Preview of the 110th Congress

MR. WALKER: Well, thank you. It's nice to be with you again. I think that this is the right order to do it because clearly Vic will have far more insights into what's going to happen in the new Congress than I will. But the transition by the Republicans from majority to minority status is proving to be interesting in and of itself.

I do think that it's going to be a fascinating look at both transition of power and, you know, what the Democrats can do as a part of their agenda. And the first 100 days they have begun to lay out some specific legislative initiatives. I would expect that those legislative initiatives will pass pretty handily; that there will not be a great deal of contest or controversy about the items in the first 100 days. Now they could come up with something intentionally controversial that people would have a problem with, but there will certainly be Republicans who will vote against things like raising the minimum wage, but my guess is that there'll be as many Republicans vote for it as vote against it and so items like that will move through pretty handily.

I think the real substantive questions relating to the 110th Congress will be what is it that the Administration decides to do in terms of dealing with the Hill. The Administration has a couple of choices here: The Administration can deal with the Hill by dealing with the Democratic leadership and there's certainly room to believe that certain committee chairmen on Capitol Hill will be willing to work with the Administration towards solutions that would then involve deals with the overall Democratic leadership. And if that happens that will set off one set of circumstances on the Hill, namely that many Republicans will be unhappy with the kinds of deals that are worked out between the Administration and the Democratic leadership. And at that point there will be a difficulty in delivering large numbers of Republican votes for those initiatives and the dynamic then will be that the Democrats will have to bring a much larger number of votes to the table. And those kinds of relationships between a Republican administration and Democratic Congress will be difficult to manage.

The other option is that the Administration could decide that this is truly a blue dog conference or blue dog Congress, meaning that there is a substantial number of Democrats who lean toward moderate to conservative. That if you put them together with the Republicans could, in fact, become a working majority. If that happens, that will be something similar to what happened in the early days of the Reagan Administration when the boll weevil Democrats combined with the Republicans to pass a number of administration initiatives. Should that happen then the Republicans are going to have to hold their numbers together pretty solidly so that they can be accommodated by a relatively few Democrats coming across to support administration initiatives on the Hill. That's also a scenario that could be possible. We'll have to wait and see. It somewhat depends upon the kind of discipline that the Democrats can have in their ranks. So there are a lot of unknowns out there at the present time, but I think clearly that it's going to be an exciting couple of years because the issues are grave and the need for some consensus built in some manner is pretty apparent.

Let me cut if off there and give it to Vic.

MR. FAZIO: Thank you, Bob. Well, the Democrats won a very important victory from their perspective. They've been 12 years out of power in the House and almost the same time in the Senate, just a very brief period when as a result of a party switch they were back in power for two years. So for them it's a great opportunity to redefine themselves for the American people. In fact, I think most observers believe that this was an election lost by the Republicans. Democrats didn't have a particularly positive image when they had one at all, and so they are aware of the fact that is a very crucial two years for them. In some ways, like we say in the entertainment industry, they're auditioning for an opportunity to be elected to the presidency. And even though we know the presidential candidates are really in a different realm, members of Congress are aware that to some degree the Democrats will send an image of their party that will affect the presidential campaign. And so not just because, as Bob said, they elected many more moderate and few conservative Democrats to Congress in lieu of Republicans, but because they as a party are becoming more centrist and more pragmatic party in order to gain power this will be a period, I think, of modest initiatives.

And underscoring all of that will be the fact that they have made it very clear from the beginning that they will adopt a different approach to the budget and it's called PAYGO. Whenever you increase spending or reduce revenues you have to find revenue or spending cuts to balance that. There's a zero sum game here as we say. That will be very, very difficult on the majority party trying to put its aperture on the American public psyche try to show some new initiatives and some new leadership in certain areas. It will therefore be easier to do something like increase the minimum wage, which I think everyone knows is long overdue in this country, then it will be to embark on some new spending program, however popular it might be.

