cartels are the enemy. not the department of justice. we need to provide men and women fighting this battle the tools they need. senator coons. >> i think attorney-general holder for being here in the oversight function of this committee, one of the most important roles we have. thank you for your service and your detailed testimony today. i am keenly concerned about the very real and the emerging threat of cybercriminals and to meet this threat we need to use all of our resources at our disposal. my home state of delaware has a promising national guard unit in network warfare squadron and last friday we sent you a letter asking for your position on whether the national guard might provide a pathway for the doj to make some use of their sophisticated cyberdefense

resources. as they expand law enforcement resources. i want to thank you for your consideration of that and look forward to the department's responds. .. >> and to promote our nation security for our ip infrastructure? >> i think the issue that you've highlighted is one that again should be of great concern to

us. i took a trip to china last year i believe it was, to have a very frank conversation with them about the concerns we have about intellectual properties, industrial, stealing of industrial secrets. we are going to have to compete with them in the 21st century and we should be doing so on a level playing field. and so that is a big concern that we have. it's one that we have expressed to the chinese. >> one follow on question i've got is about resources for the department of economic espionage act was passed 15 years ago, and as of october there have only been eight cases tried under this. so the last time that you testified before us i asked what he thought the doj need additional resources either financial or statutory to more successfully criminally prosecute those who steal

sensitive, given the report, given the real prospect that we are losing vast amounts of national treasure. is the doj ramping up its efforts to enforce the economic espionage act? do you se see a need for more statutory or financial resources in light of this report? >> i think it is a priority for the department, but i do think that even in these tough economic times and given the nature of the threat and what's at stake, both for the safety of this nation and for its economic well being, that this is an area we have to focus on. this is an area that will require, as i do with limited numbers of people, some decisions have to be made by others in the department. hopefully with the support of members of congress to ramp up our abilities to do with, deal with these issues. it is not too much to say, it is not an overstatement, not hyperbolic to say the future of this nation is really dependent

on in part how we resolve the issues that you are raising. >> on a related point, the customs and border patrol, at least in my view, has interpreted the trade secrets act from sharing with trademark rights holders even photos or documents or samples related to seize goods that could be counterfeit. there is a senate armed services committee hearing i believe today on the grave threat posed our servicemen and women like counterfeit chinese microchips that it made you into united states weapons systems appeared in significant quantity. many of the counterfeits may be examined by cbp but they are not consulting with sources of that i think could make it possible for them to more rapidly determine whether what's being intercepted is counterfeit or not. has the doj ever or do you believe it would ever prosecute a customs and border patrol agent for sharing information with the intention is to simply certify whether something that

has been seized is or is not counterfeit? >> we have prosecutorial discretion but it would hardly to imagine we would bring such a case. i also think to the extent that impediment exist between the sharing of that kind of information and given the need for public and private partnership to deal with these issues, that that might be a legislative fix that perhaps we could discuss and then somehow deal with -- we will only be successful in this if we have the public sector working with the private, government working with the private sector to deal with these issues. we can't do it alone. we can't do it alone in government. the private sector can't do it alone as well. to the extent there are barriers to information sharing, i think we have to try to knock the stem. >> thank you. i would be happy to work with you in finding a legislative fix. i think we are hamstrung in border enforcement around these vital issues. last, as part of the c.r. to fund the government for fy11,

many programs at dj to fairly deep cuts especially hard in my view with is designed to support state and local law enforcement. it was cut i think by more than 430 million technology program in particular i was concerned with, many of the grant programs to double-digit cuts. for my home state were i previously supervised a county police department, it means less money for regional information sharing, less money for using criminal diversion programs, less money for officer protection equipment. how are the cuts affecting your ability to provide cost-effective support that has a multiplier effect for state and local law enforcement? what would the impact be if the house, 12 appropriations bill, which zeroes out the entire c.o.p.s. program were to be enacted? >> let me be very, very clear. those proposed cuts are simply unacceptable. it will place this nation at risk we are enjoying

historically low crime rates. we have 30,000 vacant law enforcement positions in this country. we have lost 12,000 officers over the course of the last year, and we put at risk the possibility that these historically low rates will not remain there forever. there have been high rates of shootings of police officers, although the rates have been coming down generally in terms of crime. the amount of violence directed at police officer is up over 20% over the last two years, the number of deaths this year is outpacing that which we saw last year. the notion that somehow someway we would come at a time we're trying to create jobs, and take people who are sworn to protect the lives of the american people off the line is to meet the logical and unacceptable and dangerous. >> thank you, mr. attorney general. i look forward to working with you to sustained the c.o.p.s. program. thank you, mr. chairman.

>> thank you very much. senator blumenthal. >> thank you, mr. chairman. thank you mr. attorney general, for being here today. i've listened to all the questions and all of your answers and i want to thank you for effectively addressing many of the questions surrounding fast and furious, and dispelling any doubt that you're determined to uncover all the facts surrounding some of the very regrettable circumstances here. and just so we understand, a lot of things have been mentioned here. attorney general mukasey, kevin o'connor who happens to be a former united states attorney in connecticut, and others in the department now. there's no evidence before us here that they knew or participate in any wrongdoing, is there? >> that was, i hope my cousin was clear. i felt -- >> and it has been, thank you. and also there's an ongoing investigation which eventually we'll will disclose disclose whether or not and who knew about what was going on.

and i want to thank you for being so candid and straightforward on that point. i want to join my colleague, senator coons, and expressing my determination that there should be more assistance insufficient support for our police on the streets of connecticut, in our neighborhoods, as well as firefighters and other personal that i would regard as law enforcement, which i really in more than once in the cops on the beat to protect a day in and day out, despite the very excellent performance of the fbi. fbi. they are the ones who do the bulk of law enforcement for our nation. and i appreciate and thank you for your support. and i think perhaps for me one of the most important aspects of your testimony today is really the vigor and intensity that the

department of justice is devoting now to stopping gun trafficking and drug dealing and gang violence on our borders, and throughout the country, but most particularly in connection with the mexican gangs that pose such a threat to americans as well as mexicans. and as i understand your testimony, there have been record numbers in seizures and arrests, prosecutions, convictions and expeditions, is that correct? >> that's correct. we would substantial number of resources to the border in an attempt to stop the flow of guns into mexico, stop the violence along the border. we afford in the interior of mexico with our mexican counterparts, in training, trying to come up with ways with which we could fight the cartels. our mexican counterparts have sacrificed a great deal, and even with their lives, we have tried to be good partners in

that struggle. >> and would it be fair to say that the mexicans are increasingly becoming good partners in this effort? >> yes, i think so. i think through the use of dated units, through the use of other techniques we have shared with them, through the growing sophistication with the use of electronic devices i think they're becoming more proficient in this battle. >> and there's no question that the department of justice under your leadership will continue to work on disrupting and dismantling these gang led efforts, or other efforts on drug trafficking and containing and so forth? >> this will continue to be a priority. too often we describe this as a thousand -- southwest border problem when it is a national problem. it could have an impact in connecticut, can have an impact in chicago.

