>> but i do think while we are facing these challenges there are incredible opportunities for us to go look at what the core missions of government were and redefine our states again. thank you. >> there's nothing worse to a strong and robust economy is a big and corrupt government. and in new mexico they grew core government by 54%. handing out exempt positions to those who were donors and friends. we had a republican governor and his positions were approximately 180. this current administration grew to almost 600 exempt positions. many of them over $100,000 salaries. some of them that didn't have jobs to go to. one was a director of a museum that didn't even exist.

and then turning around in recent months -- [inaudible] >> and hiding exempt folks and placing them into classified positions. growing government beyond what anyone would expect under the current economy and we have a big and corrupt government. and what has happened to the state of new mexico it has become extremely unpredictable and i have proposed to our state -- i have proposed to those to the citizens of new mexico that we will cut back on those exempt positions back down closer to the number of 180 which will save us $10 million. i have also proposed with five % attrition rate of state employees -- because it grew actually by 5,400 state employees in just eight years. and if we reduce that force by the 3,000 vacancies that exist today that are partially funded and by the attrition rate of 5% we can save up to $40 million.

and if we started funding and paying the universities for credits that students receive receive because they enrolled and wait until they complete the course we can save another $52 million and that's just from looking from the outside in because this administration is not forthcoming not with the legislature but with the transition team and so it becomes challenging for us to know precisely what the numbers look like. but from the outside looking in, we're at $100 million. and the week after the election, the deficit went from $252 million to $452 million in just a week's time. so it is the projection that growth will be at a 6% rate that has allowed the current administration not to make cuts, not to make the tough decisions but to continue to grow because there's this expectation that is unrealistic that we're going to have a 6% growth and no one

believes that. and so we're going to make those tough decisions but i think we can find that waste and fraud. any government that grew by 54% obviously is not in touch with the population growth and inflation and therefore there is waste within state government and to make it more predictable it will root out the ability for us to be competitive with our neighbors and bring the revenue and jobs that are necessary for us to grow the economy. and i am committed not to raising taxes. that is not the way we get out of the necessary that we found ourselves in. we have to make sure that we change the culture that is being experienced in new mexico. that's the way we do business because it is not the way we do business. we intend to have a reputable government and what is in new mexico stays in new mexico because we have great jobs to offer them.

>> i want to echo two points that have already been made and that's what happens when you're at the end. number one, what governor haley said and that is the unfunded mandates that are coming down from washington. that come down to the states and oftentimes the states then pass down to the county or to the local governments. and if you're from pennsylvania and ohio we have many local governments on top of what we have at the county level that we pass much of it along. and we do to them what the federal government is doing to us. we have to get that under control. that's a great deal of spending that nobody tops pay attention to at the federal level or if we're passing it from the state to the county or to that level. they just go ahead and do it and they don't think about it. but somebody is going to pay for it. the complaint i heard throughout the government is you and government cost too much.

you and government make me pay too much in taxes. they don't differentiate. they can't differentiate where they are paying the taxes, too. whether it's the federal government, the state government, the county government and the local government and the state government. that's a tremendous problem in pennsylvania and probably in many states that we have to get that kind of spending based upon -- nikki, you also be all things to all people, and i add at all times and there's no way we're ever going to get control of this spending and, therefore, we're never going to control these budgets. because of the economic challenges that we have right now, we have probably the greatest opportunity since the '80s to get this under control and say we have to stop acting this way. we have to be responsible for anything that we send down to the next level of government. we have to make sure that they have the ability to function. and, therefore, are we going to pay for this at the level, at

the federal level or the state level? i think that's number one. and number two is, i agree with john and not just cutting with the sake of cutting. 5% across-the-board. you have to be smart about your cutting. i prioritize. i tell everybody coming from my prosecutorial background the number one role of all government -- i don't care which level it is, it's public safety. you have to make sure people are safe in the streets and in their workplaces and their schools and their homes. i know we remind the federal government the same thing happens on the federal level but we have to be safe from foreign nations that would do us harm. we will get that under control. but then we take a look at where we're spending money -- education is important but how are we spending it there? if it's not making it to the classroom, more money is not going to give you more education or better education. so we have to be much more responsible and assess how that spending is going on.

i take a look at pennsylvania. the average class of a classroom is $244,000. in philadelphia, the average cost of a classroom is 400,000. yet we have a dropout rate which is 50% and across pennsylvania we have 30,000 students drop out every year. that's unacceptable to me. so we have to be smarter. and one of the things that i campaigned on is taking -- you can't do it to all government all at one time. but taking certain agencies and start off with what i call -- and i think, john, you're familiar with this zero-based budgeting. why does this agency exist for? what is it purpose? and what do you really need? not our budget was x last year, inflation has caused it to be x. we would like to add a couple more. it's not going to be won't easiest thing and i hope

convince my legislator to that but i hope we can do that at the federal level also. >> i'll customize the questions to one panelist and we'll go through a couple quickly and then we'll open it up to other governors. governor elect sandevol we will not be a successful nation if one-third of our children are dropping out of school, they are uneducated, unskilled and unable to access the economy of today and tomorrow. that's a formula that's not going to work particularly if they're not only economically detached but they become wards of the state or become frustrated in other ways. and so what we have to make sure strategically that we're educating at the highest level possible as many people as possible. you were very bold in your campaign as it relates to education reform and holding schools accountable. why don't you share with the audience your vision for improving education? >> thank you, governor. and as i mentioned in my previous remarks i made a

commitment during the first part of the campaign to visit 100 businesses. i also visited 100 schools within the state of nevada. i visited elementary schools, middle schools, high schools, charter schools, private schools because i wanted to go into those classrooms myself and see what was going on and talk to principals, talk to teachers, talk to parents. now, i did come out with a very bold education plan. i had the benefit of working with former governor bush from the state of florida. one of the hallmarks of my education plan was choice in education. something that has never happened in the state of nevada. i believe that every parent, every child should have the ability to choose the school where they want to attend. you mentioned accountability. i think it's very, very important that schools be accountable to the parents throughout the great state of nevada. that a parent should know how that school is performing and good it's not performing, that there will be a change with regard to administration. another thing in the state of

nevada is that we have is teacher tenure. and in the great state of nevada you can get tenure after one year. i knew that would draw a gasp. so i think that is an issue that has to be taken head on and that's something that i talked about during the course of my campaign. and at the same time when i talk about all these things i think there should be merit pay for teachers. i think that we should reward the great teachers. they should be the ones that are given the benefit showing those increases in test scores and as i mentioned, you know, i talked about the fact that nevada, you know -- i heard these education statistics from the other states that we are not performing up to par when it comes to graduation rates for our students. so that is one of the commitments that i made during the course of my campaign is to improve systematically the delivery of education in our state so that we start to move those numbers up, that we provide children several different paths. not every child is meant to go to college.

they should have a career path and an opportunity in that regard so i'm going to be a strong champion of the charter schools and career and technical schools. those are all thing that are going to change the dynamic in the state of nevada so that i won't be talking about the statistics in two years or talk about the fact that we improved graduation rates and we improved every measure of education in the great state. thank you. >> in the future we see states increasingly addressing at the state level the immigration level. and, of course, we saw that with the actions and the debate in arizona recently. governor elect martinez is from a border state in new mexico and has a deep familiarity with these issues, spoke very clearly and strongly about these issues during her campaign. governor elect, your views on how the republican party, republican governors can best address the immigration issue going forward? >> i live in a county which is a county -- the second largest county in the state of new mexico and we border mexico.

actually we border juarez mexico, which is the murder capital of the world. and it has been the responsibility of our local law enforcement partnering with the federal government or the border patrol and ice to make sure that we're keeping that violence on the other side of the border and not allowing it to come across, however, it does. we are experiencing higher numbers of trafficking in narcotics, trafficking in humans. actually, we have a law in the state of mexico that was passed by the current administration that allows for the issuance of driver's licenses to illegal immigrants. and it is a driver's license that does not look any different from the one that i carry. and, therefore, they are able to travel the country without detection. and also under an executive order the current administration there is an executive order that provides sanctuary which means that when an individual is arrested and placed in a jail by the state police, they're not able to determine whether or not that individual is in this country legally or not.