I think that will be the chief restraint. But as I said a minute ago, that restraint is also one of understanding that the country wants to be governed from the center. Republicans, I think, should have learned that. I don't know whether they have but they certainly should have learned that a centrist coalition is what many independent voters really sought and did not get from this particular administration. And so I think it will be very interesting to see how Democrats proceed to work. Speaker Pelosi, Speaker-elect Pelosi, has made it very clear that she intends to change the tenor of the floor to have fewer so-called closed rules which limit debate and limit amendments. This will of course give Republicans opportunities to make their point to get the sort of advantage on the majority that Democrats have not been given largely since people like Bob Walker were there where they thrived on a free flow of debate. I've heard Bob say that he thinks the Republicans in recent years were mistaken in the way they ran the institution because they absolved the Democrats of responsibility for the positions that they espoused. They didn't really have to put the votes up on the board. It wasn't just Republicans protecting their own which was really what led to these so-called closed rules.

So it will be interesting to see how far the Democrats can go with this new and more open, more clear approach to legislating where, in fact, members will have to have copies of the bills at least in certain -- a number of days ahead of time, maybe at least 24 hours in order to have any vote taken. Something that's been unfortunately routinely ignored. These are very important symbols not just to creating more comity within the Congress, more sense of unity in terms of ultimate purpose but also in conveying to the public that we're not running a railroad here. We're running a legislative process that will have lots of give and take. And in the context Bob may well be right that there will be some center-right coalitions that emerge on some issues. And I think Speaker Pelosi is aware that she will no longer be requiring a majority of the majority to approve of every issue that comes to the floor.

We had an informal understanding on the Republican side espoused by Speaker Hastert that we would hear only bills that came from a majority of his majority. So it will be interesting to see just how dramatic that change is in terms of what the leaders say will be the method by which they'll govern. And just one more thing before we open it to questions, much of what is before the next Congress is what didn't get done in this Congress. They're leaving town here probably Friday, soon after if not then, without passing the majority by far of the appropriation bills, probably nine or ten of the bills will remain un-enacted on. Therefore all of that gets kicked into the next Congress. The Democrats come back in January with their first 100-hour agenda, the Six for '06, and then the next thing that hits them is not the new budget which will be arriving in February, but a supplemental request for the cost of the war in Iraq and Afghanistan that's reported to be between $120 and $160 billion. That's as big as any of the individual appropriation bills -- labor, health, human services and education -- and on top of that beginning the new budget cycle.

So it's, in effect, punting responsibility of governing. There are lots of complex reasons why that work didn't get done this fall before the new year. But I think part of it is some hardcore Republican members who refuse to allow any earmarks, any line items to be included that were generated by Congress, very unrealistic view in my perspective but certainly one that was sufficient for enough people in the Senate to object and so on that level we're not moving forward with this year's work left undone. I think that's kind of a monumental avoidance of responsibility and presents a huge problem to Democratic members of Congress who realize that suddenly the public says you're in charge and they won't really understand that not only are you in charge of your business but the last Congress's business too, a huge burden for them to start with. And I think that while there's many, many Republicans who are upset about this, there are many, many others who are just as happy to see this dilemma fall in the laps of the Democrats.

MODERATOR: With that we'll take your questions. If you would wait for a mike and identify -- please state your name and organization. Andrei.

QUESTION: Thank you, gentlemen for coming to talk to us. I apologize because my question is somewhat parochial. I'm with TASS the Russian news agency so my question is about Russia. We seem to have (inaudible) to the old habitual Moscow badgering and bashing on Capitol Hill, so I wanted to ask both of you gentlemen whether we should expect more or less of it in the next couple of years and why it is happening? And there is a specific issue of this right here, the PNTR status for Russia the WTO negotiations just concluded. How do you see that play out? Thank you, sir.

MR. WALKER: Well, I think clearly the relationship with Russia is going to continue to have some controversy connected with it and that will get reflected in the Congress. But as the Russian economy grows, in large part because of oil revenues, the chances of developing a mutually beneficial trading relationship I think increase. And, you know, that's always going to be a balancing act because clearly there are Russian national ambitions that at times clash with the U.S. There are U.S. national ambitions that clash with Russian perceptions and we're going to have to continue to try to work through those things over a period of time. But clearly in a globalized trade regime, the need for these two very large nations and economies to work together is going to become clearer. And what kind of agreement you come to is going to be difficult because there is a rising protectionist sentiment in this country in both parties and I'm very concerned about that and that will certainly get reflected in a lot of deals in the future. But, you know, it's two great powers that have every reason to try to figure out a way to cooperate as well as confront each other.

