inconvenience individuals, obviouslyly, the chairman would not be in any way offended if you didn't return, but it would be great to hear from you because i think you all have so much to contribute. can i have a show of hands if there is a genuine willingness to return around quarter of 2:00? then that's what we'll do. >> mr. chairman. >> yes, mr. scott. >> i just have a couple of questions that i would like to ask before we go. >> of course. >> and what we'll do, we'll end up and give the remaining time as much as he needs to mr. scott. he won't return, but i promise i will and i know the chairman of the committee, mr. cohen, he will be here because he, too, is a kentucky colonel. with that i'll yield to the

gentleman. >> i wanted to ask mr. hildebrand in the normal bankruptcy, if you have a yacht , and it's upside down and you owe more than the value of the yacht, what happens? >> the implication in the question is can bankruptcy judges, can a bankruptcy plan structure and recognize the economic reality that you mentioned in your opening remarks that the collateral is the extent of the secured claim, whether it's a yacht or a piece of business equipment or whether it's an airplane for united airlines or whether it's the plans for general motors. braptsi judges are entrusted with the ability to make these valuations and determine them for everything except the home mortgage. >> on the yacht, you could reaffirm the debt, but you would only have to reaffirm the debt up to the value of the yacht, is that right? >> if i could distinguish

reaffirmation would contain a voluntary consent on both sides. on a chapter 11, 12 or 13 plan, it is the value that you provide. as long as the court determines that the value is fair and that it's a fair market value for that, whatever the collateral is, that's the extent of your secured claim that you must pay. >> now, if the debtor wants to reaffirm, does he need permission from the creditor? >> for a reaffirmation in a chapter 7, yes. >> what about in a 13? >> in a 13, no, that would be part of the plan process. >> in a 13, the debtor can say i want to reaffirm and the debt he has to reaffirm is the value of the yacht at that time? >> the plan he proposes is whatever the value of the yacht is and he can pay -- >> that's probably a better deal for the creditor because it's not a distress sale minus expenses? >> as we got the amendments from 2005 that recognizes that the value we're giving this is not distressed value, wholesale

value, auction value, it is retail value. >> now, the reason that, -- the reason that a person would reaffirm at a higher rate on a home is essentially not because a creditor would get any more in liquidation, they would get less. he is over a barrel if he doesn't reaffirm, he is homeless, is that right? >> to the extent that a borrower agrees to pay more than the economic dictates, the answer would be yes. >> to take advantage of a debtor in that case, is that fair? >> i'm not sure i'm the one to answer what is fair and not fair. >> making him reaffirm to higher economic value than the creditor would be entitled to  in liquidation because if he doesn't reaffirm, he is over a barrel, either he are affirms at the higher rate or he is homeless? >> traditionally bankruptcy law

is created to be fair to the most people involved. in the context of putting one creditor entity or any entity having more clout, if you will, more ability to hold somebody over a barrel, that works to the detriment, not simply of the borrower or the debtor, but all of the other creditors in the case. >> i think you hear you saying that's not fair which i would agree with. mr. chairman, i would ask all of the witnesses, because we don't have time for a coherent answer on accounting incentives and disincentives whether the generally accepted accounting practices give a disincentive to modifications or incentives to modifications? i understand there may be some realization problems that may affect the balance sheet and earnings that would give people a disincentive to modify. and if any of the witnesses can comment on that briefly or in writing, i would appreciate it.

>> mr. scott, i do not speak as an expert on accounting principals, but i can say this, accounting principals are a disincentive for doing modifications that involve principal writedowns. when you write down principal, that immediately appears, that has a loss realization event on a balance sheet where as if you lower interest rates that, does does not affect how the loan appears on a balance sheet, even if they would have -- >> all of that is artificial because the fact that you modified doesn't put you in any better position because you lose even more if you let the thing go into foreclosure. >> that's correct. >> i have been notified -- does the gentleman yield back? i have been notified by staff, that rather than 40 minutes, it's closer to an hour and 15. now you know, i'm sure that some of us are more than willing to come back around

2:15, if that presents a problem and you can't make it, that's fine. i just think your testimony is that important. i'll show up and we'll have a conversation. and if anyone here is significantly inconvenienced or has anything else to do like christmas shopping or whatever, we understand. we don't want to impose, but i think maybe mr. cobel, myself, and the claim will return. let's see each other 2:15, 2:20. there is a great cafeteria here and we're in >> you have established the fact that you have patience and can endure, which means that you would make fine members of

congress, particularly in the senate. the house waiting for the senate to do something. i think we're going to be joined shortly by the chair of the sub committee, mr. cohen, but let me proceed. let me pose a hypothesis. i see clear problems in terms of utilizing voluntary modifications. i think it's been articulated by at least three of our panelists and clearly, any particular program no matter how well intentioned would have to be revamped, take into

account all of the what i believe to be obviously impediments to success. that requires a sustained effort and much consultation among the parties. i read something recently in the media about how the treasury department was going to shame those banks who were not or did not appear to be cooperating in terms of helping to resolve this problem. i just don't think that works. it's just not bankers. i don't want to particularly castigate anyone.

it's just that there are different view points, different obligations. banks, other corporations have a primary obligation to shareholders. there is obviously self-interest. self-interest is not limited to lenders. it's not limited to politicians. it's not limited to professors or c.e.o.'s of nonprofits. it's what human nature is all about. but there needs to be a balance. now in terms of the voluntary programs, does this make sense? if there were -- this is the hypothesis. if there were authority conferred on the bankruptcy

courts to reduce principal, would in your individual judgments, would we find a more -- would we find lenders moving more quickly to voluntary programs? and since you're shaking your head, ms. blanton, let me begin with -- ms. golant, would it provide leverage? >> when a get a police officer and the bank in a foreclosure case that for the first time gets the borrower leverage, we get somewhere. right now in that very limited context, borrowers have no leverage. yes, the possibility of a

judicial modification or of a chapter 13 would certainly provide leverage. >> that's what my instinct tells me. programs like hamp and i appreciate the fact that there is substantially counseling going on through these programs. i think that's a positive. but i don't think it gets us to the point where we're dealing with the issue. i think what we're doing by going the voluntary route is delaying the end. we're delaying the pain and suffering and possibly and potentially exacerbating into a full-scale crisis that at some point in time could really do permanent and serious damage to

not just real estate, but to our overall economy. mr. hildebrand. >> mr. chairman, i administer about 600 new chapter 13 cases every month. and in each one of those cases, there are issues that deal with the valuation of collateral or the interest rate that is an appropriate interest rate, how much debtors have to pay back and what we have seen is that only one or two or three maybe a month have actually litigated because in the back stop or the brac backdrop of the fact that there is a judicial remember addition a judicial response, negotiations take place. as i said in my original testimony, bankruptcy creates a platform on which there is a negotiation, where parties can act in their own economic self-trfment i totally agree with your hypothetical and that is accurate that whether it is a modification of the principal amount or whether it is a judicial back stop to the hamp

program, where if hamp is silent or there is no response or the hamp is somehow mysteriously denied, there is some judicial response to review it to see exactly what is going on. and in that context, which is not the same as the 1106 response, it is something different, which is should there be a judicial back stop which is the purview of this committee. and it would be appropriate. >> the two of you agreed that it would make ms. schwartz' program significantly more effective. >> yes. >> no question. >> and that we would see data that in a relatively short period of time would reflect that. >> there is no question that if a modification was requested and there is silence, and there

is a backstop to that whether it's a judicial review, then there will be a heavy incentive to participate in the hope program or the hamp program by the servicers and by the investors. they will exercise that right and it will facilitate a resolution to the process. >> and in addition, mr. chairman, at this point with the voluntary programs, there is no two-way dialogue. there is no balance of power. so whatever -- and that's why when these voluntary -- modifications are proposed, many times borrowers will accept them even though they know they can't pay them because it's better than nothing in their view and there is no opportunity to negotiate at all. so it's take it or leave it. they say, well, we better take it otherwise we'll lose our house. if there was a way to discuss and to have recourse to a judicial process if need be, it would make a huge difference. >> well, ms. schwartz, you're

next. >> my pleasure. >> and we have plenty of time. >> let me first -- i'm sorry. >> so this is going to be much more of a conversation than is usually the case in a formal congressional hearing because of the fact that i now have the gavel and i chair the europe committee on foreign affairs and i describe it as the committee with no rules because i think it's much more important to be able to engage in a dialogue and fully flesh out these issues and see where there is agreement and see where there is consensus. i think it's clear you know where i'm coming from, but that does not in any way mean that i don't appreciate the@@@@@@@ @ r

i have spent time with foreclosure attorneys, bankruptcy attorneys, the nonprofit counselors, the bankers, the servicers, i feel like i have spent a lot of time on this. i do need to reiterate, first, there is a requirement for

banks that have signed up with the united states treasury and have loans that are owned by fannie mae and freddie mac, it's a requirement as their job as servicers go to hamp, if it does not comply and they can still be positive n.n.t.p. value -- >> that means what? >> present value, a foreclosure is preferred or a modification or workout and we heard today that modifications are far better for investors than our foreclosures, certainly in this market. and so what whether they're redefaulting or not because of unemployment and other burdensome issues in the economy, those are requirements of the contracts they have in place with many parties in the united states government. the reason i say that is when i hear voluntary it makes me kind of crazy because the agreements for people to look through loans are to work on an n.p.v.

test before and after to decide if they go to foreclosure. >> we're going to save you for clean up. >> he'll clean up. we're cleaning up, too. >> let me interrupt and just, you know, i hear what you're saying and i'm sure that's true, but how many individuals who find themselves in foreclosure proceedings are aware of that contract? it's like when you talk about the credit card contract, there is nobody in this room that's ever read their credit card contract. i mean, i think we're asking too much of people and who, you know, what agency is policing the monitoring the contract? >> well, it's also the communication with the homeowner. so an honest conflict is there

are state laws that govern the foreclosure process. remember, i earlier said, 2/3 of the people that start that process have not gone to foreclosure and they get worked out. it's cumbersome that people are working on modifications and going down the route of foreclosure. that happens a lot because the state laws govern timelines, etc., on foreclosure versus the workout. some of the workouts do not pass the testing and the rigorous testing that goes on, but i might also add many people make 30 or 40 attempts to reach the homeowner, door knockers and don't have any communication, sometimes until after the foreclosure process. again, those are pretty good facts on the grounds of what attempts have been made, but we should do better at measuring that to understand where the breakdown is for the borrowers to call. >> i'm not going to dispute that. i guess my position is we don't have time. >> i know.