and so what happens is that person bonds out and they are in the wind and you can't find them in order to hold them accountable for the criminal activity. and we do business very differently. i've been a prosecutor since 1986 and been elected district attorney since 1996 and law enforcement made sure that we place people in jail regardless of the color of their skin. i think what's important in our message when we traveled our state was, it is not about the mexican population. it is merely about the mexican border which has been weak. and it is weakened because people will be coming across that border because it is easier to do so but they are coming from across that border from all over the world. we have arrested individuals in very recent history in the last six months from jamaica, china, from poland because they are coming to new mexico because it is anna attractive state where they can get a legal id that allows them to travel the

country without detection. and they are also provided sanctuary. in our state we find out who you are we arrest, punish, whatever it may be and you ended up being deported because you have now proven yourself to be unsafe to be in our country. and in new mexico, 45% of the population -- is that me? 45% of the population in the state of new mexico is hispanic. but it is amazing at how well the message is received that we have to secure our borders. that we cannot have comprehensive immigration reform without first securing the border. and we have done many things in our state. [applause] >> we have done many things in our state to try to do so from a fence in some places to barriers to prevent vehicles from crossing with loads of narcotics. and keep in mind, the arrests are of people from all over the world and some of them are here

to cause us direct harm. and so we understand from a law enforcement point of view. and we understand it is important that we secure that border from -- from texas, arizona and california to make sure we do that first before we take the second step and demand that the federal government do what they are supposed to do and make sure we have good positive immigration reform. >> america's competitiveness depends things going forward including access to forwardable and competitive-priced energy and a lot of the debate as recently as five years ago has changed dramatically in part because of massive new fines and availability of natural gas in north america and within the territorial jurisdiction of the united states. it is a game-changer. many experts now believe we have enough natural gas to supply the entire base load energy for the country for hundred if not hundreds plural of years to come.

and pennsylvania is one of those states that has one of those large deposits. tom, talk to us about what kind of policies the federal government needs to enact or that the states can enact to unlock that massive really game-changing transformative potential of the natural gas deposits? >> the potential for this country and for a state like pennsylvania, particularly, with the fine we call the shale in pennsylvania. it's difficult to get your head around, depending on who you talk to. i look at it from a number of different perspectives. one, it's going to mean and it's already meant 80,000 jobs to pennsylvania in this economy in the last four years. it's going to mean hundreds of thousands of jobs both direct and indirect. and building the gas supply, building the delivery system. but also building markets that we're going to be able to go use clear technology.

in addition to the technology and the resources that we already have in pennsylvania with our coal and clean coal technology, it has made pennsylvania literally the second largest energy field in the world in my opinion if you add all the different types of energy. what that allows the united states to do, if we develop it properly and safely and protect the environment while we're developing it, is to make ourselves an independent of the mideast over the course of the next 30 years as we take that technology and future into use with clean-burning fuel in various areas including developing vehicles -- in a vehicle fleet in pennsylvania, helping michigan. hopefully i would like michigan to come down to pennsylvania and get some of the trucks built down there that are gas-burning trucks. and a whole new market that is going to be distributed across not only the country but we will become a net exporter.

we have to start looking at energy in this country. and we do in certain parts of the country. we're going to do it in the northeast now as really a commodity that we can be exporting. but we have to develop it properly and safely. to me one of the best things that's going to happen to pennsylvania is this is an industry that is in its very beginning. and i always compare it and i know john remembers what it used to be like growing up in western pennsylvania when the steel mills were operating. this is the beginning of the steel industry. it's just a new industry. and what it's going to mean for the hundreds of thousands of jobs in pennsylvanians. but we have to develop it properly and safely and keep the environment in mind. that is going to be something that pennsylvanians and americans across-the-board are going to be able to rely on that kind of energy. and we have it in texas and arkansas and louisiana. we as americans have to get a better control on our energy policy and we know we've been talking about having an energy

policy for the united states and it's now 20 almost '11 and we still don't have one and i told everybody that we're going to develop one for pennsylvania. >> let's just ask john kasich, if you could tell one thing they have to butt out, get out of your life in ohio, what would that one thing be if you were a dictator and you could say -- >> how about two things. how about medicaid -- >> i can't get him to cooperate on anything. >> how about medicaid and job training. let us have our money and let us fix our own problems. let our people go. [laughter] >> nikki haley, with your entrepreneurial background, your family small business background, of course, most of the job growth in the country is going to come from those early stage entrepreneurial startup stage, small and medium size businesses if you could highlight things that would be impactful for starting new ventures in your state encouraging them, what would

that be? >> i think we have to create a small business environment and the way to do that in every state is to understand that when you give businesses cash flow, when you give them profit margins, what's the first thing they do? they hire people. so it all comes down to tort reform. it comes to workers' compensation reform, it's tax reform. it's understanding that when you give them profits they will hire people and so the smaller you can make government, the more you can create jobs. the more you can improve economic development and the more you can strengthen our small businesses. >> let's ask our other governors, governors elect to join the discussion and, unfortunately, we're having microphone issues and so we don't have a floating microphone as you can tell in the panel. if there's other governors who would have comments to these or other interests to you. rick, are you awake? [laughter] >> stay with us, man. stay with us. linda, you look like you have something on your mind. jump in.

>> i'm not sure why you're picking on me, tim. let me just take this as an opportunity to thank everyone who's here today. and to i'm sure state what everyone is thinking right now, what an impressive group you are. just a phenomenal caliber of people. [applause] >> i think for the first time in perhaps our memory the focus is going to be on the nation's governors as opposed to it off washington, d.c., as you have a split government there and in many of your states you're going to have the opportunity to get these issues dealt with and get your solutions implemented more quickly than they would be at the federal level. maybe i would pose the question to you, what is going to be the biggest challenge to each of you in getting these commonsense solutions implemented right

away? what are you going to face? what's your biggest obstacle going to be? >> that's great. i think your microphone is maybe working again so i'll try it without passing the microphone. the biggest barrier to whatever the reforms are, changes you would like to enact, the biggest barriers? >> i think it's getting the mindset of many in the media that we can actually do this. because i know the question they asked me, well, how are you going to be able to do this? nobody has been able to do it in the past? and i think they have to understand -- and we have to understand as the new governors -- we do now have a mandate from the people of pennsylvania and people of the united states or direction, they want this done and we have to follow up with it. it's going to be building -- kenz building and coalitions with the legislature to make these changes. and i think one of you said earlier today, we can't blink. and i agree with that. we can't blink. we have to do it. >> the media, other barriers or

hurdles? >> i think i'll just say that what we are going to face is very tough budgets. i think we have to be honest with the people of our state. we need to say this is going to hurt. we're going to struggle. but we have to make sure that we don't make political decisions the first year. we make the right decisions. and if we do that, we will come out of this challenge in year two and three stronger and more competitive than when we started. but i think we need to first be honest with ourselves that we are headed into a terrible budget year. i think we have to be honest with the people and let them know what we're going into but see the opportunity that when we define the role of government again we will actually bring this country to the way it's supposed to be. >> i think the biggest challenge is to get everybody to kind of reflect on the chilean miners, you know, they were down there in the mine, you know, who's going to get the last gasp of air. if we all plug together, and have a good strong team, tim, nothing should get in the way.

it's not a time to do that in my state or any in our country. it's incumbent on us to raise the bar and get other people to join. if that happens, i have no doubt we're going to be successful. >> let me ask luew luis in puer rico who took over puerto rico with a lot of challenge. the political challenge at least in recent years was the other way. he came in as a reform-minded governor and leader. he's been able to enact significant changes in the face of a lot of opposition, both current and past. luis, give us a couple of lessons learned that these governors might benefit from your experience in puerto rico. >> thank you, tim. again, i congratulate everyone here for a tremendous success this november. i must say indeed we're going to be facing tremendous challenges and i know the governors elect is well.

from my own experience what i can tell you what you're going to do is do it quickly. communicate it immediately with all the stake and everyone understands where you're coming from and why. go as far as you need to go year 1. don't space it out into a four-year term. and then once you are, because many of you have tremendous budget gaps, immediately reduce taxes and that will bring business to your state. that's my own experience. the countries looking for leadership. so i'm sure you will lead and that's why we need to hear from you. >> thank you. i appreciate it. dave heineman, i see you lonely in the corner of yourself. you've got the other continuum, a state where you have done extremely well with a lot of momentum with your perspective and leadership in mind.