and the person whose name is mentioned a lot, i think he deserves credit you. one of the person who is been leading the effort for the department of justice is lanny breuer to the head of our criminal division who's devoted a huge amount of time to this fight, has established good relationships with his counterparts in mexico and has been a person has really stood for this country in developing good tech takes to reduce that level of violence. and the danger that the cartels post to this country. >> i'd like to turn to another subject that i think it's equally important, not necessary at this point a topic of criminal investigation, but the mortgage foreclosure crisis i know has been very much on your mind and the departments focus. and i wonder whether we can expect criminal investigations or other investigations that will be aimed at going after friday of documents that are considered in court, inconsistent and contradictory

information of homeowners that have sought and sometimes received loan modifications, a series of practices and abuses that in no have been under investigation by my former colleague, the state attorneys general with the cooperation of the department of justice and the department of treasury. >> we are looking at -- there are a number of investigations that are under way. we're working with their counterparts his states a g7 helpful, and who have been extremely effective. and so we will be looking at these matters to see if criminal cases can be made. if there are other ways in which we can hold accountable organizations or people, perhaps using civil remedies as well. but it is our intention to make sure that those who were responsible for the mortgage crisis are, in fact, held accountable. >> and i would like to pursue this area in greater detail.

my time is close to expiring, but i hope that perhaps with your staff for yourself i could do so in that regard. >> i would be glad to. >> and i want to ask on a related topic, i know that so far the department of justice has declined to intervene in a lawsuit that has been brought by two mortgage brokers in georgia, alleging that a number of the larger than the institutions in this country have been in effect cheating veterans and taxpayers out of hundreds of millions of dollars by charging them illegal these in home refinancing loans. i'm particularly concerned about the effect on veterans and the possibility that they may have been treated illegally. and i wonder whether the department may be reconsidering, which i would urge, along with

two of my colleagues, senators brown and tester, that they become involved in what i view as a whistleblower action and intervene to protect the interests of these veterans and other taxpayers. >> that is something i'll have to redo. i'm not as muddier with that as obviously you are, but i will check with the appropriate people in the department and see whether our decision to decide not to become involved is, in fact, an appropriate one, but i would make a pledge to you and we will get something back to you. >> i'm not going to give you a 30 day deadline to come back to us, but, and i joined by the way with senator graham more seriously in the concern about the detainee issue as i'm the you take it seriously as well, but i very much appreciate you getting back to me on the issue. thank you for your service. >> we will. thank you. >> thank you very much. senator klobuchar. >> thank you very much, mr. chairman, and thank you,

mr. attorney general. again, many of my colleagues has mentioned the work that the justice department, fbi had done to avert terrorist attacks on our own soil including the recent assassination attempt of the saudi ambassador. i want to thank you for that and urgent also to continue to support our local law enforcement. i cannot pay the difference the c.o.p.s. program has made in our state. minneapolis was what was known as murder apples in the near times. that all changed around part because of some tougher law enforcement but also because of help from the c.o.p.s. program, so thank you. i was going to first ask you here, about some intellectual property issues. recently senator cornyn and i introduced a bill that passed through the judicial senate committee on a bipartisan basis. it is designed to go after people who steal other peoples works whether it is books or commercial music or movies, including foreign piracy. it only covers and tangible commercial theft, not people posting their own personal work

on the web, but protecting everyone's rights to children's writer in minneapolis to a first time guitarist in nashville. as far as i can see, america is not a country where people can write a song or book only to have someone copied it and sell it and make money off it without permission. so that's what this is about. i know members of your department have expressed support for this legislation, and, in fact, they came from the administration when he suggested the u.s. law enforcement agencies combat infringement had to be able to be a sophisticated as the crooks that are breaking the laws. and i appreciate the recent letter we got from your department in which you talked about how the provision of the bill regarding streaming does not criminalize conduct that is not already criminal. right now it's a misdemeanor. my only question is if you would commit to work with us to take any necessary steps to make

crystal clear that the bill does not criminalize any new conduct with a streaming issue, that we're not seeking to criminalize youtube or harmless posting of personal videos. >> sure. we will work with you on that legislation. the issue that you raise is an important one, and we will do what we can in conjunction with you to make sure that people understand what the aim of the bill is and to put people's minds at ease with regard to what actually is covered. and i guess most importantly what is not covered. >> that would be very helpful. i appreciate that. another important topic that we've been working on in this committee is the growing problem of synthetic drugs. i've been shocked at the troubling passionate dublin, troubling cause of poison control center. in just the last six months compared to the same time to year ago, with these drugs with a young man died in minnesota am tce, a synthetic hallucinogen, and we've also had bills passed

through the skin and not just for that drug but for also schumer's bill and synthetic marijuana, senator grassley's bill. these bills are unfortunately stalled. i think there was unanimous support in this committee but they are stalled because one senator, not senator durbin, has put a hold on these bills. so i've just as for your help in getting to do and maybe you could talk a little bit about what we are seeing in terms of a whole new phenomenon with these designer drug. >> i think it's something of great concern. the dea is taking emergency action with regard to the regulation, and we have seen tragically and, unfortunately, instances around the country where people, young people in particular, using these substances have had negative health consequences, sometimes even died. i'm not sure exactly, i'm not familiar with the hold, but i think that the legislation is

clearly needed, and we will work with you on that to try to get it passed. i was not aware of the hold. >> yes, a new phenomenon. not a new phenomenon. but on this bill we were surprised. we are trying to work with the senator who has put on hold. and we also have an issue with some of the house bills that we need to work out. i think it's incredibly important talking to law enforcement in our state, particularly in smaller communities where they're having to bring in chemists and people to try to prove that it's an analog substance, that gets me to the second point, is one of the things i have realize is they keep changing the compounds. we will put this on the list and to be helpful, it's not the end-all be a. one of the things i'm going to start doing is looking at that analog statute to see if there's some changes that we commit to it to make it simpler. to explain that a drug have a simple change in the compound, there's three factors or four

factors that may be we need to look at the standard differently. and so i will be working with your attorneys and law enforcement on that issue as well. if you have any views on the analog? >> i think that's very important because as these things get, their mates and then click, you can, i don't all the terms but you can change the elements of these things. it should not be the case where we have to come back to congress to get a new statute in order to do with this new compound. there ought to be some discretion. to recognize that something is made a derivative of something that has been previously banned, dealt with and then we can take emergency action, appropriate action so we can deal with these things as they come up. because we know that the reality is that these chemical compounds, substances can be change relatively quickly. we have to have the flexibility and the ability to respond as rapidly as we can. >> thank you. i still think there's a lot of

people in america, i know what i was a prosecutor, i did know about this issue. and suddenly this switch where because of people buying it easily, they think maybe it's legal because it's on the computer, it's getting to be a huge problem so i appreciate that and i think we need to look at that statute. it is a harder hall than just adding the drugs to the list but i think it will make it simpler so we can literally fit the crime here, because right at it is too tough and has been too hard of a policy to get these drugs on the list. it's something i'd hoped would happen automatically. last thing, last month i introduced a bill with senator bill nelson of florida on guardianship. so many good guardians in a country doing their jobs, but, unfortunately, including several reports by the gao have shown that some of them are using their positions of power for their own gain. and i heard dozens of heartbreaking stories at a hearing that i held judiciary committee as well as meetings i had at home. are you familiar with this issue

