>> and now a discussion on technology issues facing congress and the obama administration. topics include cybersecurity, broadband access and government information technology. this one hour event is hosted by the lobbying group techamerica. >> so to that end i just wanted to introduce phil bond as he puts on his moo cophone. -- microphone. he's president of techamerica, and he has a few opening remarks

to say what we're looking forward to in the fall. and then we have a number of our policy experts on hand and on the phone as well to facilitate what we hope will be a good, fruitful q&a session for all of you. >> thank you very much. can you pick it up? bear with me, everybody, for one minute here. i'm tech technologically challed by a lapel mic. there we go. welcome, everybody, glad you could join us. we are the largest advocate si group on behalf of the technology industry with 1500-member countries and touch some 16,000 technology companies. and on behalf of all of them, i welcome you here. we have some of our key staff with us today to help us field some of your questions. after i do a quick review kind of the water front of some of the issues still in the policy lean ma on behalf -- arena on behalf of the tech sector.

let me introduce those folks in advance so you'll know who we are. on the phone we have the executive vice president who leads our public sector group, that is all the issues having to do with bringing technology. we have bartlett cleland of e health policy, jeff clark who is the acting directer of our state government affairs program. we have ed longnecker, executive directer from the midwest, you'll hear more from him later. with me here in the room, jennifer kerber, second to my left, vice president of federal and homeland security policy. to my immediate left, trey hodgkins, vice president for national security and federal procurement policy. on my right joshua lamel who is our senior vice president for commercial policy and heads our government relations efforts generally. and then last and certainly not least liesyl franz, vice

president of cyber security policy. well, let me see if i can do a quick tour of the water front for you. from a technology industry perspective, congress departs for its august break after a very positive start. the recovery act certainly made clear that innovation was central to the president and congressional plans in terms of confronting our nation's biggest problems. washington also has taken up with renewed vigor the entire question of cyber security, several bills in play and, of course, plans to appoint an unprecedented high-level adviser in the white house. innovation clearly was a priority in the omnibus. in the budget we saw that discussed in r&d and alternative energy and smart grids. but the question now really is where do we go from here after a very good start and realizing that we're in a very competitive world? so far i think it's fair to say

that most of the attention in recovery projects has certainly been about 20th century infrastructure. tech merck and its -- techamerica and its members are more interested in broadband deployment, revolutionizing health care and the information flow there, smart grids, education, green technologies. this is not to diminish shovel-ready projects, but we're more interested in innovation-ready projects. the two do not have to be mutually exclusive. if we are going to be tearing up roads or building roads or repairing roads and bridges as shovel-ready projects are teed up, there's no reason why we can't also simultaneously be laying down 20th century infrastructure, and we have called for exactly that. josh can talk more about that later. and we recognize that to do this we need to make sure the right regulations and planning is done

in advance, but i would say that the tech sector and its individual companies are anxious to get moving. there is a lot, a lot to do. meanwhile, we're continuing to work with states as well. much of the recovery money, of course, you know is going to flow through to the states, and we're working there to make sure we continue as the innovation headquarters of the world. in particular, techamerica's midwest chapter with ed leading the charge has been asked to partner on the illinois smart grid task force. this is an effort in the state of illinois to establish a physical microgrid test bed for as a national resource, a test bed for some of the smart grid projects that will be coming through the department of energy. so as we make progress at both the federal and state levels around some of these, we also have been urging governors and federal legislators to not forget the outside's contribution that small companies make in this arena.

25 percent of the stimulus funding has been targeted for smaller companies. we've been in touch with governors in all the states to underscore that, with the hill to underscore that. in fact, we're currently collecting signatures from small companies to write to the governors to make that point to them as well. small companies need to understand better how government operates, and so techamerica's mission in part is to be at that intersection to help the companies understand how they can plug into some of these government programs and to educate policymakers and governors and others and federal agencies to find those small businesses. so we, as we play that role at the federal and state levels, we focus on things like the broadband plans and the stimulus investments there, but also the long-term commitment, the fcc's plan, national broadband plan. we have called here at techamerica for a flexible national strategy that focuses first on the high-capacity

networks, on consumer demand so that there is some pull through those networks and then what is called middle mile networks, making sure you have an anchor or high-capacity capability in a community from which you can branch off to reach other elements of that as we try to extend broadband to every corner of america. once that plan is developed and released, we'll look forward to working with both the congress and the administration on its implementation. one other area in telecom i want to mention real quickly which is that techamerica's leading a new group of associations and companies to seek a stable and uniform intercarrier compensation so that you can enable networks to move information. this is particularly focused on voip, voiceover internet protocol and other ip services. josh, again, can talk more about that. let me segway just a little bit to talk about the appropriations season that we're in. from our perspective

appropriations season often means unintentionally, provisions that unintentionally limit the ability of government to access the latest and greatest technology. there have only been a few such proposals to date this season, but we continue to watch that front and work with our friends in congress to help them understand what often are unintended consequences from some well intended ideas. also looking ahead to the balance of the year legislatively as lawmakers look at appropriations and look for pay fors on some of the spends we recognize that some will find some appeal in the ending of overseas deferral as a way to pay for some of that. our counterpoint to that is that this is a linchpin in american competitiveness, this particular tax provision is critical to our company. we are 5 percent of the world's population which means 95

percent of the world's market is outside the u.s., and the tax provisions around overseas income are critical to allowing our companies to go overseas and compete and succeed. we do not think that it is a good trade to sacrifice long-term jobs for short-term revenue. and we'll be making that point on the hill. this is a provision that our members are whole heartedly against any restrictions. another tax provision that's out there on the horizon that absolutely has to be addressed is that the r&d tax credit, of course, gets ready to expire at the end of the year. this is something that must be done on an annual basis. we'll be reminding members of congress that this isn't just about scientists working on something for ten years from now, but in fact studies show that 70 percent of the r&d spending each year actually creates realtime jobs. so we are here to say that east you think it's -- either you

think it's a good idea to encourage r&d in america and create those jobs, or you don't. so we're going to be watching proponents very closely, watching not just the votes, but who's doing the work. not just sponsoring but cosponsoring and doing the heavy lifting. those will be the true friends of american innovation in our view. there are a number of issues in cybersecurity i want to mention quickly and tee those up for questions you may have. most important would be the appointment of a cybersecurity administrator in the white house which we belief will be coming in the near term. it's worth noting that some outstanding folks have been added to this administration, greg schaffer at dhs in particular. but in this environment as has been reported, melissa hathaway after finishing the 60-day review has submitted her

resignation, as has michelle kwan from dhs. so this appointment becomes even more urgent. i think that many in the technology space who understand the importance of cybersecurity both to secure your assets but also to make the medium secure and instill confidence in people using the medium were a little bit frustrated that the appointment has not been made yet, and i would dare say the president shares that frustration because he personally came to the white house when the 60-day review was completed to promise fast action in his personal involvement in that appointment. legislatively we really rook forward to some progress on senator carper's bill to improve the federal information security management act, fisma. that will be critical, and we've been engaged in that process. on the house side, there's comprehensive legislation for breach notification, data breach. we are edge gauged with

subcommittee chairman rush as well. those will be important things for congress to address in the second half of the year. related on the security front two other things i want to mention, one is pass id, the other is, well, both -- i'm sorry -- both related to pass id. real id was proposed to identify, to insure that people are who they say they were, to make driver's licenses more secure. informs a recommendation of the -- this was a recommendation of the 9/11 commission. we believe that this recommendation makes some great progress on privacy but, in fact, makes driver's licenses less secure than they might have been otherwise. and so we think it's important that you be able to truly validate that somebody is who they say they are. so we will be continuing to work on that, and there's some specific concerns about the readable data on the cards that we'll ask jennifer kerber to

address if you have questions there. immigration is on the horizon again now. it's kind of been reenergy energized by senator schumer and representative lofgren joining forces to address what we agree is a broken immigration system, and we look forward to continuing to work with them to make sure that we get secure borders but also be able to bring in the best and brightest from around the world. both those who are employed by our companies and those who might be. our members also will be working on a related matter which is the e-verify system. we support good employment verification. we've called for changes on legislation in this area, we've also sent a letter up to folks expressing our concerns in this, or our need in this area. let me see if i can cover just a

couple of others real quickly before we open it up. one is on procurement, i mentioned in passing earlier. we were watching with great interest guidance coming out of omb, and in response to the president's march 4th memorandum on government contracting. the memo posited a number of very good questions, and we'll be watching at the agencies respond to those and working with them to make sure that as we pursue reforms and positive developments around the kind of contracting and procurement the taxpayers can have confidence in that we don't unintentionally end up putting hurdles in the way so that we do not bring the best technology and innovation to the government sector. finally, i would like to note our concern over a couple of other appointments. again, these are both related somewhat to the procurement arena. first is the gsa administrator.

we support and have called upon the senate to, to immediately upon its return to fill the position of the gsa add -- administrator. two other positions at gsa have been given a green light to go ahead and be filled, and that's good news, but we need the administrator in place. the second position i want to mention is secretary of the army. representative john mchugh is the nominee, and again, we call on the senate to act on that as soon as possible after their return. well, that is a rapid and far-reaching summary of things that are pending right now. what i'd like to do at this point is turn the gavel over to all of you, open the floor for any questions, and we'll either defer to the appropriate expert to help us out -- >> [inaudible]

-- you may take the first question yourself. >> all right. let me go right there. please identify yourself. >> irv chapman, i work for bloomberg radio. just to flush out a couple things you ran quickly past, you want to build a fiber under roads and bridges, what do you want it to do? where do you want it to go? and broadband in the same token, let's say broadband hits thanks to the feds a town of 50,000 halfway across the country. what do you want it to do for that town and where do you want it to go? >> well, i'll call on josh lamel to give you a little more detail, but we think fundamentally you don't want to miss the opportunity as you work on 20th century infrastructure to put down the infrastructure for the 21st century. and so to us it makes just ultimate common sense to put the fiber down for all kinds of capabilities, some of which we can't know yet because they are over the horizon.

but there would be certainly municipal needs, government needs, private sector should be able to plug into that as well, you should notify isps if you're going to tear up the road so if they want to put down some of their own proprietary capabilities, they can do that. i'll let josh talk a little bit more about that. in terms of, you know, we want folks to do with the broadband our first thought is you really use these kind of demand aggregators, the big users. a hospital, a library, sock other significant public service from which you can branch off with greater speed. but let me defer to josh lamel who was tech policy adviser to senator ron widen on the hill for a number of years and leads our committee effort there is. efforts there. you can just hold it. >> well, i think there's -- >> [inaudible]

want to be heard on the beltway somewhere. >> going to be tough, can you get it? >> got it. >> it's inside. >> yeah, it's inside. hold on one second. so, you know, there's a couple things here. i think the first part of the question is, you know, the basic answer why does rural america, why does small town america need broadband? and you got at why do we want, where is it going, why are we going to these 50,000-person towns? there's a lot of reasons. i think to be competitive in the 21st century job market, for their education system to be competitive, they need broadband. it is, we are at a point in terms of when we talk about this broader debate around u.s. competitiveness where if you do not understand and know how to use services you get because of broadband, you are left behind in this world, and you are not going to be creating a competitive work force, you're not creating a competitive work

force for 2005 let alone for 2025 and 2050, and i think that's an important part about it. it brings huge economic efficiencies to these commitments. one -- communities. one of the best examples we see and hear people talk about is the importance of broadband to farmers and our agriculture system in terms of the way they can monitor crops, regulate water delivery, fertilizer delivery, make sure they're keeping track of everything. you bring down the cost of producing cost, that brings down the cost of food. that's something i think there's no argument would be a good thing worldwide. in terms of, you know, how you do this, why, i think one of the reasons you see focused around this anchor concept. the idea of going to a library, going to a community center, a hospital with these massive middle mile kind of connections and then allowing the last mile to be built off of that middle mile connection provided whether it's through the stimulus or

through whatever, the fcc's going to do in the national broadband plan is that the, these institutions, you know, a hospital, a library, these are the key institutions for access. a hospital you're getting into issues around provision of medical care. a hospital having broadband allows maybe a role a doctor can confer with the number one expert in the country, send an x-ray, send a scan, send a test quickly and in realtime so he can potentially make a life-saving diagnosis that he or she other side wouldn't have the ability to make. that's a perfect example of why a hospital is a good anchor institution and having a big, fat broadband connection is important to that. libraries, you know, libraries are a place of learning for a lot of people and the community and, frankly, not everybody wants to spend the money on having a broadband connection in their home. not everybody has a computer in their home, and the library is a place where you can allow those people to go and do those things.