>> i don't think that the american public is aware nor members of congress are aware that given the data that i see in terms of the increasing numbers of foreclosures that time is of the essence here. if we continue to drag this out and attempt to perfect all of the pieces of the programs that, again, i'm sure are worthy, we're going to find ourselves in a real serious severe crisis because we don't have anybody -- we get together like this and we have a conversation and, you know, and chairman cohen and i are going to be on a plane going back to our respective districts. you'll be going back to your offices and everybody here will

feel that it's been a good discussion, but we need action now. and i get very frustrated because i understand the banks have their role, but in the end, it's self-defeating, i think, for the lenders as well because god for bid they have a -- forbid they have a total collapse in the real estate market. we're going to be back to where we are in november 2008. there are no more bailouts coming from this congress. that ain't going to happen. it's just not going to happen. and, again, i'm thinking of the authority to reduce principal as a mechanism to that's when you have everybody's feet to the fire, you have the servicer out there and it's somebody else's problem and it's the lender and the investor and how do you find where the mortgage

is because it's been securitized and it's off in some never neverland anywhere and you're making calls and the robo call comes and you're afraid it's a creditor and you don't pick up the phone, these are very real human responses. unless you get -- and these trustees are good. we have a good bankruptcy system in this country, and i just say, mr. hildebrand and his colleagues are not out to punish people including all of the stakeholders as he said in part of his statement, you know, we want to be fair. we understand that bankruptcy is incorporated into the constitution by the founders to give people a chance, but at the same time, there is a balance to insure that the investor and the lender be treated fairly and equitably as

well. i think we have gone down a road that could very well bring us back even to a more dangerous and risky situation than what we were looking at better than a year ago. and here we are today and i really wanted to come back and i appreciate the four of you in indulging me because i want to get it on the record because god forbid, but if i'm correct and my instincts are accurate, i want to be able to refer to this record and say i told you so. i told you so. and all i hear is the c.r.a. and fannie mae and freddie mac and all of this and it's government that is the problem. it might be a -- it's not --

i'm not suggesting that government is the answer, but a bankruptcy court system that has evolved from our constitution has proven to be a very effective instrument of helping people and at the same time being fair and equitable. that's my concern. i want your program to work. i really do. i think you need a little bit of a hammer hanging out there. go ahead. >> two things. i just want to be very clear. hope now doesn't really go on or off for what legislation should pass. with all the rules and the tools that are in the arsenal, to today hamp is a dominant part of what we do. if it fails hample, we do other mods etc. my personal background is a capital market background for the first 15 to 18 years of my career. i would share today we have a broken market still in a

mortgage security market and the trading market and the government is unfortunately for all of us investing in those. what i do now is i don't know what a bankruptcy on a first lien mortgage would mean to the markets, but our markets aren't even acting yet in a functional way. there are no global investors and even in the united states, there is the government buying our assets. so i don't know what bankruptcy would do. i just don't have enough data to know. i worry about that. >> here is my guess. and i have listened to a lot of experts and you know what i've discovered? >> no. >> everybody is guessing, ok. there really aren't any experts. >> i worry that that could be an issue. >> i think the major concern i have is timeliness, ok. and i don't see leverage to create the dynamic necessary to revolve the problem. that is -- i'm not an advocate

to go go into a situation with guns placing and tear down -- tear the markets down. i think you're correct. i don't see right now a rational market. and until it hits bottom and that's i think why people are hesitant because they don't think it's hit bottom. i think i agree with my republican colleagues, it isn't about subprime now, it's about unemployment. but, there is this chicken and egg argument, too. if you go underwater, then you know, you lose your house and people are holding back in terms of expenditures. you create more joblessness. you create this vicious cycle

and i don't know. and again, i'm not saying it's a panacea to cram down authority. it's not even a tool. i would like to think that the voluntary modification programs would work if you just had that sitting over on the side. >> it would help. >> professor levitin. am i making any sense to you? >> perfect sense. >> you must agree with me then? >> of course. this is do you -- should we approach this with a stick or a carrot or both? treasury's approach has been to offer a carrot. taxpayer-funded incentives paid to servicers, lenders and in some cases to homeowners to encourage hamp modifications. a carrot is a good way of encouraging behavior. when it's combined with a stick, it's likely to be much more effective. take the carrot and if you

don't, out comes the stick and bankruptcy will be the stick. there are a few things that ms. schwartz said that i want to comment on, not so much to disagree with her but just to expand on her comments. ms. schwartz rightly noted that servicers who sign up for hamp, it is largely voluntary whether they sign for hamp, they are then under a contractual obligation, they have a contract with fannie mae that as treasury's agent that they will operate under the terms of the program. it's worth noting what's the penalty for a servicer that fails to do this the only thing that is in that participation agreement is regular contractual rights that if trizzri thinks the servicer isn't complying with the contract, isn't giving a proper review to borrowers to borrowers' cases, the treasury's only real remedy is to take the servicer to court

and sue them. that is unlikely and what will the damages be to treasury? the servicer might be saving the treasury money. >> is that right? >> i haven't read the legal terms. the banks take seriously the contracts of the united states. >> i'm sure they do and don't want that on their record. i would know if i'm a banker and i want to keep my balance sheet looking well and be able to hold those assets so that when i have to report to stock holders, you know, and i know how the bureaucracy moves and how often i'm going to get sued, i might take the risk of not disregarding my contractual obligations, but not really giving it my all either if it didn't suit my self-interests. again, i like to put these

things in terms that i can understand. and the government doesn't have enough lawyers to bring those kind of suits. go ahead, professor. go ahead, professor. >> i want to be clear that i'm >> that's my point, too. you know, i look at the numbers, it's $1,000 and i'm

servicer, let's say i'm the guy in dwaufment i don't mean the servicer or the corporate entity. if i'm the guy on the phone and how is he getting paid? is it commission? >> probably. >> what is my piece of the thousand? is it a straight salary? again, and maybe i'm wrong, but i just think of human nature. and when weigh talk about how we got here, i remember talking to mortgage brokers and i say why the subprime? the answer was very simple. well, the subprime because, you know, the salesman that was out there pitching the mortgage, because i saw these numbers, i presume you wouldn't have any great disagreement, but 70% of those that took a subprime loan could have qualified for the traditional 30-year fixed rate

which they might have been able to sustain. i said how did that happen? i'm naive, i don't really know. well, because they got $13,000 commission for pushing the subprime rather than the $3,000 that they would have got for the traditional. and then you get lucy goosey with the underwriting standards and you get -- it was the wild west. that's why i take offense when i hear it's the community reinvestment act that did this. that's baloneyy. that has no data at all to support it. it just doesn't. but we hear it because we want it to be that way because government is bad. government had nothing to do with that. it's human nature. and you have government to kind of keep our demons from, you know, from surfacing and hurt the community at large.

that's my sense of government. i mean, i'm a free market guy. i'm a capitalist. you're not recognized yet because mr. levitin had his hand raised. >> i'll glad ceed to mr. cohen. >> power is machiavelli a long time ago said power is taken, not given. chairman delahunt. >> this has been a good discussion. the problem is the house just voted down, the provision as amendment to the wall street bill we had, the senate has never passed it. and the problem is, you know, you're right about government and the problems and there wasn't regulation and all of these things. if we can't get 218 votes, we passed in the house. if the senate doesn't pass it and we need something to help people. that's reality. that's the same thing as the

public option. if there aren't the votes for public option in the senate, the house as good as we can be and florence nightengale wants to be, we have to do something else. we have to do with the senate. we need a unicamer legislation and it would be in this camera it's a mess. what would you recommend we go about this? >> i would like to pose to the four of you, ok, because the chairman is correct. i was disappointed in the vote -- >> you rallied. >> i'm sorry? >> you rallied and came back to chair the committee. >> but i came back. i'm very disappointed. i think it says something about our system, our political system and how there are powerful interests that oftentimes i believe don't

really understand their own interests in the long term. they see it in very -- in a very short window. got to keep those balance sheets there. we don't want to do this and i understand that -- and i'm not being critical of their self-interests because that's their obligation. at the same time in terms of their long-term benefit, it would be ideal to clean up this mess before the mess continues to exacerbate and brings down those big banks one more time because i don't know how the chairman feels, but i know that the bailout time is over. if they want the market to function in a way where there

is no government support intervention, regulation, they will discover it. if there is another september of 2008, it will be a debacle because there is no political will in the united states congress that i can discern on either side of the aisle for any continued support. if it gets bad again, let's be clear, those that kill that legislation today, kill that amendment ready ones that are going to be responsible and let them face the american people and say, well, we thought it was in the long-term best interests of the market. there is really no data anywhere that indicates that interest rates would rise. that's about a lone -- baloney. that's just the short term view. i would like to think that it's

our responsibility here in the congress to take a long-term view and try to understand what the best interest of our free market economy is so that we have at the end of the day a functioning -- functional capitalistic system. but my question is -- how do we give ms. schwartz the leverage if we can't get the bill through so the voluntary modification programs work without going through all of the bureaucratic gyrations that we no longer have time for? maybe we should lock the four of you in a room someplace and tell you to come up with answers and come back so that we can satisfy those powerful interests on wall street so we can save wall street from itself and save the american economy.

professor. >> there are some steps that could be taken to improve the hamp program. i think a few of those would be greater transparency, both on the overall, the macro level of the program, the data the treasury has been releases has not been particularly granular. it makes it hard for any kind of real outside analysis, but also on the borrower's side that the treasury has not released publicly the details of its net present value calculation. that if i'm a borrower and looking to get a hamp modification, i should be able to have -- go to a website, plug in my data and see the net present value calculation and how it weighs out. there is a fear that if that is made public, that would allow for the system to be gamed. >> do you all -- everybody feel that's a thoughtful suggestion? ms. schwartz, you're the

minority witness here. >> i think more improvements can be done to the tests and i believe there is going to be a transparent test put out in the new year. more can be done there. i can't speak whether it's consumer facing and there is a double check that no one did anything wrong. >> how do we give you -- let me start with you, ms. schwartz, how do we give you real clout? >> i don't know. >> i'll make a suggestion. >> ok. >> that treasury needs a club to go with the carrot. if bankruptcy isn't to be that club, then some sort of very concrete monetary penalty to be imposed on servicers for violations of the terms of the hamp servicer participation agreement. >> can they really enforce it? do they have the compliance team that can enforce it?