MR. FAZIO: Well, I agree largely with what Bob has said. I think there's no question that the interest of the world economy would drive the two nations together and certainly the more negotiation that would lead to major economies all being governed under the WTO the better. And we all do have in both parties opportunists and populists who play off momentary issues that make it very difficult to relate to Russia or a number of other countries. I agree with Bob there is a protectionist sentiment rising. I think a lot of it was felt in this election. If Republicans were reelected in many cases they came back to Washington with a message that the middle class in our country is feeling a wage squeeze. They're not getting the benefits of trade which are clear to the people in the middle of our economy who are working and yet not seeing a lot of increase in their wages in real dollars. And those are very often people who would be very quick to agree that the problem is the job went to Mexico, went to China, went somewhere else even though, in fact, the factory may be inefficient and unproductive and needed to close.

But the easiest thing for people to do, and some politicians are quick to lead them there, is to focus on foreign competition and what that may be doing to individuals, individual factories, individual communities. So there's going to have to be a lot of leadership, quite apart from the Russian-American relationship, to restore the sort of free trade, pro-trade attitude that you had historically leading up to the present time. Certainly in the Clinton years, Democrats were more supportive of it than they have been since.

But I will say one thing that's very important to getting us back on track. You really have to provide assistance to Americans who lose their jobs: job training, temporary income assistance. There has been a real turning away from helping the victims of trade because there are always victims as well as, in my view, many more beneficiaries. And as long as you leave that problem unattended, support for trade will continue to decline and we'll have problems not with just Russia but so many other nations as we try to get these kinds of agreements enacted in the law.

QUESTION: This question for both gentlemen. My name is Mounzer Sleiman with Al Mustaqbal. A question probably connected: To what extent the consideration from both parties toward next presidential election will affect the business of the Congress? And what this Congress could differ from previous one in relation to foreign policy? And especially, I'm talking about here, about the Middle East. Are we going to see a different approach to the Middle East since there is absence of engaging and special envoy, et cetera? To what extent the Congress will be able to play a role in the foreign policy in the future?

MR. FAZIO: Well, I think this Congress will be very anxious to see the Administration broaden its agenda in international affairs and certainly broaden its agenda in the Middle East. I do think the presidential campaigns bring out the best in the parties. Congress has an awful lot of people who ask parochial questions of their government and deal in those issues that affect their reelection.

But the presidential candidates and the president, ultimately, in our (inaudible) government, really has to focus the American people on the broader issues. And frankly, in recent presidential elections, we haven't been doing that very well. We have not talked a lot about the Middle East, for example, leading up to this presidency, which has been largely consumed, certainly, with Iraq.

So I do think that Congress will be urging a broader approach to the Middle East and to foreign policy in general, but it's really a matter for the President to decide. As Bob said in his introductory remarks, it's really going to be up to this President to decide if this Congress will have much utility, much product, much result. He will have to come to Congress and ask for a meeting of the ways on any number of issues. And certainly, entitlement reform in this country -- you know, the Social Security and Medicare system needs to be looked at. Some want to deal with taxes. I think we could do immigration.

But it's all going to have to come from the White House. And certainly, we are going to have to deal with the Iraq situation in this next two-year timeframe. Whether the President wants to or not, events are overtaking everyone. The degree to which we can control events in Iraq is minimal and so the big issue that's got to be dealt with is the Baker-Hamilton Commission and both the congressional and, far more importantly, Executive reaction to that.

And I certainly think that the Broader Middle Eastern agenda has to be quickly entered into. We can't simply ignore the Israeli-Palestinian problems. We can't ignore the Iranian issues and Hezbollah's role and Syria's role. These are all going to have to get factored in. We have been too one-dimensional in our Middle Eastern view. And so I think there's broad bipartisan agreement that we have to go back to a broader agenda.

MR. WALKER: Yeah, I certainly agree with much of that. The problem is that in foreign policy, the country has to speak with one voice and Congress has a very difficult time speaking with even -- you know, a dozen voices. You know, they speak with a multitude of voices and so, therefore, become fairly ineffective in foreign policy questions.

And so the Congress does have the ability, using oversight hearings and using the power of the purse, to try to affect Administration policy, but in the end, it will be the President that will still be the definitional element in determining foreign policy.

Now part of your question was about, how does the presidential campaign then play in all of this? For both parties, at least in the initial phases of the presidential campaign, you are going to have so many candidates that probably will not impact Congress much at all. The main impact on Congress will be the members up there trying to sort out who the candidates are and who they should back. But you know, it will not have a dramatic impact on the legislative program.