schools, i think, are fairly obvious why it's important to have these in schools. that's been a long standing policy dating back to 2001 in this country at the fcc. so there's a lot of good we can do from that. and what you can do, and i think this is important, if you have this huge connection, the capacity is not going to get used just by that institution. and so what it allows is companies to build wi-fi networks, companies to build last mile connections through wire line off of those connections. out to the community for those people who do want to purchase in their homes, do want to purchase for their own business and allows you to do so in a cheaper way while meeting a core governmental need of providing broadband and providing kind of the infrastructure for the 21st century to these key anchor institutions. >> let me make, and i'm just going to pass this -- let me make one other perhaps more urgent point on that. three years ago we did a study here to show that domestic

sourcing, rural sourcing of work in the u.s. was becoming increasingly competitive with overseas sources. so the great innovation of the past ten years had been companies outsourcing work to others to do it more efficiently. rural america can do that work. they have the capability, human capabilities with some training they can do that. but what they need is serious bandwidth so that they're unrestricted in what kinds of services they can provide. we've seen some governors, most notably governor baldacci in maine recognize this and market his rural parts of the state as places who can compete globally for outsourced work. so that's one immediate global trend, this can be employment for rural america, but they need bandwidth. other questions. in the back, please identify yourself. >> [inaudible] you mentioned cybersecurity, and i know a big challenge that has been identified is involving industry, so it's a coordinated attempt to tackle the issue, but

at the same time industry has voiced concerns about liability, even antitrust laws' violations given the information-sharing requirements. so how can that be rectified so that we are in a coordinated attempt to attack this which is necessary, and as a follow up, you mentioned dhs' new leadership in cybersecurity, is that enough to strengthen their leadership which has been criticized in the past and how they're handling everything? >> i'm going to defer to liesyl franz and trey hodgkins on this point. we have some 300 companies engaged in cybersecurity-related efforts to track that policy and impact that policy. and both new legislation as well as regulation and interaction with the procurement officials. let me just say before i hand it off to liesyl and then to trey that, first of all, we think the two appointments at dhs riding ger and schaffer can two

extraordinarily strong players, and that can only help in the cause. the need for the white house coordination is something we recognize and called for in the past and are certainly anxious to get that piece done. i think that some of the challenges you identified, concerns about liability and proprietary information, other things only reinforce the argument for more engagement and partnership. you need the best and most cutting edge technology which means you do have to engage the private sector, but also you need to engage their perspective to understand what the hurdles may be to getting that into government service. and with that let me hand it first to liesyl and then to trey. can you reach that? thank you. >> jill, i think you did address

a couple of challenges that people have talked about with regard to that partnership that is so crucial between industry and government on cybersecurity. i mean, no one sort of element can do it, the whole thing on its own as the partnership's efforts that have been launched today indicate. i think that from the industry's perspective we look at the current environment as a time to make changes that can enable information sharing and partnership in a way that removes those obstacles. we might need to restructure or reconstitute what that partnership looks like to enable that kind of interaction. and remove fears of either inadvertent sharing of proprietary information or the threat of liability requirements

that would have unintended consequences for the use of products and services. and then really reduces security rather than enable it. to address your second question as phil pointed out, there are two very good appointments to the department and have really hit the ground running. the issue perhaps for the department is whether or not, where its authorities lie. and we see that there is some movement on the hill to try and put into statute some of those authorities that had not previously been there. so we look forward to seeing where that, where that might come out. and again, the appointment of cybersecurity coordinator would be crucially important to coalescing all the efforts of dhs and other agencies not only for securing themselves as an

agency, but bringing their, their resources and capabilities to bear to combat the problem in a coordinated manner. >> a more realtime example that i can reference where we are partnering or working diligently to try and partner with the government is around the far council's case regarding authentic i.t. products and services. the last public hearing for that effort will be this thursday, and industry has been working with the far council to try to develop a proposal for a way ahead that would allow the government and industry to come to consensus about how do we do this so that we're not excluding innovation and commercial products, that we are not inadvertently cutting off small business says to the government -- access to the government market, but also providing a degree of insurance

for the products and services delivered to the federal government. so that's a realtime exercise that we're going through now where industry is working with the government to come up with what would ultimately become a contract clause. it's not going -- what we've discovered is it's not an easy task. it's not going to happen overnight, it's not something we'll resolve on thursday at the public hearing. in fact, our proposal will be that we need to identify a time frame in which we can all work together and reach a conclusion. but that's, that is a realtime example of trying to work with the government on an immediate issue. >> what was that called again? >> it's the authentic i.t. products and services far case, and i can get that case number for you later, jill. >> others. yes, ma'am. >> the coordinator of the fcc's national background project has been pretty vocal in saying that the record so far submitted by industry and other stakeholders doesn't really seem to be moving

the ball, that there's no new ideas that are really going to let them come up with a plan that would really move broadband forward. do you, how do you respond to that, do you think you all have some ideas that would really move the ball? >> i'm sorry, would you -- >> i'm sorry, lynn stanton, telecom reports. >> thank you. >> i mean, that's certainly a vocal -- it's certainly a vocal criticism that's out there right now, and i think industry is taking it to heart and really going back and looking at what they said. i think part of it, you know, from a trade association perspective you're representing the interests of, you know, in our case, you know, hundreds to thousands of people in industry, and so it gets hard to get really down into the details. i think what we tried to do in our reply comments is try to focus it on some, some are really the big ideas that people may not necessarily be thinking about. when you're defining broadband,

we really don't know how to define speed in this country. ..

also areas around sunshine to be honest with you. i think there are some people that would love to say some thins and make some proposals and throw out some ideas, not on the record, that cannot do so, because of the f.c.c.'s sunshine laws. that would love to have those conversations over dinner with a commissioner, this is where we would like to be in 10 years, but this is where we would like to be. and the sunshine laws prevent that, i don't want to say honest dialogue, but you don't want to get put on the record making promises that technologically you don't know if you'll be able to keep or not. we've heard that many people have been going in to this, really think that the broadband coordinator and the f.c.c. chairman have really had an idea of what they want to do with this from the beginning and they're collecting a record in order to back up what they want

to do so i think people have not been investing necessarily because of that belief, people may not be investing the serious amount of times to put together a 500 page set of comments that will go in depth on every issue that they otherwise would have. i also think people recognize or at least i recognize that people have to read thousands of comments to get filed, whether it's at ntia or at the f.c.c. and i want to stick to and focus on what i can actually state from real authority and i think can add value from our organizational perspective to what they're doing. i can talk personally about what we did. we're not going to add value to this, we're not engineers, we're not hard core scientists. we're not going to add value to this process by talking about in-depth specifications that need to happen for lte in the future and everything around that. that's for the engineers, the scientists at the companies to do. as a trade association, you want to focus in on there's some bigger picture things here that

we don't want you to forget, that we don't want you to lose track of as you delve into the details of this and it's important to have that underlying everything you're doing. >> let me add one quick comment if i can. i think one of the -- one of the things that is betrayed by that kind of observation is that the companies as us as an association are running into the fact that demand matters and when i mention that, i would say that's in part an indictment of us, as a trade association, we need to do a better job of communicating to small businesses, individuals, so that they really believe, which we believe is demonstrably true that they understand that bandwidth equals job opportunities, so that there's real demand on the system. that again, returning to something i mentioned before, that's why efforts like that of governor balducchi in maine

understand that. if people demand that, they will demand more broadband and that's one of the holy grails of broadband strategy, how do we incite more demand on the network. frankly, we need to do a better job in that. >> that's a good point. you have to look at some of the studies that are out there. even when broadband goes into a community, what are you getting, 50% to 60% uptake rates, maybe into the 70's in certain communities. who are the other 30%, 40%, why aren't they choosing to purchases broadband. we all know the benefits of it, there's no argument that broadband is an kick good, but why are businesses choosing not to buy it and there's some fascinating studies out there on this. i think there's some studies that clearly get at -- and i think the stimulus bill and what the f.c.c. and ntia are looking at and are going to show this that computer ownership is still an issue in this country, if you

don't have a computer, you don't need broadband, but at the same time, in many of those communities they have mobile devices and cutting edge mobile devices that they can access some of the benefits of broadband. they even know certain cutting edge technologies like the i phone, the palm pre, the blackberry storm are changing that ability. you look at some of the net books coming out on the market, some of the deals you see wireless carriers making for a contract at a cheap price. that is rest revolutionary for helping smaller communities access broadband, because the purchase of a computer was often an impediment to that and the ability to get a new net book that enables them to do everything they need to do for $99 or for free, i'm not sure if it's free yet, it probably will be the way the market goes on some of these things, it's phenomenal. it's a game changer.

we talked about the digital divide for how many years. that is an absolute game changer. the other thing with you look at the demand issues, another good place to look at and we talked about this a little in our comments, our pointed comments to the f.c.c. is the disabled communities. broadband has been revolutionary technology, wireless and broadband, especially wireless, for the disabled communities to be able to communicate with people, for the deaf and hearing impaired, the benefits have been immense, i think any of you, if i go -- i encourage everybody to go spend an hour at the new york avenue metro station, just watching, which is for those that don't know, galludet university, the downtown metra stop services their university, and what they're able to do and how they're able to interact with people.

this had been revolutionary for that community and their ability to communicate with the rest of us, but not everybody knows that. not everybody understands that. the older generation doesn't necessarily understand that, we need to do a better job of educating that older generation. we need to do a better job of showing the blind community of the benefits that broadband can bring to them, just because they can't see all of the things they can do, using computer technology, all of the things that they can do. we need to educate the older community about the benefits of broadband. i always joke, if i tell grand grandma, you get every grandma signed up on an e-mail account in one hour if they knew they could communicate with their college grandchildren. why it's a good investment, because these things cost money, why it economically makes sense for them to shell out the $29, the $30, $40 a month to purchase

this service. we talk about why it's good, but we don't talk about at the end of the day why it's worth them spending that kind of money on it and it is worth them spending that kind of money on it. we need to do a better job educating them on that. >> let's go back here and then we'll come back. >> david hatch with congress daily. mr. bond, if you could talk a little bit about the tax deferral proposals, what are the proposals that are out there, who is pushing them, and what are some of the major companies that are most concerned about this issue as well as other associations? >> well, i'm going to hand off to bartlett cull 11, who is our -- cullen, who is our senior tech policy counsel here, but i will just say that any company that is deriving revenue overseas, will have an interest, and as i referenced earlier, since 95% of the world market is overseas, increasingly, that includes the smallest of

companies, from the very startup phase, who are trying to reach and monetize markets overseas, but bartlett, let me defer to you to give an update on where it stands legislatively? >> thanks, phil and i knew we would finally get to the good part of the program. thanks for the tax question. i'm sure it will be in all of your publications. i'll go in reverse order largely to underscore what phil said. one of the main things to take away from this debate is the interest in deferral, that is to say, keeping the tax system as it is, is very, very widespread and hinges on only one factor for the most part and that is the amount of sales derived outside of this country. or as phil said, in his comments, sales derived from that 95% of the world that isn't us. that number alone seems to be

the tipping point, and there are just in our membership, you can speak broadly about the economy, but certainly even in our membership, we have members who are deriving 90, 92, up to 96% of their revenue from foreign markets. hence, any kind of tax tinkering, even if it sounds paltry to us, 1%, 2%, is an enormous impact to their bottom line. it basically comes off their bottom line and tease days, that kind of percentage off the bottom line, eavesdrops, no doubt about it. everyone thinks about the hp's and microsofts of the world and that story is interesting, but i think not nearly so interesting as all of the sme's who are impacted. as for what's going on on the hill, virtually, no proposal has made it in to legislative language. certainly not serious legislative language. how far, the threat persists of

tinkering with the international tax system, outside of kind of a tax reform notion and we find that whole approach to be frankly dangerous. i think the key point to understand about the current tax system, i see this reported sometimes and it's reported erroneously, this is not a way to advantage our companies. this is a way to level the playing field for our companies. hence, if you take away this deferral portion, you're basically putting our companies on a lesser footing than the foreign rivals and as we all know, there are plenty of companies around the world that are directly competing with our if novation industry. >> i think there's another important point here to make. i think first of all, what you're hearing from many in congressional leadership is we want to talk about this in the context of a broader tax reform package in 2010, and we open and welcome that discussion as there are lots of issues with our corporate tax code right now,

that i think both our small, medium and large businesses want to look at. and the second point is location isn't what it used to be. the big yolk used to be location, location, location. for a company deciding where they need to be headquartered, located, because of advances in technology, because of changes in who their market is, it's less and less important every day for a company to choose to be located in the united states and it's less that -- that location becomes less and less of a factor in their decision making and so issues like the tax code, get into broader issues of general competitiveness in the united states. the u.s. tax code in 1970, especially the corporate tax code, existed if a bubble, and you can kind of put a bubble around the united states and in states doing certain things to compete for business if the united states, but basically that u.s. tax code exists in the bubble of the united states. it does not exist in that bubble anymore. when a country like ireland and

i know there's some controversy around ireland, but when a country like ireland chooses to make a decision to promote and invest in technology especially, with strong r&d provisions, with strong corporate tax code provisions and they have the education system and the work force to back it up, it becomes very easy for a company to say you know what, i'm better off being in ireland than being in the united states and for my bottom line, if you're a publicly traded company, especially for your bottom line, for what you're doing as a c.e.o. of that company, there's going to be tons of pressure on you to do so, from the market, from your investors, if it's not public from the large investors, in the market, there's going to be tons of pressure on you to do so, because location becomes less and it's going to continue to become less important every day. every day that passes, where your company is located is going

to become less and less important and the corporate tax code becomes more and por important. >> let me just say something, the impetus for -- we're in the middle of doing a survey and we'll have some data on this and i can tell you both from talking to folks and from the early data that i've looked at, the number one impetus for why that organization accompanies small, large, public, private, whatever, will send folks out of this country, why they will set up other locations, the number one, virtually the only reason, but the number one reason is for sales and so again, it goes back to what phil tee'd off, make it easy, if you're selling pizzas, you can't deliver in a neighborhood if you don't have a location in that neighborhood for which to deliver a hot, fast pizza. it's not that much different. if folks need technical support and help, you need to be on the ground to provide that technical support and help and sales. you're not going to do all your

sales sending e-mail to folks, you're going to go around the world and sell and that kind of business approach is the number one reason that our member companies certainly will locate internationally, and so to amplify what josh added, the reason people are leaving, to set up any kind of facility elsewhere is often simply sales, which drives revenue back to the united states of course. it creates more jobs. but in addition, they already have a location elsewhere, so it's even easier to be flexible in where they might be around the world. >> i would love to ask, who is behind these proposals? is it the obama administration, are there folks on the hill, and can you be specific about either members of congress or particular agencies that are pushing? >> this is -- obama put this in his budget that he proposed to congress, which started the firestorm of everybody reacting. there has not been a push from

congress yet on doing this, but behind the scenes, when you talk to people in congress, when you talk to staff, they have talked about it, and you have heard some staff talk about it, and there's no specifics, you know, any member of congress, because that member of congress isn't out there on this yet. on using this potentially as a pay-for, it is thrown out to us by members on the hill that this potentially could be used as a pay-for in the health care package. that has since been promised to us, that that would not be done. i think you've seen the senate finance committee certainly and chairman baucus talk about this more in the context of a broader debate we're going to have to have in 2010 around the tax code if general, so i think that's certainly where the senate leadership has been on this. the house side has been fairly quiet on what their plans are around this. >> bartlett, do you want to add

anything? >> well said. >> let me wrap up before i promise to come here and then we'll return. in terms of the global options that companies have i just want to underscore, we are techamerica, we are committed to the notion of america being as hospitalble technology leading companies as possible. we have as our stated goal that we want america to be the innovation headquarters for the world and america has distinct advantages, not only as the big of the market, but the highest education system continues as the envy of the world, we have the melting pot population which gives rise to an innovation kill tour. those are all huge advantages, but to the extent that we explicitly disadvantage our companies through the tax code, it does invite them to look at other places. we are committed to the notion that we have real advantages here. let's see, here and then we'll come over to you.