>> even as it currently stands, mr. chairman, there are borrowers do not have the ability as the intended third-party beneficiaries of this contracts to come into court. they would be willing to and enforce it for treasury. but as several times it's been attempted, in fact, there is a new class action that has just been filed in the last few weeks where that's exactly what borrowers are trying to do. but the courts don't understand why borrowers can stand in the shoes of treasury, so so far that has not been available. without some sort of balance of power, there is just no way to get the wheels turning. that's what's missing is enforceability, accountability, and -- >> leverage. >> leverage. >> ms. schwartz, let me ask you, what do you think about the cram down issue? >> i'm not going to say --

>> you're not going to venture an opinion? >> i have empathy for all sides. as you know, i work around the clock and -- >> i didn't say that i really respect and appreciate what you're doing. >> the uncertainty is concerning for someone with my background and i see a broken market and i worry that keeps it broken for longer. i think our job is a couple of things. why aren't we figuring out a product to help the unemployed that can be 30% or 40% of the problem so that it's in front of the hamp mod. we have kind of program to slow down the required payments and get back into partial payments to get into a hamp mod to get back on their feet when reemployed. let's talk about no borrower goes to foreclosure without review for hamp mods. >> they do. >> i hear you, but i don't know the me tricks, it's hard to respond to all of that. i see the metrics of the people

getting work out, some in process and those who didn't go into foreclosure because they're in process of review. i'm sure you're right. let's get into more detail and facts and proper controls into place so that doesn't happen. >> i agree with you. but i don't think we have the time. >> go in a room and figure that out. >> i mean that respectfully. >> and i just think that we need that -- i don't want to use the word stick. i want that option available to leverage so that the kind of suggestions or recommendations that you make because i know how slow the decision-making process is whether it's here in the u.s. congress or in any agency or bureaucracy and there is interagency review and all of that other stuff that we're going to find ourselves next september looking like it's 2008 rather than 2010.

that's my fear. >> mr. chairman, there is a vast gulf between where mortgages cannot be modified at all except for curing a default and maintaining payments and the proposal that just got defeated which is to allow cramdowns and restructuring to allow some kind of modification that may not involve evaluation of mortgage, fees and cost and interest adjustments and things that are within the hamp model that could be done that are not cramming down the mortgage, if that's not a political option. so those options need to be, i would suggest, should be addressed, should be discussed which is why the suggestion of having a backstop, a judicial backstop to a hamp program that may not be working fast enough. >> who would administer the judicial backstop? >> the bankruptcy. >> could the bankruptcy courts do that? what do you think of that ms.

schwartz? >> i don't feel i'm expert enough to have an opinion. >> everybody has an opinion now, come on. . has not even heard -- where do i go to say they are not doing what they say they are going to do? so that this chance -- so this family has a shot to stay in this house. there is not anywhere to go. >> that is a concern. >> i totally agree with that.

i have some plans for treasury and fannie mae and freddie mac. >> you are as good as it gets. how about helping us in coming up with a concept or a mechanism to do that back option, and let's not create a new bureaucracy. some sort of additional authority to the trustees are whatever. i am really concerned about this. i am going to turn the gavel back to the real chair of the commercial and administrative law subcommittee, mr. steve cohen of tennessee. >> i thank the distinguished gentleman from massachusetts for that discussion that he led and

for the time he spent and for his many good words and years of service to the bay state as well as the united states. i'm sure is he is disappointed as i was in the vote today. there were several votes that i was disappointed and. sarbanes-oxley was not fully implemented. and the cramdown position, loan modifications were not pass, but we passed a bill. you do not get everything. i appreciate you all being here. if you can bring something to us to consider, it looks like -- although you can put these provisions on other bills. that is the only time you can get good bills into law. the system has the methods to this map that. i thank you for your time today. without objection, members have 5 legislative days to submit

additional questions. they will be made part of the record. without record -- without objection, the record will remain open for five additional days for additional material. i thank everyone for their time and patience. i wish everyone a happy hanukkah, a merry christmas, and any other holiday you may hold the near and dear. this session is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]

>> you can get two or three positive ads in a one day shoot that it's difficult but you can. usually we like to do two days worth of shooting. i will have an idea of how many ads we need to make. i'll go in and write the first round of scripps. there'll be some back and forth between the campaign manager in canada. everyone reaches agreement and then we began production. this is the part every media consultant hates, and that's the ad testing. i don't know if you got into focus group testing in your earlier groups, but this is where you see the ad she made

her going to do anything for you. it used to be you would get groups of eight or 10 together and they would watch the ad. it was difficult because a group dynamic could set up a little bit of siskel and ebert where they feel like they have thumbs up or thumbs down and had. every ad maker hates that process. it could be helpful. that nowadays it's different. nowadays it's webcasting were ads will be shown to 300 people via the internet. is a lot closer to what television is like for the voter. they will watch it one time on their computer screen, then they will watch it a second time, and usually before they watch the ads they will have done a test. they type in the comments on it and then they do a revote. you can see which adds new people, one ad has something in the ad that really stuck out to a lot of people. is not one person and a group of tenzing i really hated that shot and everyone else chime in and

say that's terrible. instead, you're getting really a much more pure reaction to your advertisement. so how do we develop human messaging? let me ask you, can anybody tell me the difference between that and a message? anybody? [inaudible] >> anybody else want to take a crack at it? >> your campaign is trying to have everything fall, and the message is more individual. >> anybody else? everybody in this business has a different definition. the way i like to think of it is along the lines that the theme is the big id of the campaign, the overarching framework of the message. sometimes it's as simple as the

word change. we saw that with bill clinton's campaign in 1992. sorely saw that with barack obama's campaign. it is not -- ronald reagan in 1980. change by itself is not a message. so i like to think of the theme as the trunk of the tree, the main support network for the tree. off about trump, you have limbs. to me, the limbs are the messages. and a campaign to have more than one message as long as it fits under that same. another theme is independent. we worked for mark begich in alaska who defeated senator stevens in 2008. our slogan on a -- was independent as alaska. so independence was the theme. the messages off of that work energy independence, health care independents, and a laska health care is a low different than a lot of places. it's a rural network of villages

and how to get health care is very different. he wanted to stress that alaska's health care situation was different than most. other examples, let me go this. been off those branches are the specifics. campaigns can be won and lost in specifics. you can have sort of a nice theme and messages about change in iraq. you usually do with the specifics to flush out the campaign otherwise voters will be turned off. they don't like to hear generalities. for mark begich, if change -- if independence was the trunk and the branches, and the messages were alaska should be the energy leader, we need to reform no child left behind, reform health care, then the specifics off about on energy was anwr, critical thing in alaska, and a lot of democrats don't like to talk about that but in alaska if you need to be pro-anwr, and he is.

other specific branches were tidal power, hydropower, geothermal, wind. this lady in alaska you can do it all. those with a message specifics. so big thing, independence, then energy and off about the different areas of energy that we wanted to talk about. sometimes the theme is a slogan. usually a slogan is a distillation of that theme and message. for mark begich it was as alaska we work for tom udall. and mexico senate race, the slogan was the integrity to do what's right for new mexico. bob mcdonnell in his race for governor in virginia was a jobs governor. you don't have to have a slogan in your advertising. that's the one thing that is a little bit of a fallacy, at least in our firm, we don't like to use slogans. they sound salesmen like in a television ad. others will say that i'm dead wrong on that, but if you look at most of the barack obama television advertising, they

didn't close within aerator saying change we can believe in. or the change we need. you didn't hear it as a slogan at the end of the aggregate might have been on the screen as words, but most of the time it's better for your written materials, your yard signs, your bumper stickers to have a slogan. but not necessary in the tv ads. him a great example of the difficulty in trying to boil down a theme and a message with ronald reagan in 1984. they had a large group of people, holsters, michael deaver campaign manager, round the table. and their message, their theme is going to be leadership for america that's putting people back to work. michael deaver said you can put that on a bumper sticker, too many words. he sat there and worked on for a while and he came up with leadership that's working. a very short, pithy phrase that sums up the entire rationale for his candidacy in 1984.

so slogans as a campaign, sometimes we will spend months arguing about what the slogan should be. when we already know what the theme of the campaign is and what the messages will be. you can get too wrapped up in what slogan should be. john edwards in 2004, can anybody tell me what his theme was in his campaign? >> to america's. >> exactly. but you never saw that on a bumpersticker. that by itself isn't a slogan. but everyone is it the theme of his campaign. it's one of the better examples of a campaign that wouldn't have a slogan like that. why this change in the last 20 years? first, and i've been doing this now for 24 years, and a lot has changed her first, we're dealing with a letter of voter cynicism that is really unprecedented. and that is our biggest hurdle in making television ads.

because voters will actively resist what we are trying to communicate. they want to tell themselves that they're not going to be affected by the television ad, that it will not influence their vote. they go into it with that mindset. that is really the biggest hurdle we face. the second is channel proliferation, the rise of the internet. there are so many more viewing option. he used the elder put on the 6:00 news, we called it a roadblock with real for channels that people would be watching, and everybody would see the ad and they couldn't miss it. now they have a lot of viewing options. the right of remote control, it can be exercised at any point in time. so we have to come as ad makers, figure out a way to pay attention to add. the third thing that has changed is the cost of technology. it's come way down. there's really no good reason for political campaign to have a lousy looking at. the editing is a lot less

expensive. were not shooting a film nowadays. we are shooting in hd via tape and other forms of videotape. we are shooting on computer cards. we're not having to have his very time intensive laborious process that's very, very expensive like it used to be. there's no reason why you can't make a good looking political ad. were not just competing with other political ads. we're competing with mcdonald's, coke and pepsi. having that mindset is important really for anybody in our business to recognize that it has to be engaging. the fundamentals of designing a paid media campaign, first, your budget will dictate how many ads you will run. so again, gained about. we like to have ads run for, i know you had a meeting in session we had talked about buying an gross rating points. when i first got in the business, about 800 would be had and ad was good. that meant the average you're in the market would see at eight times. so 800 points, eight times. them with as more and more

channels, it went up to about 1000 points behind the net before they'll like it was sinking in. then it was 1200. we're really up to about 1500 points to appear at a campaign can afford to do that, to run behind an ad. it sounds like it had. you think your average viewers will see it 15 times, but some are seeing it three or four. seniors stay home are seeing at 20, 20 times. >> really? >> yes. >> 1500 points? >> yes. there used to be this cool that you would run an ad for 800 to 1001, take it down and nobody would ever see it again. you don't see that in the commercial, in the corporate world. if someone has a good ad they will run it for a year and a half. if an ad is on the message that you want on the theme in the message and is moving voters, we find the longer the run, the more effective it can be. usually it requires 1200 points before we even see movement in the tracking polls. >> what's the minimum point you would ever even bother doing?

>> we have done in very expensive states, new york, california, about 900 behind an ad. >> you would never do anything less than 900? >> nope. >> that is an important piece of information. >> when you're designing your media plans. i mean, under 900 dirges too many people that are going to see your ad. >> that's not owego. >> that is the amount of points that aqa behind and at. oftentimes will have more than one add on at a time. usually you don't want to start your ad campaign at anything lower than 500 points in the week. so use at the beginning you will probably only be running one ad at the outset of the campaign. but you like to see it be a graphical and upwards. so 500 points in your first week. letzig is a 10 week. i would probably do 500 points, seven endpoint for the next couple weeks after that.

