in a recent cnn poll, he pulled were 62% of those surveyed say is extremely important for the president and congress to do with the economy in the next year. unemployment is next. more than half of all of those surveyed about 54% said it is extremely important for the white house and congress to deal with the nagging issue of joblessness. the economy and jobs are a topic around the country as all of us know. of course right here in washington, where president obama paid a visit to the u.s. chamber of commerce this week. he urged businesses to begin hiring. >> if i've got one message coming messages now is the time in america. now is the time to invest in america. [applause] today american companies have nearly $2 trillion sitting on

their balance sheet. i know many of you have told me that you are waiting for demand to rise before you get off the sidelines and expand. science americans out of work, it is more than any of us would like. we are in this together. many of your own economists and salespeople are forecasting a healthy increase in demand. so i just want to encourage you to get in the game. >> in a minute, i will be joined by the secretary of the treasury. either we'll hear from a leading republican senator. we'll hear from the chairman of the federal communications commission, and from u.s. ambassador to china. we'll hear from senior editors in the atlantic. they'll take us through the global economy and they will talk with three young entrepreneurs who are carving out a new niche in the field of education, pharmaceuticals and baby food. joining our conversation will be on to college campuses where innovation and knowledge

premiership are part of the curriculum. the university of north carolina at chapel hill and miami university in oxford, ohio. around the country to microsoft corp. has set up seven watch parties to follow this conversation. we also want to hear from you and the atlantic. alexa mcmahon will be fielding questions from our online audience. ..

>> thank you. and back to you, jenny. >> thanks alexa. i want to welcome our first guest. secretary of the treasury, tim geithner. >> thank you. >> i want to come at it from the perspective of the college juniors around the country. they are going to be graduating next year in 2012. what's the economy going to look like? what's the employment situation going to be when they graduate next year? >> the economy is getting stronger. i talk to businesses across the country now. when they say is they feel more confident. they can look ahead and see a growing economy. you are starting to see them spend more, bring more people back into the labor force. so i think americans in college today coming out of college are going to see a stronger economy with more opportunity. >> what about any young people who are watching and beyond who are going to be graduating from high school next year?

high school juniors right now. >> okay. >> the ones who are maybe not going to be able to go on to college. what's the picture look like for them? >> i'd still say the same thing. we are still coming out of the worst recession in generations. it's doing to take the economy a while still to repair the damage fully. but, you know, we've been growing now for a year and a half. the private sector has created more than 1 million jobs. things are gradually improving. if you talk to businesses across the country, private economist, private forecasters, they think the u.s. economy will grow between 3 and 4% a year over the next two years. we'd like it to be stronger, of course. but that's pretty strong given the trauma caused by the crisis. >> what do you think the best-case scenario is for unemployment next year in 2012? >> well, it's going to come down. but it's going to come down more gradually than we would like. just because of the scars of the crisis. this is a crisis caused by a country in a sense borrowed too much.

when you have recoveries that followed financial crises caused by too much borrowing, it takes time to adjust. that's what causes the recovery to be slower. it's accelerating. listen to the people in the business community, they forecast a an economy growing between 3 and 4%. at that rate, the unemployment rate is going to come down gradually. >> mr. secretary, you know better than anybody that u.s. corporations are doing very well. their profits for the third quarter, highest on record, over $1.6 trillion, earnings way up from a year earlier, sales are up, but they are not hiring. at least not here in the united states. 8.3 million jobs lost in the recession, only 1.1 million came back last year. the president is urging them, as we heard a little bit of his speech to the chamber of commerce. he said get in the game. is there any evidence that they will? >> i do think it's starting.

again, it's more than 1 million jobs by the private sector over the last 3/4, almost a year. that's more jobs sooner than happened in the last two recoveries. now it's true, you know, millions of millions lost their jobs in the crisis. the beginning is trying to get those people back to work. but that process already started. growth normally coming before employment starts to increase rapidly. you have to have growth first. we see that dynamic. in fact, i was talking to one the major ceos in the country, one the iconic ceos a few weeks ago, he said what a lot of people say, people cut so deeply in the crisis, you know, they were so panicked, frankly by the scale of the crisis that they cut really deeply into the muscle of the american business community. and they spent the last two years improving productivity. but now they are at a point where as the economy starts to grow, they are in the going to

be able to meet the growing demand without bringing people back to work. that's encouraging. >> they also are accustom to getting by with fewer employees and making good profits. what's the incentive for them? >> that's -- again, you should see basic optimism and confidence. one the things in our economy, we tend to adjust quickly. we tend to take the weakest parts of the system, once that can't really function in today's world out of the business quickly. and you saw productivity growth very strong through this early stages of recovery. but that can't continue. again, as demand grows, as it's growing now, businesses are going to have to bring more people back to work. that process is starting. we want it to accelerate. >> i spoke with a couple of friends in new york yesterday. i talked to a number of ceos. one of them said their reveal to the president's afeel, get in the game, we'll hire when it

makes sense for us. >> the job of government is to create the conditions for businesses to expand and to thrive. and what we need to do in washington is make sure we are creating a better environment for businesses to act with a little bit more confidence about the future. again, i think that's what's starting. you know, the economy lost a little momentum last summer. but starting in september, growth started to accelerate again. and the number started to surprise on the positive side, which was good. and then two really important things happened at the end of the year. one is congress with the president passed a tax package with hundred billion payroll tax cut for individuals. and the most generous business expensing tax provision in, i think, american history. 100% expensing of capital investing for a period of one year for all american businesses. those two things on top of the other tax extensions provided a

helpful spark to recovery. the other thing that happened, you saw people in washington come together on a bipartisan basis and do something productive for the economy. and i think that helps confidence a little bit. you know, when people look at washington, and they think about the future, they want to be more confident. in washington, you are going to see people come together and solve some real problems. i think it helps reinforce the confidence. >> let's talk about the kind of jobs. because the jobs that were lost, many of them high-paying jobs, manufacturing, construction, information. but the jobs that are are -- tht have been coming back, i looked this up last night, health care, leisure, wholesale, where the pay is notably less. in fact, the top three occupations that grew last year, retail sales clerks, cashiers, and food preparers. all of those important jobs, but the median hourly wage is what, less than $10. our high paying jobs a thing of

the past? >> i take the more optimistic view. look at what's strong in the american economy. there's still parts of the economy still suffering from the trauma. housing is very weak still, construction is weak, and parts of the small bank community across the country that got exposed are still having a tough time. look at what's strong in the american economy. high-tech is quite strong, manufacturing is quite strong, export growth looks strong across the board. the agriculture sector is the strongest it's been in decade in the united states. you listen to where people are having a hard time -- where the opportunities today, they are for engineers, people in high-tech, people in high-end manufacturing. and i think that's fundamentally encouraging. again, if you look around the globe today, look at where we are. you know, you see china emerging markets, brazil yesterday two days ago. really, really strong growth out

there. where they are growing they need the things americans are good at producing. we are growing about twice the rate of growth of most of europe and japan. not as fast as china and india, but twice the rate of china and japan. people expect that to continue. we stand now at a point where we can benefit dramatically from this huge boom in growth we are seeing throughout the u.s. that's going to result in more jobs here, good jobs, high paying jobs in high-tech, high-end manufacturing production, agriculture generally. >> well, let's bore in on that a little bit. we know that what is it half of corporate revenues now come from overseas. and there's a disincentive in many instances for the companies to bring the money back home. they have to pay a tax on it. i know the labor leader, andy stern, has talked about we need to have -- a tax holiday to bring that money. is that something the administration is looking at is one way of incenting these companies to bring the money

home? hire here in the united states? >> very important issue. what the president's proposed, as we work with congress to shape a comprehensive reform of our tax, corporate tax system that would lower the very high statutory rate on income, for corporate income to 35%. lower that but do so in a way that's revenue neutral and helps improve incentive in the united states. again, the dominant strategic imperative for the american economy today is to make sure the largest possible share of the growing demand that we see around the world now is met by investment in the united states. investment my american and foreign companies. and to help reinforce that process, we want to have a tax system that's better for growth, better for investment, but we have to do it in a way that's fiscally responsible. >> what about the specific proposal? >> we are not going to look at a holiday outside the context of comprehensive reform. >> and when is the corporate tax reform coming? i think your budget director

jack lew said it's not going to be in the budget. >> yeah, not in the budget. but we are trying to shape consensus among the keep people in congress, republicans and democrats, and among the broad cross section of the business community that's going to be so affected by this. the basic principals is that we want something that lowers the rate, broadens the rate, improves investment incentives. i think we can do that. i was talking to a head of a major technology company in the united states a few days ago. i think the people who have looked at this carefully say they believe doing this in a fiscally responsible, revenue neutral way is possible? a way to help improve their competitiveness. they like the certainty. i think it'll prove their competitiveness. >> there are also business leaders that say if that's tax reform, they want it to be a tax cut. >> there's no surprise. they will always want that. >> revenue neutral is not good

enough. >> yeah. >> how do you reconcile? >> let's be realistic. we are not going to ask americans to pay high taxes so we can lower taxes on businesses. we don't have unlimited resources as a country. remember what businesses require to thrive to be competitive in this world depends on things that governments have to do. it depends on the quality of education, the quality of infrastructure, the quality of investments that we are making in basic science, research, and development. those things we can afford. we have to make sure we are doing those things at the same time, and in a way that demonstrates confidence to investors to bring down the long-term fiscal deficit. if we don't do that, it's going to hurt future growth. you know, the task of governing, to make sure we balance those competing priorities, recognizing the unlimited resources. and that's why it has to be done in a way that's fiscally responsible and revenue neutral. >> you have persuaded the

ceos. >> even the ones that persuaded, they would say they like their taxes lower. >> let's talk about another angle. the government role and the government spending. the president has proposed a five-year spending freeze. republicans say this is not enough. in order to get long term growth to get the jobs of the future, you have to cut a lot more. just a couple of days jib, respective jeb hensarling said this during the weekly republican address. we're going to show this to our audience. >> this month we will put forward 15 continuing budget resolution that outlines billions of dollars in spending cuts because we pledge to cut spending back to the prestimulus, prebailout levels. in order to get americans back to work and create jobs, there's no limit to the amount of spending that we are going to be willing to cut. of course, americans know you don't simply win the future.

you got to plan for it. and that's what makes this issue so important. washington's spending binge isn't just hurting our workers, it's threatening our children's future as well. we have reached a tipping point where we are firmly on the course to be the first generation in america's history to lead the next generation with less freedom and a lower standard of living. in other words, loss of the american dream. >> so that's the message from congressman hensarling, his good friend paul ryan, who's the chairman of the financial committee in the house, he has hut forward $35 billion in cuts now which again the republicans say is necessary to get the economy growing, to get the jobs created. what would that mean if there were $35 billion in cuts? >> well, -- >> this year. this year's budget. >> i think first of all, it's good to see across the political spectrum in the united states a broad consensus on a fundamental

reality of economics now. which is that we've been living within our means for a long time. if we are going to grow in the future, we have to bring down the long term deficits. we're going to have a debate about how best to do that. it's going to require absolutely the government spending less and spending more wisely. but the test of the credible plan is going to be what is going to bring down our deficits to the point where the overall burden of debt the economy has starts to come down as the share of the economy as a whole. the test is going to be how to make sure we are spending the tax resources more wisely, we are preserving room to invest in things critical for the information, education and infrastructure. still do it in a way that brings down the deficit. again, this is a test of governing. it's the test of creditability. you need to see people with responsibility now start to lay out the path for bringing down the deficit. the president is going to do that next week. you are going to see his proposal. very detailed proposal for how

to bring down the deficit, in a way that's growth friendly, good for investinvestments, and goodr the middle class and things like education, and infrastructure that are essential to our ability to grow in the future and essential to the business community in the united states to be competitive globally. >> you the president feel strongly that republicans have a fundamental disagreement. they are saying the spending that you are talking about, the investment that you are talking about is spending. it's digging the country deeper into a deficit hole. how do you -- how is that -- >> i think you are going to find. i think that was too dark of a vision of our future. these are fundamentally manageable challenges for us as a country. they require that we make choices here in washington. we have to take the same spirit you saw at the end of the year where republicans and democrats came together on a progrowth and pragmatic set of tax proposals and bring the same spirit of

cooperation on a set of things that will bring the deficits down over time. again, without sacrificing things that are essential. if you look at the things the president is proposing in education and innovation and infrastructure. they have had very broad support across the political spectrum in the past. i think we can preserve that. the test should be not the -- not the simple question of who can be more austere, who can go deep person the question on spending should be who is going to be smarter, more pragmatic in a deficit reduction plan that again preserves incentive for the innovation and we can be more confident it's going to help us grow more rapidly in the future. >> you are winning from the republicans? >> well, i think the big change is important. we had a decade where people said deficits don't matter. we don't have to pay for things. tax cuts pay for themselves. i think that's changed -- it's changing. again, the world is watching.

theyn't to see if washington can find the consensus. that's going to be important in confidence in the future. >> one of the people watching is a student at miami of ohio. a student with a question. go ahead and ask. >> i'm elizabeth, me question has to do with u.s. treasury bills. are they still risk free incestment, or credence towards the debt, when it rise again, could government be at a risk for default? >> there's a risk-free asset around the world. everybody relies as a basic store of value liquidity. again, one the most promising things about how the u.s. responds to the crisis was to watch when the world was at the edge of depression, at the edge of financial panic, people still sought the basic safety of treasury u.s. financial assets. that continued through the crisis, you are seeing it today. we are still paying

exceptionally low interest rates because the world is confident that ultimately america acts to deal with it's challenges. now we want to make sure we're earning the confidence over time. that's why it's so important. we're going to have the debate about how to bring down the deficits over time in a way to preserve those fundamental strengths of the american economy. >> what you meant, we're talking about the debt. there's the debate coming over the debt ceiling, and where it should be raised. it's coming up in march. the administration is saying it's got to happen. it'll be a calamity if it weren't raised. a number of conservative republicans are saying no way. but the republican leadership seems prepared to make this happen. but are you worried as a treasury secretary that this debate, just the very debate could offset the markets as they watch. this is not going to be resolved over night. it's going to be messy. how concerned are you over that? >> i think the markets should understand -- i say this with complete confidence -- u.s. will

meet it's obligations and congress will act as it always has to meet the obligations. the debt limit isn't about things congress has authorized us to do in the past. it's not about the future fiscal problem. there's political theater. that's always the case. congress will act, and it's very encouraging that you have seen the republican leadership recognize and america will do the right thing. the right debate we have to have is about how to find a strategy to bring down our fiscal deficits over time that is not going to hurt the expansion, it's not going to hurt future growth, it's not going to hurt our basic competitiveness as a country. and i think we're we're -- begig to have that debate and signs for support across the political spectrum. we are going to have views on that. ultimately, america will do the right thing, and washington will figure out how to get through this. because we recognize there's no alternative.