>> are you concerned that it gives false readings too often? >> let me refer to jen who is the expert on that system and other identity management systems. >> i think you're right, that we do have concerns, that it does allow for i'dite fraud to get through the -- eight identity fraud to get through the system and we support an on-line, workable employment verification system. it should be -- with the way technology is now, we are able to do it on line. we should no longer be asking your h.r. representative in a company to be a document authentication expert. there are plenty of ways to authenticate documents, there are ways on line, and so if we truly create a system that we're going to use for employment verification, that employers can feel sure that the information

they are getting is correct, that they are complying with the law is correct, it's going to create a lot of efficiencies in the system, because we're taking a paper-based system and putting it on line. we do have concerns. we have concerns with the scalability of the system, we have concerns that right now, i can bring you someone else's document and be employed, whether that's me or not. we have concerns, there are some liability issues in there, we're liable for our subcontractors, and you know, we don't always know what level of assurance we should have with our subcontractors are actually using the system. i think we also have some concerns as you said with its error rate. right now they say it's a 3% error rate, which is absolutely much better than it was, but 3% to a small company is devastating, especially when you have to bench somebody and you can't go work on a government contract, because you have somebody trying to figure out who is eligible to work but the system has returned a false negative or they're having to work through the social security administration or the dhs to clarify their information.

so i think if the system were phased in, i think there's a lot of stuff that can be done to improve the system and we would support it. i think it needs a little more investment on the system and i think what's happening with what you're seeing with e-verify, with senator schumer's move for biometric social security card, what we're seeing with the wheel i.d., is we're struggling to figure out how to verify a person's identity. right now we have no trusted form of identification in this country, and there are many ways it can be done, there are many technologies that can be employed, it can be done to ensure privacy and security of the system, but i would argue right now that we are on the verge of an identity crisis and the identity issue is central to everything we do. it's central to e health, cyber security, immigration, all of these, and so i think until we really sit down and resolve this issue, we're going to continue to have these same questions. how do you get a license and make sure the person is who they

say they are. how do you make sure the social security card is a legitimately issued social security card for that person. is that person able to work. and on cyber security as well. a perfect example is the homeland security presidential security 12, you saw when the department of defense started to use it for physical access, actually accessing the computer. tray, you might remember what the actual figure was. >> over? >> over 70% drop in attempted hackings to the system, and all it is is by using its secure credential to get on to the system and make sure that you're only accessing what you're supposed to access, so again, i think this identity plays a major area and i think all the proposals we're seeing on the hill passism d., e-verify, some of the e-health stuff, the social security cards is trying to get to that fund am issue of -- fundamental issue of where is the credential and the secure

identity. >> one question on cyber security, but if i could follow up one thing on that. you mentioned earlier about pass i.d., you had some concerns or problems, can you expand on where you are with that, the bill that cleared, you know, what are your feelings on the amendment, etc.? >> sure. so we doville concerns with a -- do have some concerns with a bill that's weakening the standards to a pre-9-11 standard. some of the issues around varification and validation are actually weaker, so we are not always authenticating all of the documents that are being used to authenticate your identity and i am not always the owner of the documents. there's a great youtube video of a guy who goes into a virginia dmv and he gets four licenses on the same day and he uses documents and changes his name every time, but the fourth time

he spray painted a uni brow on his face and went in and at the gave him the license and the thing is, that's because they were able to authenticate the documents being presented, the social security number, the birth certificate, however, but they weren't able to tie him, that that was really his documents being issued, so in this bill, we move away from that, we roll back some of the verification and validation procedures. we also, we take the state to state verification to a pilot program, so it's no longer mandatory to ensure one driver, one license. so i think some of that -- some of those issues, you know, we have concerns. there was great stuff done in that bill about codify the privacy provisions and the other concern we have that we are working hopefully to fix is the restrictions being put on its use of the machine readable zone on the back of a driver's license. a lot of companies use that for fraud prevention. so those are -- those are some of the areas we're working in and we look forward to working

with both the senate and the house on that legislation. >> over the last year, a lot of the bill, the bills have come from committees that relate to energy, commerce, homeland security, does that kind of approach benefit the companies you represent? is that negative, are you seeing any kind of development in a certain type of committee, or one committee that's really taking a lead on this? do you see any movement in that? because it seems as though it's coming from all directions, cyber security is all over. any comment for that? >> i'll offer a quick comment and then see what we can add. but i gist my reaction and in part betrays the fact like many people in this town, i've worked on the hill for a number of years, so my reaction to that, it is inevitable, cyber security does have multiple facets to it, it does have implications for

multiple use, as well as pier security information systems and networks, so it is inevitable that multiple committees and jurisdictions will end up looking at this and ultimately that means better legislation, because it represents the different views, but let me defer to somebody who tracks this on a day-to-day basis and much more an expert on this than i. >> i think you both touched upon the core issue, which is that cyber security is broad reaping, and -- reaching and touches sort of every aspects of our lives, whether it be commerce, government services or individual use, so it's still noted it's not surprising and probably a positive thing that there is an increased awareness of the issues that we are grappling with in cyber security, and that more and more people are getting involved in trying to find ways to improve it. having said that, with a, you

know, while i think the increased awareness and increased interest and increased need to do something allows for a proliferation of bills that we've seen, i would hope that as they progress, they progress toward a coalesced solution. except if the cases where there's a very specific -- very specific need that can be addressed in one particular area. one might be the critical infrastructure. electric infrastructure protection bills that were put out by both the senate and the house, with very specific perspective and a need that's being addressed. if you're looking at something that is more of an omnibus bill, you will need to coalesce with your colleagues in other areas, to make sure that all the perspectives are brought to bear

in the discussion at the very earliest stage, so a positive approach can be apursued. you know, much like we think that a cyber coordinator in the white house will help bring together and coalesce some of the solutions, i think you'll need to see that kind of collaboration in the congress as well, to move something forward, that is positive. >> is an omnibus bill something you see as a good idea. is that omnibus cyber security something that would be positive 7positive? >> i think that because there are so many aspects, it could take a long time to put something together that would address each of the aspects of cyber security in a positive way. so actually looking at it in a march targeted approach. for example, senator harper's bill, or congressman rush's bill to address security and data breach unification, those are

specific needs that can be addressed in a cohesive way, that can of move forward more easily than something that tries to touch everything and be everything to all people. to the extent that anything that coalesce into a broader bill down the road, if it's all positive and well vetted and well worked along the process, and with the right amount of collaboration, and you know, that would be positive as well. it's knots one or the other, i don't think. >> we're about out of time. i want to take the last question. >> you didn't address this in your opening remarks, but i saw in your letters, you included health i.t. letters, that your organization recently sent to the senate committee and you were talking about the need for incentives and stuff, but of course the congress already gave quite a bit of incentives in the recovery act, and tears been a lot of talk about needing

doctors and hospitals to get up-to-date and everything, but i think from the doctors' and hospitals' perspective, they're saying without theirs, it's knots any good. they're being promised all of these wonderful things they can do and they look at the products and they don't do it. so i mean, is the industry -- what is industry doing to come together and actually make their products being intraoperable and being able to do some of the things that were promised. >> i'll again do some preliminary comments hands then bartlett do some por comments, but i think the very tale ends of your -- tailend of your question in regard to health care, you said the key word at least from my perspective, intraopennerbility concerns. and there's funding and standardization in that arena that will be critical to unlocking the great capability here. i would stave equally as important, or close to it, would be the emphasis on training, to make sure people understand what

the real capabilities of some of the programs and other technologies are available and digitization, to make sure you have things going from paper to digits, so you can move them more speedily, but bartlett, let me ask you to comment further on the letters and other things that the techamerica has done on behalf of its memberships in this area. >> sure and i'm happy to address the letter directly, although it sounds like the question was slightly different than the thrust of the letter, so if you want to come back to the letter, just let me know. the -- so to the intraopennerbility points. one of the key positions, intraoperatebility is part of the perspective that gave rise

to the stimulus money and one of the thrusts of the stimulus money is to get in some cases, liquidity, money out there to health care systems, doctors, hospitals, etc., to be able to adopt technologies, especially if we move to -- we suddenly had a complete electronic health care record system, you would need everyone to have some way to interact with that as opposed to paper copies, so in some cases, you're going to need money, in some cases, you're going to need work and intraoperability as one of the key points to our work an one of the key talking points and part of the reason this money was made available so systems can be designed to intraoperate. training and education is a key point. if people don't know how to make it intraoperate, because with you take some human element to get records transferred from one place to another regardless.

that said, i think the industry and this is just going to be speaking to individual members as opposed to giving you any kind of empirical evidence, i think that message is heard e. i don't think it's a surprise that we find that as new systems develop, that systems develop in parts of a country. i would say this is true of health care as well, right? we start historically with individual hospitals and individual health caregivers, hospitals aggregate doctors into a network, you know, 20, 30, 40 years ago, you started seeing the physical buildings, you know longer -- in fact, i went to the doctor's office the other day and i don't go to a doctor's office anymore, i go to what is a hospital complex that includes a pharmacy and a gym and all kinds of health-related kind of activities going on at one physical establishment. that same thing will happen in i.t. and it is happening. and so while i do appreciate the teeup, in fact, it's a little bit of a softball, that is

exactly the historical perspective. the current activities are all designed to get around that. my last point would be the emc over at hhs, this is exactly why they're taking the time to make sure that definitions, this is a little bit arcane, but for example, the definition of meaningful use. we need to get those kind of definitions right. in our comments, we address intraoperability as a suggestion to h.h.s., not only product to product, but product to government rules, so in other words, they do not allocate money for systems that don't -- aren't already designed to be able to work with current or soon to be coming changes in regulation. >> i hope that's responsive to your question, and if any of you have any other followup questions, feel free to contact charlie and we'll take any other questions that may occur to you later, but with that, let me thank you all for your time and coming by today and let us know

how we can help you in the future. thank you very much.

>> as the health care conversation continues, c-span's health care hub is a key resource. go on line and follow the latest tweets, video ads and links. also keep up-to-date with town hall events and senate debates. >> a new study by the cato institute concludes that legalizing undocumented workers in the united states would benefit the economy.

and now one of the authors of the report shares his findings at this one-hour event. [applause] >> thank you very much, curt. the center for trade policy studies has been an advocate of comprehensive immigration reform for quite some time. in fact, in 2002, we published a study of mine called willing workers that made the argument that the key to successful immigration reform is a workable, temporary worker program. and we believe that to date. at the root of illegal immigration is a basic story of demand and supply. during times of normal growth, our economy is creating hundreds of thousands of net new jobs each year for workers with relatively few skills and we all know the sectors that they're in, retail, hospitality, food preparation, cleaning, construction, landscaping, and at the same time, the pool of native born americans who

traditionally filled those jobs, americans without a high school diploma, continues to shrink. in fact, in the last decade, the number of americans without a high school diploma has dropped by three million and that's going to drop another two or three million in the next decade and yet our immigration system has no adequate channel for a peaceful, hard-working immigrant from mexico or another country to come into the united states and fill these jobs. and as a result, we have chronic illegal immigration in the united states. the key to any workable immigration reform worthy of the name is to expand that legal channel to create opportunities 0 for low skilled workers to enter the country legally. now critics complain that the 1986 immigration reform and control act failed because it wasn't enforced properly. well, i don't think that's true. it failed because it had no provision for the future flow of legal workers into the u.s.

economy. any reform effort that this president and congress undertakes cannot make the same mistake as the 1986 law or we'll just have the same failure and frustration we did then. now, another complaint by critics of reform is that allowing more low skilled workers into the country will be importing poverty, will swell the underclass, and will just cost u.s. taxpayers more money. the two cato studies that we're highlighting today, speak directly, i think, to this misplaced apprehension about that. the first is a recent free trade bulletin that i authored, titled, "as immigrants move in, americans move up." what i found in that study is that from the early 1990's, up until 2007, the u.s. underclass, by a number of measures, was actually shrinking. the number of americans, native born americans living in

poverty, those struggling in adult life without a high school diploma, actually were shrinking and by every measure, and that includes african-americans. and this during a time of fairly robust, low skilled immigration to the united states, legal and illegal. during that time, the hero of the underclass did change. it became more hispanic, more immigrants, and por functional. -- more functional. by functional, i mean low skilled immigrants are much more like live to work and much less likely to commit crimes than native born low skilled workers. and that means thanks in part to immigration, in contrast to 15 years ago, if a member of the underclass is standing on a street corner today, they're probably waiting for a job and not a drug deal. our second study released this week finds huge gains for u.s. households from expanded legal

immigration. the study is titled "restriction or legalization, measuring the economic benefits of immigration reform," you should all have a copy of it. the paper was written by dr. peter dixon and dr. maureen rimmer. and they have both done extensive consulting and economic modeling for the u.s. governments and government agencies, including the u.s. international trade commission, where they actually have an office over there. and the departments of commerce, agriculture, and homeland security. and what they have done is modeled the economy wide effects for the u.s. government, changes in u.s. trade and immigration policy. i heard dr. dixon give a presentation several months ago, asked him if he could apply his model to the current immigration debate and they came through spectacularly i think. the study for the cato institute finds that the choices that congress and the president will make on immigration reform in the months ahead will have a

huge economic impact on u.s. households. their key finding is that the difference in income for u.s. households between restricting immigration on the one hand and legalizing it and accommodating it on the other, is a quarter of a trillion dollars. and curt, last time i checked, that's still real money, even here in washington. well, let me turn it over to professor dixon. he is the sir john monskh distinguished fellow. he is known internationally for his work on computable general equilibrium model and he and dr. rimmer wrote the book on the subject. in 2003, he was -- he completed his ph.d. at harvard university in 1982. please welcome dr. peter dixon.