The one thing that presidential campaigns tend to do is they tend to generate ideas. You know, candidates seeking to differentiate themselves on some of these big issues will become an idea factory and some of that will find its way into the legislative process going forward. But I don't think that, at least in the early years or early months of this Congress, that the presidential campaign will have a great deal of impact, simply because there are so many candidates. And that sorting out process is going to probably stay well into the early primaries, so we'll be well into 2008 before we begin to see that resolve itself.

MODERATOR: Let's take a quick question from New York.

QUESTION: This is a question for both of you. I'm looking for a Democratic and Republican response. It's in terms of Congress. You were speaking before with -- about Congress on the first question. And recently -- I work for Caracol Radio in Colombia and I'm interested on find -- FTA, Free Trade Agreement between the States and Colombia. That will be examined by the next Congress, but while we go into that, we depend together with different Andean countries with the APPDA, those are trade preferences that will finish on the 31st of December unless this current Congress accepts them and passes an extension of those preferences in the lame duck sessions.

Do you think this will happen on what's left in the year, considering the priorities for the Congress right now? That's one question. And the other one is about the FTA, which will be examined by the new Democratic Congress. Do you think it will be approved by this Congress, considering the concerns with labor rights and environmental issues with Colombia and the United States?

MR. WALKER: Well, I'm not certain that I'm an expert on the -- what the Congress is likely to do on the items that need to be done before the end of this Congress. As a general proposition, I would say not much is going to get done before the end of this Congress. They are planning on -- to go out on Friday and there's going to be a lot left in the lurch as was mentioned earlier by Vic.

So unless it is pretty well teed up at this point to move, I would be doubtful that you will get action on it. With regard to the FTA, I think that we will probably get a number of FTA proposals coming to the Congress next year. It will be a very different atmosphere in which they will be considered, though, and the labor and environmental provisions that are likely to be tacked on by Congress will be difficult as a part of this whole negotiating situation on the FTA.

So while I certainly believe that we are going to see Colombia included as a part of an FTA program, I do doubt that some of these FTAs are going to get through, simply because of some of the demands that Congress will put on them.

MR. FAZIO: Well, I was involved in a meeting this afternoon that gave me a little insight into this immediate question. I do believe there is an effort to put together a number of trade proposals that have pretty broad support and package them as a bill and try to move them to the President before Congress leaves town. Included in that would be the Vietnam Agreement, the Andean preferences.

But these are things that have been around a while that have been vetted in both Houses, that have pretty broad bipartisan support and still, there's absolutely no guarantee that they'll be able to clear the decks, particularly in the Senate, for action on something that a handful of senators oppose.

So I think there is some ray of hope in the short run for the issues that have been around the longest and have the most consensus. But in the new Congress, I agree with Bob; it will be a much more difficult task. I think the Democrats will demand labor and human rights issues be dealt with and some environmental issues in the trade agreements. I don't see fast track, as we used to call it, passed early on. I think it goes away in June if we haven't enacted an extension.

So it seems to me that's very unlikely to occur, which means that each of the trade agreements will have to be involved with the Congress before they can be fully agreed to and therefore, likely to be enacted. And that will prolong the difficulty. I do think that there will have to be an awareness on the part of the Democrats who have historically said they were for trade, but with caveats, to take the lead on these. Because there really are some people in both parties who really don't want any trade agreements right now, they want a moratorium.

And so we're going to have a difference of opinion within both parties. And you particularly are going to have to face the dire economic consequences of some decisions to turn our back on trade agreements. I mean, I'm hoping Haiti is in this package that comes up here at the end of this session. But certainly, you could argue that Colombia should be dealt with. And certainly, that won't be this year, but next year. But there's going to have to be an awful lot of leadership from among Democrats and essentially, acquiescence from their leaders for these agreements to have much of a chance.

QUESTION: Philippe Gelie, Le Figaro, France. I have a technical and a naïve question. To what extent exactly can a new majority change the rules in Congress? Can they do whatever they want? And secondly, from your past experience, how complex or worldly is it to work in? I mean, for a rookie, does it take some time to be efficient, to be useful for his party? Thank you.

MR. FAZIO: Well, first of all, I like technical questions that particularly I can't answer and certainly, naïve questions are right down my alley. (Laughter.)