>> right now though, i was looking at the polls that have been done the last few days. most of the polls are showing the public is favoring at least by several points, the republican proposal to cut deeper now. to deal with that deficit, to get spending down. >> again, you are going to see the president lay out in his budget next week very detailed proposals for where we can reduce spending, where we need to preserve some important investments, and how to do that in a way that brings down the deficits over time. so when you hear people say we want to cut spending, you want to ask them where will they cut? but you also want to ask them, what will they do to the broader deficit? what are they going to do for as debt as a whole. you are not going to solve the broader debt by focusing on cutting deeply into had discretionary spending. and we're not going to support cuts that again will undermine our capacity to grow in the future. >> all right. mr. secretary another question from a student.

this time from the university of north carolina at chapel hill. >> this is rick. i had a question about investment into the future. i was wondering how the government planned on doing that without investing more into education considering the rapid rate of minority rates growing in the united states over the next 50 years. >> i think you made the right point. which is part of what's important how we grow, how fair we are as a country, how much opportunity to create is the quality of education that we give our citizens. and we think it's fundamentally important to make sure we are making smart investments in support of reform to improve the quality of public education. we want to see more americans not just graduate high school, but complete college, community college or four year college. so that we have an economy more equipped to meet the much more challenging demands of competition in this global economy. >> and you are dealing, again, a political argument here. republicans who believe the government shouldn't be so much

in the business of handling college loans, that's something that should be in the private sector. aren't you going to face, you know, -- >> getting -- >> push back all the way? >> this is a good debate for us to have. it seems self-evident that there's a good economic case for trying to make sure that people have a little bit of help in affording a college education. very, very high return for the economy in making sure people have that chance to go to college. all of the evidence suggests that people are able to not just complete high school but go beyond that. they have much higher standard of living, much higher earnings growth, they contribute much more to the broader economic health of the country. if you expand opportunity like that, we'll be strong. if it's one the great defining strengths of the american economy beginning more than a century ago. very, very strong economic case for careful, targeted tax

incentives and other assistance to students who want to go into college. >> let's talk about the world that these students are going to be working in years from now. even decades from now. i noticed "the atlantic" had a cover piece the other day in connection with this. the job's future is all about freelancing. the future economy is going to be much more about individual entrepreneurs, small businesses, people working maybe out of their homes that that is going to be much more the fundamental under pinning of the economy of the future. as you think about what the economy is going to look like, the kind of world these -- your children and these other young people are going to be -- are going to grow up in and raise their children in. is that what you see? >> well, i think that will be -- has been and will continue to be a fundamental strength of the u.s. economy. again, we have an economy where we have some of the great global corporations on the planet.

that were formed in the united states, built in the united states, and defining the frontier innovation in high-tech and a whole range of sectors from agriculture to manufacturing. but that is supported by incredibly dynamic, innovative, small businesses across the country. again what the government's job should be to make sure we are maximizing the incentive for more of that innovation to happen. and it's the government's job not to take the technology of the future, not to decide where the investment should go, but to create the incentives so that the market can direct those investments to where the returns are going to be and where the ideas are. that was the strength of the economy. and it's still alive today. we're going to make sure we build and reinforce that. >> you have to be optimistic about this. yet last friday we saw unemployment numbers come out. yes, the rate went down. only 30,000 jobs were created

over the entire country. how do you feel as somebody who is sitting in a place to make a difference when you see a report like that that means there's still millions and millions of americans out there who don't have a very bright future and again young people keep coming back to the young people who are wondering what kind of a country they are going to live? >> you are exactly right. we still face very difficult challenges as a country. and this crisis did just traumatic, tragic damage to the basic economic security of millions of americans. the tragic reality of crises like this, it takes time to come out of it. and it's very important as we have these debates about fiscal policy, budget deficits, about investments that we remember we have a long way to go to dig out of the whole. a long way to go to give those people a chance to get back to work and to be more secure, more

confident in their basic economic future. and i think you are right. the number on friday was probably the unemployment rate came down dramatically, you know. that probably overstated the near term strength. i think the private sector created the number which was disappointing. i think most people you talk to today across the economy, they see a picture of steadily improving job growth that we think now is sustainable, and it's going to continue. again, we got to make sure in washington we are going things to reinforce that, not jeopardize it. >> last question, how do you as the secretary of the treasury remember to stay in touch with the flesh and blood reality of this economy? whether people have jobs or not, where they are employed, unemployed, or under employed. how do you keep that in mind when you are dealing with a lot of statistics and numbers and reports? >> yeah, i don't think the statistics tell you enough. i think the most important thing we can try to do is to make sure

we are listening to businesses across the country. we are listening to people who's jobs are to help people get through these housing markets. help them stay in their home. we are talking to community banks, community development institutions. so that we hear from them where things are getting better and where they are still very hard. we work hard for that. we have people across the administration who are out there every day across the country, trying to listen, get advise, people tell us, people are direct with us, they have lots of device. they tell us what works and what doesn't work. that's the most important thing for us. >> you feel you are getting a sense of what people are going through. >> yeah, again the great obligation that we have here in washington is to make sure that we recognize it. even though things are getting better, the economy is getting stronger, we have a lot of work to do. a long way to go. as we have the debates about our budget deficits, about where we can reduce spending that we are recognizing the most important

thing still for us to do is to make sure we are reinforcing the recovery, and making the world more confident that we can solve the problems that we face here. >> treasury secretary tim geithner, thank you for being with us. >> appreciate it. >> thank you. thank you. [applause] [applause] >> we're going to let secretary geithner leave the room. and go back to work. we will be right back in just a minute. ♪ ♪ ♪ ♪

♪ ♪ >> all right. we've just been listening to the treasury secretary, tim geithner. now we're going to talk to some of the people in our audience here at this "atlantic" live town hall meeting. the first person that i want to call on is james, he's the chief economist for the american bankers association. james, you listened to mr. geithner for almost half an hour. you came away thinking what? >> well, i was particularly understand his comments about community banks. we believe they are extremely important to the life blood of their communities. and one the disturbing thing that is we've heard from community banks recently is they are being asked to add another compliance officer to deal with the thousands of pages of new regulations are coming out. we want job growth, but i'm not sure that's the innovative.

>> you are saying the administration's what? >> well, the bill that got passed by congress last year has already created 1500 pages of proposed regulations. we think it will be thousands of pages. and for the medium sized community bank in this country, they only have 37 employees. they are small businesses. to deal with that volume is becoming extremely hard. and, in fact, one the most disturbing things to me was we had a number of bankers tell me they have been in meetings with the regulators. they said if you are a bank, small bank, less than $500 million. that's 5,000 banks in this country, you are too small to survive. and so what really worries me, and i hope the administration is really sensitive to this, i think they are, is if we lose those community banks, where they are in chapel hill or oxford, iowa, or -- oxford, ohio, we lose these communities. that's the life blood for the

community. i'm worried we are at that point to lose communities. >> you are saying there are jobs impact. >> absolutely, the banking industry employees two million people. a lot of those certainly in the small communities. there are very good jobs as the center piece of that community. banks donate thousands of hours and money. if you lose that, we lose something special in the community. >> sitting next, the founder and the head of am pierce and associated. tell us what your company does and your thoughts on what secretary geithner had to say. >> we provide acquisition support to the department of defense and other agencies. we've been in business for just over three years. one the major concerns i have is what's being done to remove the barriers for small business growth and our ability to compete in a full and open market. one the things that i would very much like to hear is when we

look at all of the support that's been provided to the wall street and to the banking economy, and that they have been able to successfully come through this and show positive profits and earnings. and yet access to capital for small business to drive growth is one the biggest issues that small businesses have. secondly, as small businesses try to grow and need to compete in an open market, our ability to compete with large corporations who are also showing strong profits is hindered by our ability to put the resources in to be able to take advantage of the complex tax structure. i'd like to understand better how the corporate tax reform will enhance the environment for small businesses to grow and to add to our job roles. >> you are saying you didn't hear that. we only had half an hour. you are saying you'd like to hear more about that from the administration. >> absolutely. the president has indicated that

small business growth is going to be the key to the recovery. i believe that. i think there's lots of opportunity. i think there's more the administration can do to remove those barriers for small business growth, our ability to compete with the larger corporations. whether it's simplifying the tax code, improving incentive for small businesses, and the like. >> all right. one other person is marsha hale. you are the business of building america's future. it's about infrastructure, help us understand what it does. >> it's a national coalition that major bloomberg, governor schwarzenegger, and rendell formed two years ago to put a spot on why it's so important to invest in the infrastructure, not just rebuilding what we have built, but moving into the 21st century technologies. >> and is this administration doing what needs to be done, in your view, when it comes to infrastructure?

>> i found secretary geithner's remarks interesting about how it's important for the government to allow the private sector to give them the basis to be able to invest. i think they have had several strong problems. one was the high-speed rail program yesterday. which is very important to the issue of jobs up and down the earn seaboard if we could actually get a high-speed rail system up and going. but we also need to get to the $2 trillion that the president mentioned in the speech to the chamber of commerce. the government needs to bring incentives to the private sector to start investing in our infrastructure so we can remain economically competitive. >> what are one or two things that you could say today that need to be done to get the private sector to do what you are talking about? >> well, one the things we really do need to do is to rebuild our infrastructure so that we are, as americans, we are safe. that would one, produce jobs, and make us safe.

i think we actually should be implementing a policy which many other countries around the world have, which is a national infrastructure bank, which allows the government to help major engineering and construction jobs take place, but bring the private sector into it. because we can't pay for it all. we have to bring the private sector into it. >> all right. marsha hale, he's the president of building america's future. i want to thank all three of america's questioners. all right. alexa a mcmahon. >> we need to purr case they are good for business growth. that's an obstacle. people love the live question from our college audience.

they are certainly enjoying that. a lot of the discussion about the steps we need to take to mitigate the impact of sluggish economies. >> so that's where the discussion is focused now. back to you, judy. >> great. thank you. all right. our second guest with us now. julius genachowski, he's the chairman of the federal communications commission. thanks for being with us. >> it's great to be here. >> tell us just for everybody here live and watching online and reading online about what we are doing, what is the federal communications commission have to do with jobs? >> well, the federal communications commission has to do with jobs because we are the agency that's focused on our communication infrastructure. so in the 20th century, that was mostly telephone service and old tvs, and devices like that. and the 21st century, it's this new platform for innovation, and

job creation, and economic growth called high speed internet. wired and wireless. that's the core mission of our agency. and the -- there's no bigger opportunity for economic growth and job creation in the 21st century than getting our high-speed internet infrastructure right for businesses, large and small, in the united states. >> well, let's talk about that. you've been making some moves just within the last few days, certainly over the last few months in that direction to shift resources from the old communication system to the new. and one of those things, one the moves is taking -- i guess making funds, proposing at least to take funds away from the effort to get phone lines out in the rule -- rural parts of the united states in another direction. why? >> that's right.