[applause] >> >> thank you, dan, and thank you to cato for giving me the opportunity to present our results to you today. now, economists can't possibly speak for more than a few seconds without needing charts and overheads, so i apologize for that, but we're going to have to have power points. so we'll see. have we got power point? can you help me? oh, ok. and can these people see too?

>> we'll post this on line. >> ok. all right. so if you want to see it, you'll have to change to the other side of the room. ok. now in 2005, there were about 7.4 million unauthorized workers in the american u.s. work force. and under business as usual assumptions, that will grow to about 12.4 million by the year 2019. so this poses some policy issues, what should be done about it. so we use our economic model to look at three possibilities. the first is tied to border security. strict supply. build the fence higher. the second is tied to internal

enforcement. and the third possibility is some form of legalization, some sort of guest worker program and we're going to look at those three possibilities. so we start with tighter border security. and the experiment that we run in our model, so we can move on, maureen can tell me whether this is the slide that goes with it. all i -- as you can see -- so there you can see the business as usual line, that's the top line, that's showing the numbers growing from 7.4 to 12.4 over the next 10 years or so. and then there's our experiment, which is to cap supply so that in fact, the numbers of

unauthorized workers grow only to i think that's about 8.4 million, so that means that we've capped supply in the year 2019 by 28%. all right. and we've done that by building the fence higher, i and the waye visualize the effects, we've made it so that a potential illegal immigrant thinks in terms of paying an extra $5,000 for a border crossing. all right. so a border crossing is a dangerous thing to do. right. it costs money, you've got to give money to smugglers, it might not be successful, you might be sent back home. there's a significant risk that something really bad will happen to you and so on. so we've built the fence higher in a way that's equivalent to potentially illegals, costing

them an extra $5,000 in terms of a cross. what's the effect of all of that. well, this policy means that in 2019, there are 3.55 million less illegals working in the u.s. now, that's about 2.1% of the employment, of the base case employment in the year 2019. so employment in the u.s., with this policy, is going to be about 2.1% lower. than it otherwise would have been. so your first guest is that the economy would be 2.1% smaller. but they say no that's not the right answer, the economy is going to be 1.6% smaller and then you think, why is it that it's only got to be 1.6%

smaller. well, you recognize that the reduction in the labor force is a reduction in low paid, low skilled work. so you haven't really got a 2.1% reduction in the effective labor force. in fact, when you think about it a bit further and realize that the productivity of the workers that you're excluding is only about half that of the average productivity of legal workers, you wonder why the economy shrink by -- shrinks by as much as 1.6. why didn't the economy shrink by 1%, because you've excluded about 1% of the effective quality of labor. so why is it 1.6%? well, the answer to that question turns out to be rather important. it's the so-called occupation mix effect. you see, when you exclude those

low skilled workers, what happens to -- what happens to the u.s. workers, the legal workers? well, what they see is vacancies opening up at the low end of the labor market, all right, so you've excluded people who are going to work at the low end of the labor market, so vacancies open up there, but simultaneously, vacancies close off at the top end. now why is that? well, you're going to have a smaller economy, so you've going to need less civil servants, you're going to need less school teachers, you're going to need less doctors, you're going to need less police officers and so on. you're going to need less of all occupations. all right. but vacancies are opening up at the bottom where you've shrewded the illegal immigrants. but closed off testify top,

where you haven't -- at the top, where you haven't excluded any illegal immigrants. so new entrants to the work force, find themselves with lesser opportunities, so the young people entering the work force settle on a job as a security -- private security officer rather than a police officer. the young graduate who wants to be an economist find that there are no jobs nor economists and settles to become a member of congress, instead of some lesser occupation. but you get the idea, all right? so excluding people from the bottom causes a shuffling effect down. all right? and that's why the economy shrinks by the 1.6% rather than the 1%, because the excluding of

these low skilled migrants, the illegal population of the united states, right? so it destroys .6% of labor. all right. now, moving right along. all right. so what does all this mean for the standard of living of the u.s. households? well, by 2019, under the policy of tighter border security, under the policy that reduces the number of illegals by 3.55 million by 2019, under that policy, the standard of living or the income of legal u.s. households has been reduced by .55%. if you like it in dollars, that's like about $80 billion.

now there are six reasons, there are six effects and i ask. the occupation mix effect, that's number two there that i outlined, ok, that americans -- legal americans will have on average, lower skilled, lower paid jobs, and that costs them -- that's the negative .31. then there's this capital effect. remember, the economy was smaller, so there will be less capital in the united states, than there otherwise would have been. all right. now, your country, like mine, is basically a denser country, so if you have less capital, you'll have less foreign owned capital, so what's the problem. well, the problem is that foreigners pay lots of taxes when they invest in this country, so having less foreign owned capital, having less capital here, means that you

collect less tax revenue from foreigners. so that's that minus .24. how about employment of legal americans? well, your first guess is that nothing happens to the employment of legal americans, but your next guess is that something slightly bad happens and that's because we shuffled americans to lower skilled jobs and lower skilled jobs have higher rates of unemployment. so by changing the original passional mix -- occupational mix of americans, we've not only reduced their average ream wages, which is because they've got lesser jobs, but we've also increased their unemployment rates and that's that fourth effect. another effect, which goes the other way, and it's the effect that's been most spoken of in the political debate, is that we'll save some money.

see, illegal immigrants, they use some public sector resourc resources. they have use some primary education, they use some emergency medical care, they use the roads and so on. and so having less of them will save the american taxpayers some money hand that's a plus for reducing the number and that's the .17. the sixth effect there is -- this is an economist's idea, already. an advantage of having a smaller economy is that you'll get a better deal in world markets. so if you have a slightly smaller economy, you'll push down the world price of oil, you'll be buying less oil, you'll reduce the world price of oil. if you have a smaller economy, you'll be exporting less, so you get a somewhat better price for the american varieties of cows

and for holidays and so on and so forth. so the trade effects, that's the advantage of having a smaller economy. now, the first effect there, this is for the people who have done economics 101 and remember it. which may be nobody. here you are. demand and supply. now, what happens is that we've restricted the supply of low skilled migrant labor, so we've moved the supply curve to the left, so in simple terms, we have increased the price of those that remain. all right. so in that diagram, the wage rate of the remaining low skilled illegal immigrants has gone up by 9%, because there's less supply of them and that's a

cost to the legal residents of the united states. so putting all those things together, there they are, the six effects, they add up to 90 beats at 95. now we could do it all again and this time we'll bear down on the employers. so the first policy was to restrict supply, build the fence higher. the second policy is to make it more costly, more dangerous for bests to employ illegal people. now, it turns out that the effects of that policy are more or less are the same. there are some -- the six effects again, and there's some little variations, for instance, the occupation mix effect isn't quite as bad. the reason that the occupation mix effect isn't quite as bad is

one of the things terms will do is they'll employ more lawyers, more high-skilled people to mitigate the problems of the irregular laces. so there's a little bit of a gain there on the occupation mix effect, but overall, there's not much to choose between shifting the supply curve out, or shifting the supply curve in, which was building its fence higher, or shifting the demand curve, the effects are roughly the same, and there it is, there we are, shifting the demand curve, shifting the demand curve in by making it more costly for employers to use illegal labor. now, let's try it the other way around. ok. let's have a guest worker program, in which employers, who

want to use low skilled immigrant labor, can obtain this labor, i mean, they go to mexico city, there's organizers that the employers can get a visa, we'll talk about whether the visa should cost money or not, we can have a visa tax if we like, but the employers can bring in low skilled immigrant labor. legally. all right. so what will that do to the supply of these workers? well, the supply curve will move out. the workers no longer have to worry about -- they no longer have to worry about smugglers fees, they no longer have to worry about being captured on the border, they no longer have to worry about starving to death with the crossing of the rio grande goes wrong or

whatever. so their supply curve, more of them will be willing to come at the going wage rate. so we reduce the cost of a border crossing by $5,000, rather than increase the cost of a border crossing by $5,000. all right. so if we do that, we get results that are basically the opposite of those that we've seen already. the direct effect, that was the demand-supply diagram, the direct effect is that the wages of the illegals, the wages as paid in america, go down. that's an advantage to american employers. more of them come, that increases the occupation mix effect, that increases the pressure on u.s. workers to be pushed now up the occupational ladder. all right. instead of down, they're pushed

up the occupational ladder. so we have a positive occupational mix effect. : ladder. so we have a positive occupational mix effect. the economy is bigger so we have a positive capital effect. there's more foreign capital here. so, remember the@@@rbrbárbrb

and then, of course, having more guest workers here will have public expenditure expects. that's down negative rather than positive. and having the economy bigger will have a negative effect on the prices that americans pay for imports and the prices they receive for their exports. the six effects are just the same as before except with the opposite sign. now, instead of cost to american households of $80 billion, this program is showing a benefit to american households of $80 billion but that's not all. you see, if you had a legalization program, if you had guest workers, then who things

would happen. one thing that would happen would be the guest workers would have -- would be -- would be more substitutable. they would be more like american workers that have higher productivity. illegal workers have low productivity and they are unreliable. the reasons for that is fairly obvious. they're always looking over their shoulder. employers can't invest in them and they can't train in them so on. illegal workers are low productivity workers and they're not particularly reliable workers. now, in our next simulation that i can see on the chart, we introduced the idea that guest workers would have higher productivity than the illegals that they replaced.

now, the illegals have product that is 30% less than native-born workers. illegals -- they get paid a lot less, and the reason they get paid a lot less is they're worth a lot less. so they have lower wages reflecting low productivity. all right? but what happens if legalizing them increases their productivity such that half the gap goes, half the gap between the productivity of the legal workers and the illegal workers -- half their productivity gap disappear isn't it so well, this magnifies the gains from a guest worker program. it magnifies the gains because a guest worker is now bringing more labor with him or her. you can think of a person comes with a certain amount of

productivity, a certain ability to produce effective labor, now with the guest worker program, each person brings more labor with them so you get a bigger increase in supply. you get a bigger occupation. you get a bigger capital effect and so on. all right. ? so all the effects before are magnified but the one effect that is not magnified quite so much is magnified on public expenditure. each person and coming and bring more labor but they're not bringing more drain on the public purse. they're still using the same amount of hospital care and schooling and roads and so on. so the negative effect doesn't block as all the good effects. so under those circumstances, the benefit has grown from something about $80 billion to

more like $160 billion a year and that's permanent for ever and ever. $160 billion a year for u.s. households. now, we can go on. there are little nuances. you don't want as many as what will come. well, that's fine. you could control the numbers not by building fences, not by prosecuting employees you can troll by a visa tax. so that next column -- column number 6 there shows the effects by a program which restricts the number of guestworkers to that 12.4 billion which is the same as illegals in our base case for 2019. so we're going to restrict the number of guestworkers to that

12.4 million in 2019 and we can do that by a visa tax. now, why does it work? imagine it like this. in the present situation the illegal is worth in the workplace 70, okay? so the american employer, the u.s. employer pays 70. now, the illegal would actually be willing to come here for 60 except for the smugglers fees and all the costs of the illegal crossing. so the illegal needs to be paid 70. and that's what they're worth at the moment but they would be willing to come here for 70 -- for 60. they would be willing to come for 60 if they don't have all the hassle of getting here.

all right? so that opens up the immediate prospect of everybody being happier with the illegal only being paid 60. so there's a prospect for having a visa tax of 10. it still cost the american employers 70 but instead of the smuggler getting 10, the u.s. government gets 10 and that's quite a good deal. now, imagine instead of that, the illegal worker, now guest worker, has an increase in productivity that is now worth 80. they're still willing to come here for 60, all right, but they're worth 80 so that opens up the prospect for the visa tax to be 20. so that opens up a prospect for

u.s. households by their government to benefit from eliminating the smugglers fees and from the increased productivity that an illegal worker would have relative to a legal worker. so to wrap this all up, here are our conclusions. so tighter border security is bad for u.s. households? why? you won't get rid of all of them. at least higher wages for the ones who remain. that's scarcer and remember the negative occupation mix effect, tighter border security means that americans, after a while -- i'm not saying anyone in this room is going to change occupations, but new interest to the workplace, new unemployed

people will find their opportunities are open up at the lower end of the work force and closed off at the top end. so that was the occupation mixed effect. tighter internal enforcement, well, basically instead of the -- instead of the illegals having higher wages, as they do with tighter border security -- instead of that, the scarcity range, if you'd like from having these people case isser in the economy -- what really happens then is dhq the scarcity value, if you'd like is used up in lawyers and accountants and legal and law enforcement office and all that sort of thing and you have all the necessarily occupation mix effect. legalization on the other hand produces welfare gain for u.s.

households. it converts illegal crossing -- it converts that to a gain and there's also the benefit from the higher productivity of the low-skilled migrant workers. we calculate that you could keep to the 12.4 million by 2019. you could keep to up a of that with all these benefits with a visa tax of 30% with the cost of employment. the cost of employing a legal migrant would be 100 then -- now guest worker, the guest worker would get 70 and the u.s. government would get 30. that's, it turns out that tax is too high. and the rights of the taxes is about 14%.

but the really key point to good policy is legalization, some sort of -- legal system rather than the illegal system. so the difference between the the 14 and the 30% visa tax from the welfare point of view of the u.s. households is not very great. and as dan said at the beginning, it's quite a big issue. i mean, you're talking about benefits to u.s. households from good policy of 160 billion a year versus costs to u.s. households of bad policy worth 80 billion a year. put those two things together and as dan said, that's a difference of 240 billion which is a quarter of a trillion, which is real money. okay. i think -- i think i have finished. so i thank you very much. [applause] >> all right.

well, at this point we're going to move into a discussion period. for those of you who weren't able to see the powerpoint, we are going to post that on the event page that presumably most of you signed up through to register for this event. and if not, then you could just go in the archived event section of the cato website it will be for you. the ma'am in the black? [inaudible] >> i would like to know where you got your figures because i've always heard the opposite. that illegal workers have higher productivity than american workers. it's the first -- and then the second one is, if they're coming here legally and they're basically the same people, how do you determine their productivity is going to be higher because they're legal if they're the same people?