we are trying to make changes to the statute? >> not familiar with it, but not for me with the bill. i've heard about this issue, this problem, and we would be more than glad to work with you both in the exploration of the problem and with the solutions to it. >> we are looking at first of all just some guidelines which is always helpful, background check systems using examples of states where it's working to do background checks. it's unbelievable that there are a number of states that don't even require criminal background checks. so while we are not swooping in with her long force on this we're looking at how can we show best practices in some of the states so that we can do a better job of oversight. we'll see a doubling of our, of the senior population by 2030. the baby boom generation, and we need to get ahead of the curve. so thank you very much. >> thank you very much, senator klobuchar. did you want to say anything to that? >> just an observation that i will be a member of that baby

boom generation that will be getting, i guess i might already be there at this time spent i thought but i decided hold that. >> i am trying to show a great deal of sympathy. [laughter] knowing the difference in our ages. senator durbin. >> thank you, mr. chair german. thank you attorney general. i noticed in the opening test when he talked about the efforts to extradite those index responsible for the killing of americans. i'd like to take you to another aspect of this issue. recently the "chicago tribune" did a series relating to the stooges, criminal fugitives who fled the country, 129th criminal suspects have fled illinois, according to doj data. and many of them have been charged with crimes as serious of murder and rape and child molestation. what we've done in cases over and over again, one case in particular, in 1996 it is alleged that page are active are

gunned down a single mother at a restaurant in chicago for spurning his romantic advances, and then fled your within two months the relatives disclose his whereabouts to chicago police come his whereabouts in mexico, even giving local detectives the name of the street where he was staying, with his parents in mexico, and supplying a telephone number where he could be reached. no action was taken. in fact, what has happened since 1996 is the family of ms. rodriguez, her daughter, has found has been no help in trying to locate him. the "chicago tribune" reporters found him in 48 hours in mexico. unfortunately, in the ensuing 15 years virtually all of the witnesses to the crime are either unavailable or incapacitated. this is repeated over and over

again in this series. and it raises serious questions about the level of condition of a local law enforcement and the department of justice and the efforts of extradition. first i'd like to ask, if you would please, to join in trying to bring all the agencies of law enforcement at every level together to resolve this breakdown in communication. and secondly i'd like to give you a chance to respond to this. >> yeah, i think the issue that you raise is one of concern that extradition relationship we have with mexico is today much better than it was quite frankly it was not good in the past but we're in a much better place. our marshal service is the primary agency within the justice department that has the responsibility of apprehending fugitives, but i think you point is i think the point you make is a good one. the federal government can only do so much. we need to work with our state and local counterparts to get information about people like the ones you have described, and would probably have to do a

better job of interacting with our mexican counterparts about who these people are, where they are, and then tried to get him back. because what the situation or the situation just laid out is simply unacceptable. >> i might add that the series also spoke of a fugitive in syria which is a different circumstance altogether when it comes to extradition. but i thank you for your willingness to join in that effort. mr. attorney general, how does the department of justice to muslim-americans in our national effort to keep america safe from terrorism? >> we do that and as essential partners in the fight against terrorism. they are an essential part of our counterterrorism fight, have proven to be reliable sources of information from a great many of the successes we've had and that i've talked about, or that attention has been brought, came as a result of leads we got from members of the muslim-american community. we have had extensive outreach

efforts in the department and investigative agencies within the department, particularly the fbi to reach out to the muslim-american community to put at rest the concerns they have, the fears they have about their interaction with law enforcement. and i have to say that i've been very encouraged by the response we have generally gotten from that community. >> i thank you for your answer but it is consistent with statements made by the previous administration after 9/11. about president bush's statements were right on, spot on in reminded people that our enemy is not those of the muslim faith, but those who would corrupt it into violent extremism. the reason i raise this issue is that guidelines were established on profiling in the department of justice, and the guidelines are explicit that neither race nor ethnicity shelby is to any degree. and, of course, that's obvious, using racial profiling to arrest african-americans, using ethnic profiling to arrest those who

appear to be hispanic is totally inconsistent with our values in this country. but notably, religion was excluded from that list, only race and ethnicity are included. we have found that the fbi agents who were given counterterrorist training were unfortunately subjected to many stereotypes of islam and muslims. for example, fbi agents in training were told that quote, islam is a highly violent radical religion. quote, mainstream american muslims are likely to be terrorist sympathizers. the epic mind is swayed more by ideas and facts. we also found, for example, one public fbi intelligence assess the claims that wearing traditional muslim attire growing facial hair and frequent attendance at a mosque or prayer group are all indicators of possible extremism. recently released documents show the fbi's engage in widespread surveillance of mosques and innocent american muslims with

no suspicion of wrongdoing. can you reconcile that activity and those training guides with your initial statement, concerning your view that i share on the role of muslim-americans? .. that person is not being used anymore i the fbi, and we are reviewing all of the materials, all of her training materials to ensure that kind of misinformation is not being used because that can really

undermine, can really undermine the substantial outreach efforts we have made and really have a negative impact on our ability to communicate effectively as we have in the past with this community. i only have to say community because the reality muslim americans, we are talking about american citizens have the same desires that we all have, one that their kids can be safe and the opportunities that this great country has to offer them. that kind of information, that kind of training sets back those efforts and so we have distanced ourselves from that person, those statements and have a process underway to review the materials to make sure that mistake does not happen in the future. >> mr. chairman could i prevail for 30 seconds? i would like to thank you very much and thanks to the other senators who are here. the last question i would like to ask i know you can't answer but there were several states including the state of florida, which have recently changed

their state of voting laws to restrict opportunities and access to vote relative to presenting photo identification cards, limiting the early voting in the states and making it more difficult, including penalizing those who are engaged in the voter registration process to the point that the league of women voters for the first time is pulled out in florida. and the penalties associated with it. i know that the voting rights act into different articles the department of justice has the authority to review the state laws to determine whether they have in fact or what in fact disenfranchised voters. can you tell me whether this is underway or whether or not it will be reviewed on a timely manner? >> we have, you are correct, two instances. i can answer that question specifically but i can't say that with regard to section 5 and section 2 of the voting rights act, this department of justice will be aggressive in

looking at those jurisdictions that have attempted for whatever reason to restrict the ability of people to get to the polls. i think you know a fundamental question is really raised. who are we as a nation? shouldn't we be coming up with ways in which we encourage more people to get to the polls, to express their views and i'm not talking about any one particular state effort. but more generally, i think for those who would consider trying to use methods, techniques to discourage people from coming to the polls is inconsistent with what we say we are as a nation, and i would hope that those kinds of efforts would not be engaged in and again that is separate and apart from what we have to do as the enforcers to section 5 and section 2 of the voting rights act. >> thank you attorney general and i yield back the balance of my time.