well, we have in this country in the 20th century, strategy and a policy to promote universal telephone service. it was a good strategy, it worked. it rolled out basic telephone service everywhere in the country. it connected small businesses, consumers, families, and it was one of the contributing factors to the success of the american economy in the 20th century. well, today's central communication medium isn't telephone service. it's internet connectivity through mobile devices or computers at work or at home. that program though, that universal service program still wakes up every day and says how can we drive telephone service? it's actually disincentivizing transitions to the next generation communication infrastructure. what we proposed yesterday at the fcc was to finally modernize that program so that it's focused on promoting universal broadband in the united states

and in the parts of the country where the economics won't lead to a private company alone without assistance offering that service. and to do it in a way that begins by cutting the waste and inefficiency and bad incentives out of the program that we have now. >> and what's the connection to jobs? >> well, the connection to jobs is without high-speed, broadband infrastructure in a community, the chance for job growth is a lot smaller than if it's there. take a small business in rural america. typically, the small business would -- it's market would be local. to the extent that it wanted to reach people outside it's community, it could do that. but it would be costly in a bricks and motar world. with the internet, all of that changes. right? any small businesses anywhere can reach consumers in the text town, city, state, truly

anywhere in the world. that's the revenue side. on the cost side, access to high speed internet allows small businesses to access services from the cloud, lower their cost. so higher revenues from reaching new markets, lower cost. that's job creation. by the way, the alternative for a lot of those small businesses in rural communities that don't have high speed internet infrastructure is to move out of those small towns. i'll say one other thing, too, farmers are realizing how important access to high speed internet is too. to get accurate information, help on crop rotations, weather, and same thing, being able to market their produce, their products anywhere in the world. >> i've interviewed the young farmers on the internet all the time looking at just the kinds of things you are talking about. and including commodity prices and shifts in the commodity markets. the president has laid out a very ambitious broadband plan. and again, it's one of those

things that sounds great. everybody thinks it's great. it cost money upfront. what's -- what's the -- people -- let's go back to the some of the argument that we had, not the same one with secretary geithner. for people who are really worried about how deep of a hole the country has dug itself into with regard to the debt. the deficit. how do you say that it's worth spending so much money right now to build a broadband? >> well, let me take a step back from the most rural parts of our country where there are economic issues that we have to solve to overall broadband strategy for the country. a goal of leading the world in wireless and wired broadband infrastructure. overwhelmingly, we will reach that go through private investment by american companies, not through government investment. and the key strategies that we are looking at are ones that

unlease private investment. and there are three prongs to this. one is the one that we talked about, transforming our universal service fund that so money we are already spending on telephone service we shift in a targeted, efficient way to broadband. second is unleasing spectrum from mobile broadband. we all see what's happening on iphone and droids and tablets. incredible new economy that will be important. we can come back and talk about it. we'll come back and talk about how to do that. but what we need to do to meet our broadband goals is unlease spectrum for the future. bring market incentives to parts of our spectrum that are being locked up and aren't being used for mobile broadband when they could. this isn't about government spending money, this is about government looking at our investibule infrastructure, our spectrum where wireless signals

travel over and making sure that's up to the task. and in the third major prong is removing barriers to broadband build out. we are later today holding the confidence on broadband acceleration, looking at the things that we can do to make it less costly and faster to build out broadband infrastructure. whether it's sighting towers, takes too long, and we need to get a lot more towers up in the country to have the wireless service that we want. whether it's laying fiber that we need to connect the towers or provide other internet service, things like poll attachments. they are blood and gut strategies. but together these topics add up to about 20% of the cost for the private company in rolling out broadband infrastructure. it takes much longer than it should. we need to reduce the time and cost for broadband build out. >> all right. i want to pursue some of those

things. we have somebody in the audience with a question. let's go to you. >> ally weinberg. nbc news. my question is about net neutrality, earlier this week the chairman of the house energy and commerce committee said that republicans would attempt to defund or restrict funding for the fcc to enact neutrality rules through the continuing resolution through the government. i wanted to know if you could talk about what your thoughts on net neutrality as it relates to the jobs issue and also what your concerns are about this -- the defunding of net neutrality to happen. >> why don't you preface your answer by reminding those who don't follow this closely what net neutrality is all about. >> sure. net neutrality is a term i don't like. >> unfortunately term of the

decade. >> i think about it as preserving the freedom and openness of the internet. the internet that we are used to and we've had some quite sometime is one where any innovator, any speaker can use the internet to reach anyone in the audience and any audience member can access any service content application on the internet. it's a core, central architecture of the internet. for the last several years on the bipartisan basis, the fcc has taken steps to preserve that openness and freedom as the internet continues to move into the next generation. a couple of months ago at the fcc, we adopted high level framework to preserve internet freedom and openness. we spent a lot of time talking to people on the technology side, and people on the infrastructure side who had been at war on this issue for many, many years. and put together a sensible set of rules that provide certainty

both to earlier stage investors and companies that want to take advantage of the internet to create and provide new services. and also certainty to broadband infrastructure builders to know that they can get a real return on their investment by building out networks. >> questioning about the republicans proposal to frankly not fund -- >> right. >> -- this thing you've been spending a few minutes describing. >> i'm convinced what we did was a sensible step to promote the internet job creation engine, to unlease even more investment both in internet applications and in internet infrastructure, and we're hopeful that we can move forward from that and focus on the other issues that we need to talk about to build a broadband future for the united states. unleaseing spectrum, transforming universal service, and removing barriers to broadband build up. >> so are you prepared to do

battle with those who have a different view? >> listen, i'm prepared to explain what we did, why we did, and we'll have a good discussion about it. and our job is to be a resource to congress. and if there's a debate, we'll engage in the debate. >> all right. we have a question from another part of the awe -- audience. >> phil from john hopkins university. with respect to the net neutrality, it seems to me there are incentives for building the networks in city and large urban dense area. the job of the fcc has been to access in the rural areas. why couldn't there be in system in which you could incentivize private investments to stay out of the markets where already the incentives exist and figure out ways to provide access without having to deal with net neutrality issues? >> well, a couple of points. with respect to major markets,

there are very important areas where the fcc needs to be engaged to make sure we have the infrastructure that we need that the next generation of the internet can succeed on. and chiefly what i'm referring to is spectrum. right now the demand on spectrum from wireless smartphones and tablets is dramatically exceeding the supply of spectrum that we have available. if we don't tackle that as a country, we will return into a wall, everyone hates dropped calls. imagine a world where as a consumer, as a small business, as a large business you are relying on the mobile internet and you have the equivalent of dropped calls all the time. high prices and terrible service. tackling the invisible infrastructure is vital. i mention that first because that's generally a large market issue. because the higher the population density, the more

spectrum congestion we'll have. so tackling this is chiefly a large market issue. we're focused on that there. you are right about rural america. that's what we were talking about before in transforming the fund. that's why we are trying to do. modernize it. cut out the waste and inefficiency, use market-based strategies like reverse auctions to get broadband to rural areas. and finally with respect to open internet ideas, you know, in a world where consumers had unlimited choices of broadband providers, i don't think there would be a lot of discussion or debate about this. overwhelmingly, americans have only one or two choices for wired internet access. and in this world, having reasonable, high level rules that lay out the basics of what's fair and what's not, provide certainty to all of the investors throughout that ecosystem.

the early stage investors that want to start new companies. we need these entrepreneurs to be incentivized to take risk. and also the larger companies who want to know where the lines are, because they need to get a return on their investment to keep on building the infrastructure. >> all right. we have a question from the student at miami of ohio university. why don't you go ahead. i want to say to all of you who are watching online, there's an address you can see on the screen if you want to submit a question online. go ahead. miami of ohio. >> good morning. my name is danielle stone. my major is accounting. how does the u.s. match up against key global players as it relates to technology, internet, and other tools of communication? >> not well. and here's one study that came out in the last year. it's a study that looked at 40

industrial countries, including the u.s. and measured the countries on metrics that looked at our innovative capacity and competitiveness around technology. including important metrics around high-speed internet. that study found the u.s. on a snapshot basis sixth out of 40. which is interesting. i tell that to people. some people say that's not so bad. of course, it's terrible. it's not what's really -- it's not on the olympic podium. it's not good enough. it's not what is the most important thing about the study. the study also looked at rate of change in these metrics for each of the countries. and each of the country was the improving. so it was really rate of improvement. on that basis, the study banked the u.s. 40th out of 40. >> ouch. >> that's scary. and it also explains something. first what does it tell us? it tells us if the u.s. is moving forward slowly, it's not moving fast enough.

other countries see the opportunities for high-speed internet, wireless and wired, and they are taking it seriously. it's also a little bit of an explanation of why it can be hard, sometimes, for people to realize how important it is to that we move more quickly. people's perceptions, this is accurate, we are moving forward to the united states. we are. what's less understood is that other countries are moving forward even faster. tackling the kinds of issues that we are talking about, unleasing spectrum to lead the world in mobile innovation. reducing some of the barriers that are slowing down the build out of our infrastructure. they are very important strategies that go directly to our global competitiveness, and to our ability to lead the world in innovation in the 21st century and have the main engines of innovation, the main new products, designed here, built here, marketed here first and then exported to the rest of the world.

that's what at stake. >> and just in a world, what is the main thing that needs to be done to get the u.s. moving faster? in a word. >> in a word. focus on broadband. focus on high-speed internet infrastructure and get it right. that's not a word. it's like six words. >> all right. now i believe we have a question from the student at the university of north carolina chapel hill. go ahead. >> good morning, i'm ricky spiro, i'm hoping you can zoom out. it seems to me you have a tricky job in the sense that communication is at the same time a high-tech industry where the needs change very quickly and the technology changes very quickly, but at the same time, any given consumer usually has very few choices of what companies they can use. it starts to look more like the utility in the sense that there aren't a lot of choices. you need some good regulation to protect consumers. can you talk a little bit about

how you view those issues and how you balance those priorities? >> sure. competition is a core strategic mission of the fcc. the issues vary as you look at different parts of the broadband economy. one of the many reasons to push wireless to unlease wireless to accelerate the next generation of global 4g which will be much faster with lower latency than 3g which is already pretty good is that it increases the chances that wireless broadband can become a competitive alternative to wired broadband. because most of the competitive issues really are in the wired space. so it's something that we focus on at the fcc. wireless is a big piece of it. consumer transparency is another important piece of it. most people don't know what broadband speeds they have. one the things that we've found in our work when we produce the

national broadband plan last year was that the speeds that most consumers actually get at home are much less than the advertised speeds. and so even with the limited competition that we have in wired internet access, consumers don't have the information right now to put pressure on companies -- >> challenge the companies. provide the service. >> exactly right. we are working on strategies to make basic information about broadband access more transparent. if you are getting slow speeds here and the neighborhood over here is getting higher speeds. you ought to know that. it ought to be easy. >> that information is not available right now is what you are saying? >> it's not easily available. you can find your own speed. the fcc released a speed test app if you go to broadband.gov or fcc.gov and measured your own

speed wired and wireless. what you can't see right now, we're working to get there, put that on a map and see how you compare to people in other communities, other parts of the country. and if the community looks at the map and says wait a minute, how this this community is getting average speeds lower. i think we'll see communities saying to their providers, do something about this. at the same time, we have to give providers to get a return on their investment. as someone pointed out, this is going to be overwhelmingly private investment. :

>> i'm wondering if -- where you are as far as building out broadband in such a way that it considers unemployment first and maybe geography second. >> the challenge that you're referring to is very important challenge for the country and that is broadband adoption. first we talked about broadband infrastructure in parts of the

country that don't have any infrastructure at all, simply rural america. the second problem the u.s. has is even in areas where broadband is available, the adoption rate, the subscription rate are low compared to other countries. in the u.s., that's 67% of people who can subscribe do subscribe. they are on the internet. that compares to say 90% in singapore. it's too low. 67% of the country is on electricity. wow, 70% have tornado watches. that'd be crazy. the adoption part is a big challenge for us. one other thing on why it's so important. the cost of digital exclusion are rising. what do i mean by that? ten years ago, if you were unemployed and didn't have access to the internet, well, you can still look for jobs. you'd see ads in the newspaper.

you have a phone. you can apply to jobs. you probably have access to a fax to get your information easily over there. today, it's a very different world. job applications moved from newspapers to the internet. over 75% -- >> and information of jobs. >> it's all on the internet. meanwhile, more and more companies are acquiring online applications for jobs and they are requiring digital skills. the cost of not being online in that area are getting higher and higher. i can tell you about the costs of health care that are rising. it's a very important challenge. there's a different part of the universal fund called lifeline link, and that's helped low income people get access telephone service over the years. next, we're looking at updating that for broadband and transforming it like in other

programs that have waste and ficialght sighs that need -- efficiencies that need taken care of. we are also looking at public and private partnerships that focus on adoption for people. it's a great opportunity for a win-win. every new subscriber that a cable oar telephone company gets for the internet is a new subscriber for them, and that take les of -- tackles the national adoption challenge. >> does that answer your question? you can be conscious of unemployment of economic circumstances of access as you think about where you want to focus. >> we have to, but the digital divide people talked about, as i said, the costs of that divide are getting higher, and it's more important to think creatively on how to tackle it. it's not easy in a time when

fiscal restraints are tight. we have to be creative and let the public and private partnerships look at anchor institutions like libraries and schools. one of the things that we did was we have a program that helps schools get online. until we changed the rules last year, those schools weren't allowed, if they wanted to, to open up their internet facilities to people in their communities who were not students. we don't want to impose that on schools, but schools that want to do that should be allowed. we've made that change, and that's helpful. >> there's the spectrum of what you want to do to get broadband up and to make sure the country is better wired than it is, but the broadcasters who control that spectrum are not necessarily willing to give it up without a fight. how do you see your way through that? >> well, we worked very hard on

this issue and developed a plan that i'm convinced is a win, win, win for everyone involved. it's not a plan that says let's take this from over here and make it available for mobile broadband. a lot of people do advocate that, but this is a plan that says let's run the two-sided option where we auction off spectrums for mobile broadband and have the supply spectrum in that option come from broadcasters who voluntary contribute their spectrum to the auction and can share or not. it's a way to bring market incentives into the decisions. we're convinced if we do that, we can free up very significant amounts of high quality contiguous spectrums for mobile broadband and do it based on voluntary incentive for broadcasters and other users of

spectrum now that have spectrum under older rules that keep market incentives out of spectrum allocations. >> one final question from university of north carolina. go ahead. >> hi, i'm a senior here, and i have a question about mobility in the workplace. given a lot of the revolutions in technology, a lot of work has become more mobile, and people can do work just as easily from a local coffee shop as they can from their cubicle. i'm curious how the fcc plans to support more of this mobility in technology. >> that's a perfect segue. what you're doing is actually great for our economy. it's making it easier for businesses to lower their cost, motivate their employees, reach new customers. the problem is it requires a invisible infrastructure, it requires spectrum.