I would say, first of all, that there will be the ability of every Congress to change the rules. They're certainly up for passage. Each House has its own rules and those can be changed and there will be some changes. One of the first things that's done in every Congress is it reconvenes the passage of its rules. It doesn't mean they won't come back and tweak them further after the opening day of the session, but certainly, that's normally when perhaps each party tries to put its own aperture on the rules.

But then there are many things that require bipartisan and bicameral agreement ultimately, and that usually leads to bipartisan. And so there are certain things that no one party can foist on the other or impose on the other, or it would be foolish to try to impose on itself without agree or would be foolish to try to impose on itself without agreement from the other body. So there will be some legislation required to really effect, for example, ethics issues that come before this Congress early on. There's only so much you can do to buy in House members without trying to have statutes that apply to both bodies.

Yes, members do need to have experience and it takes time. Some people are quicker at picking it up and become obvious stars in the making, others are more plodding, more gradual in their learning. It doesn't necessarily predict whether their careers will end. But certainly it takes time. If you've had experience in a state legislature or a city council or some other legislative forum at the local level, it helps, but it's not the same. You really do need time.

MR. WALKER: You know, the reality is that a new Congress can change the entire rules package if they want to. The chances of that are minimized when they actually take a look at what that would mean. And for the most part, what you have is marginal changes in the rules that do, as Vic just pointed out, put the parties on (inaudible) on the rules. When we came in in 1995 we had a package of rules changes that we had touted that we used the first day's session to enact a number of these rules changes. I would expect that the Democrats will have their own ideas about some rules changes. The only thing that you can't change is there are certain ways in which you operate the Congress that are mandated in the constitution and you cannot change constitutional provisions by simply changing the rules of the House.

As for members, the smartest thing that most first-term members do is spend most of their time getting reelected to a second term. That gives them a learning curve that allows them to figure out how the process works, allows them to take a look at what committee assignments they might want going forward and some things like that. And by the end of that two-year period, they have pretty much figured out the complexities. But it -- there is a learning process. Legislating is a very different kind of thing than most other professions and there are certain skills that you have to learn to be an effective legislator. And that is a very comprehensive learning process for new members.

QUESTION: Yes. Reymer Kluever from the German newspaper Sueddeutsche Zeitung. Mr. Walker you mentioned the need for compromise and for consensus that it's pretty apparent and you develop two alternatives that the more conservative members of the Democratic Party will reach out or the Administration will reach out towards them. But so far, the signs from the Administration have been very confrontational towards the Democrats and isn't there a possibility that the next Congress will end in many, many confrontation and very little consensus?

MR. WALKER: Well, there's certainly that possibility. I mean, you could end up with a substantial confrontation and a lot of those will surround budget and spending issues. And it will very much depend upon the way in which both the Hill and the Administration decide to deal with each other and what they think is in their interest. But the thing that will drive the Administration to some extent is that the President now will be looking for a legacy. He will be looking to get some things done that will place his Administration in good stead. And so he's going to try to find the kinds of working relationships with the Hill that allow him to define an appropriate legacy.

The problem in doing that, as I say, is going to be that some of his own Republicans may end up unhappy with some of the deals that they will cut toward doing that legacy creation. And that will result in also a confrontation, but not the traditional one between Republicans and Democrats, but amongst Republicans. And so there are a lot of hurdles to get over in the next several months and I don't think anybody has a strong divining rod to tell you what is going to be the case.

I'm not certain I would agree with your contention that they start off confrontationally. I mean, I think that the decision of Bolton to resign was, in fact, an acknowledgement of the fact that things have changed on Capitol Hill, that there was a not a chance for him to get confirmed and so, therefore, they needed to cut their losses and move to somebody new. And to some extent, I mean, that's a concession to the realities of a new day in Washington.

MR. FAZIO: Yeah, if I could comment. I mean, Bob alluded to some of this in his earlier remarks and I did, too, talking about the need for the President to come forward and try to find common ground. There are a number of my Republican friends who feel that the President's legacy has already been established. It's right or wrong, it's Iraq. And we really won't know the outcome until it's all played out. And so rather than try to create some new legacy on domestic issues, whatever it may be, better to have the President's legacy be in addition that he was succeeded by another Republican and therefore spend the next two years, certainly the last of the two years, really working to firm up the party lines and to show the Democrats in what Republicans would say is their true light and not necessarily one that would make it easier for them to gain the presidency. It really is a debate that I'm sure is going on right now within the White House, within the Republican circles and among the President's closest advisers.