>> i would note that senator grassley has asked for a second round, second round of five-minute questions. senator coons, i will ask senator coons when he comes back to chair and senator grassley will be recognized after senator cornyn. mr. attorney general i remain very concerned and commerce justice science appropriations bill considered by the senate last week completely eliminates funding for the second chance act programs. the bureau of prisons was increased by $300 million. now i know prisons are overpopulated. i understand funding is one of the problems and surrounding communities. i think we have to focus on re-entry and rehabilitation. unless somebody has a real life sentence which is very very

rare, and sometime they are going to come back out. and, when it costs $5000 or more a year to keep and bear, the idea is spending a tiny fraction of that to keep them from going back. it makes a lot of sense. we want to make sure we have re-entry and rehabilitation program when prisoners rejoin society and they will stay out. i think the second chance act allows that. it's a tiny fraction of what we spend on our prisons. sometimes is it a far better investment than just sending people back to prison. will you support restoration of the second chance act from this congress finishing this work this year on appropriations bills? >> yes. the investment of money and that

way is ultimately financially smart. we will save money down the road, but also i think there is a moral component to this and that is that we have to try as best we can to rehabilitate people and it is only through the tech needs we support in the second chance act that provides we can be effective i think in that regard so i think the decision not to fund that effort does not make a lot of sense. >> thank you. and the violence against women act gave the department of justice some important tools to improve the response to issues of domestic and dating violence, sexual assault and stalking. one of these makes it easier for law enforcement to apprehend violent criminals. now, law enforcement is requesting more of these visas

than are allowed under the law. i am considering as are some others proposing an increase to the number of new faces that might be available. would that help law enforcement? >> i think it could. looking at ways in which we can deal with this issue but i think that is certainly one of the things we will be considering. >> lastly senator grassley and i worked together in this congress on the fighting fraud to protect taxpayers act. it's an important measure that gives the department of justice additional resources to fight fraud at no cost to taxpayers. we joined a bipartisan effort and it is now stalled in the senate. with the increased number of investigators and prosecutors be

paid for by reimbursements and if the department of justice could hire them if we pass the -- acts. with the american people benefit by that? >> i think obviously senator, mr. chairman that is something that we want to work with you on and would support. that clearly is a benefit of benefit to the american people. >> senator grassley and i will keep on pushing on that and lastly, i keep reading even after the facts came out or i keep seeing on some of the tv programs about 16-dollar -- . the inspector general issued a corrected version of that report which apparently summon the meeting had never seen although everybody else did. we want to make sure what you

have is spent correctly and i know the the deputy attorney general caldwell. you have a copy of the cover of letter to the corrected report which pointed out that 16-dollar muffins was incorrect. what steps have you taken to make sure that conferences money is spent appropriately? >> first i want to say we have pretty good inspector general and i think that they are to be lauded for the fact that they did admit that they made an error and that calculation, the 16-dollar muffins in fact does not exist. we are in the process of reviewing all of the requests for conferences to make sure that they adhere to the guidelines that we have set out and that they are done efficiently and in a cost-effective way but i also want to point out that conferences serve a useful purpose. it is the way in which teaching occurs in a way in which ideas

are shared, policy is developed and we should not simply cast a wide net to think that conferences are not as good use of our resources. we are committed to doing it in an appropriate way. >> thank you very much and i yield to senator grassley -- for his five minutes. >> i have got a couple of statements i want to make before i ask a question. before the justice department produced documents on wide receiver, my staff asked for additional information on previous cases of gun walking, however on september 30, the department declined to provide a briefing on such cases so i have not limited my questions to obama era operations, and it is harder to get answers if you don't get these briefings.

now that the majority is interested in gun walking after nine months and they are in the majority they will probably help us get our questions answered, but that is one reason that i don't want the inference being left that i'm only interested in overseeing democratic president on gun walking. i want to speak to something senator schumer brought up and i think his facts are entirely accurate, but he referred to wide receiver, where i think he was well, he referred to wide receiver but all of the facts with regard to the hernandez case, just wanted to make clear something that has been widely misunderstood, the memo to the attorney general the case he referred to what is known as a controlled delivery in the case called hernandez, not gun walking. the u.s. corrugated with the mexican law enforcement which

was supposed to be waiting on the other side of the border to interdict these weapons, and so this is a distinct from "fast and furious," and operation wide receiver, in which no effort was made to work with mexico and guns were clearly bought. and the first question, he your justice department stood by its february 4 denial even after i sent the first set of documents that showed otherwise, so a question to you general holder. you say that you are relying on others to correct that misstatements in the february 4 letter that mr. brewer himself admitted that he first knew first-hand that those misstatements were false at the time that they were made her go shouldn't he then have notified either you and/or congress at that time? >> well i think that is of one

of the things that he admitted if i remember in his testimony he said he made a mistake in not bringing to my attention the fact of his prior acknowledgment. he admits that he made a mistake in that regard. >> your deputy received a lot of details about "fast and furious" in march 2010 briefings, details that i believe sort of raise red flags. for example, he was informed that just three straw buyers bought 670 guns. he was informed that the atf all of them to the stash houses and he was informed that the guns ended up in mexico so if you look at the charts with grindler's own handwriting on these things here, yet you said in a recent letter that acute thing deputy attorney general grindler was not told of the

unacceptable tactics employed and the "operation fast and furious" during that briefing. if by unacceptable tactics you mean watching straw buyers illegally buy guns without seizing them before they get to mexico, isn't that exactly what he was told? >> i don't know exactly what he was told but as i understand what he was told, that he got this briefing as part of a monthly interaction that he had with atf. the person did the briefing was ken nelson the acting director of atf who at that point indicated he did not know about these inappropriate tactics and also the person who briefed chairman isaiah as i understand it gave him pretty much the same briefing. so i don't know, i which are the conclusions that you do on the basis of that, what i understand the nature of the interaction was. one of the things that i have been told is that during the

course of that briefing the question of guns walking was not briefed to then acting deputy attorney -- attorney grindler. >> one of the aft briefing papers explicitly says that the strategy was quote to allow the transfer of firearms to continue. in one of the e-mails forwarding that paper, it says that it is quote, likely to go to dag which i assume is deputy attorney general, and of quote. you can know for sure that no one informed him of that strategy, can you? >> well, i have understood it, he was not told of the tactics, the gun walking tactics. as i have also been told, and the pictures were guns that were recovered in the united states. this is what again, delivered in the united states, this is what

i've been told. i'm not as familiar with that interaction has perhaps you are but what i have been told is that the fact is that the deputy, acting deputy attorney general was not told about guns walking. he got the same briefing that congressman issa got from the same person as ken nelson. ken nelson has indicated that the time that he did that briefing, he was not aware of the gun lobbying -- as best i can remember think it was in march of 2011 when he talks about the gun the attorney. >> senator grassley, chairman leahy has gone to a vote which many of the members of the committee are currently out so instead if i might, i'm going to begin a second round of questions. from me and then we have other senators who will be returning to ask additional questions. one of the central issues he spoke about in previous questions was a two state and local law enforcement and one of