the broad spectrum we have to free it up for mobile broadband, it's designed precisely so that people like you can have access to enough spectrum to use it in the ways that you're using it, and we can tell the same story not just about businesses, but using spectrum for health care, remote diagnose not ticks, being able to get information anywhere, consult with a doctor anywhere on a mobile device, education. we really be the first country in the world to move from paper textbooks to wireless digital textbooks. i have a 19-year-old. he carried around a 50 pound backpack for years. he was lucky, went to a good school, his textbooks were current. students carry around 50 pound bags with old textbooks. now that the cost of tablets are coming down, you can have up to date textbooks that are more

than books, they are interactive devices that empower teachers help students. that requires spectrum too. >> those devices cost money. >> they cost money, but they don't cost more than the textbooks. if you look at the cost of the big stack of books compare it not tablets, it's a fair fight. what i want to see is the country moving aggressively in this direction. one, it helps the students in the education system. two, because it will help our economy and our job challenge because we want to be the country that invent digital textbooks, to have them become the norm here, and export of that to the world. we don't want to see in other countries figure out, oh, we can do digital textbooks here, and they can sell their books into this market. >> thank you very much for being with us today at this town meeting. thank you, appreciate it. [applause]

[applause] >> all right, we are -- we're going to wait just a second for chairman to leave, and i think while we have this opportunity, this moment, if we have the connection with the students, let's go to university of miami in ohio to ask you, how many of you have a job lined up? i just want to see o show of hands. i think i can see you on one of the monitors in the studio in washington. how many of you have employment lined up? raise your hand and move it around because i can't see you. only one, three, okay. can the others who don't tell me, you know, what are you worried about, what kind of job do you want? what do you think is available out there for you or not? i just want to hear from one or two of you.

>> well, as far as not having a job yet, my main concern is waiting until i get grad school notifications back. it's not so much looking for employment now as it is looking for a greater education before searching for my first job and career. >> all right. that makes good sense. anybody else? what about one of you who does have a job. what are you going to do? >> i'm going to be joining morgan stanley as this summer. appreciative applause here from washington. what about the other two that have jobs? >> can you repeat that? >> the other two who have jobs. can you share with us what they are? >> i'm actually going to be working for young doing auto work with them. >> i'm working with consulting doing the strategy and

operations. >> pretty successful group. congratulations, and we hope that the others in the group, that your plans work out well too whether it's grad school or employment. we'll come back, and i want to ask the students at the university of north carolina in just a minute. back here in the studio, miraculously next to me is the senior senator from the state of utah. he is senator orrin hatch, the ranking republican on the senate finance committee, and a senator who spent 34 years in the united states senate. senator, it's very good to see you. thank you for being here. >> it's always nice to be with you, judy. i heard you were looking for someone with charm, wit, and charisma. i'm happy to fill in until you find him. [laughter] >> we're hear to talk about jobs of the future. what do you see right now? i mean, you know, you represent the state of utah, but you've

been in washington for over three decades. as you look out ahead, what do you think the outlook is for young peemg who are watching -- people who are watching? >> well, if they are going to college, they have excellent opportunities to get good jobs at that. those who don't finish high school, they are going to drag behind and have difficult times in life. it pays to get an education, pays to go through high school, pays to go through college and pay attention to those things. we're going to have to do a lot of things to resuscitate our country. our country is the greatest country in the world. we're in danger of losing it. right now, we're spending -- >> we're in danger of losing it? >> of losing that position. we are now spending 69% of gdp. some say the gross national debt to gdp is up to 90%. if it is, we are in real trouble. i think it's closer to 62%.

we have to spend less on government, more aattracting businesses and opportunities in this country, and that includes everything from what the president suggested, having corporate tax rates and doing it in a way that doesn't harm the growth of companies, the small business companies where 70% of the jobs are created to basically helping our young people to find jobs, and get them educated so they can get jobs. >> what's the government role in doing that? >> well, i think the government's best role would be to keep taxes low, try to get spending under control. we're spending 25% of gdp right now. we haven't spent that much since world war ii and shortly there after. it's usually 20% at the mostment . right now, our revenues are something like, you know, 14.8%. practically our issues should be around 18% or a little higher

from time to time. when you are studying 25% above your revenue and 25% of the total expenditures and you only have 14.8% coming in, you can see that's putting the country in great jeopardy. we also have huge national debts that we've gt to bring down, and the only way we can do that is to be competitive and being competitive means giving business an opportunity to grow, businesses, and keeping our high-tech world going. i'm chairman of the republican senator high-tech task force. our tech world is second to none if the world, but we're in danger of losing that when you consider how competitive china and india has become, and that's just mentioning two countries, and not all of them. >> people are looking at job growth, or the lack of it over the last decade, and not just the last year or two. we understand looking back that job growth was starting to slow

in the year or the decade of 2000 to 2010. we weren't seeing in this country the kind of automatic growth we had seen before, that those ingredients were already there, and so i guess my question is what are the fundamentals in our economy that need to shift beyond just tax changes? >> well, this country is the greatest country in the world still, and it would be catastrophicically stupid -- catastrophically sciewpped for us to throw it down the drain. we can do it with too much government. when the administration came in, they wanted to do away with deferral rules. deferral means that are we going to tax the overseas profits of our large corporations? if we do, then they're uncompetitive because other

countries don't do that, so we were able to defer. our laws still aren't very good in that particular area. >> that would be a tax cut or a tax break, wouldn't it? >> well, it's a tax break if they don't tax overseas profits, but if they bring them back to the country, they tax them. even though there's a lot of businesses overseas by necessity, that still means there's a lot of jobs here. as long as the company is moving ahead, that company will employee -- >> that doesn't always go hand in hand. companies grow jobs overseas, and not as many here. >> that's true and not true. for instance, in the 1980s of the 50 largest multinational corporations in the world, we have 37 of them based in the united states. today, because of our poor tax policies and because some of our other government approaches to everything, we now have 16. you know, that's pathetic when you think about it. this is the most innovative

country in the world. take the high-tech world. who can compare with what we've done when you consider microsoft and i just chatted with my friend mark of facebook yesterday. he's 26 years of age worth $29 million because of facebook. we want to encourage that. we can tax too much. we can overregulate too much to the point where businesses don't feel comfortable here, and they will go overseas. look, we're also not balancing our budget. like i said, we're spending 25% of gdp. >> so the administering, the president is thinking, and we just heard from secretary geithner, that yes, there is a deficit, and yes, it needs to be addressed, but we have to worry about the jobs of the yiewch, and to do that, we need to

invest in education, medical research, and infrastructure. some of the things that are going to make it possible for jobs to be created down the line. you're saying that's not as important as getting the debt? >> no, i'm not saying that at all. i think that is all important, and we do invest a lot of money. do we do it efficiently? do we do it well? do we do it in ways that encourage businesses? are we encourage our small businesses where 70% of jobs are created? are we taxes them too much? let's face it, the president said he's going to reduce corporate tax rates. not many corporations pay the full 35% because there's tax expenditures. well, i think we can reduce those rates. the g7, largest countries in the world and most productive, they are about 28% tax rate. we're 35. the g20 is 25%. we're 35%.

we have to get in the real world in order to be more competitive, and we need to do things, everything from expanding h 1-rbgs v visas, -- >> you're saying cutting the corporate tax rate down to what? >> i'd like to get it down to 25%. if it was done to 25%, and i'm along with senator baucus, which keeps our people competitive, a lot of other countries have research and development tax credits. we should make it permanent. if we made it permanent, then companies could plan and count on it and do a lot of things that they're not doing today. >> there's a question from the audience. do you know what the impact would be on the deficit to institute those tax cuts? >> the only way to get out of the deficit is to strengthen businesses, opportunities, and success in this country. if we do that, we'll have enough

revenues to take care of the country. we have to stop spending. when you spend 25% of gdp, that a really off the charts, and that's really costing us every step of the way. we've got to bring spending down. the federal government is not the answer to everything, and unfortunately, over the last 30 years it's become the last answer to everything. >> yes, i'm doug with competitive power ventures. senator hatch, we hear a lot about controlling discretionary spending, but the real threat to fiscal soundness is entitlements. >> that's right. >> when president bush tried to take on social security, i think it's fair to say he was attacked by the democrats and abandoned by his own party. i suspect that president obama is afraid of the same thing if he tries to take this on. how do we have a serious adult conversation about entitlements without it become party

warfare? >> well, presidents are afraid. they are afraid of tackling these entitlements. but you can want solve those -- cannot solve those problems without presidential leadership. you have to have a president to stand up, but you also need a good chairman of the finance committee. i intend to be chairman in 2013. >> that requires a republican takeover of the senate. >> that's right. [laughter] >> i'm not only praying for it, but working towards it. >> your reelection, you are up for reelection. >> i am, and i intend to get reelected so that i can do this. i intend to see what we can do to help resolve entitlements. that's social security and medicare, international trade, this is all in the finance committee. i intend to do everything in my power to resolve these issues and get spending under control. i'll tell you, if i'm the most hated person in washington, i'm going to get that done, but i

need to be chairman of that committee, and i know how to do it. i've been moving around up there a lot over the years, mostly in the minority, but when we're in the majority, we have done some amazing things. there's another aspect which is international trade. there's three tradings that the president says he's for, but only for the korean trade agreement right now, and we should be for that although it's very difficult to get the democrats to move up and do something about it. that means at least $11 billion net positive to this country, and probably more. we also have columbia and panama. they are already negotiated and done, but have been stopped from being done. columbia has free rights in america, and we don't have that in columbia. that's another billion dollars a year. >> what were the jobs? >> accomplishes to create jobs, and from an export stand point,

and these are types of things that i think the president has the right feelings about, but he hadn't led. go back to social security, medicaid, and medicare, those programs need to get under control. >> a question from a student at the university of ohio. go ahead. >> senator, "new york times" recently found while the united states has combined federal and state corporate tax rate of around 39%, the actual burden that falls on corporations is substantially lower. united states actually according to the world bank ranks around 124 healthdyne of the for tax burden. what are the loopholes that reduces burdens and our inability to pay off the deficit? >> that's a good question, and frankly, we still -- all these other nations have tax expend cheers and -- expenditures. they have tax credits we don't.

we can't giver our companies the -- give our countries the consistency to rely on being treated fairly. we're still, next to japan, the highest corporate taxing nation in the world, and we need to bring those down so that we can give the incentives to hire more people, create more jobs, and keep us going, and we can do that. it's a difference in philosophy. my friends on the other side believe, and they sincerely believe, the federal government is the last answer to solving these problems. i think it's an impediment to solving these problems. we have too much determination coming from washington and too late allowing the free market systems to expand and grow and do what it should. >> you know, it's a classic combat that's been going on my whole 34 years in the united states senate. i'm now the most senior republican in the united states

senate, and all these years #, we've never had a fiscal conservative majority. it's always been 3 to 6 who go to almost all liberal democrats on spending issues. we've won battles by great president leadership, reagan, bush one, bush two, and even bill clinton. >> how much republicans are left? >> we keep the ones we have, and expand getting more fiscal conservatives. we don't need nuts in the united states, but fiscal conservatives. [laughter] that's what we need more than anything. we have the nuts on the other side, and every once in awhile, we find them on our side. [laughter] we try to work to resolve these problems and make people less nutty.