you've got a lot of experience under your belt but a lot of vision going forward. give us some lessons learned and what you see going forward for the state of nebraska that these new governors might benefit from? >> well, i'd share a little bit of what you just heard from luis. you've got to communicate what you believe in frequently, often and until people start coming back to you and say, hey, i'm tired of hearing that speech. i think we all know that. we've been out on the campaign trail but it is really true in that regard. secondly, when i took over state spending was averaging about 7% a year. we slowed it to 4%. allowed us to pass the largest tax relief package in the history of the state. when i started as governor, we were in the top 10 in someplace we didn't want to be. top 10 highest tax states. tax foundation ranking. i think we were 45th out of 50. we're now down out of 29. we're not done yet. you can make a difference. the one thing i'd share with you and i think we all have learned as governors, when you stand up

and lead, your state will follow. and if you can set those markers out there, you can really challenge your legislature. now, the other challenge for me is, in spite of the fact of how important taxes and spending are, what counts most in our states is when the university of nebraska wins a football game. and so i want to thank rick perry in advance in making sure we're going to beat texas a & m this year. it's important we win this game next year we're going to join the big 10 and i'm sure tom, john will allow nebraska to come in and allow us to win those first games. and so when you do that, nebraska will continue to grow and i want to thank you in advance for that. [laughter] >> let me ask our governors who just came through the campaign, they're fresh off the trail. had in most cases a very competitive experience with the exception of sandevol which was essentially coordinated.

what surprised you in the campaign you wished you would have known earlier or you now know that will serve you going forward that perhaps you didn't fully appreciate when you first got into it? brian, maybe i'll just throw it out to you to start. >> probably the biggest surprise of it was the intensity of it from moment one. when i jumped in the race, i announced my resignation from the federal bench. a month later, i stepped down. i did a sentencing at 3:00 pm. alt 5:00 pm there was a reporter on my doorstep ready to ask me questions and interview me. and the next day had several interviews and meeting with different groups that you have to be on at every moment. you know, i learned about trackers. i never knew about trackers before. [laughter] >> and so again just making sure that you're on your game every moment. the importance of getting out in the community. and i hate being to redundant but going to those businesses and schools and learning of things firsthand so that you

have your finger on the pulse of your state. that you realize the degree of how people are hurting and how when you say something, you say you're going to do and now i'm going to do what i said i would do. and i made statements in my campaign and i put together my team and transition and i'm interviewing each of the respective persons that are the heads of my respective divisions within state government so i hit the ground running. as i said, there was never a day when there wasn't something going on and working and i think that was good boot camp for when you're the governor. because starting january 3rd, it's going to be the same way. >> nikki, a surprise along the way for you that you learned from that you can share with the others. >> ignorance is bliss and god says sometimes you just don't need to know and you just go for it. and i think there's good there's certain things that you don't know when you run for governor but certainly the biggest surprise was watching people

find the power of their voice. understanding that when you let people know that you were working for them. and when you were fighting for them. the fact that they are getting involved. sometimes for the first time and have never voted in an election and we're seeing this ground-swell across the country is an amazing thing to watch and it's an amazing that i think is going to grow and everybody wants to analyze the tea parties and i have to say, one, i'm a huge fan of the tea parties because it's not a party at all. it's republicans, democrats and independents who said we've had enough and we're taking our states back and party back and let everybody just hear us and that was an inspirational message of people and such a motivation for all the governors of this country. >> a couple minutes left and we'll go to our panel. i want to come on the health care questions and -- but let's go to my friend from south dakota who couldn't hit a pheasant with a shotgun at close range. [laughter] >> thanks, tim.

although, i've been hunting lately, have i? i was thinking about as we met a great group of new governors coming in and i think our country is in very good hands. and i was also thinking of the fact that there's a reality that we sometimes walk away from. in south dakota, and we're one of the smaller states in terms of our total overall budget. but if you look at the general fund which is the part that the legislative branch which has the opportunity to impact, about 49 cents of every dollar in our state goes into education, whether it would be k-12 or higher education. 35 cents goes into taking care of people, either matching federal medicaid, people that are in the state hospital and so forth. it leaves you with 11 cents for all your corrections, your courts, protecting the public. if you add it all up you have 5 cents left out of every general fund dollar that actually goes into what most of us like to beat up on which is the bureaucracy and the operation in our case eight departments, four

bureaus, our economic development efforts. and, you know, at the same time, if you look at that amount in south dakota, the amount that goes into that bureaucracy is $58 million per year. this year, our federal medical matching rate, and our medicare program in our state -- because of our income averaged out effort last two years compared to everyone else's was up to number 3 in the nation. that means we get to put in another 483 bases points of matching funds. our fmap increase would be $37 million more than this year than last year. compared that with the operation of the bureaucracy of government, everything in about 57, 58 million it starts to bring in the reality the federal government their policies and their mandates are clearly going to be a player in how all of us are going to be able to fix our budgets long term. the reason why i bring it up and the reason why i think it's important to talk about it today is there has to be a commitment among the governors that are

here in the future. that they have to be actively involved in sharing policy and what the impacts are at the federal level and what it does to people. and i don't think you can walk away from it. i think as much as governing and the fact at the local level you get in and you roll up your sleeves and so forth but i don't think these governors with their responsibility telling it like it is in the federal government and getting on the policy side because if you don't, nobody else will. and i think we truly need this new group of governors to step forward and play an active role at the federal level. >> well said, mike. thank you. this will be the next question. rick scott is the new governor of the state of florida. he's probably one of the foremost policy leaders and experienced hands in the health care debate and legged a major country. rick, if you look at state budgets, of course, you see in places like minnesota and k-12

education, higher education, health and human services you got about three-fourths of the budget, k-12 have their own stories but in health and human services is not close to health and human services. we've got to find a way to slow down health care costs at the local level, state level, federal level. give us 60 seconds worth of the best ways to contain health care costs from your perspective. >> most of the problems of health care costs by government, there's reason health care should cost what it costs. so i agree with the governor we have to be very active and make sure all the -- all the federal policy we're involved in, we've got to make sure everyone knows exactly how it's going to impact our citizens, our state budgets. it's going to bankrupt us. it's going to be a obama-care will be the biggest job killer ever in the history of this country. we have got to do everything we can to stop the implementation of it. we've got to repeal it. but the way to do it is educate everybody in our states and everybody nationwide with the problems and then do everything

we can to get government outlet of our health care decisions but the more we have government involvement and that's what's causing most of our health care inflation. >> this panel is just a representative sample of the quality and depth and experience and the character and the integrity of this great crop of republican governors. i think like i said at the onset a transformative moment in the history of the country when the country starts to get back on track mostly because of the leadership of these fine men and women. you've heard of five of them today and a few of them on the panel and there's some others you haven't heard from yet but i hope you'll take the time to get to know them in the coming days. i think you'll hear the work of the rga reflected not in their capabilities and leadership that they will bring forward in the four to eight years. again, thank you very much for coming to this session, for attending the rga, annual meeting. we hope that you'll continue to say engaged over these next few days and now our emcee is going to give us instructions and directions on the next event. [applause]

>> more now from the republican governors association. coming up we'll hear from former house speaker newt gingrich. he's joined by ceos including casino and real estate developer steve wynn. this is about an hour and 10 minutes. we are ready to start plenary session number 3, saving america. and we welcome back up to the speaker's chair, governor haley barber. -- barbour. >> i'm just up here to introduce our moderator who will then take over this panel. john fund and i have been

friends since 1982 and, of course, a lot of y'all have read his work in the "wall street journal" and his books and other things. and we just thought he would be a great, great moderator for this truly outstanding panel of real leaders in the united states and the world, from politics and business, ideas and actually getting things done. when i was elected governor between the election and the inauguration, we had a jobs creation summit. we have 700 business people, educators, legislators, in jackson. we spent all day, what the best things we could do for job creation in mississippi. the keynote speaker was fred smith. and i will never forget his

saying what we really need in government is a department of doing things. i can't remember how you -- how you put it. but we need somebody to actually do the real work rather than just talking about it. and i would commend that to you. i'd also commend the idea of having job creation summit if you can. we came out with a consensus -- there were three things that we needed to do. not raise taxes, improve work force development and job training and have tort reform. and so that gave us is good kick off, but i'll always be grateful to fred for being part of that. i'm going to get off stage and john fund, you're in charge. >> thanks, haley. this last midterm election featured a lot of voters who were worried about the future of the american dream. they were afraid it was slipping away from them, their children and their grandchildren. when people are worried about