the things that is of great concern to me as officer safety. you had spoken earlier about how we are seeing significant reductions in crime overall debt increases in violence directed against officers, obviously has been discussed at length tragic losses and the line of duty of officers. i wonder if you might comment on what sorts of programs the department is currently funding, what sorts of funding challenges these programs face particularly i am personally familiar with the officer vest program but i would be interested in other comments you would care to make about officer programs and grants. >> is something we have tried to focus on. i have had what we have come to call a summit meeting after there were a number of deaths of local law enforcement officers in shootings, and as a result of that we develop something we call the officer safety initiative where we are trying to channel information two hours date and local counterparts so

that they have ways on which they can receive training and how to handle themselves in violent situations. as you indicated we have supported the bulletproof vest program to get these best out there and we also have something called the valor program the deals again with this whole notion about how our forces can protect themselves in these situations. we try to educate them and make them familiar with ways in which they can protect themselves and also try to isolate. one of the things that most tend to result in these kinds of officer shootings, one of the things we found is that when officers tried to break into houses, that is oftentimes when you see shootings occurred, so by sharing this kind of information and getting information from our state and local counterparts and then sharing that with them, we hope that we will have an impact on what i think it's it is a very disturbing trend of officer shootings. >> we recently had the first ever loss of life by the county police department and i used to be intimately connected with an

individual who is reported was reported in our local newspaper and it hasn't been finalized through toxicology reports but was reported with these bath salts discuss privet will -- grievously. can you discuss what we might take a pass forward federally to make sure legislation that a number of us are -- that would criminalize these that are realistically dangerous substances? >> we will work with you in that regard and not the least of which is that we put as you have indicated tragically potentially enforcement officers at risk, the people who use these substances obviously putting themselves at risk. and we don't want to have a situation where we are being affected with regard to the more traditional drugs and then we have these new ones, these new synthetic drugs popping up that have the same impact or the same possibility of devastating communities and away the more

traditional drugs have. so we want to work with you to identify what the current problems are. i think we always have to be mindful of new situations, new trends. we have to be flexible. we have to be responsive and i think one of the ways in which we can do that is to interact with members of this committee but our state and local counterparts with in fact what is going on out there and how can we as a federal government assist? >> our government delaware has taken decisive action to deal with this and i would be happy to share with you and your department what results we have seen. let me last ask in the hernandez case, senator grassley was just a referring to in regards to the 2007 the casey memo that has been discussed here. do you know the atf lost track of the letters they got to mexico? >> i don't know. i have focused on "fast and furious" when that was happening. i am not as familiar with the

hernandez case. >> thank you very much for your testimony. senator cornyn. >> thank you mr. chairman. hester hold or let me just try to tie up some loose ends. you agree that on february the fourth a letter that was written to senator grassley with the allegation that the atf sanctioned or knowingly allowed the purchase of assault weapons and transported them into mexico is false. that letter dated february 4, 2011 is itself false. we now know. >> what i said is a contains inaccurate information. >> well, isn't that falls? >> well false, i don't want to quibble with you but i think false implies people making a decision to deceive and that was not what was going on there. people were with faith giving what they thought was correct

information to senator grassley. we now know that information was. >> if you won't agree with me it was false, it was not true? do you agree with that? >> i would save is not accurate. >> it was not accurate. to the person who wrote this letter on february the fourth 2011, have ever been disciplined or otherwise been held accountable for providing false information to a united states senator? >> well has indicated the people who wrote the letter acted in good faith and thought that they were sending was in fact accurate information. the people supplying information on the information thought it was accurate. at some point somebody in that chain did not have, did not give good information and that is one of the things the inspector general i would hope would he able to determine. >> did lanny or were no better than what was represented in the february the fourth letter? was he privy to either these two

memos, the july 5, 2010? he said he was reached in april 2010 and by the way what office does lanny brewer hold in the department of justice? >> he is the assistant attorney general for the criminal division. >> why would lanny brewer knowing as he did back in july, april 2010 about "operation fast and furious," allow a letter that went out on the department stationery february 4, 2011 why would he let a letter that was false represent the position of the department of justice? >> first off the briefing, the a.g. brief was about wide receiver. that wasn't about fast fast imperious. >> by the way do you know the differences between wide receiver and "fast and furious"? >> do i know -- they are different operations. >> right so do you know the factual differences between wide receiver in "fast and furious"? >> well there are a number of differences both in scope, both

in terms of kind. the bush administration was the one that started wide receiver and the obama administration is with fast imperious. >> are you winging this or do you actually no? >> i know this. >> to know the wide receiver was done in conjunction with the government of mexico and the intention, the plan was to follow the weapons and neither was there the intention to follow the weapons on "fast and furious" nor did mexico know that the united states government was allowing guns to walk into the hands of the cartels? did you know that? >> senator i have not tried to equate wide receiver with fast imperious. >> i'm just asking if you know the differences between the two? >> sure. what i know about wide receiver, what you have said, in fact there were memos that talk about gun walking that are related to wide receiver but again i'm not trying to equate the two. >> when you got senator grassley's letter, on january

the 30th, 2011 why didn't you investigate? >> i did. i asked the people on my staff to look into the materials that were concerned raised in the letter. it was the january 27 letter i believe, the two letters he gave me i think on the 30th and the 31st, something like that and i asked people on my staff to look into that and they did and they started asking questions within the department about the things, the material contained in the senator grassley letter. >> course that was shortly after the letter that senator grassley gave you was shortly after the well-publicized murder of ryan terry, united states one person asian. >> to declare the letters were addressed to the acting head of the atf, ken nelson but -- >> who works for you. >> january 31. >> so, i believe that you told senator whitehouse that you thought your staff made the right decision in not ringing

fast imperious tactics to your attention. is that correct? >> no. what i said was that there was no indication the materials that they reviewed the contained anything about the tactics we used in fast imperious and as a result there was no need for them to bring to my attention the reports. if in fact there was in those reports indications of guns walking i think they should've brought that to my attention but that was not contained in the reports and that is what the the assistant attorney general brewer said was the mistake he made when he heard about the gun walking. he should've brought back to my attention, the attention of the deputy attorney general. >> can you name me one person that has been held accountable for this "fast and furious"? >> we have made a number of changes with regard to personnel both in phoenix u.s. attorney's office and also the atf headquarters here and i will certainly await the report that comes out of the inspector general and i will show you an

american people that people will be held accountable for any mistakes made in connection with fast imperious. >> thank you. >> thank you senator holder. thank you for coming back. senator frank and you have any questions? >> i'm sorry i haven't done here. we have been at a health committee meeting so i've missed the last two and a half hours. before i begin, i just want to take a moment to align myself with senator kohl's comments on the t-mobile merger, the antitrust division sat largely dormant under the previous administration and i'm very pleased under your leadership the department that was willing to send a message that the antitrust laws still relevant and should the applied to block large anti-competitive mergers so thank you. i know you have had a long week

so i will just ask one question. as you know, there is an epidemic of bullying against transgender students in our nations schools. nine out of 10 lgbt kids are holy did in school. a third skip school and the last month because they felt unsafe and these kids are missing school and they are going as far as committing suicide. they are literally being bullied to death. and our nation does not have a law that explicitly prohibits discrimination on the basis of sexual orientation or gender identity and our public schools. general holder, i have a bill, the student nondiscrimination act that would fix this. it has been cosponsored by 34 senators including the chairman and almost all of the democratic members of this committee and the help committee.