[inaudible] >> can you hear me? all right. so the question was, how do i know illegals have low productivity relative to legal workers in the same occupation. and the second question is -- not really a question, really how do i know converting them to be legal will increase their productivity. the main reason for their productivity is low is their wages. economic theory suggests that people will be employed up to the point where their wage is equal to their productivity. i mean, if wages were higher than the productivity, well, then they'll get fired, right? if wages are lower than their

productivity, well, then you'll want more of them. so the main evidence of the idea that their productivity is low is that they systemically earn low wages relative to legal residents. all right? now, the other question, well, why do i think their wages would go up? that's speculative. i gave you the option -- i gave you a simulation without their productivity rising and then with their productivity rising. i think their productivity would rise because i think they become more reliable workers and they become workers in which employers could invest, give them some training and so on. >> could i just, let me just add to that quickly. in my 2002 study willing workers, i looked at some evidence that the government found -- you know, what really

was an amnesty in the 1980s. they went back a few years later and looked at what the work force record was of those workers. the evidence completely supported what peter is saying. they invested more in their job and their language skills because they were more secure as workers. and their wages took an almost bump up after several percentage points after being stagnant so the empirical evidence is much in line of what dr. dixon said. >> yes, sir. >> the two factors i always hear for -- >> that doesn't feed into the amplification system. >> the two reason why people object to immigrants is one they're going to use up all our medical, emergency rooms and

they're not going to have health insurance in other words. two, their children are going to flood the school systems and essentially they're not -- they're not paying anything for their tuition. it seemed to me that two things could be done. why not require them to get entrance company that they have to buy health insurance, just some kind of fairly minimal amount rarely than paying a coyote they could by health insurance. that could be a requirement. and if they're going to have children here, why not make them pay some kind of tuition even to a public school? >> thank you. >> yeah, thanks. you can see in those figures that having more of them here was a negative. so we've tried to take into

account what resources they use up in the medical system and what resources they use up in the school system. and that seems to be to get most air space in the debate on the issue but you can see it's a fairly minor effect relative to all those good things that i talked about. [inaudible] >> well, okay, yeah, if you had a guest worker program, you could actually design it so that they didn't bring their children. that would be a possibility. it's a tough deal. i mean, we're talking about a deal whereby the united states makes a deal to have various jobs done by foreigners but everybody wins. the united states households win and the foreigners willingly come. now they came on fairly short

temporary visas, they come here and he earn a lot more money than they get at home. and they -- it might well work that they leave their families at home. >> a comment on that. when we commissioned this study, we did not tell dr. dixon and dr. rimer. i would like this result. i knew their model had been tested and i was curious and we went with the results. and it confirms in part what the critics say about immigration reform. it is going to cost us as taxpayers -- the government is going to have to spend more on schools and medical care. but that cost is overwhelmed by the economy-wide benefits. this is, i think, the headline finding of the study. when you look at these other effects that dr. dixon and dr. rimmer to take away. the government can do things to

restrict access to the welfare state by immigrants and my strong preference is let's wall off the welfare state and not our country. i think that should be our right approach. the supreme courts ruled you can't bar children of illegals from public schools. you can't turn them away from him emergency rooms but i think those costs tend to be exaggerated and more than offset by the economy benefits that dr. dixon up. why don't you come up afterwards and we'll -- >> the gentleman in the back there. >> when you have illegal immigrants here, even -- you know, this not -- the united states not being dubai or a country that can expel them for "x" number of years. i think most immigrants who come under a guest program will look

this is a path to citizenship. in the long run they are making less than the average american would, even after that their bump in productivity that you mentioned with their legalization does that imply a lower median income for average -- average income for americans having more guestworkers in the united states? and number two is, there is a socially optimal point for the united states government to impose a visa tax. how high can this tax be without rechanneling these guestworkers to the coyotes? and how much -- what's your approximation of the revenue that could be raised by imposing such a visa tax at a socially optimal level. thanks. >> the first part is about the

path to citizenship. it would have to be completely clear this is not a path to citizenship. this is a way in which the u.s. gets a job done -- it's like trade. you're importing labor to do a particular job and then go away again. it's not meant to be a path to citizenship. but that should be made absolutely clear. now as far as -- well, if you had such a program, all right, in place, i think that the prospects for people to be employed illegally would actually be rather -- would be reduced, you see? if employers had a perfectly reasonable legal way of getting this type of labor, that would destroy the demand for the illegal people. see, simultaneously with all of this, you can have your enforcement programs.

my guess is that the american public would be very sympathetic with a very tough program on employers who -- although there was a perfectly sensible legal channel for them to get this type of labor chose to employ illegal people. all right? so it's not a path to citizenship. and i think it would -- the people who came on the program, i think, would find it very difficult to get a job after the the illegal period was over because they'd been in competition with legal workers. you get the point, all right, now on the revenue side, well, our rough calculations suggest that about 30% of the costs of employing the guestworkers could be siphoned off by the u.s.

government. now, whether that give much incentive to illegal employment, i think i gave the answer before. i think the answer is no. okay. the 30% would not be enough, i think, to make it worth the while of employers to take on illegal workers when they had a perfectly reasonable access to legal workers. >> if i could just jump in, one of the perverse consequences of our current enforcement-only policy we've actually made it more likely once the illegals come into the country that they'll stay. it's so costly and dangerous to cross the border. once they're here, they don't dare go back and pose all those costs and risks on them again so they stay. half the illegals have been here for five years or more.

if we adopted a system of expanded legal entry, they'd be able to go home for christmas. they'd be able to stay in touch with their family. they'd have less incentive to bring their spouses and their children over. in the mid-1960s to the mid-1980s when it was technically illegal for them to be here but we didn't do much about it, we had a very strong circular pattern of illegal immigration from mexico. in fact, our research at cato shows about 80% of them eventually went back home. and i think adopting a legalization program with some kind of fee for the visa would restore that circular -- most mexicans want to go back. that's where their family and their culture. they come here to solve short-term problems. we make it virtually impossible for them to do legally. what we need to do is create that channel.

they'll benefit the u.s. economy and themselves and their families and the large majority based on past experience will go home. they don't -- they don't come here to seek citizenship typically. they come here for economic reason reasons. >> i have two issues. the one the cyclical nature of this kind of heated debate in the u.s. and we've seen this before with other waves of immigrants. and two, given how uncivil the health reform debate is becoming through the town halls and all of that, do you foresee that same environment happening when the immigration reform debate finally gets rolling next year? thank you. >> i'll leave number two to dan. number one on the aspects. one of the aspects of the guest

worker program it really cushions u.s. employment from the ups and downs of the cycle. for instance, now, in the depth of this recession that you're in, you wouldn't expect employers to want many of these people. all right? but then in the boom, you'd expect them to want more. so, in fact, a good guest worker program smoothes out the ups and downs in employment for the legal residents of the united states. but i'll leave the -- >> well, just to emphasize that point. the by all accounts the number of illegal immigrants in the u.s. has actually gone down in the last couple of years which perfectly supports dr. dixon's point. about the civility of the debate, yes, the immigration debate needs a good dose of

civility. it's a -- you know, i tell people when the trade debate gets a little tame then i turn to immigration where people's emotions are even higher. i think both parties, the democrats and the republicans, have factions within their constituencies that need to be faced down if we're going to succeed at immigration reform. the republicans have to stand up and transcend a minority nativist element that just seems to oppose immigrants generally. as you mention, that's common feature of american history. 100 years ago it was those italians and poles and russian jews and before that, the irish. this is a standard fare. we tend to love the past generations of immigrants and have all the questions about the current generation, never stopping to consider that the u.s. continues to absorb

immigrants, i think, in a generally successful way. the democrats, however, i think are facing opposition among organized labor. organized labor kind of gave up their absolute oppositization a few years ago but they continued to oppose guest worker programs and temporary worker programming. i think this is a critical mistake on the part of organized labor. if you take one message away from our presentation today, it's that a workable, robust guest worker program is essential to the success of immigration reform and to the extent that the nativists on the right and organized labor on the left oppose that, i think they both have to be marginalized in this debate if immigration reform is going to succeed and we're going to finally solve this problem of illegal immigration. >> okay. this is going to be the last question here.

>> president obama seems to side-step the issue of legalizing immigrants because he said his plate is full to judicial issues and debates on healthcare. could you comment on this? and because he campaigned during the presidential campaign that legalization of immigrants should be a priority. could you comment? >> well, if i were giving advice to president obama -- and he hasn't called me about this. [laughter] >> but i would say put aside healthcare reform and concentrate on immigration reform. you know, polls show two-thirds of americans are satisfied with their healthcare. i don't think we have a healthcare crisis in this country. sure, the system needs to be changed. we have plenty of ideas at cato. go to cato.org and you can see how we can improve the healthcare system. but with illegal immigration we have a status quo that very few people are satisfied with. congress can do something concrete about it that will

reduce illegal immigration, enhance our economy, enhance our border security. i don't think immigration reform should be shunted off any longer than possible for these other matters. senator schumer very much to his credit has said he wants to make this a priority of his committee and start with hearings. i think there is enough -- there are enough republicans to work on this issue, senator mccain, congressman jeff flake of arizona and others, senator kyl i think took a very constructive approach the last time around. there are enough republicans and democrats, i think, to deliver clear majorities in both chambers and a president who said he wants to get this done. there's no excuse this time. the single biggest obstacle to immigration reform, i think, was the house leadership last time around who i think made tactical and strategic mistake to demonize to illegal immigrants and it's part of the reason they

paid at the polls. they're no longer able to stop immigration reform legislation so the democrats are in charge. i think they need to deliver on this, and i believe there are republicans willing to work with them. they could get this done in 2009 if they wanted to. >> well, we do have to wrap up now thank you all for coming. i hope this was informative to y'all. we are going to stick around a little bit if you have questions that didn't get answered and please join me in thanking our speakers. [applause] [inaudible conversations]

>> a discussion now on preparations for the h1n1 virus also known as swine flu. you'll hear from the white house director for medical preparedness. this one-hour event was hosted by fema and the volunteer group citizen corps. >> thank you, glass clinkers.

good afternoon, everyone. i hope you've enjoyed your lunch. we are going to start our luncheon presentation today. and it is my distinct to introduce our next speaker to you. dr. richard hatchet. dr. hatchet is the director of medical preparedness policy on the white house national security staff. and he is here today to teach us more about the h1n1 virus, to provide some historical perspective and to discuss what goes into community relil sense. -- resilience. in addition to his role of the white house he's been the associate director for radiation counter measures research and emergency preparedness at the national institute for allergy and infectious disease. overseeing a program that develops drugs and devices to prevent radiation exposure in if 2005, 2006 he served as director of the biodefense agree on homeland security and was a

principal author of the national strategy for pandemic influenza implementation plan. dr. hatchett served as human advisor office of public preparedness where he worked on a wide range of biodefense issues including the delivery of mass pharmaceuticals to the areas and the formulation of public health. he had his education in vanderbilt and internship and residency at new york hospital, cornell medical center and a fellowship in medical oncology at the duke university medical center. so as you can see, we're in very good hands. we are extremely fortunate to have him with us here today. i give you dr. richard hatchette. [applause] >> karen, thank you for that

very kind introduction and thank you to fema and to administrator fugate and to deputy administrator manning for inviting me to address all you have in this very important topic. unfortunately, this is the only part of this conference that i have been able to attend. it looks like a fabulous conference. i've been to the annual conference for the medical reserve corps on a couple of occasions in the past and i always found those to be terrifically inspiring. a great opportunity to learn to hear from people working in local communities about what they are doing. i am sure that this conference will fulfill that same function for all of you. i'm sorry that i have not been able to participate in it or will be able to participate in the sessions going forward. it's really terrifically inspiring. in thinking about the conference and looking over the session i

was thinking about justice lewis brand dice comment was that of president is citizen. all of us are citizens and all of us contribute to the well-being to our communities and ultimately to the well-being of our nation and that's what i'm going to talk about today in the context of thinking about h1n1 influenza and the unfolding pandemic that we've been observing for several months now and that we anticipate will result in increased disease, unfortunately, death in the months to come. at the national security staff, i belong to something called the resilience directorate. it's a new directorate within the national security apparatus that focuses on preparedness and response to disasters and in this case to public health crises. resiliency has been a buzzword in the preparedness and response community for several years now.

but it's not necessarily something that is easily defined. we talk a lot about it. we try to foster and augment it but we often don't have a terrifically clear idea -- or a terrifically fixed idea of what we're talking about. i want to just start my remarks by referring to an attempted definition by a fellow named michele branoe at the state university of new york in buffalo. he's devised a nice framework which we calls the four r's. he talks about the robustness as the ability to withstand stress with minimal degradation and redundancy as the availability of substitutes, things that can be switched in if a particular aspect or a component of a community or critical infrastructure fails.

he underscores the importance of resourcefulness, the capacity to identify problems and mobilize responses. and finally, he talks about rapidity, which is the ability to address priorities and accomplish goals in a timely fashion. i think we're going to have to draw on all four of these elements as we move into the fall and i'm sure that all of you, your organizations, the constituencies you serve, your publics will contribute in their own unique way to enhancing our capabilities in this regard. would you advance the slide, please.