There are some things that look to me like very low-hanging fruit. I mentioned the immigration issue which should have an easier time now than it did in the last Congress. But it does remain to be seen. I do think there's a few people in the Administration who need to be given attention. The Secretary of the Treasury, Mr. Paulson, is someone who came to Washington not just to jawbone the Chinese currency, but to try to do some things in the domestic economic policy area and I do think that he would be a very capable negotiator and advisor to the President should he want to come to Congress on some of those issues that I mentioned, like the process of mixing the entitlements and to perhaps try to deal with the tax reform issue which has some real bipartisan needs. If you don't do that together on both those issues, one party can't do it. They are so difficult to pass that you have to have bipartisanship at some level.

Unfortunately, this President, despite running on his good relationship with the Democrats in Texas and after all I know that Texas Democrats aren't all like national Democrats, but he certainly hasn't used that approach in Washington. He and Karl Rove have taken another approach which has caused a lot of Democratic conservatives frankly to be alienated and driven into the arms of their party leaders. They just haven't been factored in as historically when Bob was in Congress, it was done. The Blue Dog's predecessors were part of the coalition, the ruling coalition. And for many of the years the Democrats controlled Congress it was a Republican, conservative Democratic majority on the floor that really ran the place. But both parties have become more pure. There are fewer people from the moderate or liberal side on the Republican Party. And even with this election, still fewer moderate conservative Democrats.

MR. WALKER: But there's one dynamic here that Vic just kind of reminded me of in his statement that you do have to put into perspective in all of this and that is there are only two groups in town that are really in charge of governing at this point. One is the President and the White House and his Administration and the Democrats on Capitol Hill. The Republicans on Capitol Hill at this point have no responsibility for governing whatsoever. And so what you may see play out here is people that with a responsibility for governing will take a different tack than those who have no responsibility at all. And as I've often told college audiences, the only job of a minority is to become a majority. And I think that that's what the Republicans on Capitol Hill will probably be focused on.

MODERATOR: Yeah. I have a question from New York. Go ahead.

QUESTION: Yeah. My name is Anirudh Bhattacharyya. I'm with Indian television CNBC TV 18. Actually, I have two questions for both gentlemen and I'll start with my first question. Both of you did mention that protectionist sentiment is rising in this country. Now India of course is very interested in issues like offshoring and outsourcing. Now with the composition of the Congress changing, how much of an impact do you think that will have on this sector? That's my first question. I'll come to my second question later.

MR. FAZIO: Well, I think it's going to be more difficult. The offshoring issue, evening when you don't get below the surface of that is very difficult for people in both parties to deal with, although I think you can make a very good case that actually preserves American jobs, it doesn't seem that way, you know. The first reaction is it can't. So I think it will be a more difficult environment, but it will also require those people in both parties who have an international commitment and have had one historically, people who serve in administrations and don't run for Congress, because we don't have that parliamentary system where those kinds of two groups can't really exist. They do in this country. The internationalist wing in both parties is really going to have to go on the offensive and be far more insistent and articulate about the values of internationalism and globalization which we believe -- and I know Bob and I would -- is a fact of life, not something you can turn on or turn off.

MR. WALKER: Yeah. One of the easiest things to demagogue in the political process is the whole idea of outsourcing because any time you have a plant that closes and the jobs appear to go overseas, that becomes a headline. It's much harder to find the situations where jobs in twos and threes are being put into thousands of plants all over the country and so it becomes one of those issues that's very easy to demagogue. And I would say that it's going to be an issue that will get a good deal of play in this Congress. My guess is that any bill that would prohibit outsourcing on its own would end up getting vetoed by the White House and so it may be more of a discussion piece than an actual legislative piece. But it will be something that will be a high-profile political item.

MR. FAZO: I just need to go back to one point I mentioned earlier, unless you deal with the insecurity of the American working class which doesn't have national health coverage, which is losing its pension rights and not being able to replace them very readily, unless you deal with the stagnant wages in certain states -- parts of the country -- you're going to have a continued problem in this area. It's the easy place to attack. But in fact, we have to fix that problem within our own economy so that we can be more aggressive internationalists again.