you know, 902000 next couple of weeks after that. we would like to get up to 1500 points or 1600 points per week at the end of a campaign if we can. that means we can do dual track, be running to ads simultaneously. but it's how many ads, how many points each ad accrues behind it. that's what's most important sometimes an ad will take three weeks to get up to 1000 or 1200 points or 1500 points. >> how do you test your prices? what does that mean? >> the cost per point, cpp, is set by the stations. so you are dealing with what they're willing to sell it at. and races, federal races come you can't be preempted. you can get the lowest unit cost, whatever that may be, they have to sell to. so you can negotiate with the stations and you can get them to come down some, but there's a

certain floor they're not going to sell below. you have to do with the stations and you have a media buyer. we have one that we work with that outside of our firm. some firms like ours haven't been in half. some of them work with a subcontractor. we do as a subcontractor. it's their job to negotiate and get the lowest cost per point again. [inaudible] is that for each media market? >> yes. some media market you might be on in northern virginia, washington, d.c., 1200 points the last two weeks were in roanoke were richmond might be on 1500 or 2000 points. [inaudible] >> guest comment acutely behind it that it's not really the minimum. i think the minimum is the 900 range behind and ad. let's just say you're going to run three ads in your campaign and let's say a six-week bike,

you could run 500 points in first week, 500 points the next week and over the course of that two weeks, have accumulated enough points behind the first attitude then go onto the next ad. we like to run two ads at times or you're not just communicating a 30, second job but really like 60-second chunks. so one ad might be a bioactivity, another ad is a specific issue. that to ad up to more substance for the voter. but it takes longer to guess would like to get the minimum 900 to 1000 would be had under behind it. talked about two tracks. everything should work in concert in the campaign. i heard you haven't talked about mail yet but you would like to go direct milby in the same message as your television as the same message as what you're doing and earned media, press coverage, what your cat missing out on the stump. you would like it to all be organized and cohesive and work

as one combined message. you don't want different areas doing different things. you can darkwood mail a lot more precisely than you can with television. sometimes a specific message in another she don't want a whole state to see but you want specific county to see. you can do target, targeting with radio. a lot more effectively than you can with television. television gigabyte cable programming, about the history of the constitution in a state or something like that, but usually televisions is a much more broader medium and you can nato passed from there on radio and treadmill. i'm going to focus on television advertising, but there are tendrils that i like to follow that i think apply to really all the mediums, radio, direct med media. for she had to get the voters attention. you surprise come into comic humor, emotion that we like our ads to stand and look different

but we don't want to be different just for the sake of being different. that has to be a reason for why the ad takes the approach does. also sometimes we don't want to tip off that is a political at. we would like to watch them and watch the first five or six seconds and not realize it's a political ad, but to engage with it whether it be a story or just a very compelling situation visually. so it's okay if it's not selling the candidate right from the get-go. rule number two, keep it simple. don't try to say too much. that's probably the biggest mistake i see any lot of political advertising. yazdi? do you prefer having that whoever i approve this message at the end of this commercial? >> usually. sometimes if it's a pretty tough ad that you're making, you don't like and with that. you would rather do that at the beginning. that's just a decision is made in the making of the ad. do we want -- is a pretty tough

ad what we did put that approved message at the end of it. i'll talk about that more in the course of the ads but it's a good question. most of the ads, we put it at the end so we have that freedom of starting with the fresh slate at the beginning of the ad and the voter doesn't know it's political. rule number three, make sure it's relevant to persuadable voters. that comes from the research, your polling focus group research. if you talk about something that doesn't matter to those voters you might want not be on the air. because those are the people you want to move, the people that are and decide, in the middle that are persuadable torture candidate, and that's really the great tool of polling is to help you figure out what to be talking about in your ads. number four, make sure it's believable, something you can achieve. you don't want to get it on there saying they will bring about world peace or it's just not credible to voters. that is that threshold, the cynicism i talked about, they are going to take it there again

pay attention to if they don't think it is achievable. number five, make sure whenever possible you tell a story. for those of you who are going to end up working on campaigns, try and find the candidates stories. there are great examples. an old colleague of mine did don clark for governor in 1994, and he found out through the course of working on a campaign that she could shoot a mean game of pool. and he did his campaign called the straight shooter. and it was a fantastic ad, like a poser, she was incredible. and helped her win that nomination that she didn't win any end but she was a tough battle. there is a whole list of messages off of the theme of the straight shooter. it was a great story that only came out because he just happened to be in a conversation with her and learned she learned how to shoot pool and publisher i worked in philadelphia where

our candidate was a professional football player for one season, and he got that position as a walk on to the denver broncos because he spent an entire summer running up the steps of franklin field. that's the football field at the university of pennsylvania. it was a great metaphor for his life. he had been a set of sharecroppers, grew up dirt poor, but worked hard his entire life. got into college on a scholarship. went to law school eventually, but climbed the steps of his life to get to where he was running for mayor. the whole ad was showing a reenactment of him as a younger man running up the steps of the field. so try and find those stories are to candidate and try to find real stories that once, if you find out the health is a critical issue, you're going to want to find some real-life examples in your district, your state, that can help your candidate talk about the issue in a very personal way. number six, captured your candidate's personality.

and play to his or her strings. that can't be overstated. people in the end don't just vote on issues. they vote on whether they like somebody. they vote on whether they think that person gets them. you will see, most of our ads feature the candidates speaking. it's our job to figure out how to best capture them speaking. sometimes it's straight to camera, sometimes it's with humor, sometimes an interview that our job is to figure out how we can best play to their strengths as a communiqué to. but we wanted to speak in ads so people can get a sense of the personality. you don't see as many narrator voice of god as as least as you used to. we found it's a lot more effective to capture the candidate themselves. rule number seven, take advantage of your opponent's mistakes. just always be ready. sometimes you pull an ad out a little earlier than you would like you to get something new

on, if something happens in the campaign. that was a huge mistake that george allen may. the new ads were on the air within day showing that moment. number eight, define the choice on your terms that the other gaucher is set the agenda or stay on your playing field. you know, you want to try to define the race and stick to your and throughout the whole campaign. rule number nine, don't let effective attacks go unanswered. now there's some -- some people so you have to enter everything that you really don't. sometimes you will know, you know, from pulling you will see you do tracking polls taking the temperature and sing it and opponents attacking you is working. sometimes they don't. sometimes the ads don't work and you can afford to ignore the. if you're seeing it in your tracking data or you just know

in your gut it's an ad you need to answer, you've got to get a response on. in this business you have to be able to do that within 24 hours. although you can sometimes in this spy versus spy game, go on too quickly with a response if you want people to sing the attack but you need to be able to make the ad within 24 hours and then choose when you put on the air. you wait a day or two. sometimes they will attack you on the weekend, he'd do on a friday, knowing that it's difficult for you to get an add on air until the next week. stations will usually make you wait 24 hours before you get an add on. so you get hit on a friday afternoon, you are making your ad usually friday night or saturday. you deliberate monday morning and you have to wait until tuesday morning before gets on air to a lot of campaigns will sucker punch on a friday but you need to be able to make the response right away so it can be at the stations monday morning. rule number 10, state from the voters perspective. the candidate isn't the hero.

the people are. the voters are. i think too often candidates are shown as this great hero who is saving the day, and people are skeptical and cynical about that. they don't believe it. this obama example i will show you in a minute, really speaks to that, the importance of understanding it. understanding problems from the person's perspective, speaking about from their perspective and what you can do to help them. but not be this hero that's going to save the day. all right. will show some ads. a few things to watch for. first, most of these have original music. i have the strong belief when you're making an argument for somebody you're not just making a logical argument that you're making an emotional argument at the same time in music is critical. it's called post is going. when you write the music to the finished ad, it can literally play the piano to the way the person is speaking. it sounds like a very detailed

thing, because it is. it's something you can't really help bring a viewer through your emotional, through your argument emotionally if you take that level of care. second, you will see different approaches for different candidates in different situations. sometimes a candidate speaking to the camera, sometimes we use humor, sometimes we use the motion. it just really depends on the situation and what's going to work best for your candidate. number three, we really do try to do something unexpected for political ads, with humor or high production dice. people are expecting that in political ads. i try to avoid cliché as much as i can. it's a little unavoidable in political advertising. when we can, we try to avoid that. the first thing i'm going to show you is from the obama 30 minute show. is really the first, this first example hits nearly every point in that list that i mentioned, except the part about taking a vantage of your opponents mistakes. we made a conscious decision in

the 30 minute show to not talk about john mccain. we show him in one brief scene. i should be a little bit about the story of the making of that ad. this will take just a minute or two. i got a call for weeks in today's before the air date by jim margolis who was one of the two lead ever tiding firms. and he asked if i was able to help with this. i said of course. but it took a week before we really did anything that we had some conversations about what we might want to do but really not a whole lot happened. i like what really got to get going on is. there was about 1000 hours of footage to go through. we made a decision very early on that ever going to be, that we wanted to have realized in this commercial. to make it about real people and not just about senator obama. bit was really less about

senator obama that was about the people. the goals of the show in that first week that we talked about it, it really came from the campaign manager. he was worried about the 20 day lack of time between the last debate and election day that he wanted to have something major, you know, a game changer, major moment in producing event to happen in a 20 day window. he was afraid of starting to stagnate at it. so his idea was this show should excite supporters, really a last pitch to undecided or leaning obama voters and do something with a big enough footprint to dominate that in game media coverage. and so, the key elements that we all agreed upon were that we want to tell real-life stories that i wanted to break up the video into four main sections. after the introduction, then we had an economic plan that was really about the short-term measures that deal with the crisis that we want that right at the front of the show.

so that viewers who might not make it through the whole show would at least get some immediate answers for what barack obama was going to do to help the economy. the second section took a longer view about energy independence, iraq, but to reform measures he wanted to do. the third section was barack's story where we focused on his education. the imports of health care reform to him because of his own mother passing away from cancer and having preexisting conditions be a real issue in her insurance coverage. and we told the story of his rise to national prominence for the last section was about the commander-in-chief in between each of those sections we had wonderful stories that we went out and shut. i was given this list of every person that barack obama had met in the campaign that maybe they were on a forum with him, roundtable discussion, introduced him at anything. for those sorts of people that have these great biographies that i was given about 500 people that i could go to and say this would be a great

person. they went out and shut the roaster about the folks in senator was. where did he talk a preexisting conditions, which speeches and do we have video, it was a real lot of people, jim margolis going out and interviewing people. it was a team effort, and a lot of people involved in it. but it was any interest when he hour days for the last two and a half weeks to get it done. so i'm going to show you the opening segment and if you were to see nothing else, if they tuned out after a minute and half we want them to get the message that this program was going to focus on real people, senator obama was going to give some specific solutions, longer-term solutions, we wanted him to look strong, reassuring, visually we wanted a strong opening. i wanted the first 10 seconds to not look like a political ad. as i mentioned earlier. i wanted to sort of draw people in. we want him to look

presidential. we got to each other with it for the office that we don't do. people so you're trying to make it look like the oval office did all i really wanted was i wanted to look like a senatorial office. and we were supposed to shoot in one city. at the last minute, like often have it in a presidential campaign, it got shifted to another city about two days before we are going to be filming the center. so we scramble to find another location. to me it doesn't look like the oval office because there's not noddy pinewood in the oval office. there is a tree outside and alonso that makes it look like the oval office. i just wanted it to have that feeling of seriousness like an oval office address. without him sitting behind the desk. and i want him to be able to speak straight to people like a president does. somebody was raising their hand. [inaudible] >> from the very beginning, jim and i both argued strongly for a live any. there were different ideas on

how to have a live component to the show. one idea was the whole program could be life on the senator's house. is talking from his home to your home. i wanted it, and jim wanted it to be a bigger feel at in. the video doesn't have much of a nod to the grassroots nature of the campaign. until the ending. so thought it was important to show the widespread support for the campaign. and get a feel for the grassroots nature of it without spending time on it earlier in the shelter that was was the most difficult part of the whole program, was having, when he was speaking to a live crowd, he been speaking for 20 minutes before we went live in the show, to make sure that he was going to be at the right place in the speech, at the moment we went live. so there was a lot of coordination. i won't bore you with all the details of that but that was something there was a lot of discussion that senator obama needed to be convinced we could

pull it all. we had a whole lot of trucks at a. it was like broadcasting a sporting event that it was that complex with that many people working on it. they had the budget to do it. a show like this hadn't been done since 1996 when ross perot did one where he just sat there with pie charts. so the expense of doing something like this was a reason you haven't seen one in so many years. we wanted to do something that was just not in that vein. we wanted to do something that wasn't just about barack obama but was about all these other people. we wanted to tell stories that we wanted to tell his story and other people's choice but we wanted to capture the energy and excitement. david bluffed more eloquently than i can say, you know, he made the case of the senator that all throughout this campaign we been up on the high wire and it's always worked that they had a live convention when they could have rained and it didn't. the race's speech which is one of the greatest speeches in american history i think with something that they had to do,

and he pulled it off. so every time the campaign had taken a big chance it always worked out. senator obama in the end went along with it. >> do you know, how much this ended up costing? >> a lot of. [laughter] >> i was going to ask something along the same lines. it was broadcast on several different channels. did you have to pay for each channel? >> yes. i think the moment it became real for me was the day it was announced that they were buying all the major networks except abc, which for some reason didn't want to suppertime. and miss at the last that they decided it. but but at that time all the money had been spent. it became very real for me when it was reported the world series is going to be delayed by 15 minutes so that fox could finish showing the show before the first pitch because when i got heartburn. >> what markets did you buy?