a little bit of technical difficulties. they advised me -- they said blackberries can interfere with your remote. i said there's probably 700 blackberries in the room. so that doesn't bode well. [laughter] >> so please bear with me as we move through this. i'm going to talk about four things basically. i'm going to give you an overview of the current situation. what i will not do is make predictions. as anybody knows in the flu business knows flu is unpredictable. it is the dangerous business of being in the business of flu prediction. i will look at some historical examples to tell you how these things have unfolded in the past in the hope that will inform your understanding of what we may face or what we may be prepared to face potentially. i will spend some time talking about vaccination program. it is by no means the only part

of our response but it is a very important part of our response and it is likely to be part of the response that many of you in your organizations may become involved in, in a volunteer capacity going forward. and then i'll just conclude with some overarching thoughts and some comments. so the current situation -- i'm going to show you a couple of maps -- i'll walk you through them individually. these are maps that have been prepared by who. they illustrate the remarkable speed in this case with which the virus has spread. the orangish-colored countries are countries that have officially confirmed cases of h1n1. the circles represent according to the legend in the lower left the number of deaths that have occurred in each country. what you can see is that to date, the virus has spread

globally. the blank spots in africa are a little difficult to interpret. africa is a very surveillance-deprived area so the fact those countries have not been colored in does not mean the disease is not there but almost everywhere else in the world we have documented disease. the western hemisphere has been most affected to date. not surprisingly because of the origins of the virus in central america probably in the early spring. this is a chart that was prepared by who and i draw your attention to the fact that the data is only from july 19th. now, ordinarily if i were standing up here and presenting data from july 19th, i would say that this is hot off the presses. this is very fresh data. in this case, this is almost an aeon ago in terms of this pandemic in terms of how fast

it's changing and spreading but what you can is there has been widespread disease particularly in the western hemisphere, almost all of the western hemisphere has now experienced widespread disease and at the time australia and new zealand and they were not colored and currently they are not reporting data and there is widespread disease in australia, new zealand, thailand and great britain. this is a slide that represents an effort by who to illustrate the intensity of spread, meaning the burden of acute respiratory disease that have been observed in the affected countries. lots of the countries are not reporting so this is sort of an incomplete map and again, this is data through july 19th. but what you can see is actually the united states has been deemed by w.h.o. to have low or

moderate intensity to date. we've had lots and lots of disease but we are a very big country. and except for a few local outbreaks like the outbreak in new york city, the outbreak in milwaukee, the general intensity of transmission that we've seen has not been overwhelming yet. canada has seen a little bit more. mexico certainly had a very large outbreak in the spring that has continued to percolate along and they are now seeing increasing disease transmission in the southeastern states down in the yucatan peninsula. in particular, the nations of the southern hemisphere have demonstrated very high intensity of transmission to date. that is not surprising. the flu seasons are reversed seasonally so they are in the high traverse of the flu season right now. we've been watching the nations of the southern hemisphere very closely, particularly, nations like australia, new zealand,

argentina, chile that have social demographics and similar standard of living to the united states trying to discern patterns there that may help inform our planning and preparedness for the fall. we've certainly been paying close attention to the disease domestically but we are also trying to learn what we can from the experience of other nations. some of the nation it is in the southern hemisphere have undertaken quite aggressive responses and we are also striving to learn from their responses. argentina, for example -- most of the nations in the southern hemisphere i should say have a winter break that would correspond more or less to our christmas break and most of the nations take that winter break at some point in july. for a couple of weeks and people go skiing and do the sorts of things that you do in the winter. argentina took a quite aggressive stance in terms of their winter break. they actually extended -- it

ordinarily would have been two weeks. they started it early on july 6th and they extended it through august 3rd and so the schools were out for almost a month in argentina. and they have gone back into session and we continue to watch. they are still in their high transmission season. it will be very interesting to see and they had quite intense disease. it will be interesting to see what happens going forward so we continue to observe that closely. i should warn you of actually before we get too much further into this talk, i belong to a band of -- what we call flu wonks and flu wonks like to put up lots of curves of lines going up and down so you will see lots of curves of lines going up and down and i'll try to explain but it is an unfortunate habit of people like me. so you'll to have forgive me. there will be a wonkish element to this but i'll try to keep it

at a high level. [laughter] >> a little bit about what's going on in the united states. we have had disease transmitting in the united states really actually since early april. the first cases of h1n1 influenza, in fact, were diagnosed in the united states, in california and texas, before the mexico outbreak was recognized to be an influenza outbreak and those samples were out in early april so we had early flu transmission. flu transmits very rapidly particularly within two or three or four days of a person getting sick they have transmitted it on to others. at this point, it is very difficult to know how many cases we have had in the united states. cdc some time ago publicly estimated that there had been greater than a million cases. if you talk to people in the flu modeling business, and there is actually a minor industry of flu

modeling, you'll get various estimates as to the number of cases that we have probably seen to date. i have heard privately estimates ranging from 1.5 to 10 million cases in the u.s. to date. no one knows for sure. but it's been a lot. we now have cases in every state, every jurisdiction. we have seen to date as of august 6th, where h1n1 has been confirmed and we have seen deaths. that suggests to us -- given the estimate of the cases that suggests that the overall case fatality rate -- the risk of any given individual actually perishing from flu is quite low which is reassuring but the aggregate numbers as the disease spreads through the community and spreads throughout the nation, you know, will grow in a way that, you know, we, unfortunately, will not like to

see. one of the defining characteristics of this virus is that it seems to be targeting our younger populations. the attack rates in younger populations -- or not the attack rates necessarily but the percentage of total cases that are observed in younger populations is quite high. this is a chart showing some cdc data as of a couple of weeks ago showing that about 60% of the cases have actually occurred in people younger than the age of 24. influenza is a disease that is more easily transmitted among younger populations for a variety of reasons. even with seasonal flu, we see more cases in younger people. we don't necessarily see more deaths or more hospitalizations because the people who tend to have a problem with influenza are people with other medical

conditions, the aged whose immune systems may have declined, people with immunosuppression, so on and so forth. and those people -- their greater concentration of those people in older age groups, but this is very, very striking. and what's particularly striking is the very low number of people even after the reverse has been transmitting efficiently in the united states for months over the age of 50 who actually been documented to have the illness. and the informed scientific speculation, there's some data to support this. the informed speculation people who were born before 1957 had been exposure to h1n1 viruses that circulated in name 18 to 1957 which appear to be closely related to this particular virus than the h1n1 viruses that have been circulating since 1977. and so just to -- to be very clear, h1n1 viruses have been circulating in the united states

for 30 years but this is a very different h1n1. it is genetically quite distinct from the h1n1 viruses that we've had circulating for the last 20 to 30 years an immunity to the viruses we've had circulating does not provide a great deal of immunity to the current virus but exposure to the viruses that circulated before 1957, the guess or the informed guess i was saying they do provide some immunity which may explain why the attack rates are so low in older populations. that same phenomenon might explain why we have seen a disproportionate number of hospitalizations in younger populations. as i said, with seasonal influenza, the usual pattern that we see is that the burden of severe disease, the burden of mortality tends to cluster at the extremes of the age spectrum

even the age of younger than 4 and over the age of 65. both for hospitalizations and for deaths. what we are seeing with this virus is that among those hospitalized the largest proportion, about 50%, are younger than the age of 24. and that there are a substantial proportion in the age range of 25 to 49 who are also being hospitalized. this does not necessarily mean that the absolute numbers of people in those age groups who are being hospitalized is greater than with seasonal influenza. we simply don't know yet because we don't how many cases, you know, we're going to have. this is something that we'll figure out retrospectively. but there's a striking absence -- or not complete absence but a striking reduction in the number of hospitalizations and deaths occurring in the older populations.

just to give you a sense of the burden of disease that we have seen to date and that we may see in the fall, this is some data from new york state. what you can see here, the four curves represent the number of hospitalizations by week -- so week one is the first week of january. you know, so on and so forth. the week 52 is the last week of december. number of hospitalizations by date in new york state with confirmed influenza, over the last four influenza seasons. and what you can see is that the 2008/2009 season up until the spring had like 2005/2006 and 2006/2007 been a relatively mild year as far as influenza was concerned in new york state. 2007/2008 was a bit more intense

in new york state and you had more cases of influenza hospitalization mostly occurring in kind of the february, early march time frame. this is what happened after h1n1 came out. as i said, new york city had a particularly large outbreak. the new york city department of health and mental hygiene based on some subsequent surveys that they did estimated that about 10% of the population of new york city actually fell ill with h1n1 during their spring outbreak. what i can see is that the large outbreaks in the new york city area and it spread into other parts of new york state resulted in a striking increase of people who were hospitalized. just to reference point to frame this up. we normally would expect somewhere in the ordinary of 5 to 15% of the population to develop influenza during a typical seasonal flu year.

they had about 10% roughly -- and again, these numbers are not certain. these are best estimates at this point. but they estimated that about 10% of new york city's population developed influenza. so that was almost like a winter's worth of flu in the spring. historically, when we look at previous pandemics, we have estimated that the overall attack rate, the overall percentage of the population that will become ill during the course of the pandemic is somewhere on the order of 25 to 35%. so the outbreak in new york state, while it was a substantial outbreak, doesn't really compare in its extent or intensity with what we have seen with previous pandemics. as i said, i'm not going to hazard any predictions because influenza is inherently unpredictable.

come to the issue of the mortality patterns that we are seeing. again, as with hospitalizations, we are seeing an unusual distribution of mortality. i want to underscore that is distribution of mortality. i don't want to -- i don't want any of you to walk away saying that we know that we are having more death in aggregate than we would have in these age groups with seasonal influenza but looking at the total number of deaths in which age groups they fall into, this is not a pattern that we see with typical seasonal influenza. there is, as i said, a striking reduction in the elderly population. this is a slide from mexico comparing h1n1 distribution of mortality, again, not absolute numbers but the distribution of mortality with the last two seasonal flu years. the last two seasonal flu years are the black and the white bars

and they show the very typical pattern of seasonal influenza mortality where roughly 90% of the mortality is observed in the people who are 65 and older. and a large portion of the rest of the mortality is observed in the population between the ages of 0 and 4. that is, as you can see with the orange bars, which represent the distribution for h1n1, not what you're seeing with this virus. the last issue that i want to touch on is certainly the issue that i think everyone is most sensitive to, which is that if this is a virus that is largely affecting young people, unfortunately, it is also causing some deaths in the pediatric populations. typically, and i show this slide to illustrate what we've seen to date with what we've seen for the last few years.

this is cdc data. cdc has undertaken to try to keep track of pediatric influenza deaths as a result of the 2003/2004 flu year where there was -- there were -- i don't know if any of you remember this but there was stories of increased number of deaths in children from influenza that year. and the vaccine was delayed. there was some scarcity issues with the vaccine initially so it produced a lot of anxiety. in 2003/2004, we had 150 or so deaths in children that were directly attributed to influenza. and the average number of deaths that we see during a normal typical seasonal flu year in the pediatric populations is somewhere to 60 to 100 it varies year to year depending what the dominant strain that is circulating is. but it's somewhere in that

ballpark. the curves in purple and the one yellow slot represent the pediatric deaths that have been reported to date for h1n1 virus. and so we have had roughly, i think, 29 or 30 pediatric deaths so far. and again we don't how large an outbreak we had and how large an i don't break is coming. we will see substantial large outbreaks in the future. we don't where this number will end up but it will certainly be -- these are very poignant deaths. they attract a lot of attention. they typically reported certainly in local and regional newspapers. this is something we'll be keeping a very, very close eye on as we go forward. it certainly contributes to public perceptions of severity of the outbreak for obvious reasons.

i'll talk very briefly about some of the social disruption that we saw in the spring. when the pandemic began, the reports that were emerging from mexico initially were very concerning. we were hearing stories about hundreds or thousands of young people who were becoming seriously ill requiring hospitalization, many young people on ventilators, many young people dying. and at that point in late april, it was, i believe, april 23rd when we got confirmed from the mexico outbreak. it was november sure how large the outbreak was. the cdc -- they erred on the side of caution in terms of making recommendations in terms of school closures and they recommended that schools close at relatively low burdens of disease and what you can see -- the blue curve represents the number of schools that were closed on a day by day basis in

late april and early may. it peaked at around 726 schools that were closed because of influenza. affecting almost 470,000 students. this was obviously quite disruptive. i have to say that cdc is to be commended for working rapidly to gain a better understanding of the virus and the disease was much more widespread than what we initially understood and the actual average case of h1n1 disease was much less severe than we had initially feared might be the case. be the case. and so taking that context, they adapted their guidance very rapidly. on may 4 or death, they released a revised guidance that it was not necessary to close a school at the first sign of influenza. you can see the sharp decline in

the numbers of schools that were closed. that type of contextual adaptation, i think, is going to be very important as we go forward into the fall. we in the government are bureaucrats and we do not typically work at lightning speed. but cdc worked very rapidly to sort out what was happening and provide the best and as many of you have heard, the release guidance for friday where the goal will be to keep schools open, but safe. and to focus on ways to protect the general student population, particularly the volatile populations within schools. we will continue to look at our guidance and revise our guidance as these changes and continue to adapt in the local communities. you will have to look at the situation in your community and

look at adjustments as we go along and we need to be ready to adapt in that rapid fashion as circumstances dictate. i should point out that one interesting thing about this chart is that even after the guidance to reopen the schools was released, it was still necessary all the way through may to close some schools. there were reasons to close the schools, a number of students or teachers who were absent was too high to allow useful educational instruction to occur, so school closures were observed throughout the rest of the spring but at a much reduced rate and with much less social disruption that we witnessed in the early part of may. i would anticipate that we are likely to see, even the guidance is to try to keep schools open and make sure they're safe environment for our students, i would expect we will see some school closures in the fall and it is important for all communities to anticipate that

that may occur, and to work with students and families with the educational community to try to insure useful instruction can continue, that parents are able to adapt if and when they need to in the event that a school here or there or perhaps a school district were to close. being prepared for that doesn't mean having to implement it, it just means, something that may be forced upon us by circumstances. just to summarize, that is the end of the situation update. the good news, if there is some good news, is that the overall mortality rate appears to be quite low. we can't really put a fix on that, but it seems to be somewhere in aggregate in the range of influenza, the challenge going forward in the fall is we may see a substantial increase in the burden of

disease by a factor of two or three. not to say we are totally out of the woods the we are not dealing with the andromeda strain or 1918 virus. what we are also seeing from biological surveillance, domestically and abroad, sequencing and comparison to the viral license we have seen before, the virus is not mutating in any significant way to either increase its severity or transmitted of the, the virus seems to be behaving in the southern hemisphere pretty much as if it is transmitting more efficiently because they are in flu season but the virus seems to be the same virus. with the exception of a few isolated instances, the virus continues to be susceptible to

tamiflu and our main anti-viral drugs which is good news. so i want to talk about -- i said i would not make any predictions, i want to talk about our historical experience. these charts, it is a little complicated, i hope everybody can see. we will try to have the arrow to walk you through this. they are basically illustrations of the epidemic curve of the last four pandemics in different locations. there was a candidate in 1989, obviously you heard about the 1918 pandemic, there's a pandemic in 1957, the start of 1957 and 1968. the reason i am putting this slide up is to illustrate something that is very important to understand about pandemics. pandemics are multi wave, multi-year events. we are heading into what will

likely be the fall wave of the 2009 pandemic but previous pandemics have returned over several years to cause enhanced mortality, higher rates of hospitalizations and deaths over several years. they 1957 pandemic, you can see that in the lower left corner, 1957, in the fall, there is a sharp spike, and a fairly dramatic decline in the number of deaths that were involved and it returned in the spring. we need to mentally prepare ourselves for the duration of the campaign we are about to face. we are racing against the fall wave in an effort to develop a vaccine and hope we can get the people to protect a large part of the population. even if the fall wave beat the next scene, it doesn't mean we were too late because this is likely to be an event that will occur.