it has passed appearances before this committee. the department of justice has lauded the goals of this act come the student nondiscrimination act and in fact even acknowledging lgbt bullying was the greatest growth area in the civil rights docket. but even though this administration is publicly and formally supporting other lgbt rights bills like the employment nondiscrimination act, the respect for marriage act, it is not yet publicly support the student nondiscrimination act. general -- general holder does this administration support this bill or does it not? >> well, i think the operative word we would use is yet. i will go back and try to see where we stand and why we are not in a place where i think we ought to be formally.

because i think you are right, as we look at the steps this administration has taken with regard to similar issues, we have been i think in an appropriate place in the right place, it and with regard to the bill we are talking about i hope that we can get to that appropriate place relatively soon. >> thank you very much and i hope before we get to the floor with it on the esea though. thank you very much general holder. >> attorney general holder, i want to thank you for being here. everybody has had a chance to ask their questions. everything has been said and sometimes more than once or twice or three times, but i appreciate you being here and as i said by the beginning of my

statements you are part of the president's national security team and i will let you go see you can get back to those issues that really affect us. thank you very much. >> thank you mr. chairman. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] now former reagan administration officials discussed a life and legacy of america's 40th president. this year marks the 100th anniversary of reagan's birth. one of the speakers today is ed meese who served as attorney general during the reagan years. this is hosted by the university of notre dame's rooney center for the study of american democracy and also the reagan presidential foundation. we will have more live coverage today, including the veterans day observance at arlington

national cemetery. delaying of the wreath at the tomb of the unknown by president obama. also there today at the arlington national cemetery, defense secretary leon panetta and veterans affairs secretary eric shinseki. [inaudible conversations] [inaudible conversations] [inaudible conversations]

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

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

[inaudible conversations] [inaudible conversations] >> we are expecting to hear from former reagan administration officials here today, including ed meese a former attorney general, james burnley, former secretary of transportation and also james miller who was the

former director of the office of management and budget. we will have more live coverage tonight as our contenders series continues. we are focusing on barry goldwater. he ran against a lyndon johnson in 1964 and lost the race. >> welcome everyone. my name is david campbell. i am a professor of political science at notre dame and director of the rooney center for the study of american democracy. one of the sponsors of today's event in addition to the ronald reagan presidential foundation. in just a few moments we will get into our formal introductions of our panelists with a discussion of our objective here today. but to start us off i would like to welcome father john jenkins, president of notre dame, to the podium to offer an invocation

and perhaps a brief welcome as well. father jenkins. [applause] >> thank you david, thanks to all of you for joining us here at this wonderful discussion and thanks to our distinguished panelists were being here with us to talk about these important issues. we gather on veterans day and we thought it would be good to begin with a prayer on this solemn day. so let us together pray. god of peace, thank you for bringing us together here today. we pray for those who served our nation in the armed forces. we remember with gratitude those who have given their lives to defend our freedom. we lift up those whose body or spirit has been wounded by war. we ask your protection for those who currently serve and

especially those in harm's way. and may the peace you gave us, the peace that sustains us be more fully realized in our world. we pray this in your name, amen. you will notice that i'm wearing a red flower on my lapel. i do so in honor of veterans day or as they call it in canada where i was born and in the u.k. and other nations of the commonwealth, remembrance day. the poppy is to remind us of those who have fought for our freedom and as john mcrae so powerfully put it in his poem in flanders fields, and flanders fields the poppies blow between

the crosses row upon row. it is fitting that we meet this morning to discuss the life and legacy of presidents ronald reagan on veterans day. not only are some of our panelists veterans themselves, but of course president reagan was a champion of freedom not only for the united states but for people everywhere. it is also fitting that notre dame would host a symposium on president reagan given the ties between our university and america's 40th president. perhaps most famously won a president reagan's nickname the gipper comes from his portrayal of george get the legendary notre dame football player and the movie new brockley all american. when president reagan spoke at notre dame's commencement in 1981, he spoke of playing the role. he spoke of how the famous locker room speech that he gave invoking the name of george get

to motivate his players quote so inspired and that they rose above their personal animosities for someone they had never known. they join together in a common cause and attained the unattainable. in that speech president reagan then spoke of the problems that america faced then, some of which sound a lot like the challenges that america faces today. i thus look forward to hearing from our panelists as they reflect on how president reagan faced the challenges then berg. perhaps we can learn something about how to face the challenges that face us now. again, quoting from president reagan's commencement address. he spoke of how in its third century the american nation would quote, the age, affirm its leadership of free men and women serving selflessly, a vision of man with god, government for people and humanity at peace. let me now introduce stewart mclaren the executive director

of the ronald reagan centennial celebration to say a few words about our symposium at which time i will return and offer introductions of our panelists and we will be off to the races. >> thank you david very much for that introduction and on behalf of the ronald reagan presidential foundation, i too would like to thank all auer turned -- american veterans those who served and continue to serve to defend our freedoms around the world today. also i would like to thank the university of notre dame and father jenkins, the rooney center for the study of american democracy directed by david campbell and our very distinguished moderator and panelists we have with us this morning. this is actually the sixth of six partnerships that the reagan centennial has conducted with great american universities during this centennial year. we started in february this year with a partnership with the university of southern california. that focused on the biography of leadership and a biography of

president reagan, what made him the man and a great leader that he was. we then moved to charlottesville and washington d.c. where we had a partnership with the miller center and the university of virginia and that focused on president reagan's life, leadership and legacy in the international arena and his legacy on the world stage as an american president. thirdly, we partnered with pepperdine university for a focus on the presidents life of faith and faith in the president's life. and with georgetown university we focus very specifically on president reagan's leadership to establish diplomatic relations with the holy see in 1994 with the whole vatican and today we are actually, two weeks ago the united states naval academy, we have a terrific partnership focusing on peace through strength. two-day seminar will focus on the economic and domestic policy, bush mends and legacy of president reagan. this centennial year began on january the first, 2011 with the

ronald reagan theme float in the turn amid of roses parade. the first time in the 122 year history that great institution that an american president has been on her. we. we have since then had a years work of activities and partnerships to summarize those for you briefly as the president began his career as a radio sportscaster. he had a terrific sports agenda busy with 11 major-league nasal teams who paid tribute to president reagan across bald arcs across the country. with nascar he was the first president to attend a nascar race at daytona 51984 so we had tributes at daytona, phoenix, montana and kansas city. actually we were fortunate in kansas city at the richard childress branded an entire car for the reagan centennial logos and the raising kansas city and with brian herder racing we were honored to have the reagan centennial will go on the front of the winning indianapolis 500 car this year also the centennial running of that race.