the future, they often react incompletely different ways than they used to. look at some of the voting patterns that we've seen. women for the first time since modern exit polling voted a plurality for a congressional republican candidates. evangelicals voted even higher numbers than normal for republican candidates, 76% but at the same time, 31% of gay americans voted republican for congress. and in quite a bit of surprise, 31% of the hispanics who now serve in the u.s. congress are hispanic. republicans. and we also have the first two african-american republican house members in over a decade. one of the reasons this has happened because many are concerned. the white working class which represents over 40% of typical electorate voted for republican congressional candidates by 29

points. and they have disproportionately beared the brunt of these hard economic times. one of the things that we're going to talk about is the future of america, why people are so worried about the future of the america and some of the ideas that can be brought to bear to solve that. our first speaker is newt gingrich. i have known newt since the first year that i knew haley barbour in 1982. i remember the first time i met newt. he had at least 12 or 13 ideas to present to me. and i haven't even caught up with all of those and since then he has been a prolific author in recent years, a consultant to many major corporations and become an expert on health care. and, newt, i know you have ideas and throw out a few and let's hope the rest of us can keep up with it. [inaudible] >> whatever you wish. >> thank you, john.

and i want to start by recognizing haley and nick ayers because the republican association has followed a plan which really goes back a number of years to the professionalization and the development of this organization and it really worked. i also want to thank governor perry agreeing to come back and serving again as chairman because i think the next two years are going to be very, very important. and i want to congratulate each of the new governors for earning the right to lead your state in a time of profound transformational change. the great victories of 2009 and 2010 are only the beginning. the elections of 2011 and 2012 must create a republican majority large enough and durable enough to replace the increasingly leftist political system which has dominated america since 1932. last year in virginia, new jersey and this year across the

country, the american people rejected the left by decisive margins. however, the american people have rejected the left before. in 1972, the left was decisively repudiated. the left carried as many states for president as herbert hoover in 1932. in 1984, the left carried only one state for president. in 1994, the left was rejected as republicans won control of the house for the first time in 40 years. but rejection proved to be an inadequate remedy for bureaucracy sis, judgeships, academics. the left continue to grow the institutions it dominates. the left grew more radical and more demanding. even as the american people rejected it in the electoral arena. the challenge for us is to turn rejection of the left into replacement of the left. the challenge for us is to have a republican party of jobs and

paychecks, replace the democratic party of bureaucracy and food stamps. the first great laboratory for replacing the left will not be in washington. it will be in the states. washington is trapped in obsolete policies, regulations and ideologies. however, in your states, you will have an opportunity to provide creative leadership and organize innovative creative citizens in new models of solutions appropriate to the age of the iphone, ipad, youtube, facebook, twitter, google, and text messaging. we can regain full employment, have the best jobs in the world, compete successfully with india and china and protect ourselves from those who would destroy our civilization. to do so, we need dramatically new policies and institutions. america stands on the edge of an era of amazing prosperity,

health, clean energy, enhanced environmental protection and increased safety from both attacks and drugs. furthermore, this new era of achievement should include an extraordinary improvement in the lives and prospects of the poorest americans. the explosion of scientific and technological knowledge will be historic with at least four to seven times more new knowledge in the next 25 years than in the last 25. cancer cease be a cause of death. alzheimer's should be preventible and treatable. a new model of public health based on the cell phone and mass marketing will lead to breakthroughs, wellness, prevention and chronic disease management. new models of life time learning that are electronic, 24/7 and demand focus will enable everybody american to participate fully in a more productive and more profitable life. the list of possibilities is enormous. but the problem of washington

center centered bureaucratic government is crippling our future. there is no question that the future will be better. there is some question whether the lead in getting to that future will be centered in the united states or will have migrated to china, india and germany. volvo is now a chinese company. jaguar is now an indian company. china is introducing a passenger airliner to compete directly with boeing and airbus. these are the new 21st century realities. america will transform much faster in the 50-state laboratories of citizen-led government than in the centralized bureaucratic interest group dominated system of washington. we need your leadership in creating experiments of modernization and transformation. as governors, you have an

opportunity to lead your states and intransformational change while washington is held captive by the reactionary groups of bureaucracies of the last. in december and january i will lead five web stars on transformational change, replacing obama-care by transforming our system of health and health care at the state level will be offered by the center for health transformation at healthtransformation.net on reducing cost while improving outcomes in government, and on an american energy future will be at americansolutions dhaum one will be at american leadership on sustaining and enhancing american exceptionallism as the foundation of foundation civilization. we hope to develop additional webinars with governors who will want real change in their state. and a website for center right hispanic dialog we're continuing

to develop policies for the hispanic american community and on december 2nd and 3rd, it will host its first annual hispanic forum in washington. as a start, here are 12 steps you can take as the leader of your state and the manager of your state government and they are very different roles. one, turn the $132 billion spent on unemployment compensation last year into a human capital development fund by requiring every person who can't find a job to take a training program in return for their compensation. paying people to do nothing for 99 weeks is as wrong in unemployment compensation as it was in welfare. this is an opportunity to dramatically enhance -- [applause] >> this is an opportunity to dramatically enhance the working skills of the american people at virtually no new cost.

two, replace litigation focused workers' compensation with a rehabilitation and capabilities-focused program that maximizes the speed of helping people medically and focuses on retraining and focusing on what they can do rather than on what they can't do. three, review the ibm technology companies proposal to take a trillion dollars out of the cost of running federal government over the next decade and ask ibm and other technology companies to make a similar proposal for your state and for local governments in your state. four, as a first step on a tenth amendment, every governor should instruct their staff to identify every federal regulation which cost money and minimizes state creativity. working through the rga collectively you should have congress either repeal the regulation, abolish the officer agency or defund the activity. five, as a step toward replacing

obama-care, block grant medicaid by the number of people in poverty for state and give the states freedom it off invent a more effective system of prevention, wellness and chronic disease management without washington red tape and bureaucratic dictation. six, as a step toward more affordable care eliminate the 70 to $120 billion a year in theft in medicare and medicaid created by the administrative incompetence of the federal bureaucracy and the innovative determination of individuals. and block all federal health information technology money and see which state can complete the first paperless health system. eight, as leader of the state, a very different job for manager of the state government. bring together every innovative entrepreneur and ceo in the state to develop a benchmark for helping businesses and

entrepreneurs create high paying jobs and competition with china, india and germany and to focus and grow in their states export successes to create local jobs through worldwide sales. nine, emphasize the right of parents to know how their children are doing and know how their school is doing and have the right to choose a better school if they believe their child is being inadequately prepared for success. insist on paying great teachers for more and releasing bad teachers before they cripple the children they serve. benchmark salaries and benefits in state including benefits and insist that government employees be compensated fairly within the framework of the taxpayers capabilities. as governor elect scott walker has said, we are not going to have bureaucratic haves and taxpayer have knots. 12, insist on american

exceptional by taxpayer financed schools whether k through 12 or in the state college or university systems have a brief course annually on the declaration of independence. its assertion of truth that is we have certain unalienable rights which are life, liberty and the pursuit of happiness the time has come to reassert that we are americans and america is a learned civilization. [applause] >> there are many other opportunities for modernization and transformation. but these give you a sense of the scale of leadership we need. this is an enormous challenge. it is our generation's rendezvous with did he say if i. -- destniy and we have the right

to continue moving america towards freedom, safety and prosperity. thank you very, very much. [applause] >> our next speaker is fred smith is the founder and ceo of federal express. an idea that he developed in a college paper that he wrote at yale university for which i think he only got a passing grade? [laughter] >> however, to show you that ideas implemented can often turn out even better than people expected, federal express is now a behemoth. it delivers packages efficiently all over the world. it has put the united states postal services and many competitors to shame. fred is an idea man who puts things into action. fred smith. >> thank you, john.