we may see a wave next fall or the following spring, we don't know. the effort to immunize the public will be critical even if the virus happens to get here before the vaccine does. we are moving as fast as we can to make sure we have a vaccine available. but it is not all about the fall. just to illustrate another point about pandemics. this is deep into the strange part of the talks so i will try to get away from these curves. in previous pandemics, we have seen this same urgent skewing of attack rates in the populations, it is very characteristic of influence because of the social environment we live in because of the social environment that our children live in, that attack rates are higher in children. there's nothing peculiar about

this epidemic except perhaps the amplitude of the case burden we are seeing in younger populations. the reason i show this to you is the. turf 1957 virus, which was actually different from the 1918 and 1968 viruses, the red in greencurves, in the striking propensity for attacking the population. 1957, for the people who live through it, was a pandemic that was triggered by the opening of the schools in the fall. a lot of us a a lot of us are looking to the 1957 pandemic as a potential guide to what we might expect because of the way this virus seems to be behaving. instead of looking at 1918 which is the worst-case scenario, a lot of us are trying to learn more about the 1957 pandemic and understand the dynamics of that

event. a lot of the slides i am going to show you represent the 1957 pandemic, not the 1918 pandemic which lots of you have seen presentations about 1918 before. these are mortality curves. the dotted line represents mortality in england, the solid line represents mortality in the united states. i showed this to point out the fact that as i said, this is likely to be around, the 1957 pandemic was caused by higher rates of mortality for six or seven months once it actually started. the 1957 and 1918 are important examples for us historically because they were the two and amex where we knew the pandemic virus was circulating in the united states in the spring, late spring and early summer and

percolated through the summer in 1957. there were -- as this year, a number of outbreaks, there was a big outbreak at the boy scout jamboree. that is observed through the summer. i had the opportunity to spend a couple of hours with dr. d.a. henderson, who is most well known for leading the who smallpox eradication program but in 1957 was the chief operating officer at cdc in performing epidemiology and surveillance related to the 1957 virus, he gave a wonderful metaphor for what they experienced. he said it was like a virus laid down a bed of new throughout the summer and when conditions were right, in this case when schools reopened, the virus came up like the grass in spring, it came up everywhere at the same time. it was almost overwhelming how

quickly it happened. that is a useful analogy. it certainly is governing our efforts to prepare for what we might see in the fall. we can't know anything for certain. this is a chart to illustrate how quickly the virus spread. this is how they tracked its spread in 1957 in real time, discounting the number of counties that were reporting outbreaks. this chart shows how the virus over september and october peaking around the week of october, rapidly spreading to hundreds and hundreds of counties and each county had an outbreak that lasted six to ten weeks so that by the time you were at the peak he were probably looking at 1800 counties that having simultaneous outbreaks. that absolute diffusion of

disease would place insurmountable burdens on the federal government's ability to respond to all the communities at the same time. this is a message everyone has heard, the community the going to have to grow up on their own resources if and when this actually occurs. subsequently, in 1957, through the use of survey tools, they went back and tried to recreate the actual case turf. they estimated the week of october nineteenth twelve million people became sick and had to stay in bed, the denominator of the total population of the united states, hundred seventy million people. 7 fresen, 8% of the population becoming sick in one week. this is a complicated chart.

it shows absenteeism in schools, this is an issue people will be very concerned about. in 1918, there were very few cities in 1918 that left their schools open. only three that i am aware of, new york, chicago and new haven. chicago contracts -- best record. they look that absenteeism in the best parts of the city of time. looking at the chart, absenteeism in chicago schools peaked around 40%, right at the peak of the epidemic. actually peaked as the number of deaths were peaking. because deaths were delayed by weeks or more after cases, lot of absenteeism is probably driven by parental sear and anxiety, not illness. those anxieties and concerns were reduced in 1957 because it was much less lethal in its effects. absenteeism in 1957 peaked in

most schools around 30%. in the schools that risk that he was hired in high-schogher in h elementary schools. in some communities the elementary schools were affected first. it is likely to the knicks this fall. at&t was one of the largest industrial concerns in the united states in 1957. they went back and look at the average absenteeism in at&t across the nation over the course of 1957 pandemic. the average absenteeism spread across the whole country, peaked at around 2% to 3% above baseline. the deficit across the entire country, in specific locations, it was up to 8% or 10% above the

base line absenteeism. i want to move quickly to talk about the vaccination programs, our vaccination program. we have a couple of historical analogies to look at in terms of semi emergency vaccination programs. i will talk about three of them. one of the most famous, many of you have heard stories about this, the 1947 smallpox vaccination program in new york city. a traveler came back from mexico, developed hemorrhagic smallpox, not as easy to diagnose as classical smallpox, moves around the city for several days, caused a few more cases of smallpox so they implemented a crash program to vaccinate the entire city. new york city succeeded, population was probably eight million people. they claim to have vaccinated six million people. infectious disease specialists

in new york city went back and look at it, he thinks they estimated four million people. we don't know for sure. it is certainly part of our collective memory in the emergency preparedness response community as to what can be achieved when the population is and has -- to be vaccinated. another example that bears scrutiny is the 1954 bob -- polio vaccine, the largest clinical trial conducted in the united states, involved 1.3 million students in spring of 1954. david aleutians the road holyoke, america's story, and won the pulitzer prize for history, all about how -- and interesting study, it is not a perfect example, it was a successful campaign. it was not a perfect example because it was a clinical trial. there was lots of additional

record keeping. in standing up the vaccination program where you are targeting a one.3 million students, they had to get the assistance of something like 50,000 physicians, almost 200,000 volunteers to stand at trial up. that is just to give you a sense of the magnitude of what we might be facing going forward as we talk about trying to vaccinate 150, even two hundred million people are as many people as want to be vaccinated. the last example we have looked at, and many of you have heard or remember the swine flu fiasco as it is known popularly. in 1976, there was h1n1 outbreak in fort dix, a young soldier, 22-year-old young man died, the first time h1n1 had been seen in the population since the late

15s, it was thought that the virus was closely related to the 1918 virus. there was a tremendous amount of anxiety that we might be facing a recurrence of the 1918 virus, terrible mortality we saw in 1918. there were some questionable decisions that were made. we have studied the decisionmaking process, the president of the institute of medicine, historian at harvard actually wrote a very interesting study in 1978 about the decisionmaking process, extremely interesting reading for some of us. [laughter] that is not why i am bringing the example. the bring it up because it was perceived to be an emergency and

there was an effort to rapidly vaccinate the american population. the effort in 1976 focused on overpopulation and we succeeded in vaccinating forty million people in two-1/2 months. that was a remarkable accomplishment. if you dig down into that accomplishment would you can see is a vaccination rates were quite variable. some cities vaccinated 50% of the target population, some vaccinated 15% or 20%, depending on the efforts of people in local communities and on the commitment of local public health officials. the other thing about 1976 is 85% of the vaccinations were done through public health clinics and only 15% for private providers. and we envisioned a different mix in terms of our vaccination

strategy for the fall. fortunately, the only example we have to turn to that even approaches the scope of we are attempting, are seasonal flu vaccination program, we vaccinate 1 hundred twenty million people year, most of those vaccinations are high risk individuals and the elderly increasing numbers in the children, most of it goes through the private health system, most of the vaccination deckers before influenza begins to circulate. with seasonal flu because of prior immunity and prior exposure to vaccine most people only need 1 shot. there are some striking differences with we're looking at in the fall. we are lucky to be in the middle of a vaccination program while a lot of influenza is circulating. this may be an incentive to people to get vaccinated and may put a strain on their delivery systems. the 53 committee on

immunization, the issue is high priority recommendations which actually cover 1 hundred fifty-nine million americans. we are aspiring to vaccinating a lot more than we vaccinate the seasonal flu. it remains to be seen, the studies. because people have never been exposed to this virus before, and may require two shots. that will impose additional burdens. the many elements to our program, i won't the labor office, delivering the vaccine is only part of it, we need to track the vaccine, how much we had, how much we are using, we need to make sure we check the safety of the vaccine. that was one of the unfortunate outcome is in 1976, an unexpected side effect affecting millions of people. we had several hundred people who came down with a rare disorder, 30 people actually died as a result of the vaccination program.

tracking that going forward is going to be a critical effort. the largest challenge will be coordinating the delivery. that is where a lot of your organizations may play an important role in helping us at the local level deliver vaccine to the people if needed and to reach out to high risk groups and hard to reach groups, very interesting discussion at lunge, michael sweeney, about the challenges that they face in reaching groups that predominantly live in another language, we need to be mindful of everyone in the community as we try to move forward. this is a slide showing that people get vaccinated in the deaf -- bunch of different places. we hope to utilize all of these

locations as we move forward. we are still working on this. we certainly welcome the input and assistance of people at the local level in terms of helping us figure out how to deliver vaccine most efficiently to those who need it. finally, these are the high priority groups that are mentioned that the committee provided. a lot of play about these pregnant women are at high risk, health-care workers will be on the front lines, children younger than six months of age, the vaccine is not licensed, which is why we want to vaccinate the people taking care, because of the disproportionate diseases. people who have documented high risk conditions, pregnancy, neurological disorders, asthma,

constructive pulmonary disease will be in the population that we target. this is a chart showing our coverage rates for seasonal flu. in normal risk populations the coverage rates by different age groups are actually not as high as we would like them to be. they are higher in groups identified as being at high risk but we certainly want to aim to achieve higher rates of coverage than we have achieved here. this is going to be one of the big challenges in the fall. i just want to conclude briefly by going back to some of the thoughts that i had brought up earlier about adaptation and social resiliency. this is a chart that we have shown frequently, many of you have heard the story comparing philadelphia and st. louis in

1918. philadelphia was one of the cities on the east coast that was hit quite early. they actually allowed a large city parade to take place, resisted implementing any measures to control the spread of disease in 1918, had a terrible outbreak. you can see the death rates that were observed in philadelphia. st. louis, on the other hand, had a couple weeks lead time, they were observing what went on the east coast for and they acted very aggressively. the health commissioner in st. louis was arm in arm with the mayor and other public officials and voluntary organizations, they implemented a broad array of community litigation measures to close schools, theaters and public gatherings, and kept them in place for six weeks. you can see that the death rates in st. louis were dramatically lower as a result. i bring this up not to talk about community litigation measure is but to talk about the

adaptability of an entire community and with a little bit of the time, and effective communication from its elected leaders and voluntary organizations, was able to adapt to a challenging circumstances. st. louis saw its first case we two weeks after philadelphia did, yet they were able to act very quickly. it is not just on a city by city basis. in 1995, chicago had a terrible heat wave in the middle of july. you can see the mortality peak over a few days in the middle of july when temperatures spikes up to 95, there were high rates of humidity, 700 people died in this the way if -- heat wave. what is significant about this curve is not what it shows but what it didn't show. there was another the way that the end of the month with almost

the same duration, almost the same temperatures. you can see what happened. the city, having lived through the terrible the way in the middle of the month, reacted very quickly. they sent people knocking at doors, particularly in poor communities where the death rates had been very high and they actually prevent a recurrence of the high rates of mortality that the scene just a couple of weeks before. this kind of adaptation, rapid adaptation, rapid response to what is happening in your community is what we are going to be looking for from you in the fall. human communities are not just built environments, they are composed of people, social and political institutions, economic activities and infrastructure. getting a handle on this contextualize adaptation, this ability of individuals and groups to draw on available resources and their own

individual -- ingenuity to solve problems is the biggest challenge that we will be tested on in the fall. i would offer to you that our capacity in this regard to adapt should not be underestimated. such adaptation is much easier when a community is magnetized by an external threat. external threats are wonderfully effective at promoting cooperation, breaking down barriers, removing bureaucratic obstacles, i think we should all go into the fall realizing we are going to draw from this. if i can offer something to the general conversation, the dunkirk affect. i will talk about that briefly. all of you know the story. the british expeditionary force was on the european mainland,

officially the entire british army in 1940, 200,000 men. they ended up being trapped when the king of belgium surrendered his a at army and the germans were coming from both sides. they were taken to the beaches at dunkirk. when the evacuation started on may 26th, churchill thought that they would be lucky if they could get 50,000 men out. the problem was that the british destroyers, you can see in this picture, the draft too deep, were having to wade out to the destroyers to board and they were going to stand neck deep for hours at a time. a couple days later on may 28th, the british ministry of shipping actually put out a call for all with shallow draft, pleasure craft, private yachts, fishing boats, merchant marine vessels, more than 700, none of them with

arms, all piloted by civilians, asked for assistance. with the help of small boats, in a week, all of the british expeditionary force, 140,000 men reactivated successfully. it was quite interesting. things got organize, a wonderful example of contextualized adaptation. churchill called the evacuation a miracle of deliverance achieved by valor, perfect discipline, fault less service, resources, skill and fidelity. he also reminded his colleagues in parliament that wars are not won by evaluations. [laughter] i want to conclude, draw on personal experience.

i was a civilian until 2002, i head -- i had the privilege of responding to ground 0 after the attacks on september 11th. was an utterly life changing experience. >> we leave the last few minutes of this event to take you live to a discussion on juvenile crime and the impact of life without parole sentences. the supreme court will hear two cases during its next term challenging life without parole for minors. the heritage foundation hosting this event, it just got underway. live coverage on c-span2. >> toasting our program today is at the 11 who served as ronald reagan distinguished fellow in public policy, chairman of the center for the additional studies for the heritage foundation. he is also the 70 fifth attorney general of the united states and among president reagan's most trusted advisers.