[laughter] >> can i ask you to name names? [laughter] >> i don't want to disillusion this young audience. >> young people are so bright today. they know this stuff so well. they can figure out who the nuts are. [laughter] you'll find them on the democratic side. [laughter] >> thank you for joining us. appreciate it. good to see you. thank you so much. [applause] >> all right, we are going to give senator hatch a chance to take the microphone off and get back to work in the senate. we appreciate you being with us. coming up, we're talk with the governor of virginia and later with all the talk about the need to innovate, we'll have the ceo's of three recent startups join us. it was in that spirit that students from miami university in ohio set off to fill a void

in their own college town. >> my friend, nicole, and i worked at a coffee shop part time. we loved it, and when we came back to school, we thought it was a crime that a university town didn't have a good coffee shop. officially it started with hoping the owners of that business would open a franchise here. they were supportive and great with us, but they didn't want to move in that direction. we knew we had a good idea, and we just figured we would take it as far as as we could, and low and behold, a year later, we had a business all of our own. >> i think the biggest challenge was just learning how to manage people. it went from being a part time worker and a full time student to all the sudden owning a business and having a staff of 18 people who were my age and my friends, learning how to treat them with respect, how to be a boss was definitely hard.

people showed me a lot of grace. >> being my own boss is great. i make my own schedule, take time off when i want to. i'm able to hire the people i want to spend the majority of my time with. i believe i have the greatest job in the entire world. i'm fortunate that the rest of my careers are ruined because i've always been my own boss. it already difficult for another person to have authority over me telling me what i can and cannot do. it's easier when you know you're allowed to set your day and what your career looks like. >> all right. we've been hearing from students at miami university of ohio. joining us now in the studio here in washington, d.c. from the commonwealth of virginia right across the pennsylvania -- patomic river.

>> i appreciate being here. >> well, the focus as you know today this morning is all about jobs, and jobs of the future. tell us in the state of virginia, what's the picture? i mean, what's the employment picture, the unemployment picture, and what does it look like down the road for the next few years? >> this was our top focus in virginia, and i think for most governors, republican and democrat, focusing on economic development and recovery from the great economic downturn globally and getting people back to work is their top priority. i had a bumper sticker that said bob's for jobs. i'm still focused on that because it's what people are concerned about. jobs give people a since of dignity, reduces reliance on government. virginia, because of our tax and regulatory requirement, right to work laws, is generally faired better than other states. we're at 6.7% right now compared

to 9% nationally. >> why is that? why is virginia in a better spot? >> well, i think several things. the fundamentals of the virginia economy under republican and democrat governor says i think stays strong because there's a focus on keeping taxes and litigations and we're a right to work state, only one of 22. we can recruit business, have the best universities in america. long term we address work force development by having skilled labor. we got proximity to washington, d.c. and because of the technology sector and defense contracting, there has been a fairly stable market up there in those areas. we've just focused on it. i mean, academic development takes work by the government, not to create jobs, the government doesn't create wealth or opportunity. that's the private sector, but you can reduce the barriers for

entrepreneurship, economic development, and create incentives to attract businesses. i travel out to other states, and other countries, europe primarily, to talk about the virginia story and why people should come to virginia, and i think that's helped. >> tell us about that. that's something people find interesting that as you said not only travel in the unite, but you've traveled overseas. telg us about the process of how that worked and how successful has it been, and how many jobs did it create? >> right now, we are fourth in the country of new jobs created since i've been governor. we are behind texas, california, and pennsylvania. all bigger states, but on per capita, we are fourth or fifth. it's like learning a business. you have to close the deal and look them in the eye and say virginia is right for you. here's why, here's what we'll offer you and what you can enjoy

in a quality of life in your business for your workers when you get here. i made trips to california because their tax and regulatory and right to work environments are not good. if they're going to exit,. i them to come to virginia. i asked for a major economic package giving us $63 million in new incentives. i asked for money to open offices in england, chai that, and india. i'll travel throughout the year, and this opens offices, meet with potential investors, and potential new customers for virginia's products. >> how many jobs have to be at stake to get the governor himself to show up for one of these meetings? i mean, are we talking thousands, hundreds?

will you fly across the country for a few hundred jobs? >> sure. we have multiple meetings during those times where i meet with a lot of potential investors. we put together a plan saying what are we good at in virginia? it's defense contracting, aerospace, technology, advanced manufacturing, wine, tourism, and fill. . we know what we're good at. i want to go and tell people in other states and in other countries what we're good at, what the incentives virginia has to offer to create interests to get them to look at virginia and i think one the biggest issues is we've got agriculture that's still the largest industry in virginia even though we are known for manufacturing and other things. i want to open markets in china and india, two of the largest populated countries in the world, for virginia agriculture products.

there's a lot of benefit in doing this. i spend a lot of time on the phones, first, ones based here, secondly, ones to grow here, and third, the recruits. sometimes that personal relationship means as much as the money. if they come to the state, they want an ally that's pro-business and continues to find ways to break down impediments to free enterprise, and that's the story we're telling. >> there's a question online. before that though, you cut virginia's budget, and correct me if i'm wrong, by -- or you oversaw the cutting of the budget by $4.2 billion last year. was there an affect on jobs as a result of that? >> i think there's an ax us. we cut another bill and out of last year's budget.

we reduced speaning. i think the message to the business community is we're not balancing the budget on you. we're going to find ways to reduce spending, get government to live within its means like businesses and families are doing any ways, and to say we want to grow our budget to be able to fund services in the future, not with tax increases, but economic growth. we put up sipes at every border saying virginia is open for business up like what we see in the federal government over the last couple years when they are talking down to wall street and business. we say great things about business because we understand jobs are created by the private sector and entrepreneurs. >> not a loss of jobs because of the budget cut? >> there were some public sector jobs lost. we have reduced the size of government by 1500 employees over the last couple years between my predecessor and i, but we made that up much more in private sector jobs. >> okay.

there's a question from online. >> thank you for being with us today. this person wants to know you've made increasing trades with china a priority for your state. why? should other states be following your lead? >> did you travel to china? >> we are going to may. china, korea, and japan. we have the schedule pretty well set. one, they have shown an interest in doing more trade with states. secondly, there's over a billion people there. there's enormous new markets for virginia products whether it's agriculture products or technology products. you know, ask jesse james why he robs banks? it's because that's where the money is. china is not only where the money is, but potential customers. we think there's a opportunities there that we haven't seen before, and again, you have to

look people in the eye and say this is why i have to come to virginia. >> we'll come back to you in a second. governor, you said if you had more money you wouldn't make new investments in education, higher education, transportation. you referred to this as infrastructure. those sound like some of the same things that president obama is talking about investing in. how are your ideas different from his or are they? >> well, i'd say for the first couple years, this administration was not very favorable to business and free enterprise, not only were they using rhetoric that's down the wall street, but some of the policies, cap-and-trade, car check, unfunded mandates on the states, micromanaging, parts of the free enterprise systems, taking over gm, corporate increase tax rates, these are

things not positive to grow us out of an economic downturn. >> should they have let gm go? >> well, another too big too fail. what was in it for the small business guy? nothing. you know, i will say that maybe pieces the stimulus were helpful, some was just spending for democrats being out of power for 15 years. if they had spent the money in the stimulus package on infrastructure, 6% was on transportation. that's not acceptable. that would have been one time, you don't build on your spending obligations and it would have got people back to work right away. what we're investing this year now that we have a surplus and we've up vested because our economy is growing faster than we anticipated, we are putting money back into education.

long term, judy, that is a critical part of growing your economy is improving education. we're falling behind specific countries, and secondly, money goes into transportation and thirdly economic development and trade incentives. i've asked for another $54 million from the general assembly this year for tax subsidies and other incentives to get businesses to come to virginia. >> when you talk about investing in infrastructure and education and so forth, it's different because it's at the state level versus the federal level? >> well, not necessarily. i do think some of the thing that the president has begun to talk about now after two years of things that have not been that helpful, i think, to the free enterprise system, investments in infrastructure, it's a good idea. we have got crumbling and substandard infrastructure in

many parts of the country. i do think those invest. -- investments are prudent. they form the basis to grow and development. on that floor, i applaud him. i just say it's a little late. that should have been a part of the stimulus package and not just 6% of the transportation. that's a big part of our package this year, and it's critical for our future prosperity. >> question from a stay tuned at the student at -- question from a student at north carolina. go ahead. >> good morning, i have a question. you were talking about engaging with trade from countries around the world, opening up borders, and just the united states in general, your concerns about how it will affect the global economy and might be detrimental to other countries not on the

playing field yet? >> not really. i'm glad you're calling in though. the governor of purdue has done a great job. frankly, i think that's the way it ought to be. we don't want the federal government involved. we want states competing with one another with jobs. governor purdue has done well in racking jobs for her state. i think that i believe in free trade. i'm less concerned about the concerns the young man raised. i think we ought to try to promote american goods and services around the world. now, if there's not a balanced playing field, then i think that's certainly an issue for our federal government. i know there's a lot of concerns about protecting property rights and intellectual property in china. that's still an impediment to free and fair trade with china. if i can expand markets for

virginia products in korea, china, japan, and so forth, i'm going to try to do it. >> there's a question here in the live audience. all the way in the back. >> good morning, mr. governor. >> good morning. >> i'm a defense contractor in virginia. >> hi, neil. >> my question was about impending defense cuts in the next five years and how that will affect the state of virginia and folks in virginia that work in the defense industry? >> well, first, neil, thanks for your work in that area. we've got the greatest military on the planet, the young men and women with the resources provided by entrepreneurs like you in the private sector that are doing marvelous work. we are the home of the united states military with the pentagon, the greatest navy base in the world. yeah, the federal government makes enormous investments in

virginia in defense. now, there are plans by secretary gates with the tailed philosophy to put more money into the war fighter, less in administration and overhead. i applaud that. we have $14 trillion national debt that's unsustainable and immoral when we impose that debt on our kids, and so every branch of the federal government ought to look at how they can cut. it just needs to be done in a prudent way, and actually as a governor, i'm concerned about the jobs in cutting back on up vestments in -- investments in virginia. the recent announcement the secretary made in august about reducing the joint forces command presence in hamton rose and reducing contractors like you, 30% in virginia and across the board caused great concern. i spoke to him this morning, he's going to make the announcement about joint forces command this afternoon.

i'll let him make that announcement, and we'll do better in virginia than we had hoped. on the defense contractor side, i think 30% was allottable, but arbitrary. there was no discussion whether those services can be done in house, cheaper, more effectively than with a contractor. they are rethinking that. there's a work group with the secretary to relook at that because i think so much of the technology capacity that makes us a superior war fighter in america is because the great technology our defense contractors provide. we're working on that, and hopefully we'll have a good presence at the table. >> governor, another question from the audience. yes, sir, go ahead. >> i'm john. we represent thousands of i.t. companies, small and medium-sized i.t. companies around the country include k many, many in the state of virginia. gm will probably sell more cars

to china this year an the united states. you just made a passing reference to the problems with intellectual property, but virginia has to confront the issues while china appears increasingly to take their own property more and more seriously with a promise to hire 9,000 patent examiners for example, but what do we have to do for them to take these more seriously there so the markets are available to entrepreneurs in the state of virginia and around the country? >> well, that's part of the purpose i know of my visit. thanks for your leadership, by the way, in the organization. i think that with that size of a population and with more and more opportunities for markets dob open over there, then it is a prime time and opportunity to talk to them about some of these

technological advancements. you pointed out the key challenge is that what we don't want to do is take the great new stuff that entrepreneurs like you create in virginia and then everything we have that's been protected here threw our great offices gets immediately appropriated, and you lose the value, and you got fabricated or copy-cat materials for that product coming from china. i think that's still a huge concern for our federal government, and it's ongoing work with china to find a way to balance the playing field and get those protections in place. in the meantime, on any of those things where we don't run the risk on infringement and pat ends is to push to expand those markets over there. i mean, we know there's a flood of goods in china that are being

manufactured, frankly, a lot that used to be manufactured in southern virginia are now manufactured in china and being sold back to people in virginia. i'd many rather have them take those things that are manufactured here and purchase. i think the person was right the other day when he said we need to make things again in america. wee are much more slanted towards the service industry, less towards manufacturing industry, and i think we have to get back to that. >> you have a question from online? >> i do. >> this is from a user named ck. where doing the job growth will be in 2015-2020? what should our colleges and high high schools be doing to prepare today's youth for capitalizing on these segments? >> you know, that's a great question. that's something i know we're examining this year. i asked for major reforms in the higher education system this year. the bill passed unanimously in

both houses for the first time, the greatest strategic length between higher education and economic development. you can't just grant degrees without a sense of what are going to be the jobs of the future, otherwise, you're falling bhaind. when you look at the specific countries like china, korea, and japan, they are doing a great job. we are way behind in engineers, mathematicians, scientists per capita than we graduate. that's a bad long term trend for american defense, technology, and manufacturing industries, so the question is timely. i think, at least for us in virginia, that advanced manufacturing, aerospace, defense contracting of virtually all flavors, and then some of the softer industries like wine, tourism, film, things like that are things we're good at and growing, and we want to invest that. part of our higher education

restructuring is to create inventives for college presidents and boards and visitors to create degrees in areas that have the adequate highly skilled work force to meet the demands in the future, and that's, i think, critically important so that the young person now who is in 8th grade, knows what's on the table for their future in 10 years. >> last question, governor. what have you learned in the year you've been in office about jobs and job creation that suprised you? i'm curious. >> this trend towards incentives, i think, is not going away. some call it corporate welfare. we talked to the young man who called in from north carolina. governor purdue has three times the amount of incentives than i got in virginia. >> what's an example? >> well, there's something i have a governor's opportunity fund which is essentially a cash incentive to be able to relocate

to virginia. my cro soft just made the largest in business in the history of sorns virginia. we offered a series of incentives to come. relocating from california to virginia this year, and we offer significant cash packages to come to offset the costs of the relocation, but more so to create inventives to leave one state and come here. that's one, but i guess the bigger one, more than up sentives that basic fundamentals that made america great for 235 years are still important. what my predecessors, the first two governors of virginia, jefferson and henry, what they said is important then are still important now. that's free enterprise. if you have a climate in your state that is not friendly on those issues, you're not going to be able to grow and expand.

if you do like virginia does, you're going to grow. i think there's nothing much new under the sun in terms of what it takes to promote a strong economy to a degree that virginia promotes those values, and we'll stay a strong country. >> you need some taxes to provide services and you're looking at that battle. >> right. i think i used the word excessive taxes and regulation. i have to build roads, hospitals, and prisons. >> and educate the children. >> absolutely. >> thank you for coming. we appreciate it. it's very good to see you. thank you, thank you. [applause] >> the washington press club foundation's annual continual dinner will be live tonight here on c-span2 at 9 eastern.