[applause] >> let me -- let me clarify the comments about the grade i got on that paper. it's generally said that i got a c and how foolish the professor was and so forth. and for the historical record let me tell you i was extremely happy to get a c on anything in college. [laughter] >> i'm very grateful to the professor who graded it. as john mentioned, fedex is a very large organization. we deal with every state represented here and let me say on behalf of the 300,000 people that make a up the fedex team, how much we appreciate your service. it's a -- it's a tough business that you're in, being in the arena of politics. i admire all of you who subject yourself to the rigors of the political process and i congratulate those of you who

are newly elected, particularly our new governor in tennessee. governor haslam. and i wish you great success in your administrations in the years to come. let me tell you a couple of things about fedex so it will set the stage for where i'm coming from. as john graciously mentioned, it has become a very large organization. almost $40 billion in total revenue. employees about 300,000 people around the world. we have four primary operating units in the company. first, fedex express, the original federal express, fedex express is the world's largest all-cargo and an air express carrier. we operate about 700 airplanes. we serve 222, i think, countries and territories around the world.

in fact, the only places that we don't operate in are those that are embargoed by the united states government which i think now are down to four. the second largest segment is fedex ground which is headquartered in pittsburgh. it's the second largest ground parcel company. it's very unique in that it originally was founded as rps and built around a system of entrepreneurial owner operators which is a wonderful business model for the ground pick up operations that it specializes in. the third business segment is fedex freight which is the largest freight company in the country. there's two ways to move freight. one in unit loads, truckloads are on the rail and the other is

less than truckload things on wooden pallets that require forklifts to move it and through a network and fedex freight is the largest of those companies and finally, our services unit which has our retail organization, fedex office and all of our technology. the company operates about 85,000 vehicles in its various operating units. we burn about 1.7 billion gallons of fossil fuel each year and we spend in terms of capital about $3.5 billion. we're boeing's large 777 freighter customer, for instance. some of the automotive manufacturers and engine manufacturers like cummings among their biggest customers. and by best estimates, the

economic activities that support fed ex's operations because of the local impact that we have and our capital budget that i just mentioned are probably double what our own employment is of about 300,000 people and probably have someplace between a 60 and $70 billion effect on the national economy. so i give you that as some perspective as to the data points that we have at fedex. of -- i'm very confident as the fed is and the treasury department and we and our largest competitor, ups are probably the best indicators of economic activity certainly in this country but increasingly around the world. we're like people's housekeepers. we see inside every business, every state, every municipality. and have a very unique perspective because of that. as i mentioned, we operate in

every state represented here today and all 50 states of the united states with substantial investment and employment. the issue that the united states has today it seems to me is not nearly as complicated as a lot of people want to make it. the creation of wealth is a feature over the last 200 years of invention and innovation, entrepreneurship, engineering, cheap energy, growing markets. and those ingredients are what happens created the most prosperous society in the history of the world. a government can help in terms of having safety and security of the rule of law, infrastructure, education, but at the end of the

day, the wealth that all of us benefit from today over the past two centuries were created by the private sector. and if you go down that list of activities that have created our national wealth and grade what government has done over the past 30 or 40 years, i think you would have to say that in every one of those areas, we have almost optimally constrained our ability to grow. ...

>> i will give this to governor barbour, and maybe he can pass it around and i was sure to john. this is a chart of the correlation between private and business investment. and job creation. and if you can see it, it's almost 100%. today in the united states in

2010, private investment is running about 15% lower than what it was in 2007. if you take structures out of it, it's growing about 8% less than it was in 2007. so the bottom line in all of this is, absent increased business investment, there is no possibility whatsoever that this country can create jobs to absorb that 10 million unemployed -- 10% unemployed, and the underemployed. and the tax rates that we have in this country at the federal level are simply injury is to capital investment in the united states relative to the opportunities elsewhere in the world. and remember the largest economy in the world today is no longer the united states. the largest economy in the world today is the economy of global trade. it's about 26%, and for the past

40 years it's grown twice the rate of economic activity in any single country. so the united states, to go back to 315% growth rate, as opposed to the 2.5% that are wonderful economists, jean wang predicts for 2011, is the difference over the next 10 years of producing an additional 10 million jobs in this country. we have a federal tax rate of 35%. that's 10 percentage points higher than the oecd average. we have a prejudice in the tax code because of that high interest rate, and the tax on capital investment, which has encouraged movement of economic

activity and financial investment in the speculation and financial sector, which, right before the crash, had gone from 1983, representing about 15% of our corporate profits, to about 35%. when anybody in the finance industry will tell you that the purpose of finance is as a secondary activity to facilitate the industrial economy. so the question is how do we move back towards international activities, big service companies, mining, agriculture, manufacturing, as opposed to financial speculation and financial services. so the first thing that has to happen is the corporate tax rate has to be reduced your otherwise otherwise, as opposed to make

investment in the industrial sector of which create the kind of wealth and blue-collar jobs that you're all looking for is simply impossible, as this chart shows. we need of a territorial tax system, virtually all of the united states measure of competitors passionate major competitors have one. and there's a sense on the part of some that investment overseas, making baby food or products for chinese consumers somehow isn't outsourcing of u.s. jobs. well, that's silly. the ability of the united states companies can compete abroad, and engage in the domestic economies, and then employ people at png headquarters in cincinnati, or back at rolls-royce in indianapolis, or any of the great companies represented in the states here,

would be facilitated by moving to a territorial tax system. and third, and in my mind most important things is to allow the expensing of capital equipment and software. and what that does is it changes the risk equation at the board level for making capital investments in the plant and equipment that you need. because when times get bad, every board of directors, i can assure you, has the same mantra. make do with what you have. at capital expenditures, cash is king. once you allow and expensing of capital equipment and software, that dynamic is taken off the table. so whether we buy a boeing triple sevens replace one of our in the seventh come is based on what doesn't economic reason to do so, not because of the tax considerations and what it does to our balance sheet.

so in my opinion if those three things were done at the federal level, and they do think you are seeing a shift in that direction, there's a great op-ed in "the wall street journal" today about this exact subject. and the second thing, and i'll be brief on this because it's a much more diffuse issue is, any major corporate ceo in the country, myself included, will tell you that we have so many disincentives to employ people in the united states, that if there's any chance to conduct economic activity elsewhere, that will be the choice. and most of these disincentives come at the state level. not at the federal level, although there are plenty of them there, too. and i would urge you in each of your states, the first thing that you ought to do when you go

back is to go down the list of things that inhibit the employment of our citizens, and make it easy to have flexible, entrepreneurial work forces. i mentioned the fact that we have fedex ground that's run by a network of owner operators. well, i cannot say the amount of litigation and a salt on that sector of the economy, and there in mind, there's about 10 or 11 million people who are independent contractors. snap on tools, allstate insurance, state farm, fedex ground, and so forth. and the union says some of the attorneys general in the states had increasingly tried to define the relationship of employers to owner operators or independent business people, and that is

very, very shortsighted item. i will bet you that this conference in large measure was put on by independent contractors. i don't know whether this is a fact, but the vast majority of tv and videography's in the country are independent contractors. the vast majority of people that drove you to this hotel in cars or taxis are independent contractors. that's just one example that i can give you several others. at the end of the day, the country has to get back to being a great place to invest capital, and it has to be a great place to employ people without all of the bureaucratic and increasingly stifling regulations and restrictions that have been put on over the past 30 years. those two things are done, i don't have any question, based on my experience, and all these other countries in the world, we

remain the most energetic, the most entrepreneurial, the most dynamic society in the world. but we've got to get back to those roots if we have any chance to create the kind of prosperity the united states is looking for, much less pay for a reasonable amount of entitlements that the society has decided that it wants to pay to the elderly and the disadvantaged and forth. >> thank you. [applause] >> our next speaker, steve, is a businessman and developer who kicked off the transformation of las vegas, and into in a cup a dynamic and impressive city that it appeals to a wide range of americans and the tourism. and mr. win in 2006 was named by "time" magazine as one of the 100 most impressive influential americans.