>> thank you. i join in welcoming you on behalf of the heritage foundation, and the center for legal and judicial studies, which is an important part of this organization, we have a program on crime control and public safety which deals with the kinds of issues such as we are discussing this morning. today's topic is very timely. this october term which will begin in just a few months, the united states supreme court million two cases from florida brought by convicts serving life terms without parole for crimes they committed as juveniles. the law defines juveniles as those persons below the age of 18. coalition that persuaded some years ago the court to discover a new limitation on capital punishment which took place in 2005 in the case of rover against simmons is seeking to

achieve a constitutional end run around 43 state legislatures, the district of columbia and the federal government. each of whom has authorized the sentence of life without parole for the worst juvenile offenders. as we all know, as the supreme court has stated repeatedly, death is different. that is why that coalition was able to prevail on changing what had been the historic, two centuries of law relating to capital punishment for juveniles. if this coalition succeeds in a non death penalty line of cases, it would be a major step towards subject in all criminal sentences at the federal and state level to the kind of a amendment jurisprudence and scrutiny the court has previously applied in capital cases where, as former justice sandra day o'connor has observed, the court has

frequently usurped the legislative function. to date, this public policy debate has been shaped by a carefully crafted campaign of misinformation, legislatures, courts, the public and media have all been misled on crucial points concerning this particular subject. until now, that is. today, we are delighted to present the results of a study that has taken place over a year and a half in which the results of that work has been brought together in the form of a book that is entitled adult time for adult crime. the book, which has been spearheaded by the heritage foundation, particularly our senior fellow, cully charles stimson, a collaborative effort between prostitutes--prosecutors, defense attorneys, human rights advocates, victims' rights advocates, law-enforcement officials, international law

scholars, and many others, the book aims to set state record on this subject and educate the public, legislators, courts and others about the fact of the crimes, the sentences and the law that relates to this topic. the conclusions are simple. first, life without possibility of parole is reasonable, constitutional, and appropriately rare. secondly, contrary to what many have contended, the united states has no international obligation to than the life without parole sentence for serious juvenile criminals. joining us today to discuss this issue are three distinguished attorneys. each believes that the juvenile justice system in our country should handle the vast majority of crimes committed by juveniles but each of these also in the read of a state of potential for most juvenile criminals. but each also believes that life

without parole, for some small percentage of juvenile killers and violent scenes is appropriate. our speakers include paul wallace, the chief of appeals in the criminal division for the dollar department of justice. he has argued a number of cases including the tories case, about 14-year-old murder, before the delaware supreme court, and won the case. is highlighted on page 46 of this new book. for the last 20 years he has been a front line prosecutor and had numerous leadership positions in the delaware attorney general's office. he has been the chief prosecutor for newcastle county, he has been head of the felony trial sex crimes, white collar crimes, career criminal and misdemeanor units within that office. he has acted as the legislative counsel for the delaware attorney general and has authored numerous state criminal laws. he has argued numerous cases before the state supreme court

and federal trial and appellate courts on behalf of the state of delaware. another one of our panelists is daniel horowitz, he has been a renowned california defense criminal defense attorney for the last 29 years. he appears often as legal commentator on cnn's nancy grace show, on ms nbc and fox news and other television programs. he has tried over 200 cases, jury trials as defense attorney, he has been a member of and a lecturer with the two main california defense attorney organizations in that state, he has taught at the california death penalty college for defense attorneys and handled 27 death penalty cases, of which went to trial, only one client out of 27 received the death penalty. unfortunately, on the fifteenth of october, 2005, his beautiful

wife, pamela, was murdered by a 17-year-old juvenile. the juvenile was convicted and sentenced to life without parole. by final speaker is cully charles stimson. prior to joining heritage, he was a deputy assistant secretary of defense under the presidency of george w. bush. he has been a local, state and federal military prosecutor and has also been a defense attorney. he is a former instructor at the naval justice school, adjunct professor of law at george mason university school of law. he has tried over 100 jury trials as both a prosecutor and a defense attorney. he is co-author of the book adult time for adult crimes. as you can see we have an expert panel to deal with this subject, so we will present our first speaker, who is paul wallace, who will be our first speaker this morning and present the

initial topic to you. paul? >> i think i would like to welcome everybody here. thank you for your very kind framing of the issue and introductions. and i thought it would be helpful, instead of me jumping in and talking about the large report or small book, first, a better to have a historical perspective of eighth amendment jurisprudence and non lawyerly terms from paul wallace to try these cases, argued these cases before the delaware supreme court, and we will move to the findings we have had in the book and then turn finally to daniel horowitz, understanding we want to leave time for your questions and that is why we have our timekeeper and assistant here who will be flashing some cards to tell us to be quiet. >> no statement in any public

policy discussion can chill that discussion more quickly than when someone, especially lawyer, says it is unconstitutional. to do whatever. fill in the blank. i saw it as a trial attorney and as an appellate attorney, also hedges at -- as a legislative attorney for 15 years in delaware. in the current discussion about life without parole for juvenile defenders, violent juvenile offenders, then comes down to two claims. one, the juvenile can never constitutionally be given life without parole, war two, that, in fact, the constitution requires that a court take into consideration use befoyouth bef can be constitutionally imposed.

the law has never said that in the u.s. constitution or in any state. here is why. you have to first go back to the beginning of the eighth amendment jurisprudence, common law. common law, basically what occurred, anyone who had the mental ability to commit a crime, could be punished and as -- as an adult. someone who was under 7 is deemed to be not competent, they cannot be treated as an adult, cannot be held legally responsible. there was a rebuttal presumption, when one was between 7, and 14-year-old, they may be. they redeemed not to be but they may be depending on the individual characteristics of

the person and what the court finds. for those who were 14 and over, the rebuttal assumption that in fact they were criminally responsible and in those circumstances to be treated as adults and receive adult punishment. as we move to the history of the united states, crime and punishment in the eighth amendment, it is always framed that this is a cool and unusual punishment, and in fact, as those words have always been defined by the united states supreme court and by the vast majority of courts in the united states, it is neither. crew and unusual punishment started to basically ensure that there wasn't torture. it meant to talk about the method of punishment. it ensured the united states did not import into our jurisprudence things like coloring, drying and scorinawi ,

quartering, those types of things. in 1946 the supreme court looked at length of sentence. was explained 50 years later was not the length of the sentence so much but the fact that it was disproportionate to the crime that was committed. falsification of public records, basically, what we would call today, white collar crimes. for it, the defendant received 12 years of hard and painful labor in irons. you can see a bit of the torture aspect of such a sentence and what the supreme court would be

concerned. but the supreme court made a pretty broad pronouncement, saying that it would look at excess of sentences or disproportionate sentences, and for the next 50 years, did not find any sentence to be that. and, in fact, outside the death penalty contexts, has never found a sentence of incarceration to be this do the -- disproportionate, and a matter what. it has found other types of punishments, in the 1916s, they looked at a case where someone was made an expatriate, stripped of their citizenship and left as a person without -- was an american born person, left without a country. they said that is unusual. in fact, other countries do not do that. the united states had never done that. so it had determined, when looking at a sentence, it should

look at what it said are the standards of decency. standards of decency, it is always said, are applicable in the death penalty context. moved up to the 1960s and where we are coming in to what was one of the biggest crime waves, unfortunately, in united states history, and one which many states -- cully will talk about the trends in legislation -- where state had decided, in fact, that they were going to get tougher on crime in certain ways. and one of the ways was insuring that adult sentences may be applicable to juvenile offenders, particularly violent juvenile offenders, and overwhelmingly made those sentences available. at the same time, we have the death penalty being reinstituted

reunited states. there was a period in the 70s, by nearly 80s, many states had the death penalty back again. as a possible punishment. when it did so, there began to the questions as to how the death penalty would be applied. what came out of the united states supreme court jurisprudence was basically the sense that the death penalty has to be individualized. it has to be proportionate to the crime, murder. and that any court, any law as to allow individual factors to play part in whether or not someone should receive that ultimate penalty. what happened is there was a turn from the individualize capital sentencing idea, to determine whether or not it should be applied to these new sentences, for instance three

strikes, you are out. something that may put someone in jail for the rest of their life for a crime they normally would not be, based on their criminal past. the supreme court kept alive -- has kept the line between death penalty cases and incarceration. even life without parole incarceration. the disturbing part in the current discussion is this -- that certain people want to blur that line, they want to take down that wall between the sentences. the importance of that law is this. the united states supreme court has always said that you don't even look at the eighth amendment unless, in fact, the sentence is grossly disproportionate and grossly disproportionate to the crime. that is the importance in the discussion we have today, because the crimes we are

speaking of overwhelmingly, in the juvenile context, are murder, but also other crimes for which someone may get life in prison. rape, kidnapping, those few crimes where life is an option. that is what this is about. whether or not life without parole can remain an option. in the constitutional context, the united states supreme court has always said that for those crimes, for those specific offenses, it is an option, but for adults and juveniles, and that is why overall, legislators have endorsed the use of that sentence, at least as a possibility. as i was introduced, i was a prosecutor for 20 years, i fully believe in the juvenile justice system, i fully believe that you have to have a spectrum of

treatment for juvenile offenders, those who are -- who don't deserve that type of punishment because of their crime. they should be in the juvenile system but unfortunately i have also seen what can happen to certain youthful murderers. their crimes are no different from adults. there is no gross this proportionality in the crime that they commit and the sentence that they receive. and therefore, just as the constitution says, we need look no further, at least in the constitutional argument, as to whether or not the eighth amendment permits these types of sentences. it is also important to note, although every right thinking prosecutor and every right thinking criminal lawyer believes that there's a place for the juvenile system.

even courts have said there is no constitutional right to even be treated as a juvenile in any circumstance no matter what. we are not even close to the line that any court would be concerned about. the blurring of that line has real implications. if we do not say that we keep the test that we have now, it has to be some great disproportion between the crime committed and the sentence received, then what we do is we basically open the door to second-guessing every type of sentencing, every type of legislative act, because in the constitutional sense, relieving life without parole won't makes sense to us, those folks who might believe this change makes

sense. what would have to happen would be federal courts, state courts would have to start to set some arbitrary rules as to when, in fact, a juvenile who has killed as to get a parole hearing. it would have to make it as a right. the eighth amendment simply does not require that. all 8 requires our proportionate sentences. the use of the death penalty, specifically some of the findings in rover, makes it quite difficult, makes it difficult for the other side, because in that very case, the united states supreme court says one of the reasons it was striking the death penalty for juveniles was because life without parole was there, and that was inappropriate sentence, a proportionate since to what they had done. it would make no sense for the

united states supreme court to say we are striking the death penalty because we have this option. that option must be there. it is used in the most serious of cases. but there's nothing constitutionally that prohibits it from being there. as edwin meese iii said when he introduced me, i have prosecuted these cases, i prosecuted them as a trial lawyer, i defended them, i had two in the last year. there are some disturbing acts -- aspects to them. the application that i already talked about, the application of death penalty law, these are not death sentences. as other courts have found, in addition to the supreme court, the united states supreme court, when it struck the death

penalty, said it was concerned park the offenders have an opportunity to learn about the crimes they commit, they want an image or understanding of what they have done, they do not believe they can do that. is that exactly that, it gives them that opportunity and also gives the opportunity for victims to have peace of mind, that this person is made to pay for a crime they committed and is safely away from others in society. one of the cases that i tried, did not try but heard on appeal and litigated on appeal was t r torres vs. state. a 14-year-old became friends with a family, they became friends with the family because what happened was, he threw a rock through the windshield of

the father's car. the father wouldn't reported to the police, he said i have a rough childhood myself. let me make him work to payback. he took him fishing over the next month or so and made friends with him. when the young man tried to teach his 3-1/2-year-old son how to light matches, he scolded him for it. a few days later, what he did was broken into that house, spread kerosene all over including the stairwell, he later said he knew what he was doing, he knew the family was there, and he let it on fire. he watched as the father came out, and watched him go back in screening for his children and his wife. tabor the god family in delaware. he was trying to shield his wife from the flames, he died. his wife died also.

and their 3-1/2 and 1-1/2 died in that fire. if you try to apply what is asked for by the other side in this discussion, it would say that no matter what, at some point, we have to say that donald morrtorres gets a parole hearing. in delaware we have consecutive sentences and your parole eligibility is considered. what it would say is instead of waiting 60 years that he has to wait for parole, in order for them to get what they wish on the other side of this litigation, the court would have to set in arbitrary number.

it is not constitutionally required. this case and some of the other cases are how i came to be part of this discussion today. i am certainly willing and able to answer any questions you may have when it is time to do this, when it is time to answer those questions. what i suggest is this -- the united states supreme court has had a very hands off approach on cases other than death penalty cases and for good reason. it wants to allow that several states decide what is best for them. in delaware, for instance, we decide consecutive sentences and life without parole for murder in the first degree is appropriate. even for someone who is 14. big -- the supreme court may judge looking at the facts, you

will stay an adult. individual states need to have that ability. united states supreme court has never said constitutionally, that is prohibited. states should be able to make those decisions for themselves, that there is, under the eighth amendment, no constitutional requirement that everybody be the same, that everybody have certain parole eligibility, that every venetian treat each crime the same as far as sentencing. >> thank you, paul. the issue of how civilized and just society treats a criminal defendant is a bellwether, how that society is.

is an important topic, especially important in the context of how we as a society treat juvenile, like adults cameras. in the issue of juvenile murder and rape, how they deal with them is as important to date. this debate has been driven by a misleading lobbying campaign in the form of self published studies which i will go into, disingenuous lobbying campaigns for state legislatures, aggressive litigation for the courts, which is appropriate, but what is inappropriate is the misleading statistics and the false reading of supreme court precedent and the accusation that this country is in violation of international law by having life without parole

sentences for juvenile killers and violent teen differs place. we are not. that is why we are exceptionally pleased today to begin a new debate, a debate that is framed by a forthright, honest and direct discussion of the actual facts. the facts are these. most juvenile deserve to be treated in the juvenile justice system. everyone up here agrees with that. very few percentage of juvenile need to be treated within the adult courts if the state so recognizes the ability of juvenile seaway of up to adult court. in a very small percentage of the worst juvenile offenders, the one that we highlight in this book, in our 16 case digests, deserve a fair