>> it was national. we bought national feeds. so it was everywhere. it was up to like 35 million viewers. let's watch the beginning. again, this was the first minute and 45 seconds that aired. you'll see in this minute 45 seconds really lay out what the whole video is going to be liked, with whole program will be like. ♪ >> with each passing month, our country has faced increasingly difficult times. everywhere i go, despite the economic crisis, and war, and

uncertainty about tomorrow, i still see optimism. and hope, and strength. we've seen over the last eight years how decisions by a president can have a profound effect on the course of history, and on american lives. and much that's wrong in our country goes back even farther than that. we been talking about the same problems for decades. and nothing is ever done to solve them. this election is a defining moment. the chance for our leaders to meet the demands of these challenging times and keep faith with our people. for the past 20 months i've traveled the length of this country, and michelle and i have met so many americans who are looking for real and lasting change that makes a difference in their lives. their stories are american stories. stories that reflect the state of our union. i'd like to introduce you to some of those people tonight. i will also lay out in specific detail what i would do as

president to restore the long-term health of our economy and our middle class, and how i will make the decisions to get us there. what struck me most about the stories you will see tonight is not just the challenges these americans face, but also their resolve to change this country. >> we would arrive in there to the first real story. the senator would narrate what little bits of their ration we would have in the stories he would do, and he was a constant presence throughout the entire program, but it really was him telling a story of himself, of these people, america. and in a very, as he is, a very calm way. it was exciting and thrilling to be a part of that. the next ad i want to show you is, i'm going to sort use different ads to show different principles. the next commercial is from governor schweitzer's campaign. we help them get reelected in 2008 and this was one of the

early commercials that we did. i think it falls into the capture your candidates personality, and make sure it's relevant to persuadable photos that really all the ads we want to make sure they are relevant to persuadable voters. capturing his personalities that he is a humorous guide. he is very comparable on camera and we want to do something that would seem really uniquely montanan. so here's what we did for governor schweitzer. >> a lot of outside folks were telling us what's best for montana. washington bureaucrats saying we need a federal id cards for the lawyers telling us not to worry about them polluting our rivers. and lobbyist fighting against clean energy jobs. >> i told them no federal id is. keep our rivers clean and like it or not, we're creating clean energy jobs. they have things backwards, but we got turned around.

>> anybody who asked to ride horses, they will watch the beginning of the ad and think what a minute, they are on the wrong side of the horse. but unless you don't ride horses you don't notice that. usually when we make these commercials, we don't necessary storyboard every moment that we don't have the time or the budget to do that. so we are shooting on location type to make sure we get it right in trying to make sure we are shooting those guys putting the saddles on correctly and making everything logical sense but in the end it all worked. the filmmaking side of this business, it's not just in the strategy right, it's not getting the language right you are making commercials which is one of the things that attracted me to the business in the first place. this was a challenge want to make, harder than it looks. the next commercial is one of my favorites but it's from 2002. we held them very unknown state senator and oklahoma named brad henry, get elected governor.

he started off about 6 percent in the polls in a crowded primary. he was in a situation we just wanted to squeak in a second place but there goes another candidate who is a self financing candidates who had a lot of the traditional support from labor unions and teachers unions that even though he had recently switched from being republican to a democrat, people saw him institutionally as the most likely winner because he could make his own campaign. we were the underdog in this. we needed to do something that would stick out from the crowd, grapples attention. we wanted to committee, he was a young father. he had three really attractive kids. he had energy, ideas. but we need to make a splash to get people to pay attention to his. i'm going to take a story after you see a. just keep an eye out for the kids in the ad. >> we wanted to be about our dad, brad henry eric he's

running for governor. that's why he raise teacher pay. to help keep our best teachers. without raising property taxes it's why he created the oklahoma college savings plan. so parents can save tax-free. >> is why he will work to recruit new jobs with tax incentive. so we can grow up and stay in opal. >> is our dad, brad henry. he will be a great governor. >> the pledge is a little bit more and then freeze it. specs of this kitten, is probably a very large reason why brad henry got elected governor. part of getting to know a candidate and getting ready for the shoot, i knew he had three daughters. i haven't met them and asked how old are these daughters as i was told i believe the ages at the time 10, eight and six. i thought okay, six-year old users can pull something off. we write the script, love the script that we show up at the

shoot and bailey is four years old. doesn't want to have anything to do with issues that she is scared to death but she is clinging to her monthly. we shot the first two daughters, and we felt her partner. we put her on this playground equipment, and i usually will stand up to the site that i will be watching the monitor. i will say the line and the person will repeat it. she wasn't saying anything. and i'm watching this and thinking, i guess this ad isn't going to go anywhere. and nowhere, this kitten comes walking up. it couldn't have been more than six to eight weeks old. and daily kos, kittens, kitty or something. her mom, thanks, can i play with again. i'm like yeah, if you do your lines. so we are holding that kitten over the camera lens. she is talking to the kitten. and it is what overtime and, you saw that she is perfect to ad

into that, i, i said to brad, the kitten was homeless. it looks like you got yourself a kitten. is like i know. [laughter] >> at that point in the campaign, this might be an omen. it came out of nowhere. it saved this ad. at that time, the fund-raising was going that well. nobody knew who was. and i thought maybe things will pick up. then i called him about three weeks later. how's the kid doing? he says, we took it to the vet, whatever you do to kids, dewormed anti-louse is. we brought it home and it died. and i thought, oh, no. i don't want this to be an omen for the campaign. but they ended up getting another kitten for being. this ad was a huge hit in oklahoma. everybody would come up doing a talk about his daughters. our numbers just took off when this ad went on it and we squeak into that runoff like we wanted to. we made it out of the runoff. we were the nominee. it was a really tight race that

we were running against steve largent was a former football player, hall of famer with the seattle seahawks. so it was a tough race. so we were neck and neck with him. right into the campaign, a wealthy donor called up and said i'm going to make a substantial contribution if you put that ad back on air. we did. the campaign with governor henry, we want to put it on anyway and in the end we won by about half a percent. that kitten really is a big part of him winning. besides the fact that he's a great candidate and now a great governor. then we had a reelection for usually. i like to show this ad. this isn't one of the rules but maybe it should be. is to speak in the cultural voice of the elected. maybe it's the 11th will. we were anticipatanticipating an campaign and ended up running against a congressman from oklahoma, conservative republican. we were going to position the campaign as the oklahoma way versus the washington way.

what is the oklahoma way? you will hear it define. that was the whole point of this ad, was how do we define what the oklahoma way is it and you'll hear it's culturally conservative on a number of issues. i came up with the idea, since it was going to be oklahoma centennial the next year, to have a bunch of centenarians describe what the oklahoma way is. so the campaign manager, when i called him up and said i want you to find at least eight, 100 year-old people. he was scared to death the hoelscher because just transported to them what we're going to be shooting them, he was afraid something would happen to them. so here we will surely ad from his reelection. >> ever since i became governor we tried to do things the oklahoma way. nasa's oklahoma turns 100 next year we thought some folks with the same birthday could explain the oklahoma way that you've got to be bipartisan.

>> without raising taxes. >> did that. >> and pay teachers more. >> doing that. >> so we can protect ourselves. >> we called it a standard ground lob. >> if you are doing all that you are doing at the oklahoma way. >> and again, governor henry got elected in 2002 which was a terrible year for democrats, especially in red states like oklahoma but we are proud to be. another difficult place for democrats to get elected. this ad is an example of getting the voter's attention with something different and playing to your candidate's strengths. governor bredesen is an extremely thoughtful but reserve meant that he is a harvard trained physicist. he is not one for the typical political razzmatazz that he is a very serious guy. so we wanted to do an ad though that had a little bit of flair,

you will see. is divided into sections so that each piece is interesting and occasional attention and it's talking about education or education is one of those issues in political campaigns that you do some adult education. especially in federal races which are like parliamentary campaigns would you are talking about teacher pay and the same sorts of things over and over again. you want to find out new way to talk about familiar issues. this was an ad we think i did that and got a lot of attention for it. >> as governor i have worked hard because it's the most important thing we can do for our kids. we now have prekindergarten in over 100 school systems across tennessee. we've raise teacher pay for the first time in years. our lottery scholarships mean every high school graduate with an b. average can go to a tennessee college.

we're not done yet. were doing what's right for tennessee's children. >> we could've made an ad that had governor bredesen sitting in a classroom talking to kids and talking to teachers and talking to parents, and sort of -- this would have been, we called the village people adds. sometimes they're talking to people in hard hats and peoples, please been environ. we wanted to do something a little different on education. people paid attention to it. i'm going to talk about bill richardson to. we worked on his reelection in 2006 which was looking toward his presidential campaign in 2008. we were with governor richardson's presidential campaign until we worked on the obama campaign in the general election. the two atom going to show from his gubernatorial campaign spee-2 two different things. one is the rise of the internet. i haven't spoken a lot about the internet but it really is a dominant force in campaigns now.

and i think of the internet largely as a persuasion tool and an organizational tool. in a primary, it can be a persuasion tool. most voters in the primary of little more tuned in and interested in what a candidate feels about more issues. they are more likely to go to a website and read up on the candidate. it's also great organizational tool in caucuses to turn out people, the committee would've on a regular basis. general election much less of a persuasion tool. people, the voters that are going to turn out in a general are much less likely to go visit a website. but it's still a great organizational tool. advertising on internet, not something we do a whole lot of. integration and convergence is happening, but where we use it the most is what you're going to see in the first ad. which is dealing with that skepticism i talked about earlier the voters have. we will hear in focus groups

voters will say, well, that's just a 30-second and that it doesn't come anything. i guess i'll have to go to the library and look it up, read more about these candidates. so what we do now is we say in the ad, you can go to the website and read the whole plan. so right away, 99.9 percent of the viewers will never go to the website, but they think that they could if they wanted to. so it deals with that skepticism that it is your argument more is credibility. usually i will send you my plan, or call me up and i will send you my campaign plan and it would show a booklet. nowadays we like to try and show the website, or refer to the website at the end of the ad. is the first time we did this was for governor richardson. we've done a few more since then, and the other ad is catching the candidates personality. we had an acer is a very traditional positive ads for governor richardson, but he has a larger-than-life personality.