is also got involved in public policy recently appearing on cnbc to decry the massive levels of debt and spinning that he feels are dragging out our economy and hurting our country's future. mr. winn. [applause] >> relax. having listened with you to the insightful remarks of newt and fred, it's unlikely that you will have to endure any particular barrage of thunderbolts of wisdom for me in the next few minutes. i was delighted to be invited here by hate that it was a big treat for me. as you can imagine how wonderful it is for someone in my business to be invited to participate in a symposium of all the republican governors, especially at a time when so many states are considering liberalizing their laws about casino gaming in order to create jobs to get more taxes. i remember before i left to

come. yesterday, my staff got together and said look, steve, governor perry is going to be there. governor scott. make sure you make a good impression. [laughter] >> be sure to remind governor perry and governor scott and the other republican governors that we're the only company and the first company to receive the forbes five star and all of our hotels, both here and in china. and that we've broke ground on that sort of thing. having done that, my conscious is clear, governor scott, governor perry. [laughter] >> i'm sure today that most of you in this room believe that the moment that you are republican governors, for the moment. and since you are, i guess we have a lot in common. in my company and in my career, i was listening to fred just now, and his 300,000 employees around the world were much

smaller of course, maybe 10% of its size, but in my time in las vegas, i'm told by the state of nevada that says for every job created in one of our hotels, there are three jobs created in the community. and based upon that, in the last 30 or 40 years i've created about 350,000 jobs in nevada, maybe 375. and i think him as i stand here today at 68 years old, that's the proudest thing that i have to say about my life, is that i've helped make a better life for other people by creating jobs and giving families an opportunity to have a better future than the past, or their present. i've been particularly proud as a businessman, and i think probably the reason we got the forbes five star, and whatever success we been able to achieve, is it because we built aggressive buildings are we had the crystal chandeliers are on x. or marble all over the place.

it's nice to have a nice building, at at the end of the day when one of these places is finished, the building and all of its attitudes are pretty much history. the future of the enterprise, its franchise, whether it is fedex or wynn resorts is about people. because only people make people happy. and i'm in the business of trying to make people happy. just like fred is. now, i've learned that in order to do that you have to adopt sort of a dot dot philosophy. you have to feel that you're responsible for the people that work for you. you recognize that at the base of any success, the simple truth, the staff feels safe. if they feel great about their job and about themselves, and everything else is automatic. our sins, all of us in this room today, our sense of happiness at the moment is by and large a function of our sense of the

future. tell a man who was in terrible pain that it's going to be all better the day after tomorrow and he feels good today. take someone who is at the peak of their pleasure in success and tell them that we put out it's going to be over, and the misery is instantaneous. our attitudes are based upon our sense of the future. and right now in the know states of that's sort of tough. i think that maybe we have lost our sense of simple truths your in my country, the first simple truth, an idea and then a building. the first simple truth, and then a policy for human resources. for example, a simple truth, in the history of civilization, fred touched upon this and so has newt. in the history of the civilization the only thing that has ever been shown to produce a better standard of living for any human that has lived on this planet is the demand for that person's labor.

the more demand there is for our labor, the present company included, the better our life is. the better our future, our happiness. the less demand for our labor, that goes the other way. until finally when there is no demand for our labor, we starve to death. these simple kinds of truths beg the question of what is the purpose of government been? the purpose of government is to create, establish the rule of law, to defend the citizens. and fundamentally too great an environment that allows the demand for human labor to grow. job formation, capital investment, nothing else matters, nothing else has ever worked. no government is able to substitute that. there are numerous experiments and examples, starting with the soviet union and earlier, that alternatives fail. simple truths seem to have gotten away from us. i have been watching during this election cycle populist politicians be claiming china.

i'm in business in macau and i've spent the last nine years going to china. it's been an enlightening experience for me. people say, well, they get cheap labor. the president of the united states last week at the economic summit took advantage of the most to declaim once again that china should appreciate its currency. if the president had been coached probably he would have known that the billion people in china, 1 billion are living below poverty level, the company, the country is in a race against social unrest. there are demonstrations in every province of china every single month. they are in a race to try to industrialized that country and create jobs, or have serious social unrest. but we say let's have protected terrorists. let's give the chinese to raise the five. if anything about chinese, you know the current leaders of china have as much power to

raise or change their currency intelligently without creating 100 million more unemployed as they do flying over the building. is an enlightened public policy, and we seemed to be bombarded by it constantly. let's have protected terrorists, as if, by raising the price of the toys, that russ makes in china, brings to the united states, we will make a to industry spring up in america. that's not the way to do it because every protective tariff, in every flop ads to the regulations like this travesty of health care that we just got, the consumer pays for it and it results in a loss of living standards for my employees. i have since mentioned i become a little bit of a political activist. i was being interviewed on cnbc in an unrelated interview about the opening of a beach club we had. and i've made a remark to be

considered politically activist. but the fact of the matter is this thing i mentioned go about my role as a ceo, has to do with the fact that i think i should protect my employees as best as i can, so that they do feel safe, so that they feel as if their future is positive and affirmative, in the context of my company. for the first time in my 40 odd years of being a ceo, in the hospitality business, i find myself trapped. i faced with an absolute certainty that the deficits and government policy accelerated in the last two years are leading to a drop in the living standard of the people that work for me. with all the pipe's rhetoric, the group that is paying the price for all of this is the working class of america, the people that work for me are getting paid and paychecks that are worth 60 to 70 cents on the

dog in the past, guys like fred smith have been able to give his employees a raise, the damage done by government. it blunts it. but for the first time myself and fred are finding it more difficult to run our business and be able to give our employees the raises that will help sustain their standard of living. so we've got to double whammy. we of uncle sam making it tougher for us to run our business and take care of our employees. and any ceo worth a nickel will know that his franchise exists in his employees. that's where it's at, and i have expressed a lot of frustration at this. and any businessman that doesn't understand that this is a fistfight, that if you keep quiet while this is going on, you deserve exactly what you get. so i'm not going to keep quiet about it. but i want to get back to the idea of a simple idea. there is a free going around in my head that comes to bear in my

job, and i think probably is something we ought to talk about, socially and politically in this country. it's a phrase that i would use for lack of a better term, dynamic restraint. the most powerful force that governments have is the right to tax the citizens, whether it's the state or the federal government. the restraint of that power can be used to incentivize dynamic action by the citizens, almost overnight. if obama, after his election, had said the biggest problem this country faces at the moment besides temporarily patching up the financial system, is a creation of jobs, he could have sat down and said we're going to create a pro graham that incentivize -- program that hires people by giving them a tax credit and subsidizing part of the salaries of the new hires if they are full-time and health insurance. if you can prove we did it we

will give you tax credits for 30% of their salary. you would've had job creation in every corner of this economy within 60 days. the stimulus program was at best the trillion dollars, eight or 900 billion, maybe 35 or 40% effective. the rest of the money is gone. when you think of the term dynamic restraint, i think that all of us in this room would recognize that no country can survive and less the electorate is well educated. for all of us that achieve any success in life, we come to the conclusion that if we're going to give charity, support these, it should be the education of the young people. the preparation of society for the challenges of the future, to get the jobs or may help make the jobs that will spell prosperity. education has been the thing that my company has focused on for the last 25 or 30 years, personally and my family and in my company. and we all know that my

constitutional the outcome education is controlled by local government. i will give you an example of dynamic restraint. people claim that education is stymied by teachers unions. well, as a man who has been in a business would have my employers are unionized for the past four years, i can tell you i've never had a grievance. i can't find anything on the union because there are good unions and there are bad unions. and unions are the business of employees. if you have a badgering you want to get rid of it. if there's a good union, good for them. how do these federal government, the society make a change in education in america when we all recognize without exception that we need to do a much better job. my state of nevada is in a dismal failure in education. the answer is this. the federal government has this ability for dynamic restraint. if i were president of the united states, i would get a hold of the speaker of the house, senate majority leader, and i would introduce a bill

that says if you're a teacher or if you go into the teaching profession, if you can prove to us by virtue of a test scores of your students, test established by the federal government and local government, state and local government, and in conjunction with the federal government, if your students can reach a certain test level, you as a teacher will receive a federal tax credit for up to $75,000 a year on a joint tax return. if you get higher degrees and your students, as a group, continue to assess and show progress, and you stay in profession for 10 years you get a federal tax credit of $100,000. if we had done a simple thing like that, we would cause an army of students in america to change their careers in college and go into teaching. we would have the best teachers who leave the teaching today, stay in teaching, rather than go and get a job where they can

make more money. this kind of dynamic restraint applies all over the spectrum of governmental action. it's incentivizing using the taxing power, or the lack of it in this case, to get people to do what you want. we do that all the time in businesses. we incentivize people to do the right thing, or to do whatever we think is right. i've become a little bit of a political activist, probably more than i should have as a businessman, but i think about this. and as i go to bed at night, when i was watching television during the last election cycle, i remember the words of a political philosopher bringing in my ear. my memory conjured up the words of alexis, who said the american system of democracy will survive until that point, until the point when the politicians discover they can private the

electorate with her own money. i think that america is on the verge, and has begun to realize the spot we are in. and maybe, that old statement you get the government you deserve, maybe with better education and with the awareness of the crisis that we are facing in so many areas of government, that this is today in this country, maybe we will be able to avoid the prediction, the shadow that was predicted in this section in las vegas, nevada, it is a place in deflation. you know that definition that overcapacity, unemployment. that is the definition of the las vegas tourist market at the moment, or at least has been for the last two years. in the last two years, i invested in the last 18 months in my company. incidentally, if you take the appreciation interests and all the expenses, the las vegas operation probably listened to hunter 50, or 300 million a year. offset by eight or 900 million in asia.