>> u.s. trade representative, ron kirk, says president obama's plan to submit the u.s. free trade agreement to congress in the next few weeks. mr. kirk testified before the house ways and means committee in a hearing that looked at pending trade agreements with columbia and panama and trade between the u.s. and china. this is a little more than two hours. [inaudible conversations]

>> good morning. the committee will come to order. we are opening the hearing on president obama's trade policy agenda, and good morning. i want to welcome everyone here, and also extend a special welcome to our guests, united states trade representative, ambassador ron kirk. ambassador, this is the first time you've been invited to appear before the committee, so we're looking forward to discussions and particularly the path you see forward on the three pending trade agreements. international trade has been a corner stone of foreign policy for the past 60 years. we need a robust trade agenda to create jobs. while the president spoke about the merits of trade, there's little to show for it. the american people are demanding more and more and

deserve more from this administration when it comes to the job creating potential of our trade agreements. now, we've seen steps in the right direction in the recent months, and i appreciate your work and the president's work on the agreements, but there's more to do. most pressing on the trade agenda are agreements with columbia, panama, and south korea. the president's leadership helped move this deal forward, but no similar action with regard to the columbia and panama agreements. where is the pass forward? why didn't there a clear identification of the issues, clear steps to be taken to address the issues, a time frame for resolution, and a commitment

to action? while the president made positive reference to completing the agreement with south korea in the state of the union address, columbia and panama were mentioned just briefly as afterthoughts. no action plan or commitments characterizing them that the administration intends to pursue. there's trade agreemented signed three and a half years ago, and i hope you will provide clarity on what the president met and have a concrete timeline for all three agreements. as i've said repeatedly, i want to see the three agreemented considered by july 1. the lack of commitment on these critical job creating agreements is hippedderring the rest of the -- ihindering the trade agreements. the president's unwillingnd to engage especially on columbia grounded everything else to a halt, and our workers are suffering as a result. the administration's strategy makes noceps.

the agreements are important to u.s. interests and will help support jobs here in the united states. 250,000 jobs croording to the president's own measure, and given our unemployment rate is at or above 9% for the last 21 consecutive months, we have to explore all possible opportunities to sell to the world and create jobs in the united states. the failure to move these agreements with disadvantage workers, farmers, and ranchers. other countries recognize the value of the markets, and are signing agreements at lower barriers for exports and seize our opportunity. in addition to pending trade agreements, we have to enforce our rights worldwide. take china, it's the second largest trading partner and third largest export market. while china presents the threat, they impede market access for

u.s. goods and services and steals the intellectual property for american businesses. this is deeply troubling and cannot be allowed to stand. part of the policy in addressing issues should be the bilateral investment treaty negotiations. i strongly support efforts to have a round of negotiations at the world trade organization and hope that renewed efforts over the past few months will lead to success. i also strongly support the administration's efforts to negotiate the transpacific partnership. i hope the president can have app agreement when he hosts the apec leaders in nine short months. this would show the commitment to the fast growing asia-pacific reason as well as create american jobs by opening markets. this puts u.s. business, workers, farmers, and ranchers back on the offense. let's seize this opportunity. i look forward to hearing your

testimony on the administration's ideas and how to kick start the u.s. trade agenda. i will now yield to the ranking member to make an opening statement. >> thank you, mr. chairman, and welcome, ambassador. i am disappointed today that we start the hearing without action to extend the trade adjustment trade program scheduled to expire in just a few days. taa has been a good faith effort for nearly 50 years to assist workers who have lost their jobs through trade and globalization. as a result of the 2009 reforms, an additional 170,000 workers are eligible for taa to help them secure new good paying jobs. starting tuesday, tens of thousands of displaced workers in our country will be affected,

and i strenuously urge my republican colleagues not to let this vital program last. congressional democrats have been actively working to shape a new trade policy that is responsive to the changing dynamics of a global economy. we rejected the passive hands off approach of the last administration. our embracing expansion of trade in ways that assesses impact and broaden benefits from expanded trade. carrying out this new policy, we succeeded in pushing for the inclusion of enforceable worker rights and environmental standards beginning with their incorporation in the fda. . .

respondent, and i quote, we just went through a decade where we were told that it didn't matter, just keep on in reporting, by ian stuff from other countries and everything is going to be okay, but there was built on a house of cards, end of quote. so the obama administration has undertaken a model effort to implement a new and improved trade policy. for example, commitment to the enforcement of existing trade agreements and triet law there was clear from the china

safeguard action on tigers, and i mentioned the previous administration on four occasions refuse to use the safeguard. and recent data indicates that the safeguard action has helped make possible an increase in u.s. production and employment in u.s. high your manufacturing. the commitment to enforcement is also clear from the filing of the first case ever on of labor provisions in the trade agreement with guatemala. a commitment through trade was embodied in the president's insistence that we go back and change the free trade agreement and finally knocked down the barriers where automotive trade accounts for 75% of the 10 billion with u.s. trade deficit with korea. this would not have happened if the republicans had earlier succeed in their insistence that fold agreements be improved. likewise in the case of panama

the administration pushed for an agreement to address panel's status attack even and we understand panel is working to implement that agreement now. this administration has also been working on efforts started several years ago to ensure that panama's sleeper laws comply with basic international standards and with its fda obligations. because of our efforts there are now important labor changes pending before the panama legislature. with regard to columbia, as we have pointed out repeatedly, and it's indicated consistently in the state department reports there are serious outstanding issues related to the columbia fta. columbia labour laws fall below the norms and workers struggle to exercise their rights to associate and collectively bargain. persistent problems include abuse of cooperative and other

forms of contracting. employees direct negotiation with workers between unions are present, and prohibitions on the right. moreover, enforcement of labor laws is eak. the violence in colombia remains unacceptably high. it's not the highest in the world. limited progress is being made in the investigation and prosecution of those responsible additionally, reports indicate threats against union workers and others have increased and there has been little concrete action today to pursue these cases. as i served during my five day fact-finding trip in colombia last month, the new administration has now articulated a different approach from its predecessor that provides an opportunity for serious discussions between the two governments and these concerns. but we should be very clear that the burden is on the colombian government to act and address

these concerns that have been made abundantly clear to them for years. the only adequate measurement is progress on the ground. there are other areas where i believe we can do more to change u.s. trade policy, and i go into, and the chairman has talked about china's trade distorting policies -- and i also urge that the administration take a more assertive stance to address china's currency manipulation. and so let me just say this as i conclude. it is action on so many fronts that we are already taking. republicans have expressed impatience with changing u.s. trade policy as difficult for us to return to the failed policies of the past and approve the full trade agreements. so let me be clear, we will not go back.

thank you, mr. chairman. >> thank you. today we are joined by investors ron kirk, the trade representative. a prayer to his work in the obama administration he had a distinguished career in the private sector and government, notably he was the mayor of dallas from 1995 to 2001 at which time i should add he suffered first and the benefit of trade agreement and was a strong proponent for nafta. ambassador kirk, we welcome you and look forward to your testimony. i would ask you keep your testimony to five minutes. mr. ambassador, your full written statement will be made a part of the record and you are recognized for five minutes. welcome. >> thank you, mr. chairman and ranking member levin and members of the committee. it is indeed a and honor for me to have an opportunity to visit with you today. in a state of the union address, president obama told america that the future is ours to win. if we rise to the challenge. to compete for and when the jobs and industries of the future, america must now in ovate, elder educate and out build the rest

of the world. ustr is doing our part to keep america globally competitive and our work is producing results. u.s. goods and services, exports through the first 11 months of 2010 were up $239 billion over the same time period in 2009. and we are on pace to reach president obama's export goal of doubling exports by the end of 2014. to ensure that american firms continue to generate jobs and economic growth, opening global markets and in forcing america's trade rights must remain key components of our economic recovery effort. after extensive consultations with the business community, with labour, members of congress, in december we conclude today u.s. period korea agreement that is better for america's auto industry and for

america's auto workers and its winning brought widespread support here in congress. to bring home its promise, which is billions of dollars in exports and tens of thousands of jobs here at home, the president will submit busbee 18 korea rider ury meant to converse in the next few weeks and look forward to working with you to secure its approval this spring. but we are not going to stop there. with that same engagement and cooperation, we want to work to address outstanding concerns relating to the panama and columbia trade agreement. if we are successful, we will move these forward as well. i can tell you today that the president has directed me to immediately intensified our engagement with partners in colombia and panama with the objective of resolving the outstanding issues as soon as possible this year and bringing

in those agreements for consideration immediately thereafter. but i must make it clear there remain serious issues to be resolved before these agreements can be submitted for congressional consideration. some of these issues go to the core u.s. values and interests such as the protection of labor rights. any timetable will be contingent on the successful resolution of these issues. for example with regard to columbia, it will be imperative to resolve issues regarding laws and practices impacting the protection of internationally recognized labor rights as well as issues concerning violence against labor leaders and the prosecution of the perpetrators. colombia and panama have begun to take important steps and we think that's a good signal but more remains to be done. we will be consulting closely with you and major stockholders including labor and human rights groups throughout this process.

we will not be left behind, however, has others open markets and take on market share. the president has made one thing abundantly clear, however, when will not sign agreements just for agreement sake. they must be enforceable and of the highest standard and in the interest of america's workers, farmers, businesses and entrepreneurs. in the partnership now the world's most dynamic regional trade negotiating market, we are moving forward to unlock the asia pacific 321st century trade agreement. in the doha talks we seek an ambitious outcome in which all countries including the advanced emerging nations provide market access commensurate with the global economic growth. and our efforts to bring russia into the world trade organization will include working with you this year to grant russia permanent normal

trade relations status so that u.s. firms and workers for the benefit from russia's secession to the wto. this year, the united states will host the 21 economies of the asia-pacific economic cooperation forum. with them, we will work to make it cheaper, easier, faster for the firms to trade in a greater regional economy. and we are doing the same with our partners in europe and throughout north america. aggressive enforcement will continue to accompany these efforts. we have kept our promise to hold trade partners accountable from steps to address a harmful surge of chinese tai years to important winds of the wto for the aerospace and agricultural sectors to the first labor enforcement case ever brought under the u.s. trade agreement. our agenda will only succeed if we make it clear to the american

public what is at stake in the global markets. and if we keep faith with america's workers including reading trade adjustment assistance. we also ask the congress to keep faith with the world's poorest economies and create american jobs by reading the system of preferences and the trade preferences act and let's do so for long group of both time than a few months. i believe, mr. chairman and members of the committee, we can use common sense to find common ground on the trade and i look forward to working with you and i look forward to taking your questions. thank you. >> thank you very much, ambassador. as i listen to your testimony, i first want to say i appreciate your comments on the south korean trade agreement signed in june, 2007. it's the world's eighth largest economy. the e.u. agreement with korea is

suspected to be effective july 1st. so your time line of a few weeks is a very important one. in terms of the other agreements with panama signed in june 2007 they signed the tax information exchange agreement the recently signed trade agreements with the e.u. and canada. with regard to columbia signed november, 2006 and since that time our exporters have paid over $3 billion in the duties to columbia canada will implement a trade agreement in june and the e.u. is soon to complete. that is our largest export market in south america. so with regard to those agreements, i appreciate the language you want to complete those by next year but frankly those are statements i would have expected to years ago. we are seeing other countries

move forward dramatically. we are losing market share in those countries as they develop trade relationships to other places. we need specific concrete steps. can you tell me what specific things or items need to occur within the columbia and panama agreements that would allow the administration to move forward? >> first of all let me assure you we share your concern with the respect to the competitive market that is developing in the south america and the efforts to sign other free trade agreements, but we also share a very firm belief and unshakeable belief that the only way to go forward in a matter that i feel all of us would like to is that if we work together kuhl lubber ridgely just as we did on the korea fta and not just hear from those that frankly want to cut the gas line and put the pedal to the metal and go forward and

not just those that are stomping on the break and say do nothing. we have to find a way to find common ground on some of those core values that at least for the obama administration we won't compromise on and we want to get these done but we want them done in a way that we address the underlying concerns about the labor rights. this is a little bit different than korea and which frankly we were addressing issues of market access. these or more fundamental issues with what we want to do and will intensify over the next several weeks. i am sending a team to colombia next week. as you know, ranking member love and i feed visited colombia during the january recess. finance number bachus is condemned. we will then meet with all the stakeholders and come up with a workable plan and sit down with our partners in colombia to address them to the >> when you say we, are you planning to go to colombia and panama as well? >> i don't know, ustr is sending