and one of his interesting accomplishments was yet attracted a lot of hollywood business into new mexico. hundreds of millions of dollars worth of production had been happening in new mexico. how do we tell that story? so came up with this idea, and it became a real signature ad in the campaign. so you will see two very different ads, both featuring the governor very prominently speaking in the first smaller speakable but a very clever interesting way of talking about something that most people wouldn't think about, hollywood does is coming to new mexico. so we will play to adds. >> when i became governor one of our highest priorities was improving our schools but now with 30-second tv ad isn't enough time, but you can go to my website to see everything that we are working on, like investing $600 billion in our classrooms and requiring school district to shift money from administration to teach.

we've raise teacher's pay to its highest level in 15 years. and we are six in the nation for setting high standards that there is still a lot more to be done, but new mexico is funny on the right track. >> says bill richardson became governor we've seen some changes. smack there is a new law man in town. >> had them off at the pass. >> over 400 meth labs shut down. >> give me a milk. >> 72000 more jobs and a new commuter rail system. >> times are changing. >> and $600 billion worth of movie production. governor bill richardson, moving new mexico for. >> next time, let's make a space movie. >> now that lassa is a low bit of an inside joke in new mexico. richard branson had made new mexico his first spaceport, and new mexico competed for this designation, and gave a lot of tax breaks to make it happen. so its controversial but the governor was getting a lot of

heat for giving tax breaks to virgin atlantic to do this. so in new mexico and everybody gets that, that referenced it and it's an example of an appealing trait of leadership is self-deprecation are just not taking yourself too souza, to put herself in an ad like that and act like that is refreshing to voters do not take yourself so circe. so we took the lessons of that ad into the presidential campaign. and made what were really the first humorous ads ever run in a presidential campaign. with governor richardson, we had a unique intersection of circumstances. he was this unique personality and he had a status in the race of being underestimated. and really relegated to a second tier, despite his great expense. so we took a unique intersection and initially made some positive ads that were serious and made

his very same points are about to see. but it wasn't until we ran these ads that the numbers just took off in iowa. and we were only running these in iowa, a little bit in new hampshire but mostly in iowa. the whole game plan for trinity was to do well and i would. the same game plan that barack obama was working under. and in fact, we saw our target voters as being people undecided between barack obama and go richardson. they were attracted by the energy and the youth and the intelligence of senator obama. they were also attracted by the good humor and the substance of the richardson. and we waited to go to we saw that that we needed to knock out one of the three in order to really get into that consideration set of voters. had to be in the top three or we knew we were in trouble. we went from 2 percent to about 12 percent in just a really matter of two or three weeks on the basis of these adds. i'm going to run all three. don't usually get to show all of them but i thought you would get

a sense of the whole campaign by saying the entirety of it. >> okay. 14 years in congress. secretary of energy, governor of new mexico, negotiate with dictators and iraq, north korea, nigeria, yugoslavia. got a cease-fire in darfur. nominated for the peace prize for times. so, what makes you think you can be president? >> i go richardson, and i approved this message. >> tell me what you did as governor in new mexico? >> i used taxco street over 80000 jobs spent a lot of those jobs to our high-tech spit up in six inundation. >> balanced budget, get school bureaucracy. >> new mexico was 46 in teacher pay. now we are going nightstick.

>> for what we are looking for, you might be a little overqualified. >> i'm bill richardson and i approve this message. >> global warming is critical for the next president. no other state has done as much as new mexico but we passed tax credits for wind and solar and biofuels. utility company's had to use renewable sources. and i set tough standards for greenhouse emission. president bush doesn't follow the kyoto treaty but my state is that i can do all that as president. >> but what i asked you, what kind of tree would you be? >> i'm bill richardson and i approve this message. >> among the easiest ads i've ever written, they just wrote themselves that they were a lot of fun. and he was a real good sport about it but he never had a doubt it was the right thing to do. it was very helpful in the campaign. >> did you see numbers were after those ads? >> yes. we were 2%, stuck at 2% and we

had done this initial wave of advertising. we didn't see a lot of movement taking a sirs approach that we knew we are going to follow up with this and we wanted people, not everybody likes humor and adds, and they think it's not presidential so we saw we really weren't climbing it. detachment on the on the air and public polls, our internal tracking showed it right up to 12, two to 12 and really just a matter of a few weeks. then we stayed at 12%. we didn't go above that. and i have a lot of it, it's not just advertising on television. in iowa, political campaign, it is much more about hands-on meeting people. we need one of the top three to slip a. we knew that going into it. we deftly ditzy movement. next campaign is bob casey. very different approach. senator casey challenged then senator in 2006, the purpose of these two ads is usually different way of introducing a

candidate, much more serious, lay out the theme of the campaign and set up the negative campaign. this is an important part of any advertising campaign that you not try to do it all in one and. it's very difficult to come out of the box and hit somebody. no matter how well-known you are. people knew his name in pennsylvania. but we still couldn't come out of the box going negative. so we had to lay a foundation, a positive, vitally important. we wanted to set up the negative on being fiscally responsible, tax cuts for multimillionaires, protecting jobs instead of sending them overseas. and investing in people. all positive hits that would set up the eventual negative hit that we did among others, so if we can run again to ad you will see the back to back.

>> i think the priorities in washington have gotten completely turned rep that i think government should live within its means like any small business. that's why these tax cuts on top of tax cuts for multimillionaires just don't make any sense that we are giving corporations tax breaks for sending jobs overseas. we need to reduce the deficit, lower interest rates and invest in people again. we can do a lot better in washington, and we will. i bob casey and i approve this message. >> what i tried to do is really not just talking but deliver. >> thirteen times against voting for the minimum wage. 13 times to cut medicare. he has voted for trade deals like after that send jobs overseas. he is the leader in the senate for privatizing social security. 98% voting record with george bush. so what's behind all the talk? i record that hurts pennsylvania.

>> i'm bob casey and i approve this message. >> one of the argus were concerned about that he could make is that he was given for pennsylvania, that he had the seniority to bring a lot of projects on, a lot of jobs on. it took him a while to get out of that message but at the time we started running this, he had finally started talking about that. that's why he talks about delivering for pennsylvania. we wanted to say, no, here is what he is doing to regular pennsylvanians. so it's the set up with a positive and a follow through with the negative. and also reacting, anticipating where he was likely to go with the one message that was going to do him the most good. and what was going to be a tough year for him. we do a lot of work for the esc see, the democratic centroids campaign. they are challenging because you're not allowed to talk to the campaign that you're helping out at the. gnocchi mutations or can't filmdom. sometimes you can send a camera,

a news camera, but you can't talk to them that you can't try to stage anything. so in some ways your hands are tied and it's difficult to make advertisements. what you will see is from the maryland senate race in 2006 where we were helping out, now senator ben cardin, and our opponent was michael steele, the now republican chairman. and he had a great series of ads where it was just him and the sort of white studio, talking to people, capturing his personality, very, very well. and he was making some ground. african-american candidate in a state that is driven by the african-american vote. and it was a state that we should win, but he was making some inroads. he had predicted the sort of negative ads that were soon to come, we use that against him. it's one of these dull but effective attacks or affected

ads go unanswered. is another, taking advantage of an opponents mistake that i think in the end the approach he took in his positive ad, as you will see, was a mistake. you will see his positive ad with our little -- [inaudible] >> have you seen these? you will see his ad. then you will see hours. >> it will be two ads. >> hey, me again, michael steele. soon your tv will be jammed with negative ads from the washington crowd. grainy pictures and spooky music sang steelcase puppies. and words. for the record, i love puppies. and i think you deserve better. some real ideas for change. and no last amendment four-port real spending the that's a start because washington can't fix our

problems until we fix there's. i michael steele and this is my message. >> it's nice that michael steele likes puppies, but he's running for united states senate and it's important to know what he stands on the issues. michael steele is a longtime supporter of george bush. he supports the war in iraq. he supported bush's veto of embryonic stem cell research antaeus gives a woman's right to choose. michael steele, he likes puppies but he loves george bush. [laughter] . . of

voters expecting it. maybe we didn't put the footnotes in or have them when we were testing or what they were. people say that doesn't tell me where i can read more about that. it just looks substantive. it deals with that skepticism and cynicism with voters. next is an example of the most powerful ad is the simplest and. the two rules this follows are tell a story and the candidate is not the hero.

you will also your i approve this message. i wish some of these senators say vote for mccain, the part about including i approve this message. it eats up three seconds, 12% of your at is devoted to the disclaimer that voters think is silly. why are you saying you approve the ad you are in. most of the time they're saying it in an ad they are clearly in. unless someone is saying -- holding a gun to their head, easily eliminates the time -- a whole substantive point. we also see that approval statement as an opportunity to make another point. i have done and that are silly and the candidates say believe it or not i approve this message and other times we do what we did in this ad.

>> my name is eric shy. three years ago i was an army sergeant in iraq and i was shot in the head by a sniper. the doctors thought i wouldn't survive but i am still here and i am getting better. i want to thank governor udall for more funding. that means everything. >> i am humbled to approve this message. >> we made at at at the beginning of the campaign and didn't use it until the end. our general election opponent was steve pierce. we were expecting a tighter race than it was and we were saving this for when we thought we would be under assault from a lot of directions included republicans. never really developed that way.