but i invested $200 million in totally remodeling the win in the last two months because it was five years old. building the restaurants and nightclubs, changing and refurbishing, keeping fresh out of customer service levels, and our capital investment. i did so because i was in business in china. so much for damaging and america by being in business elsewhere. fred made the point, and i am echoing it again, that we're in business around the world, all of us, and that business involvement is the opportunity for great prosperity and increase vitality and united states of america. the globalization of commerce is not a threat to the united states. it represents, in my opinion, its greatest promise for the future. thanks for inviting me, haley. i'm proud to be a friend of yours, and i'm glad to sit down

next to newt. thank you. [applause] >> we realize where the only thing standing between you and your lunch, so we will have a rather truncated discussion. mr. when brought up of course china. and i think in all of the clutter, political ads we have seen the last few weeks, one that stood out was the one about the chinese professor. who appears before an audience of chinese students in beijing in the year 2030, and described the fall of great civilizations, greece, rome, the british empire, the united states of america. he points out that the country overspent on its government budget, it lost its technological edge and nationalize key industries, and now he said, well, they forgot that we owed so much of their

paper, the government debt. and, of course, now they can't forget that because they work for us. and that was a rather chilling us ability of the future that might befall us. but i personally have a more optimistic and i would like to hear from fred smith he does business in china, and newt it was very much involved with understanding the chinese economy and politics, what your thoughts are. >> well, mine are pretty straightforward. and once modern communication became capable of, in essence creating a single visual picture to everybody in the world as to what a wealthy society looked like, it was impossible for anybody in those wealthy societies to think that they

could continue to live in great abundance with the rest of the citizens in the world living in poverty. so, from my days in asia, courtesy of the u.s. government during the vietnam war, to see what's happened in asia, steve mentioned his operations in macau coming out ask yourself, is that a good thing or is it a bad thing. well, it's an unequivocally good thing, that hundreds of people have been dragged out of poverty. and it's a good thing because it did not create the seeds of another world conflagration as it happened twice in the center. and second from purely business standpoint, we've got about 300 million people in this country, over 6 billion people elsewhere around the world, those are potential customers, for the united states businesses, if we embrace the

emergence of these economies. we've just got to do it in an appropriate way. we've got to be very entrepreneurial in how we become more energy efficient, for instance. people get mad at the chinese because we have a huge trade deficit with them, but if you dissect the, you will find that about half of it, percentage wise, was really trade deficit. we already had with other countries in asia prior to the emergence in china. and now, they are at the point of final assembly. so it's not by accident that fedex has a huge hub in china where we connect all of the points in asia. nobody says much about the fact that we are shipping offshore about $300 billion every year by oil, mostly from people who dislike us, and nationalize oil companies that engage in our

cartel if it were done in this country, would be against the law. why the chinese manufacturers make great products that we all enjoy, like the example that steve gave on the toys r. us twice. so we have to embrace globalization, and as i mentioned before, we have to make the united states the place of choice for capital investment, engineering, scientific achievement, and invention, and get back to those things that made the country which to begin with. i mean, this is not rocket science. the lessons of history are there for anybody that wants to read them. is within our power to turn this thing around. and i quite frankly, am very optimistic that we will do just that. >> to what extent should we be worried about china, and why? >> i don't think we have a chinese problem.

we have an american problem. i think that if we, we benchmarked is with american solution. basically, think of it as a business case study. you have to reform taxation, litigation, education, health, energy, infrastructure in order to compete with china. but you have to do it anyway. you're going to be in the world market. let me make three quick points that obama is exactly wrong to go to tokyo and basically say, won't the rest of you please slow down? because we can't reform any of our institutions, and it's not fair for you to get ahead of us because of our reactionary behavior. it's exactly backwards. second, germany today, germans is a really interesting case study for america's. the lowest unemployment rate in 18 years. it is a very competitive manufacturing headquarters. and guess what, the german government gets up every morning and says, i wonder how i can

create more high-value german jobs. now an american government that did that, we would blow the world away. we had human talent in this country, that if we organized and got our act together and we took a pro-jobs, pro-export, pro-growth model, in three to five years we would be in a dramatically different world. we would be back to 4% unemployment with, the budget would shrink dramatically in deficit because people would leave unemployment with extensive medicaid and go back to paying taxes. if you talk to rick perry about texas, i think it's no accident that into of the last four years, texas created more jobs than the other 49 states combined. they have a litigation reform, low taxes, limited legislature, with a bureaucracy that actually favors dismissed. now, you take that package and say, gosh, you might be able to develop economic growth.

last point, stimulus was peculiarly stupid, because we are in a world market. keynesian demand side economics are utterly irrational if you're getting your people money you borrow from china in order for your people to go to the store to buy chinese goods. the obama stimulus package was a chinese full employment act, and we have to fundamentally tear down any national economic analysis when you're in the world market. and you have to ask every morning, what am i doing that fits the global market in which i want to create wealth, and dare i will build on what fred said. we went to 100% expensing on investment. you have a boom in this country. we would have the most modern workforce, and if you take 5% penalty for bringing capital back on from overseas, you would bring $500 billion back overnight to be invested in the united states. that would be a rational world market of american jobs.

[applause] >> and with governor perry to speak with us with "the wall street journal." and some state is going to go to the loser pays first after this election. and i think texas may be one of the states that's going to try first for that honor. one final quick question. obamacare, to very large employers here, and we knew it as a health care expert. of obamacare is not fundamental changed, what is the future of that for american business? and is there anything we can do quickly, that can make it better? >> i thought we would talk about this today so i took a look. i build wynn in april of '05. at that time, i'm going to take just a sample of 5000 of my employees. insurance was causing a 6600 a year to cover my people.

the company was paying 2300 of it. the company was covering all of them it was costing us about 21, 22 million. today, the $6000 per person is now $9000 a person. i'm paying $33 billion of it. i never lowered the benefits or increase the co-pays or anything like that. we just adore the exit 20 or 30 million. i told him he read on the telephone the day after the election, a buddy of mine for four years, i said we have run their thoughts together that i said harry, just so you here, i'm a health care provider, has been for four years. here's the bottom line. the rate of increase of health care has been a% a year. we have absorbed it. we have taken the top 10 points of this fiasco that you guys past, that no one read, and it takes us to 11.5, to 12% increase as you. that is to say it's a 40%

increase in the rate of increase of health care. it is wrong in every single way. and what it's going to do is i'm going to have to pass something on to the employees, or the union is trapped. they get -- i think in your contract with the union. they get a fixed amount every year. they either take it in wages or they take and health care. not only did my employees not get a raise under the union contract, but the union had to borrow to million dollars from elijah because they were in trouble with their health care. that will not be exacerbated. and you say i called shelley berkley, democratic congresswoman in nevada who i've known all my life, and i have supported or. shelley, you can do this. she said steve, i know. it's junk. it's terrible that my husband is a doctor. but if i don't vote for it, she, nancy pelosi, will punish me. the other democratic congresswoman, who is no longer in congress, i'm happy to say, i

was a political science professor at the university in nevada las vegas that i supported her in the past. i said here's the bottom line on this. these are all the things wrong with this idea. it produces the exact opposite effect of the presidents rhetoric, which is totally the big lie. it's as much as a big lie. and she says, she's from arkansas, steve, i know it's no good, but there must be something in there, i got to take it too. that's the slough off. that's what we're up against here. we just got to come to grips with the logic and common sense. left alone, there's only one way to lower health costs. at a health care provider and health insurer, for 40 -- for decades that out of its the old fashion way. you go to the market place, taken finish effective 35,000 employees, you go lean on the guide with the mris and the cat scans and the diagnostic sector, you play one against the other, you use the market.