sadly the driver of that car was dan wheldon who was tragically killed later in las vegas. been on the president's actual birthday is february the sixth was the super bowl in dallas. we had a wonderful tribute to the present their so is a great year of sports activities. we have had a wonderful engagement with high schools across the nation on the weekend of september 23, 24th and 25th. 6826 high schools from alaska to florida and maine to hawaii tossed a ronald reagan centennial going to begin that football game. 170 for colleges and universities including notre dame did the same and in seven nfl team so it has been a very grassroots involvement as well. this summer in europe, eastern european capitals saw avenues being named, conferences being held and the statue president reagan unveiled in grocery square in london and just last week the unveiling of the wonderful statue of president reagan just a few miles from

here at reagan national airport. we also this summer and invited every governor of the united states to send to students from their state to washington for a partnership with the close-up foundation focusing on civil discourse, how with the lessons of ronald reagan we can disagree politically and ideologically but you can still respect your opponent. than we have a wonderful birthday weekend in february at the library with a concert for america and a wonderful ceremony on sunday morning with a flyover of f-18's on the deck of the u.s. ronald reagan and we will wrap up this centennial year in the next few weeks with a partnership with a motion picture association focusing on the presidents life in the movies and the tribute to the president of the army-navy game here in washington on december the tenth. an important thing to us in the centennial as evidence by the partnership of notre dame and the other five universities is the next generation of young americans and sharing with them president reagan's life,

leadership, legacy and impact on our country and on their lives today and we are grateful to have a strong representation of the notre dame students and the washington program that are better with us here this morning. resident reagan first made his, made a first trip to notre dame just two years after he graduated from eureka college when he was there to broadcast a football game of all things, and then a few years later he was there for the world premiere of the all-american and as david mentioned he returned in 1981 for a commencement address that was rightly heralded and is still today. it is fitting and proper we continue that wonderful relationship with the university of notre dame with this terrific conference here today and we look forward to hearing from our wonderful panel on issues of economic and domestic policy and with ronald reagan's legacies on those issues and how they impact our world today. thank you. [applause]

>> my role now is simply to introduce our panelists. they have all had such illustrious careers that i could not hope to list all of their comp richmond here but we would not even make it to the football game tomorrow so instead i will only hit on some of the highlights. let me again with edwin meese who served as counselor to the president. president reagan's chief domestic policy adviser and as attorney general from 1985 to 1988. i should also note that mr. meese served his country in the army after having been a member of the rotc at yale. he reserve and army reserve until 1984 retiring with the rank of colonel. we will also hear from manley johnson who served as vice present of the board of governors at the federal reserve system for nearly five years during the reagan administration and he too served in the united states army from 1968 to 1971. we will also hear from jim miller who served as the director of the office of management and budget from 1985

to 1988. and from jim burnley who served as secretary of transportation from 1987 to 1989 and we are deeply grateful for these gentlemen for their participation today and their reflections that they will provide on their years serving with the president. all of which brings me to our moderator, judy woodruff. she has become a familiar face to americans having worked in the news media for more than three decades. she is currently a coanchor on the "pbs newshour" and aptly given the theme of today's presentation was the principle reporter for the pbs documentary, nancy reagan, the role of a lifetime. please join me in welcoming our panelists. [applause] >> thank you david campbell. i'm so delighted to be here and i'm honored to have been asked to participate in this wonderful program today by the reagan

foundation. thank you mr. mclaurin and thank you father jenkins for representing notre dame. i think it is a wonderful idea what the foundation is doing, forming these programs with a series of universities and i think the subject we are going to talk about today could not be more timely. i have to tell you though on a personal note, it's been 30 years this year since i started to cover the administration for ronald reagan. i can't believe how the time has flown, and i have to also tell you that like every other journalist, we all have a story or a memory of president reagan. mind is particularly personal. i will tell you that my husband and i were welcoming our first child. he was born, jeffrey was born in september, 1981 so i took a maternity leave and have been away for about two months. is planning to come back in december when i got a call from the white house press office,

inviting me to come over and showed the baby to the staff of the white house. so i got jeffrey organized. he was two months old, and came over there that day and unbeknownst to me they had called my husband, al hunt who was then covering congress for "the wall street journal." they said, you should be here too. is going to be kind of nice and fun. so we show up in jeffrey at that point of course is having it auto every two or three hours. i had gotten there and we showed up and we said hello and then they said there is somebody we really want jeffrey to me. and of course they meant the president, and as soon as i realized this i realized my jeffrey had just finished a bottle and they said well we have got to go right into the oval office right now, because the president has an important meeting in 20 minutes with the president of sudan. so there i am with his 2-month-old and had not had a chance to him. we walk straight into the oval office and there is a smiling

president reagan and i will never forget, like it was yesterday of wearing one of his gorgeous brown suits. he reaches for the baby and puts put him on the shoulder, and start holding them up. you know, moving him up and down. [laughter] and he said, he starts telling us stories about his own children and how he and nancy did this and that the width, when their children or young. he said here is my favorite. he put him on the shoulder and heat started talking about it. this is the way the ladies right, riding a horse. he said this is the way the gentleman right in this is the way the cowboys ride and by the time he finished jeffrey was up and down with the president and my eyes are getting bigger and bigger. needless to say i am happy to tell you after 15 minutes of a wonderful conversation, we left. the president's jacket was perfect. nothing happened. [laughter] and so my son has been perfectly

well behaved ever cents. anyway, you can imagine it's a favorite memory for al and me and for jeffrey because we have a picture of that location. but it is one more reminder of not only the leadership of ronald reagan but also the personal charm that this president had. so it is just one more reason why i am delighted to be here today. the subject as we said couldn't be more important, and i'm going to call on our distinguished panelists to say a few words about putting the president's legacy with regard to the economy and domestic issue in their own words and i just want to say if they turn to you at meese that if you start listing three things and you can't get to the third one we are all going to pitch in and help. [laughter] ed meese, it's your turn. >> thank you judy. to understand the legacy of ronald reagan you have to go back to where the country was in january of 1981.

we were in really dire straits both at home and abroad. at home we had the worst economic crisis we have had since the great depression of the 1930s at that time. we had inflation at 12.5% and we had interest rates at 21% and unemployment at 10%. we had energies -- and we also had other things beyond the scope of today's discussion. but in order to understand the situation, our national security situation was also perilous with the soviet unions flexing its muscles around the world, where we were at a situation where military forces had been depleted in the wake of vietnam. we had, we had as they said the planes couldn't fly for lack of spare parts. ships couldn't sail for lack of trained crews. we were neither a credible deterrent to our opponents are a

reliable ally to our friends of that has had an impact also on the relationship between national security and economics obviously that was there. so this was the situation. i think the important thing was ronald reagan came to office with a vision of where the country ought to be going both in our relationships with the soviet union but more particularly on how to deal with our economic rob long's. sitting between two eminent ex-economist on either and, but let me say and i'm sure they will everybody came into office with a four-point program. the first was to lower tax rates across the board. he didn't believe in this class warfare. he believed everybody should be treated fairly. secondly, he had the rigor terry reform in mind because regulations were stifling our business and industry. the third he wanted to work for the federal reserve to have stable monetary policies rather than the up-and-down policies that we have had which have led to the inflation and forth he wanted to slow the growth of