it was a wonderful closing and moving story to tell. he is getting better slowly but surely. it was one of those stories when we ran across it, it was a natural for it to tell. it was concise and he believed every word of that. he was very emotional about the congressman. next campaign not want to show you, mark baggage was running for senate against ted stevens in alaska. i don't know how much you know about senator stevens's illegal troubles? most of you. at the time we aired this commercial he was not yet indicted but it was clearly on the horizon. his home had been raided by the fbi for influence peddling and accepting gifts. there was a whole host of charges likely against him and at the same time of lot of other

scandals going on in state government. alaskans were fed up with politicians in general. this is a good example of not just getting the voters's attention but speaking from the voters's perspective. talking about the frustration that alaskans had with politicians in general and it was a tough position we were in. we could not quickly go after ted stevens. he was a very well-respected longtime legislator. four years in the u.s. senate. attacking him onwas not going t work. we didn't mention him by name until two weeks before the end of the campaign. this was the first ad that had a little bit of a sharp jab

directed at ted stevens. >> don't you wish you could do this? alaska families -- every time a senator meets with special interests it should be public record. they should account for every nickel of their income with no senate pay raise unless they raise the minimum wage at the same time. i will be a senator for the state of alaska who put alaska's families first. >> that was one time you will hear our slogan in a tv ad. he puts alaska families first. it was about 45 degrees that day. the water was about 45 degrees because if you have warm water chemicals would be sprayed out at the same time. in order to get clean water we had to have a water really cold and we had no shortage of people willing to go out and be in the

ad. if you were a democrat you wanted to be in this ad. half of them were using their own clothes. it showed the level of anger among democrats towards ted stevens. the next one is the ultimate example of capturing a candidate's personality. we worked for david wu in oregon who is a great guy. when he first picked me up in 1998 when he was running for the first time he gave me a tour of portland, oregon. that is where i get my coffee and by my newspaper, he was given the guided tour in his suv of why he was running for congress. this add as you see, he is the only candidate who could get away with yelling at the camera. it was an example of an ad where we are talking about education

and overcrowding and one of these issues that is done at nauseam. we want to figure out a new way to talk about a familiar issue. >> i am david wu and i think overcrowding is a serious problem in oregon. we decided to see how many kids could get into a classroom. you never know. the way things are going, this could be the future. if we have 100,000 police across the country we could hire 100,000 more -- when they are in the classroom no one learns anything. you can't even hear yourself think. i am david wu and when i'm in congress i am going to do something about this! >> this is a primary campaign when we were running against linda peters who was on the board of supervisors in the biggest county in the district and was pretty well known and nobody knew who david was. he was a lawyer. we had two ads in the campaign

and there was this one and one where he was driving around and it was before us of these ads. this was in the days when we didn't have 900 points. you see that ad and we remember it. we won an upset in the primary and won a tough general election where we had a little more resources and time to develop an argument. it defied his persona which is not your usual candidate. it worked to his advantage because that is who he is. i never had anyone else who could get away with that. last couple campaigns, new york 20. we were fortunate to win new york 20 special election in the spring and n.y. 23 in november. working for both of those candidates, new york 23 was the one good news they for another crack at election day. this is from scott murphy,

taking advantage of your opponent's mistake. whenever possible we love to have a tracker following the opponent around. we want to record every radio show they are on. we hope for that unscripted moment that the opponent later regrets. this was done in front of news cameras which is a little bit unusual. we had been pressing our opponent, where do you stand on the president's economic stimulus plan? would you have voted for it in congress? was saying that is a hypothetical. i wasn't in congress. for 6 weeks he couldn't answer how he would have voted and kept getting asked about it until finally he made the worst mistake candidate can make which is get angry. here is what happened. >> jim finally told us how species voted on the economic recovery plan.

>> get ready. no. >> on 76,000 jobs for upstate new york and the largest middle class tax cut in american history, $16 billion to help the line on property taxes. scott murphy is a businessman who created jobs. aquino's we need the president's economic recovery. >> i am scott murphy and i approve this message. >> scott had been a venture capitalist and we wanted the campaign to be about jobs. that is how we were talking about the plan. it was in the framework of jobs and we wanted to keep the campaign on our terrain which was jobs. he wanted to keep it on taxes and spending and spending was not -- it didn't have as much traction as it would now. we were able to make all about jobs and show him being belligerent, arrogant, a moment he later regretted. left by my will show you is from

1996, free internet. i want to show this. jerry solomon did lot of traveling at taxpayer expense. it shows the value of opposition research. i was flipping through this book and got to the section on foreign travel and it was about ten pages of every line, different trip he took. well over 100 trips. in all the years he had been in congress. it was magic to see that. we came up with an approach emulating david letterman's person on the street type approach. we didn't win but we did better than a democrat had done against jerry solomon and he did not run the next time because we scared him out of politics. >> i am steve james and i am

running against jerry solomon. we want to see if anyone can read in thirty-second all the trips he has taken at taxpayer expense. >> morocco, grease, italy. >> united kingdom. >> italy. >> he likes to travel. >> macedonia. >> austria. >> columbia. >> that was free internet so we were trying to show that sense of accessibility of the candidate with a phone number. go to my web site and tell me what you think. he really captured him. it helped that steve james was an actor. in addition to being involved in a dairy farm in upstate new york he was an actor so he was comfortable on camera. our job is to make sure every candidate is comfortable on

camera. that is it for the ads. any questions? >> to follow the other candidate, that has proven very useful in many campaigns. how do you go about doing that? i am curious about the logistics. >> you have to be a special person to be willing to put up with it. the thing is you don't try to shoot your windows in. if you are following the opponent around in public settings, you should not be obnoxious. you don't want to create an event. some trackers will do that. they will become nasty to the opponent. ask some questions as they come out of an event. a lot of trekkers get to know the person they are tracking. ted stevens was quite friendly to the person who was trekking

him. he grumbled about it and said washington people are doing typical washington tactics but he was polite to the tracker and the tracker was polite to him. the tracker is always there at public events, not trying to sneak into public fundraisers or anything like that. occasionally video will come out of a fund-raiser and shoot something with a camera phone. >> guns and religion. >> you never know. some of that stuff doesn't come from a tractor. it is more on the record, public access. [inaudible] >> usually that is done within the campaign. we will give tips to how to shoot it, try not to be too shaky. little tips like that to whoever gets that position.

usually -- often times nothing comes of it. most campaigns will issued thousands of hours and there will not be anything there but the occasional nugget does happen. a [inaudible] >> the cost of making the ads? [inaudible] >> there are production costs of making an ad and it is something you need to factor into the budget. we need to see the ads be less than 10% of the actual amount spent on the air but sometimes that is not realistic. if you are in south dakota where you are airing a lot more ads -- it can get up to 15% or 20%. you are spending a million dollars you would like to be under $100,000 of production

costs. a day of shooting, we are union signatories so we only use union crews around the country. we fly in, one person who will bring it in. that kicks the cost down. we are looking at $25,000 for a day of shooting. depending on the equipment you use and the cost of the crew talent. and the cost of making the ads in the editing phase. $6,000 per add to $8,000. it depends on the special effects. then the card being handed from room to room with him talking. video tracking, and more expensive way of making an ad. most consultants make a percentage of the medium, the amount that is allocated for spending on the air. that is how we get paid. the more at you make the more

expensive it gets. we need to factor that into the budget because that is not an insignificant amount. [inaudible] >> it depends. we have a library of stuff we have shot over the years that we can sometimes applied to different campaigns, the agreement is we may shoot some be role for your cam him because you might take advantage of something we shot. we have our own library footage and sometimes we purchase footage from sources -- lot more of that than there used to be. istop thephoto on line is a good source, very inexpensive. there are other sources, sometimes you can't get an image anyplace else. there are a lot of sources that we use. >> in the baggage stevens race,

stevens called baggage french bleach -- they remember that add? it was an internet and. i don't remember there being a response. >> on the internet we don't respond to internet ads. it was over the top the way they tried to portray that. and could get involved in fallacies of the story but it was not something we needed to respond to. he never attacked us and the senatorial campaign committee never attacked as because of the pending indictment -- there was a state of suspension for most of that campaign and we used that time to put mark begich in position of being an acceptable alternative. he had a lot of great ideas. young, vibrant, young family. we are asking people to vote

against somebody they voted for habitually for 40 years. because of that we wanted to get into consideration and be an acceptable alternative. with all the trial stuff going on voters were not moving. people locked into position waiting for the outcome of the trial. there were no attack ads against begich on the air until the end. >> when testing these ads -- [inaudible] >> the pollsters usually do that. that is part of their game, to actually do the testing and do the analysis of the results. we are all watching it. if it is focus groups we are watching through the 1-way glass or looking at the results online if it is online testing. that is part of their domain. somebody else raising their hand? >> what would you say is tougher? creating ads as a rebuttal to

another ad or creating an opening advertisement to set the dialogue? >> that is a good question. i think they are different. they are equally challenging an equally interesting. trying to figure out the positive argument for a candidate and what is going to work creatively as well as substantive, that is the puzzle of any campaign and you have a lot more time to think about that oftentimes -- it is and attack you didn't anticipate which happens often, trying to figure out a response very quickly, have a research team -- is what they are talking about even true? this is a very different skill set. one is crisis response and the other is pure marketing and advertising. they are very different. the early part of the campaign

season you are doing the first of the former and in the last couple months of the campaign you are doing more response. use end up putting a lot more all miters into the latter part of the campaign. >> we come up with some spots -- [inaudible] >> you have to know all you can about the candidate. the web is a great school nowadays. i did an ad once for a candidate who we had jumped off of a bridge. that was a brainstorm that hit me. ed google search and it turned out the privately-owned bungee jumping bridge was an hour from

where the candidate lived. it made sense. it fit the candidate. sometimes it is just an inspiration. the centenarians thing. when i was trying to figure out how to define the oklahoma way, i typed oklahoma to see what popped up. it was the centennial. i didn't know it was the centennial. google held me learned that and that led to the centenarians being in the ad. every person is different in how they do their creative approach. when you have a team i encourage you to brainstorm. oftentimes i sit at the computer on my own to play with words until something comes up. >> i would assume polling and funding would speak to this but are there any outside factors outside of the campaign that affect -- with anything that you

need to be aware of? >> when you go on the air is something every campaign wrestles with. it is best to stick to the game plan of going on when you can stay on for the duration of the campaign. if you have a march primary you are not going to go on and stay through the november election. if it is a march primary you go on -- it is late january. then go dark and start waging a general election campaign. some campaigns toy with this idea of let's spend money to raise money and it never works. you spend too much trying to get on the air. it never pays for itself. i am trying to think of an example. you are seeing senators who have tough votes on the health care reform bill going on the air and explaining why they did it. some people are not running

until 2012. there might be a reason like that to go on the air to deal with the issue of the moment that is troublesome from the candidacy. for the most part you wait and sometimes it is hard to wait. if someone has more money and is on the airline earlier and you're watching them solidify their support and get some of those undecided voters, sometimes you have to wait. or you make a calculated gamble that we are going on two weeks earlier than we thought. we are confident in our plan and we think we will become competitive and we will have better fund raising at the end than we are looking for. worst thing you can do is leave money unspent. the budgeting is the hardest part and figuring out where you are going to be the last two weeks of the campaign, pay all your vendors so if your candidate loses you don't want

them getting sued. as a campaign manager, probably the hardest job is figuring out cash flow but most campaigns have better ending fund raising and they expect. if they are viable they do better than they expect. does that answer the question? anybody else? >> if the olympics mess you up, christmas will mess you up, i am trying to think of some other big things. the summer olympics in 2012, you don't want to be on the air when the summer olympics are on the air because no one will listen to you. they are watching the olympics. if you have a march primary this coming year, you have a problem. it will be hard to get people's attention. you don't feel people up during december because -- there are those kinds of things that you

have to -- big media or cultural events are happening that you have to take into account. rarely are really in a position where we are up in december or august, but you will hit one where i have to advertise in the middle of this huge national or international thing. you do come to a lower point for those few days. you never want to come completely down. that is where it gets really tricky and you want guys like mark thinking about this. there is no right or wrong answer but you don't want 2,000 points of expensive television running during a massive national event where no one is paying attention to your television ads. every now and then you run into something like that but it is not common. is very uncommon. >> mark begich went off the air for about a week during the summer olympics.

