and brings people together around a common goal. And as one of her admirers says, “She’s the kind of person who makes everybody around her better.”  Not surprisingly, she is held in high esteem by colleagues across the country and around the world who look to the United States, as I said, and the Fed for leadership.

Janet is committed to both sides of the Fed’s dual mandate, and she understands the necessity of a stable financial system where we move ahead with the reforms that we've begun -- to protect consumers, to ensure that no institution is too big to fail, and to make sure that taxpayers are never again left holding the bag because of the mistakes of the reckless few.

And at the same time, she’s committed to increasing employment, and she understands the human costs when Americans can’t find a job.  She has said before, “These are not just statistics to me.  The toll is simply terrible on the mental and physical health of workers, on their marriages, on their children.”  So Janet understands this.  And America’s workers and their families will have a champion in Janet Yellen.
 
So, Janet, I thank you for taking on this new assignment.  And given the urgent economic challenges facing our nation, I urge the Senate to confirm Janet without delay.  I am absolutely confident that she will be an exceptional chair of the Federal Reserve.  I should add that she’ll be the first woman to lead the Fed in its 100-year history.  And I know a lot of Americans -- men and women -- thank you for not only your example and your excellence, but also being a role model for a lot of folks out there.

It’s been said that Janet found love at the Federal Reserve -- literally.  (Laughter.)  This is where she met her husband George, a celebrated economist in his own right.  And their son Robert is an economist as well.  So you can imagine the conversations around the dinner table might be a little different than ours.  (Laughter.)  In fact, I’ve been told their idea of a great family vacation is the beach -- with a suitcase full of economics books.  (Laughter.)  But this is a family affair.  We thank George and Robert for their support as Janet begins this journey.

Again, I want to thank Ben Bernanke for the outstanding work that he’s done, and obviously he will continue to help keep our economy moving forward during the remainder of his tenure here.  So we'll probably have occasion for additional good-byes.  And I know that Janet is very much counting on him to give some good advice as she moves into the chairman spot.

But with this, I’d like to give Janet a chance to say a few words.  (Applause.)

DR. YELLEN:  Thank you, Mr. President.  I'm honored and humbled by the faith that you’ve placed in me.  If confirmed by the Senate, I pledge to do my upmost to keep that trust and meet the great responsibilities that Congress has entrusted to the Federal Reserve -- to promote maximum employment, stable prices, and a strong and stable financial system.

I'd also like to thank my spouse, George, and my son, Robert.  I couldn't imagine taking on this new challenge without their love and support.

The past six years have been tumultuous for the economy and challenging for many Americans.  While I think we all agree, Mr. President, that more needs to be done to strengthen the recovery, particularly for those hardest hit by the Great Recession, we have made progress.  The economy is stronger and the financial system sounder.

As you said, Mr. President, considerable credit for that goes to Chairman Bernanke, for his wise, courageous and skillful leadership.  It has been my privilege to serve with him and learn from him.

While we have made progress, we have farther to go.  The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they’ll pay their bills and provide for their families.  The Federal Reserve can help if it does its job effectively.  We can help ensure that everyone has the opportunity to work hard and build a better life.  We can ensure that inflation remains in check and doesn’t undermine the benefits of a growing economy.
We can, and must, safeguard the financial system.

The Fed has powerful tools to influence the economy and the financial system.  But I believe its greatest strength rests in its capacity to approach important decisions with expertise and objectivity, to vigorously debate diverse views and then to unite behind its response.

The Fed’s effectiveness depends on the commitment, ingenuity and integrity of the Fed staff and my fellow policymakers.  They serve America with great dedication.

Mr. President, thank you for giving me this opportunity to continue serving the Federal Reserve and carrying out its important work on behalf of the American people.  (Applause.)