QUESTION: (Inaudible) NHK Broadcasting. I know there's been a couple of questions regarding the whole protectionist issue. Specifically on the U.S.-Korea trade agreement, free trade agreement, the South Koreans are still pushing, asking about that the Kaesong Industrial Complex be included within that package. And of course, that's the project in conjunction with North Korea. How likely is that the new Congress will buy this?

MR. FAZIO: I couldn't be too optimistic. On the other hand, I think we know our relations with South Korea are extremely important and we all have to stand together, particularly as we confront the North. And we of course, want to do that on a much broader basis than just on a bilateral basis. So one, not necessarily fully informed to give you an honest answer. But my instincts tell me it would be more difficult.

MR. WALKER: Yeah. I would agree with that. I mean, there are a series of very difficult issues to be overcome in an agreement with South Korea. And the issue of the industrial complex in the DMZ is certainly one of them. But I think that any chance for that to end up being included will largely depend upon what happens in the six-party talks. And if, in fact, the six-party talks are able to reduce the tensions and are able to come to some agreement with regard to the nuclear ambitions of North Korea, there may be some chance of working that deal because at that point I think it will -- Americans will see it in American interest for the South to have more of an impact in the policies of the North. But if you don't get to that point and if those talks drag out for a long period of time, then I think it's going to be very difficult to write an agreement that includes that complex.

MODERATOR: Yes, sir. Right here.

QUESTION: Thank you. My name is Wada. I'm with Japan's Mainichi newspaper. In connection with the North Korean issue, do you expect the new Congress to come up with more pressure on the Administration to pursue, for example, direct talks with North Korea? I mean, you said that it's basically up to the Executive Branch to decide on issues of foreign relations. And so far we don't see much of new Administration coming out of Administration to change the current format, the intent on pushing the six-party talk framework, but --

MR. FAZIO: I think there will be increasing pressure, but I don't think that pressure will be felt very well by the President. I think the President won't be frankly moved by it. But there will be increasingly voices in Congress saying we need to get into more direct negotiation, not just with North Korea, but Iran and other places. I don't know that there's going to be a revolt against the support that the President has to have to conduct the nation's foreign policy. But there will be policy voices from the Congress and the broader community, as there has already been, asking for a willingness to deal more directly. I don't think we will, for example, deal with North Korea unless it's an offshoot of a subset of the six-party talks, but that may well be one of the outcomes of a successful six-party discussion.

MR. WALKER: Yeah. This will be a case of Congress speaking with multiple voices, that there will certainly be people on the Hill, maybe even committee chairman look to hold hearings on the subject matter. But the chances of changing the direction on it are probably not very good. You know, the President is being counseled all the time these days about the direct talks with people like Kim and Ahmadi-Nejad and a lot of these folks. And I think the Administration is very wary of that and I think for Congress as a policy issue, to wade into that would put them on very dangerous ground because those are very controversial issues. And as Vic noted, to some extent this going to be a Democratic Congress that's going to seek to be moderate in their performance, that would be a national security issue that will play very well for the Republicans if the Democrats were trying to force the President to hold talks with people who are international outlaws.

MODERATOR: Winston.

QUESTION: Winston Chen with Hong Kong Sing Tao Daily. Could you talk a little bit about the impact on the relation between China and the United States because right now at least -- I mean, the incumbent Speaker, Ms. Pelosi, very opinion on China? And also there are so many issues involved in -- I mean, the relation between two countries, not only trade but also military energy -- I mean, human rights, a lot of things, you can name it. So I mean, what's your opinion?

MR. WALKER: Well, my guess is that again that there will certainly be pressure from various people on Capitol Hill that will raise the issues. Certainly the Chinese currency issue is one that is going to continue to have salience, not only because of Capitol Hill, but because the Administration has also been actively involved in trying to resolve some of those. The balance of trade problem between China and the United States will continue to be seen as a major economic issue for this country and so therefore will play itself out. Whether Congress will actually take direct action to change the relationship, I would doubt that. I think what you'll have is a lot of noise about various issues, but very little in the way of direct action to change the relationship.

MR. FAZIO: You know, I think Speaker Pelosi's concerns about human rights are well known and certainly she represents a large constituency of Asian Americans largely Chinese Americans who are in many, many cases not happy with the way Chinese Government operates. Some of that's historic. Some of it's more recent. But I don't think the Speaker will be trying to impress upon her members her views on all these issues. I do think the Democrats are going to have to, as the Republicans are, develop a more balanced approach to China.