a little at the beginning and the end. that was a state where we bought everything we wanted near the end. alaskans in the summer are often outside doing something. we were having to buy more heavily in june and july than we would normally do just because people were not watching television. during the olympics it was ridiculous. we went off the air because it was too expensive and no one was watching our ads. >> that plane crash right before the 2000 election against john ashcroft, he closed the tv down. two week south, lot of people think that was the stupidest thing he could have done and he ended up losing. there are lot of reasons why that happened. it was very controversial. what would you take your ads down two weeks before election day? your opponent just died and you are trying to be generous of

heart and spirit. tough call. very serious tough call. maybe -- i don't know. what would you have done? would you have come all the way down? very strange circumstances. it happened twice. it happened in missouri and minnesota. very strange circumstances. >> we were working in 2000 with gov. bob old and who won election last year. we went off the air. everybody went off the air, political advertising. it seemed unseemly in the wake of this tragic crash. with a tough senate race. definitely had an affect on the gubernatorial race. people were instantly nostalgic for governor carnahan.

gov. holden was the heir to a lot of good things in missouri but he went off the air because we went out the last week of the campaign. anybody else? good luck for those of you -- [applause] [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> we are alive at the national press club in washington for a discussion on long-term care services. we will hear about a provision in the senate health care bill that will create a long-term insurance plan for the elderly and disabled. this is being hosted by the journal health affairs and the scam foundation. the associated press reports this morning on health care. the u.s. spend 680 one thousand

dollars per person on health care in 2008 for a total of $2.3 trillion even though spending slowed because of the recession. this federal study says health spending did not slow as much as the overall economic output. in keeping with the decades-old trend that pushed health care costs for over 16% of the nation's economy. a discussion on long-term health care about to get underway at the national press club. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] >> this is the national press club's discussion of long-term care services about to get underway shortly hosted by the journal health affairs and the s.c.a.n. foundation. a couple live events coming up at 10:00 eastern. c-span looking at the world economy in the coming year with officials from the world bank and other officials law that:00 on c-span. c-span3, officials from business and government and the academic world sharing ideas on energy efficiency and climate control, climate change and smart grid technology coming up at 10:00 on c-span3.

both of those events online. president obama back for his first full day of work after returning from the holiday recess in hawaii. president obama will announce new measures to tighten up airline security after the failed christmas day attack on a u.s. jet liner. the associated press writes the president has killed a high-ranking white house meeting with 20 government officials who will carry out reviews following the attack. the secretary of state, defense secretary robert gates, homeland security secretary janet napolitano and the fbi director. after the session the president will address the public. the white house says he will offer new steps to thwart future terrorist attacks and improve watch lists. we will get that story as we get more information. live coverage at the national press club on c-span2.

>> test, test, test, one, 2, 3 people test. test. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> here at the national press club the journal health affairs and the s.c.a.n. foundation are putting on a discussion of long-term health care services. they will hear about a provision

in the senate health care bill that would create a new long-term insurance program for the elderly and disabled on the class act. expect the discussion to get underway shortly. several panels this morning and our coverage continuing on c-span2 crew 12:thirty-second day. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> we are here for a form of long-term care services. the group would hear about a provision in the senate health care bill creating a new long-term insurance program for the elderly and disabled. this is being hosted by the journal health affairs and the

s.c.a.n. foundation. >> may i ask you all to take your seats and we will get started shortly. [inaudible conversations] >> it sounds like they will get underway shortly. we will stay here live for coverage. some other live coverage coming up at noon eastern on c-span. the social safety net, how it is affected by the recession. the associated press reports americans are less satisfied the brutal more unhappy about their jobs. only 45% of americans are satisfied with their work. live coverage of that social safety net discussion today at noon on c-span.

[inaudible conversations] >> good morning. welcome to this health affairs briefing on our new january 2010 issue advancing long-term services and support. this is a very special day for us at health affairs. we are very excited about this issue which is the first full issue of the journal that has ever been devoted to this particular topic of long-term service and support. we are extremely grateful to the s.c.a.n. foundation which provided us with the funding to execute it. even though this issue was planned in the summer of 2008 it

could hardly be better timed. we stand on the verge of not acting probably major health care reform legislation but historic long-term care legislation as well. as many of you are very well aware key provisions in the house and senate versions of health reform pertain to this area of long-term service and support, the largest one being the provisions of the community living assisted services act or class act. we will be hearing from one of the key people who made sure that the class act was part of health-care reform, connie garner. there are other provisions that pertain to long-term supports and services and we will hear about those today and the fact that this is the case, that held reform will include two -- long-term care reform, is an achievement not to be

understated. as our issue suggests, there is a lot of reform less to do and there will be even if the class act and other provisions are enacted. whether the goal is advancing the quality of care of long-term service and support or providing the most appropriate type of care in the most appropriate setting, or providing the most appropriate care for those nearing the end of life or recruiting and paying a work force or working out the cost of this, there will be a lot of work to be done. papers in this issue tackle all of these subjects and lay out an agenda for those in the long-term care sector as well as those in government how best to proceed. as i say for obvious reasons we

are excited about this and today marks the debut of the new redesigned health affairs. we have this new redesign and format for the physical edition of the journal and also rolling out today the early prototype of our redesigned web site which will be unfolding in its greater glory later this year. we also convert from bimonthly to monthly publication of the hard copy of the journal. there are plenty of health policies to publish over the course of the year. we have a new logo as you see and we have a new motto. we are at the intersection of health care. we think you will find it much more readable, more visually

interesting and more user-friendly than ever before. at the same time as it maintains the core of the old health affairs, peer reviewed, analytical, serious thought on all spectrums of health policy. none of this would have happened without many hours of loving care and a fair amount of sweat and tears. i want to introduce and say thank you to the health affairs staff who are here it today, all of whom worked hard to execute the new journal. please stand up and take a ball. [applause] i also want to thank donna abraham who was the lead editor in the thematic issue on

long-term services and supports. thank you very much. [applause] i want to thank mary naylor who will be speaking later today for serving as our outside adviser. thank you. [applause] and i want to thank larry wheeler who helped to engineer the publication of this issue, without whom we would not be here. thank you very much. [applause] finally, i want to thank the s.c.a.n. foundation for making the issue possible. we are going to introduce the ceo of that foundation the digital dr. bruce turn chernoff california where the s.c.a.n. foundation is headquartered and the foundation's mission is to

advance sustainable continue of tears. s.c.a.n. is the second largest foundation in the u.s. focused entirely on improving the quality of health for seniors. before heading s.c.a.n. dr. c r chernooff was chief medical officer for the department of health services after it serving as senior medical director for clinical affairs. earlier he served as the regional medical director for california health programs, the largest network model managed-care plan. previous to that he worked as an academic general interest in the v.a. system and the ucla medical center. he is an adjunct professor of medicine at ucla and served as founding director of ucla's five year program. please join me in welcoming dr. bruce chernoff. [applause]

>> good morning. it is a pleasure to be here. let me say we are thrilled to see this issue arrive today, thrilled to see all of you today. this is an important moment, a defining moment in how we think about health care and the care of seniors. i want to begin by thanking susan, her entire team for bringing this issue to fruition. when we had this idea, little more than a year ago, we said we have this nutty idea. we think you should do a theme issue, this is not an issue you covered in the long time in a robust way. from the first conversation susan and the team said this is a great topic. it is time, something we could

give more attention to and we are here today to really celebrate bringing together the leadership that put together this issue. i want to thank the authors and the folks who helped from an editorial perspective. many of the authors are here today. you all have done a terrific job. many of you have worked on these topics for many years. we are thrilled to see health affairs create an opportunity to bring together your thinking in a comprehensive way. now is the time. it is really important. we think the product of all of your work individually and as a whole is unbelievable. i read the whole turtle over jo the holidays and was thrilled.

if you look at the things contained in the house and senate version of health care reform, this is not just a bill about standard health care reform. if you think about where we started out it will be about coverage or access, that is the discussion that is going on here today in washington but if you look at the bill carefully the foundation of long-term service and support is in this bill. when you look at things like creating an office or a center for innovation, if you look at the proposals around care coordination, the ideas around improving community-based services at the state level, stalls impoverishment protection. takenpouse impoverishment protection. taken as a whole isn't everything but long-term service

and support starts with health-care reform. creating more person centric care, creating quality of life agenda, not just quality of health agenda. the tough decisions like bending the cost curve is for those chronically ill who use the system. it is for those most in need of those opportunities. we think that today's issue and the comments that will be made by at doctors today lead that discussion. we are proud to be here to continue the discussion. thank you very much. [applause] >> as bruce mentioned several authors are with us today who will not be presenting because we figured we could not have a news briefing that was three or four day is long and include all of the authors in this issue but i want to thank don taylor of duke.

ed diane taylor and diane 9tel. we are happy to have them with us today. sometimes we talk from the national perspective. we want to be conscious that this is a local issue in every community across the country. we are happy to have this morning from the d.c. city council david katanya who heads the committee on health care for the council. he is a member of various other council committees including government operations and the environment. we asked him to come today particularly because he has led

d.c.'s efforts to make enormous and often unsung inroads into the insurance problem in washington d.c. but also particularly has begun to take on the long-term services and supports issue, deeply important to washingtonians who, despite their lack of national voting rights, are as much citizens of the country as anybody else and deeply affected by these issues. let me welcome to the podium to make some remarks from a local perspective, councilman catania. thank you very much. [applause] >> good morning. thank you for that introduction and for giving me a few seconds to day. an issue that is incredibly important to the district of columbia, 19 skilled nursing facilities here, twice as many deficiencies as the national average including three of our homes which are ranked among the worst in the country.

this has been an area that has long been ignored and i authored the health care facilities improvement act to address not only quality of care -- it is not enough. how do you measure quality and find efficiencies within a system that has a high-quality? a few components we are working on is the first in the country, requirement for physicians services on the premises. cost shifting by our skilled nursing facilities on to our cute care facilities, with a lack of health care facilities on site, we have found the first thing our skilled nursing facilities do is dial 911. twenty% if you live in the district, 20% of our e m s calls in the city are to our 19 skilled nursing facilities. they average more than one today. some of our facilities more than two a day. a few of the reforms we are

seeking require physician presence of 40 hours per week at each of our facilities. we are looking at increasing the nurse staffing ratio from our current 3.5 to 4.1. we require expanded services that include everything from podiatry to dialysis to rehabilitative services. there will be enhanced discharge planning on the involuntary side and importantly on the voluntary side. we are making a huge investment in community-based care. in the last four years we tripled the number of placements that our elderly and persons with disabilities waiver. we invest more heavily than any jurisdiction in the country in home and community-based care. we have to make sure we connect hour adult and disability resource center with patients in nursing homes. we have seen people check in and they don't check out without

aggressive front end middle and that end discharge planning. among other things we are requiring within 72 hours of that mission a comprehensive health analysis. there will be discharge planning underway to make sure the patient needs to be there. if the patient does not need to be there we will be connecting them with our home or community based system. among other things that we're looking at as being very pro-active in making sure our nursing homes have no way out. if you are in the long term care business we pay you a hefty wage to take care of our residents. it is no longer going to be standard operating procedure. it is a privilege. we are strengthening our restricted licenses for deficiencies and also strengthening our petition for receivership so we can actually assume control if we are not