you go to the first hospitals in town, and you negotiate by bidding a better day rate for your employees. you go and make a deal with wal-mart or cbs about pharmaceuticals, about pharmacy. you go and you use private enterprise and the old fashion common sense to lower your health costs. and then, if you're us, you give everybody a cd about eating, and she put the game menus that are plant-based foods in every restaurant and every step dining room so that they'll take it home to their children and they stop running their cholesterol up through the roof. because i have to pay for it when they get sick. [laughter] >> fred, i don't know if -- [applause] >> that was good. start i'm going to look for that vegan restaurant. is very vegan restaurant at fedex because we have some vegan

meals there for sure, and what steve is getting at, of course, is one of the biggest problems of our health care system is the effects of the poor lifestyle choices that our population makes. we are a huge health care provider, just as steve wynn is, hundreds and hundreds and hundreds of millions of dollars. and i am guided by my experience there and service for many, many years on the board of directors of the mayo clinic, which most of your familiar with. and the simple facts of the matter are that, that our technology has outrun our ability to pay for unlimited amounts of high technology, medical care for anyone without limit, it simply cannot be done without fundamental change. and there's only two ways to

address the market. one is by rationing, and the other is by using market forces, as steve mentioned your and i've been around long enough where i can remember when the only kind of health insurance you could buy was the major medical. and i think that really gets to the heart of the problem. we can as a society i would think ensure that catastrophic events in life, accidents, bad draw of the cards, cancer or heart problems, and so forth. and that can and probably should be done by the government. but below that, the only solution is to let market forces and the use of modern technology lower the cost. a great article in "the wall street journal" today about merck, with a new experimental lester all drug. -- cholesterol drug.

and i think your things on the horizon that can make a big difference in that regard, but you got to be one or the other thing. you've either got to let the market basically allocate resources, or you have to do it the way europe has done, and else place around the world. and you have to ration it. i would just give you one factoid here. is governor pawlenty here? from minnesota? well, when i used to go from -- to the rochester, minnesota, mayo clinic, the headquarters for our board meeting, i was always struck by something that i saw there, and that was a huge number of canadian license plates that were in the parking lot. and, of course, we were there safety valve. because they have health care that is rationed, government provided him an single-payer. and you come across the border and use their own funds to get those services that may get to do with health problems that they couldn't get at a time, or

inappropriate fashion north of the board. so to me, it's just that simple. >> do you want to close us out? >> three quick things. this is a perfect example of replacement rather than rejection. you either go to a market centered individually centered system in which people are making informed choices with real consequence, or you go to a government bureaucracy, ration system on the european model. anything in between is a total mess. and so part of what you have to think about is, how am i going to migrate the whole system, this is what i wrote saving lives and saving money 2002, and we founded the center. i think we literally could save 40% of the current cost of health care, 618% of gdp if we went to a market oriented system of personal responsibility over 10 or 15 year period. second, i believe the short run strategy in obamacare will be very simple. it is unsustainable, all the news is going to be bad, every group is going to get matter. the congress should adopt to

moderate the republican house will reveal. there are 23 democrats up in the senate in 2012. if a petition driving explode in his 23 states, the vote on not repeating it will become unbelievably expensive for those senators. and then the question will be if it gets to the president, could you build a nationwide petition drive and get 59 signatures asking the president to sign it quits and in his decision to veto the comes very expensive. they have to cut off all the money, don't allow the secretary for hhs or the head of the cms to spend any money on testimony the bill and allow it to atrophy and interim. and, finally, every republican presidential candidate will run based on repeal. republicans are going to gain 12 to 14 senate seats, 40 house seats, and by no later than april of 2013 is going to be repealed. >> well, thank you. [applause] >> as we prepared our food and

let's, whether it is vegan or otherwise, i know all of you have brought us a lot of food for thought, and we thank you for that. and this session is closed, and thank you all for participating in the coming. from the republican governors association meeting we go live now to a form with the control of the white house is financial measure office. he will talk about steps that the federal government is taking to control spending within the agencies, including looking for waste and fraud in current operations. he is said to speak is going to for an organization of private sector and federal, state and local government budget officers while meeting this week here in washington. a little bit they will have more live coverage on a panel of current and former federal budget officers. they will talk about change in federal budget management over the last few decades. the possible remedies for current budget imbalance. that will start at 12:30 eastern and will have that life for you here on c-span2.

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[inaudible conversations] [inaudible conversations] >> again, we're live at the nation's capital for a seminar on federal budget management. we understand that it's going to for a little later than we expected. the control of the white house financial management office will talk about the steps the federal government is taking to control spending within agencies. he would also be talking about ways, they're looking for waste and fraud in current operations. when it gets underway we'll have live coverage right here on c-span2.

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good morning. we're going to go ahead and get started. my name is jonathan stehle and i have the privilege of serving as a bba president this year. welcome everyone. this fall 2010 fall symposium from the budget act to the recovery act, a balancing act. today we conclude a celebration of 35 years of service with aabpa. this spring we were fortunate enough to gather at this ballroom with some of our founding members. one of them who was able to join the that day was oddly, treasure on the first elected board of aabpa. over 54 year federal career, and even afterwards, she wasn't advocates for this profession. pictured here in the center,

seated, with others who helped found his organization and current board members, train to celebrate with us the legacy of the effort begun in the 1970s. she passed away this september and we remember her here today. it was a pleasure to meet audrey to discuss the vision created by all those who were involved in the founding of aabpa. it is now our turn to be stewards of this vision. as we look forward to today's event, it's important to look back on how this organization has been an agent of change over its first 35 years. in the 1970s, members of the federal budget officers conference saw the need to elevate the profession and provide opportunities for training for midcareer professionals. they proposed the creation of a professional organization, and merged with the american association for program analysis, to meet those needs. in 1975, the american

association for budget and program analysis was launched. as aabpa grew up with a 1974 budget and atomic control act, one of its artists accomplishments was to partner with what is now known as abs and, to publish the journal public budgeting and finance. the niger issue appeared in the spring of 1981. public budgeting and finance has become a premier journal for research and public finance, it is a publication for practitioners interested in ideas, and for scholars interested in practice. in the 1990s, aabpa focus training on budget process, executive branch procedures to implement the 1974 act. aabpa took the lead in providing information and training in the automation of public budgeting, and heightened emphasis on performance management. aabpa members have been prominent in designing and implementing budget performance systems across the federal

government. most recently, aabpa has strengthened its ties to academia and students. the budget policy and professionals of the future. this effort has benefited significantly from the move of several aabpa members from public service into academic positions, the creation of a research competition and a summer intern program. each of these initiatives is providing professional contacts and support for students transition into public service. today's conversations on the current economic outlook and resulting significant challenges it poses at the federal, state, and local level requires a thoughtful balance of competing interests and needs. many of us have been intimately involved in the delivery and accountability for stimulus programs, the restructuring of health insurance mechanisms, and the ongoing debate on how to regulate the financial institutions. information technology is transfer of the ways we do day-to-day work. it has also expanded the

analytical roles and expectations for budget and program professionals. sessions today we give you the insight you need an exposure you're looking for to succeed quickly in this changing environment. i urge you to take advantage of the networking breaks today to connect with analysts and managers from offices across the federal government who are also changing with the times. we are front and center in the formulation and delivery of government services, and continuing education is the key to staying ahead. to give you a brief outline of today, our first speaker, danny werfel, will get a perspective on the current trends at omb. during lunch a panel of four budget expert, bob sunshine, stewarding, barry anderson, and marvin, will share their insights on my favorite title of the day, the good, the bad and the ugly of budgeting. capping off the day will be a discussion on how our work is used in the writing for cnn, with cnn writer. don't forget, ice cream and all the toppings you can handle

after lunch. in between you have a chance to hear panels on containing resolutions, career development, a state and local perspective on the current economic climate, change management, and develop a tie between financial management and budget for malaysian and execution. i am very pleased today to talk about some of the people are helping us out. these include our sponsors, those of us sitting at our membership desk and all the students who volunteered with us today. i am particularly grateful for the students who volunteer to help us as reporters. you will see them in the panel sessions taking notes and can look forward to summaries in our upcoming newsletter. you may also see members taking pictures throughout the day. i encourage you to take a moment to stop by to see our sponsors. ..