Certainly the Secretary of the Treasury, Mr. Paulson, who's already been there will be sort of the lead individual in this administration on Chinese-American relations. But it's a long slog we have and it's a more complex one, even in our relations with Russia. And there will be ups and downs and good months and bad. I think you'll see a lot more jaw-boning on the currency issue from people like Schumer and Graham of South Carolina. But I don't think the Congress will enter into the thicket of trying to legislate in that area. I do think that there will be more talk than action. But it's all about sending messages and buttressing sometimes. We use a term in this country, the good cop, bad cop. This is the Congress being the bad cop so that the Administration can be the good cop. But I know people might have a problem with the concept of a cop. But we are going to have to have obviously a very, very close and difficult, but hopefully gradually strengthening relationship with China.

MODERATOR: We have a question from New York. Go ahead.

QUESTION: Yes. Mignon Lamia with the Asahi Shimbun. I'm wondering what role you -- either of you think the new Congress will consider for the UN in designing an exit strategy from Iraq?

MR. FAZIO: I think we'll have a new leadership at the UN and at that point perhaps we will know what might be the UN role in the Middle East and certainly in Iraq. At this moment, though, I would not assume that we will be looking to the UN. I'm waiting to see what the Baker-Hamilton Commission will suggest to the President and to the Congress and it may well be that they would hope to find a role at the UN. Not only will we have a new leader at the UN, we'll have a new representative at the UN. So who knows, it could suddenly become a much more creative place to be, but I'm not counting on it.

MR. WALKER: Well, there is a philosophical difference between the two parties on the issue of multilateralism, of the use of international organizations, for pursuing questions of national interest and I think that may play itself out in some of the congressional debates. I certainly would assume that again there will be some oversight hearings. I would assume that there will be amendments on the floor on international relations bills that would call for more use of the United Nations not only in situations like Iraq, but in Darfur and lots of other hot spots around the world. And that is going to be one of the issues as it plays itself out in the Congress that will perhaps have an impact on the presidential races because you'll have a multitude of voices in the presidential races, raising some of those same issues about the direction of the conduct of U.S. foreign policy for the future. So you know, I'm not certain that we will get anything specific out of this, but it will certainly be a subject of much debate between the Congress and the Administration.

MODERATOR: Yes. New York, go ahead. You'll be our last question.

QUESTION: Yeah, right. My second question. Anirudh Bhattacharyya from CNBC TV 18 once again. This is about the lame duck session which is on right now and the India-U.S. civil nuclear deal. A reconciliation process of the bills which have been passed by the House and the Senate are supposed to be undertaken during this week. How much do you think that is on the agenda? How high do you think or how much of a priority do you think that is? And especially since both bills apparently have deal killers in them do you think there'll be enough time for both the Congress and the House to get together and actually resolve the issue?

MR. WALKER: Well, my guess is that this one where the Administration will be pushing hard to try to get something done by the end of the week. You raised the difficult question and that is whether or not the Conference Committee can in fact come up with something in a timely manner, but it is something which is a priority for the Administration. It's one of the accomplishments that the President points to and my guess is that there will be considerable pressure, but time is running out quickly.

MR. FAZIO: I agree with everything Bob said. I would only add I don't know. But we have one more question here and maybe that would be the end, since you were in the room when we went to New York.

QUESTION: Thank you. I'll end on a less serious question. But since you guys are side by side, in his first speech after the midterms, Bush referred several times -- I'm with CBC, Canadian Broadcasting. The President referred to the Democratic Party several times as the Democrat Party. I'm just wondering, in terms of tone, how do you feel when he's, you know, calls it and he's not the only Republican to do that.

MR. FAZIO: I personally throw a tantrum. (Laughter.) Actually I think it is an important issue. You actually may have seen the op-ed piece the Washington Post about this. It is not something that Democrats enjoy hearing. And usually when we hear it on the floor, it's intentional. So I think it would be good to start calling each party by the name they want to be called, you know, but then again the government won't fall over it.

MR. WALKER: Yeah, I don't think government will fall over it. I agree comity would suggest that we ought to refer to it as the Democratic Party. Hopefully, some of the members of Vic's party would stop referring to us as fascists. (Laughter.)

MR. FAZIO: Well, if you'll stop call us "communists." (Laughter.)

MODERATOR: Thank you very much.