a team. i may go and wait and see what the plans are as they offered the president's visit later this month. >> well, i guess my point was the time for generality has passed, to say we need to continue to work forward on fees. we really need specifics, and if there are -- and we need an action plan of benchmarks that we can meet to move this forward. i think these have languished long enough, and really for far too long, and to the extent you could shed light on any specific items i think would be enlightened. >> i want to do that mr. chairman but we are using the same approach as we did. the example last year when i think it was in june at the forum, president obama directed the office to sit down and negotiate with our partners. we were able to do that in a reasonably efficient period of time. we want to take the same

approach with respect to panama and colombia. the issues are different. as i said, in columbia there are longstanding concerns in terms of the rights of workers and violence against union organizers. panama we have made good progress on a number of the issues in terms of addressing some of the labor concerns as i understand and they have worked with our department of treasury to address the issues of their having been labeled a tax haven and moving on to the tax information exchanges. >> with panama, is their anything left for the panamanians to? >> there's a couple of general concerns to the recent changes to the labor law but we have been in consultation with the panamanian government and trying to get those results to our satisfaction. >> thank you. mr. levin may inquire. >> mr. chairman, i think your question has helped to frame the issue. you said the time for

generalities, they were not generalities. the issues with korea were very specific. the way it was negotiated it did not assure access to the market's for our automotive goods, and to work on this. was very specific. they were shipping 500,000 cars a year. we were shipping 5,000. hundai has 400 dealerships here, ford has won an overall dhaka automate its producers and suppliers insisted that the trade be a two-way street. it was very specific. in terms of -- if you had your way, not you, but if the republicans had their way in the bush administration, we would have approved the created free trade agreement essentially having a major part of our economy shut out from the market when they had complete access to

it with panama we started discussions. the issues were very specific. the related to the violation by panama of basic international standards as outlined in our state department reports and in terms of the workers' rights, and it was a tax haven. we tried to work, and then they elected someone who was a speaker of the house, who had an arrest warrant for killing an american, and those discussions stopped. was very specific. and when it comes to columbia, the issues -- and our ambassador has laid out the areas where there are issues and we have been discussing these for years with the colombians. and the ilo and state department reports that spilled these out year after year after year. now there's a new administration

in columbia, which says it now wants to address these issues that were not satisfactorily addressed by the previous administration. and now the ambassador has said that there is an effort to see if common ground can be reached. so i think there isn't a lack of specificity. there has been a lack of willingness to work with us to resolve basic important economic issues. let me just ask you, if i might, mr. investor, about tpp and proceeding. you intend to table something next week, do you, in terms of tpp, and i think it's important we proceed in the right way. there will be a tabling of some proposals next week?

>> yes, there will. as you know, we have had four rounds of talks. we are moving very aggressively to meet our own goal, which is as originally a crafted trade agreement for the 21st century with the highest standards in every area across the board. we will be meeting in chile next week for the first round of the more intense negotiations and we will begin tabling proposals in certain categories at that time. >> everyone should note that most of the participants in tpp we have a trade agreement with. it's the newcomers in terms of a trade agreement, vietnam and now malaysia, and they raised some important issues not only in terms of the workers' rights, which is important, but in terms of agriculture, etc., and as we have discussed, i hope very much that before those proposals are

tabled they will be further consultations with the committee regarding a the specifics including those relating to investment. >> we will come in and we have -- and i think as you know, mr. chairman, we have the most extensive consultations with this committee and the committee of jurisdiction in the senate as well. all of the stakeholders on tpp as we have ever done before and we will continue that. this is an opportunity in which one, i think we all benefited from the fact we are starting with a blank sheet of paper. we are not burdened by some of the arguments that have derailed some of our trade agreements in the past, but it is an opportunity for the united states to be in the lead in crafting the architecture for what we hope will be the most advanced trade liberalizing free trade agreement in one of the most dynamic regions of the world. >> what consultations do you think? >> thank you. i just want to, i was concerned

about market access on the south korean agreement from the beginning, but that really sort of begs the question it's not really -- not really interested in why these agreements were not passed to it a half years ago. i'm interested in why they are not being passed now given what has happened. with that i will recognize mr. berger for five minutes. >> thank you, mr. chairman. i have a tie line of ki president obama administration statements regarding the columbia trade promotion agreement. unfortunately, i won't have time to go through all of this in my five minutes. however, i would like to have included in the record, and i would just touch on some highlights. ambassador kirk, the president's 2009 trade policy agenda release tiffin to -- of the race to, quote, we are in the process of developing a plan of action to address the pending agreements in consultation with congress. we plan to establish benchmarks

for progress on the columbia fta, end of quote. in april of 2011, during a speech at georgetown university school all, you stated, quote, we are looking for new solutions to the issues that have dragged on and existing free trade agreement at the summit of the americas president obama instructed me to lead a review of the columbia agreement to deal with outstanding issues, in dolph quote. now lets us get to about a year later in march of 2010. and your testimony at the senate finance hearings you stated that the pending fda were a parody and that ustr was working to the issues so they could move forward with the agreement. and in response to a question on the columbia fta, used to the

following, quote, we are hopeful we can come to some solution with members of congress over the next several months so we can go back to colombia with specific goals. what we don't want to do is keep moving the goal post. this agreement is almost singularly going to benefit the united states, and of quote. moving forward a few months to july, 2010, in announcing the establishment of the president's export council, the president again reiterated that the administration was working to resolve the, quote, outstanding issues with the pending fta with the goal of submitting them to converse, quote, as soon as possible. now in 2011 during a speech at third way, mr. ambassador, you stated, quote, we took the time to do the fta right, so we feel

it's important just as we have done korea, let's not short circuit that process with panama and colombia. they are just as important to us. mr. ambassador, how much longer will await continue until the columbia agreement is ready for congress? it has been two years since the at the station announced the development benchmarks on columbia. we waited a year, and then the head of ministration again stated that it is working on the list of recommendations for the cullom against -- colombians. where are these recommendations from these benchmarks that the administration want to see in place, and again, how much longer do we have to wait until the columbia agreement is ready? >> i appreciate your

preservation of our commitment on that. we are firm in that, and hopefully, mr. herger, it won't be much longer. we share your concern. we want to move forward on these agreements, but the reality is there's a very wide -- you can tell from this committee there's been a wide divergence of thought as to how we ought to proceed. the one thing president obama instructed me is to sit down with those on both sides of the aisle, stakeholders of every opinion about how to go forward and see if we can't find a common way forward. but we also made a firm commitment when we came into office that we didn't feel it was our responsibility just to pick up all of these trade agreements as they were and move forward. we took the time to take a step back and take a strategic look at how we wanted a trade to fit into our overall economic policy, and our number one goal and that is how we get this economy going and how we create jobs. that included not only looking at in examining these free trade agreement with the work we have

done on enforcement and we have done to engage leiber and communities and business to come up with a plan that would allow us to you as we have done with korea and as i announced today the president directed us to do the same thing in the coming months with our partners with columbia and panama as ranking member levin noted, we have new leadership in colombia. we have vice president here last week. we have met with him. there is a renewed sense of urgency on both parts will be meeting with them in the coming weeks and months to address those issues and it is different in the case of korea, because it isn't just related to the market access. it goes to some of those core values that i think many americans want congress to take into account as it relates to how we treat and respect the rights of workers, and that is an issue but at least for the obama administration we won't compromise on that. >> look, i appreciate that, but that sounds carry much like we've been hearing the last two

years. >> the gentleman's time is expired. mr. johnson. specs before, mr. chairman. first i want to well, my friend from dallas. it's too bad you weren't there. the super bowl might have been a better place to go. [laughter] >> unfortunately i was there. [laughter] >> bless you. ambassador kirk and i have known each other a long time and i'm glad he's finally had the opportunity to visit here on the committee. >> i would like the committee to vote for the record, he and i used to bet dinners and he still owes me one. [laughter] now mr. ambassador, as a former mayor of dallas i know that you are aware of the benefits of trade to the area and i assure you know the dallas area is the ninth largest metropolitan exporter in the united states. 2008 alone, dallas export almost $7 billion to both nafta and kafta. the numbers go on and on. in three years before the

u.s.-austria agreement, exports from texas lostroh it averaged 800 million. in three years after the trade agreement, texas exports averaged 1.3 billion per year and increased 66%. before the u.s. through coach rollie grumet, texas exports to chile were declining. since the agreement, the exports to chile has increased by 107%. you know, those numbers just tell me that we are spending our wheels. this agreement was signed in to fill some seven, and this is 2011 and we still haven't finished them. now i would like to know why we are delaying because other nations in the world are taking our place in the trade environment, and it's because you haven't been able to finish the job, and most of it you are telling me is labor related.

i would like to know your opinion on that and what you intend to do. and i tell you what, you get these three agreements done and you don't have to buy a dinner. [laughter] >> thanks. senator, i have enjoyed your friendship and we have enjoyed a lot of plates of mexican food over the years and it would be low for me to quarrel with a good friend of public but i'm not sure who was which the last dinner but we want me to dinner contingent on this. let me say i was incredibly honored and humbled when president obama asked me to serve the of penetration in this capacity and frankly saying to you there were a lot of people were skeptical of me coming from dallas for the reasons you articulate it. we believe in trade. we understand it. we've seen the impact in our city and state of texas is the number one exporting state in the country so you don't need to convince me how important these would be to our economy. when i raise my hand and took

that oath i agreed to be the united states trade representative for the entire country and like the congressman over here, my wife is from detroit. so i brought with me not just our passion for exports that we have in texas, but i also brought with me the concern and frustration of all of my and walz in detroit and cleveland and pittsburgh who when i should and told them i was going to be the representative fault line was a to headed monster because they believe they haven't benefited from trade. so what we have committed ourselves to doing is talking to find the common ground because the only way we can go forward in a way that allows our farmers and ranchers and manufactures and states is we have to keep pace with the rest of america that wants to know we have a trade policy that works for everybody and not just for some of us. you know i like african proverbs and one of my favorites is pretty simple. is is you should take no comfort from hole in my end of the vote. the problem is too much for our

trade debate is in place is sometimes like texas or florida or washington. we just look at our heads and say poured its work, poor carolina, poor detroit, and we aren't going to get their pay that's why these agreements were stalled. i don't have to tell you there are strong differences on this committee with the we go forward or not. what we have been doing is trying to not only craft trade policy that allows us to have open, fair access to these markets, address that is a mystery. we have with many of them, but also helps us to restore the american public faith that trade can work for us. we can create jobs. that's what we did successfully life and with korea and what we are working to do with panama and colombia. >> it will create jobs. >> how about getting it done all three of them. can you tell us you building that? >> i can do it if i can get the committee to come together and agree it's just as important to open up markets and it's equally

important to make sure we keep faith with american workers and don't compromise our core values of standing up for workers' rights. if we can come together and that we can do anything. we did it on korea, we need to bid on panama and colombia. >> thank you. >> mr. starts is recognized. >> [inaudible] mr. mcdermott. >> thank you, mr. chairman. welcome, ambassador. it's good to see you. i would just on a historical note, i would point out to the members of the committee they want specifics. in five days, the taa program ends. 150,000 american workers will be ending their trade adjustment assistance. now if you are serious, it was on the calendar yesterday, you to get off the calendar, it's not on the calendar today, this is wednesday. is it going to be on thursday or

friday and indeed pass through the senate by monday so that 150,000 workers in this country do not lose their assistance? if you are serious about trade and you want to make it all about somebody else out there and ignore the people in the united states, the workers, you are going to have a tough time. but let me move to another issue because i think there are other things besides columbia and panama. how are we going to work and move forward on intellectual property protection in china? how are we going to keep the focus on this issue in china? i know when the chinese were here, the piracy of the business software, the continued to be long on promises very short on performance. it practically didn't come up when president hu jintao was here, and it doesn't appear that

the chinese are stepping up to address the enterprise including of the state owned enterprises which put u.s. companies at a competitive disadvantage. and it seems to me that the chinese are very clever in how they have moved around, but the chinese authority has the ability to track how much money in the procurement system is being spent that's helpful. but it doesn't end the piracy to beat they don't check whether the software used in their government is legal or not. now, what's the plan? what do we want to do to help you in force the good words that come out of beijing? they are nice words, i appreciate them. but we would like to have help from you about how we can help

enforce that. >> the issue of piracy and the intellectual goods is one of our key concerns from a key component of our enforcement efforts and it's a key part of our dialogue with china, and i would only add one correction perhaps to your introduction to read this issue did come up in president hu jintao. he addressed directly as you know we've recently concluded the joint commission on commerce and trade which the secretory lock and i take the lead. in december we did get a commitment from the government of china to begin to address more rigorous the absence of using the legitimate software in the government procurement. during president hu jintao's visit we got to commitments in

one. the you're going to provide money. the chinese said they would do this a number of times they didn't get their government in the sub government any resource to purchase a legitimate software. for the first time they've committed to do that and second, we did get them to make a commitment to honor that. but as you know, our engagement with china is important, its complex, and there's the reason that we have regular engagement with china through the jcct as well as economic dialogue, and we will be as diligent as you say the chinese are crafty and pressing them to make sure they honor and respect the american intellectual property and copyright because that is an extraordinary opportunity for our industries to grow in the debt markets. >> thank you. i appreciate that. and if there's things we can do i hope you will let us know because if this committee would be interested in trying to support the ustr in their

enforcement efforts. we know that through passed through the budget ministry should free trade agreement. after the agreement made may tend by mr. rangel and mr. levin with the ustr and that administration you're about to table something in chile, and i hope that you do not weaken things that were agreed upon and that may delete to make that possible, the peru a grumet particularly access to medication. that kind of gets slipped under the table. we talk about the environment and labor but sometimes the access to medication gets lost, and i hope that that will be a part of what you table on monday when you get to chile. >> if you could respond briefly because time has expired. >> i don't know that we are to the point. for us the value of our at the

demonstration, the may 10th agreement represents a good, sound bipartisan agreement among democrats and republicans and that is certainly something we are going to reach for. now we had the opportunity from what we have learned over the last seven years that there's some in areas that were not addressed like indigenous innovation, state owned enterprises, but that is something we are using as sort of, do know, something we are striving for, certainly something as aspirational as we hope to achieve through the transpacific partnership tariffs the mix before. the chairman of the subcommittee mr. brady is recognized. >> i would like to ask consent to insert my statement for the record. >> without objection. >> i want to thank you co-chairmen, for holding disputed the way that you build by partisanship for this producing issue and house republicans especially this committee or commission to conduct a very aggressive trade focus on three areas come on finding the customers and

opening markets in the plea field for the american workers and companies. second, resisting protectionism here and abroad as we can tear down barriers for the american producers and companies. third, working both within the united states and with our trading partners to find innovative ways to move the goods and services faster and cheaper around this world. your presence, mr. ambassador, is keen to those goals and we look forward to you as a partner in all of those. we would be not just a willing partner but insisted partner moving forward on trade. i appreciate your openness and willingness to consult and listen and talk about all of these issues the past two years. i congratulate you on a successful improvement of the south caribbean free trade agreement. very much applaud the joining of the transpacific partnership. it is key to both job production

, setting up a state of the art agreement and getting us directly into china's backyard and that growing market. three points i hope he will take with you today from this committee. one, the time is up for colombia and panama. the have not only done all that we have asked committee have gone far beyond it. finding the original agreement with the united states, the contract with us. then they amended it at the direction of democrat members and republican members and a bipartisan agreement both agreed to improve labor standards and environmental standards and intellectual property rights, a whole host of demands that had been levied upon them and they did it. both went beyond that. preaching in panama the treaty addressing more labor issues. the have done everything we've asked.

it's time for panama. columbia has done the same, spending a decade in approving the rule of law, labor rights, creating peace whether it was silent. they, too, have been waiting to jump frankly to meet our demand so that we can be actable trading partners, and i think it's embarrassing that we have not moved forward on that. so i hope you will understand this isn't about -- these trade agreements need to be submitted in the first six months. not about embarrassing any party or the white house. it's about making sure america doesn't further in paris itself by turning its back on our trading partners and workers in the meantime. the second point is that russia indeed i think there are tremendous benefits moving them into the rules based global system and i applaud your work in that area. but as a priority i think it is important to know that there is virtually no chance that the

russia people in t.r. will be moved ahead of panama and colombia. i think it is critical that those be signed by the president before we take that. russia's progress could be measured in months. panama and columbia could be measured in years and years and they deserve movement now. final point, the head in this region is looking at reorganization of trade and exporting efforts. i think that's very important. but ustr is unique. it's very lean, entrepreneurial, very nimble agency in an economy worldwide that requires all fat. i'm not interested in turning five ustr from a cougar into a pippo on the trade issues. stay nimble and you will get a great score. i would like to comment on those points and as well on the tpp has a job offer to be looking for work i know you are working hard on that.

can you address those issues? >> i am aware of the time constraints, mr. chairman. just let me say, congressman braley, we very much look forward to working with you and your leadership on the subcommittee. being from houston, understanding the importance of that, one thing i would tell you in tpp also with our partners and north america we are looking at the logistics side of all of those barriers to make it easier and cheaper to move goods around, it is a big part of what we are doing on that i hear your concerns and those members of both sides on panama and colombia. i assure you we are ready to get started. we want to try to get those resolved. with respect to the ustr, i am exceptionally privileged to lead an agency to provide the best bank for the buck to the american taxpayers, 230 of us we do an extraordinary service in the negotiating agreement,

forcing america's rights, and that does make our work special, and we want to keep that, but at the same time, having been in business, you and i know if we don't examine how you do what you do with free to come from five years you were losing ground, so we welcome this review under the president's commission, but we will also make sure that we don't lose what makes the ustr special and a portability to help flout and create jobs with what we do read >> as a fellow texan, thank you. >> mr. nunes is recognized. specs before. mr. kirk, welcome to the committee, here virtually everyone on this side of the aisle has asked you about specifics as it relates to colombia and panama come and we still haven't heard any specifics. the ranking member mr. leffinge mentioned the specifics to exist although we still don't know what they are. i did hear you specifically say

you mentioned something when mr. johnson was questioning you mentioned pittsburgh, detroit and the carolinas is not benefiting from trade, so i thought that was getting close to the specifics and i just wonder how do those communities not benefit from the colombian or the panama trade agreement? >> first of all, let me say if i said that i misspoke. all americans benefit from trade because festival every family benefits when we make it cheaper to put food on the table to feed your family when we make it easy to provide the most advanced electronic stuff for your kids' education, but there are communities and i know you won't find this as a surprise they feel like the trade policy has not operated to their benefit to read the have been harmed more than they have been helped, and it's a very broad brush. to get list of the mississippi river most of the members are taught to, a democrat or republican, wanting me to move forward. you get into the building and

there is a little more cynicism and it isn't just that. our concern is the war overwhelming majority of americans now disagree with the proposition that the trade has been good for us. >> when it comes specifically to panama and columbia, those countries have access into our market and we do not have access into the market. we would under these trade agreements if they were advanced. so if that's true, then why don't we -- all we want our specifics. i think that all of columbia and panama is asking for is what you want us to do? beat on beyond the leverage after in the indian trade preference act, the half explicitly incorporated the international labor organization declaration into this agreement. so i am just -- all we want our specifics as to what our -- what does the obama administration

asked columbia and panama to do before the president will submit these to be approved by the, chris. >> let me make this plan. there are different elements involved in panama and colombia. they are not the same with respect to columbia, it is decided, we have decided the been focusing on the issue of the labor rights, the violence against workers. there has been some progress, and obviously some of your reading from the different books, but i would say there's a fairly strong divergence on this committee, and among a number of our stakeholders how much columbia house and the progress they have made in putting in place the necessary changes to the wall street suggest provide the basic rights to organize. we are not asking them to mirror our rules in the united states and to strengthen their judiciary and the enforcement to bring those that have perpetrated this violence to

justice. those are the issues we are trying to focus on. we wanted to get at it again the fact finding mission of your ranking member against chairman bachus. we are sending a team, we are going to do everything we can to expedite that so that we can agree. >> mr. ambassador, aren't these matters that are outside of the confines of the trade agreement that was signed may 10th, 27? >> yes, in many cases they are but there are issues that the american public believe door sacrosanct for us. the reason that i give you the restitution about my experience around the country, part of the american public frustration is one, nobody plays by rules but roskam and it wasn't just china. they felt like trading partners were not playing by the rules and we wouldn't stand up and enforce our rights. we address that. but the other thing is people's concern and we will find an agreement with anybody. some of these benefit we will sign it and we don't care how they treat their workers or if

it undercuts our workers or create an unlevel playing field and that's why we think it's important to address that, not just to try to find a way to get forward but to get americans confidence that triet works for us. we can create jobs here and we are not creating incentives to just move production to another country that may not respect the rights of those workers. >> i know president obama is going to go down to south america and is going to visit brazil, and i just think, you know, before we go -- i don't have a problem with him going to brazil. i think it is a positive step, but, you know, with columbia still sitting out there and he's going to that part of the hemisphere and for him to be sitting out there don't know what credibility of the president will have for the administration will have when we still have pending trade agreements from 2007 and we are operating outside of the confines of the trade agreements asking for things that quite frankly, mr. ambassador, go outside of all of the rules of

engagement on making these autrey agreements, and i will submit, i want to thank you come ambassador and for the record a question on thought mexico and trucking issue. >> mr. mcdermott is recognized. >> thank you, mr. chairman. thank you. mr. strak for giving me another five minutes. i would like to go on to question china. section 301, the green technologies issue. there was a letter from us 178 democrats and three republicans asking you to look into what was going on in terms of the green technology and wind turbines. it's my understanding you decided to file a case on the wind turbine issue, and we are very pleased by all of that, and you said that in doing that, you lack of the tools and the resources to uncover all of the evidence within the statutory time frame. tell us what you need to make it

possible for you to do this and other areas and in a more timely fashion. because we want to work hand in glove with you to make fees' work for our workers for our economy. >> first, we do appreciate the letter and as you know, the 301 petition was filed last fall regarding china's industrial policies and the energy areas. there were five different complaints. the good news is we were able to successfully resolve the overwhelming majority of those by directly engaging and confronting china through our office of the ustr. we did initiate consultations with the world trade organization on china's we think illegal subsidy of their projects in the wind area. we are beginning consultation. i want to be careful in this environment in which i know at the same time this committee,

the budget committee is meeting in an orderly constrained environment and we were asking american families to tighten their belt and make decisions, and i know that it's too easy sometimes for all of us to say give me more resources. we have a very strong team at ustr but we are not all lawyers. 223 employers as everybody from top to bottom, and if we are going to have their robust enforcement that we have committed ourselves and engage don, one of the things we are going to be looking through in the organization is how we can strengthen our resources, because we have a great legal talent that understands the law and can prosecute cases. we are woefully short on the investigative side. so in many cases we have to rely on the resources of a regencies. something as simple as when we take on a case with china and the case that congress meant

levin mentioned, we've exhausted our translation budget in three months on one case with china because of the amount of money we have to spend on translators. but we are working with other agencies to see if we can't address that and we will be happy to come back and visit with the committee on ways that will have the resources to make sure that we can stand up for our rights in america's workers. >> can i ask for the we talked little bit about the curry -- korea free trade agreement and i'd like to hear from you what you think the positive impact -- we are arguing about the timeline and when would be up here and all that. when it happens, give us an idea what you anticipate will be the positive impact on the economy. i understand you estimate $10 billion as opposed to $1 billion in columbia, so it seems like a much bigger deal, but where is that going to happen in the economy?

>> chris, i do appreciate that 10 billion-dollar number is one that the estimates. we don't do the economic estimates to be they take that away from us. we think that is a fairly conservative number because the way that we capture the trade right now is much more heavily weighted to the manufacturers and exported goods. it's not as precise as it relates to services. we talked a lot about what this will do to level the playing field in the automotive sector but this is great to be good for all american manufacturers because we are going to see a reduction. the elimination of most of them and the first five years and 80% of our exports to korea and the manufactured goods sector. for those of you from farm states, this is a great wind exports and beef exports are up. we are exporting almost $500 million working with beef and korea. the tariffs are going to come down immediately. also helping grains and

soybeans, so those sectors are going to benefit as well. where we see an opportunity for us to gain market access is in korea's service market. 560 billion-dollar market that we for the most part have had very little penetration for the first time we are going to have access to that. so we think the 10 billion-dollar number is compelling. the 70,000 jobs we actually think that is a fairly conservative number. the other thing it gives us a foothold again in one of the most economically dynamic regions themselves and strengthens what is already a very strong strategic partnership between the united states and south korea. >> thank you. >> thank you, mr. chairman and ambassador for your leadership and for being here today. as you may remember, from ohio, one of the states to talk about. i know you have an ohio connection as well. quick question. the president has talked about doubling of exports.

can we do that without passing any additional trade agreements? >> it would be difficult. we think pessin -- again, one of our passions for getting korea and the authors write, mr. tiberi, is to the -- >> thank you. >> -- or exports are running about 17% per annum which is above the 15% needed, but certainly if we can get not only korea but panama and colombian partnership done it will make it -- and increasing exports means increasing jobs, growing the economy, correct? >> yes, sir. >> you talk about cynicism and you were actually right on. in my state there is a respect to trade and there is a disconnect between trade and exporting. and i appreciate your leadership. it's been absolutely fantastic. however, there is a farmer in this room for my district. his name is john davis, and he's cynical as well with respect to

washington, d.c., and here's why. if you sat at his farm in the fall of 2008 during the election, he would have seen a candidate obama talk about repealing nafta, how kafta was bad, how trade has cost jobs. if you could have sat in his farm house the last election 2010, you would have seen more money than i have ever seen spent in central ohio, as well as in the cleveland market and the cincinnati market about how triet has cost hundreds of thousands of jobs in our state. trade is the big bogeyman with respect to how well how you's economy has suffered. so if you or john davis sitting in this room and you want to hear about cynicism, how do we stop that cynicism when every two years in an election we have people running for office making a trade the bogyman.

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