federal spending. he accomplished in the first year all of these objectives, at least they were all initiated, and started the tax rate reduction was the key to all of this that took place in august of that first year, and as a result of these policies, we started the longest period of peacetime economic growth in the history of the country. so this was a key part of how he got started and his legacy. the other part i would like to mention was, he was all so -- he understood people and he was a leader. his military background, he had been a captain in the army air corps during world war ii, his leadership of the screen actors guild and the movie industry and all of that has led him to understand how you lead people in one of the things he did was develop mechanisms for people to work together, things such as the cabinet council in which members of the cabinet sat together on a regular basis in order to develop plans which they then brought to him the cabinet meetings, bringing the

entire of -- coterie of people working from the various departments together and regular intervals, having special courses taught by people from the kennedy school at harvard on the management of departments. these kind of thing so it was a combination of a vision of where the country should be going and then developing the leadership plans in order to bring together a cohesive administration of people throughout the government who can get us in the direction and along the way towards the goals he sought for the country. >> at meese, thank you very much. let's hear now from jim burnley the former secretary of transportation. >> if i might judy, thank you. i would like to offer a different perspective by way of personal anecdote as well about how ronald reagan views his role as president. in the spring of 1988, in may, i had the opportunity to travel with him to connecticut to the

coast guard academy. i had asked him to address their commencement, and he had done the other three service academies during his presidency. this was the one that was outstanding so he readily agreed, and as you know the coast guard academy is in new london connecticut. new london has an apartment and certainly couldn't handle air force one so air force one had to land in hartford about 30 miles away and did so. when we got into the presidential limousine, as we pulled through the gates of the airport, we were engaged along with his then chief of staff and the three of us in polite conversation. he said to me, jim i don't want you to think i'm rude, but we are going to keep talking, but i have to add knowledge these people along the roadside. so that is what happened for 30 miles. for 30 miles, we had casual conversation about this and that

and as he looked out one side and waved and then the other. what is significant about that? well, he was in the eighth year of his presidency, and yet he still felt an obligation, and that is the way he put it, it was an obligation, to what knowledge the american people and those in particular who had stood as he said for sometimes a couple of hours waiting for a brief glimpse of the presidents as he came by. he was never going to run for office again. it was nothing political about this. it was just how he viewed his role. it was his responsibility even in the waning months of his presidency he felt to connect with people, to his knowledge them. and, i was obviously shocked by that at the time. today i am still struck by it.

each president has his own unique approach to the role, but it said so much to me and still does about his view, of his role. he had a multiplicity of roles obviously but what nonetheless for eight years when ronald reagan, we had a president who clearly thought it was an important fundamental part of his role to simply connect the people in this country. ..

>> the fact was that on a bipartisan basis in the late '70s, congress has passed legislation to economically deregulate every mode of transportation. until the late '70s, railroads were strictly regulated in terms of pricing. airlines were regulated where pricing is going to decline down the line. trucking similarly regulated. so the reagan administration was not a part of that deregulation legislative exercise, but we came into office at a time when it was just beginning to take hold and play out. and i actually got to the department of transportation early in 1983, to briefly be general counsel and deputy secretary for the balance of my

time and till i got to move to the front office. and so it was very clear and our signals from the white house were very clear, that we were suppose to come on the economic side, stay out of the way. let these statutes take old complaint these these industries sort out their own economic futures. figure out how to actually compete in the marketplace, which they have not done until president reagan took office. and there were certainly more than a few voices who would, from time to time, suggest this wasn't going well and that maybe congress should we regulate. you still occasionally hear that today, particularly as to the airline industry. so i would say in my sphere, and sort of the basic themes of the administration and transportation, safety always first and foremost, but then on the economic side leave them alone, let them figure out how

to provide those services would all depend on. and compete with each other. >> okay. jim bradley, thank you very much. knowledge of from jim miller who was the director of the office of management and budget under president reagan. >> thank you, judy. thank you for inviting me here. it's so good to see some former members of the reagan administration in the audience. you know, we talk a lot about what president reagan accomplished, and he accomplished so much. he restored faith in america and he restored faith in the presidency. i've often thought though aside from that, what with the qualities of the man that made the difference? what made him so special and so effective in what he did? and i want to pick up on something that jim burnley started off with, and that is

his humility. i think that came across, he was someone who talked about, ed will remember, he used to talk about the constitutions of so many countries. started off with the government gives the people certain rights. he was so, he delighted in pointing out that our constitution says we the people give the government limited rights. he was one who spoke not about i do this, but we do this. he was always putting himself in the background. he told me several times, jim, i'm going back to california. i'm going back to the ranch. he saw the presidency as a finite term that american people gave him a responsibility for a finite term.

and he was, when it ended he got on the helicopter, got on the plane and went back to california. there was a plaque on his desk that said, i wrote it down. there is no limit to what a man can accomplish or how far he can go if he doesn't mind who gets the credit. just as an anecdote. the first budget i prepared for president reagan, i was sitting down with him in the cabinet room going over some details that i put together, and i wanted to check and make sure that i had everything right. and i said in the case of the postal service, it would make sense to privatize the postal service and de-monopolize the postal service. and his response was, jim, that

sounds like a good idea. i felt just so proud of myself sitting there, you know? only years later, years later did we discover -- discovered the box of those yellow sheets and those are his handwritten scripts for his radio program. one of those scripts said virtually the same -- >> can you fix your mic? i think it slipped down. >> i do too much gesturing. one of those scripts said virtually the same thing. now, rather than his sitting there and saying, well, jim, i wrote about this, or i said this eight years ago, or something, nine years ago or something like

that, he made me think it was my idea. i think that was one of the keys to his success, his humility. >> all right. that's an important not to add. and, finally, let's welcome manley johnson who as we know is former vice chairman of the federal reserve board of governors. manley johnson. >> thank you, judy. i have three brief stories i think i can help illustrate, you know, the way ronald reagan was and how i related to him. i know before i was vice chairman of the federal reserve was also assistant secretary of the treasury for economic policy in his first term under both donald regan and jim baker. but ed has pointed out that when reagan became president and during his campaign he formulated a platform, domestic

policy platform based on four major principles. and ed went over those, and i think this explains a lot about ronald reagan. he was a man of deep convictio convictions, developed, which had been developed over a long period of his experience. and i don't think he could operate without a principle-based administration. and i think that's really important. and when we all came into the reagan administration we all knew these principles, and you could recite them by heart. no, they weren't complicated. the issues underneath them were complicated by the principals were easy to understand. but they set the stage for his domestic policy, and i think in many ways kind of contained the debates that went on within his own administration about how to conduct the policy. and i think that was very important. i know when i was first, this

first story when i was at treasury, my office was always being sent over comments from the president to respond to. someone would come in and meet with the president in the oval office and hand him a paper that they had other ideas, and most presidents which is kind of hand that off to a staff member and it would be forgotten, or a nice form letter would be sent later. reagan in many instances would take those papers and read them and write marginal notes about them. because i would get them. i would be over at the treasury and get the white house staff would send me the papers that someone had come in with an economic idea, and reagan had read it and written on his handwritten marginal notes on the site. and i was asked to go over these and check it for facts and make sure that, and prepare a written

response, which would be edited back in the white house. i was just amazed at how many of those came over from the white house to the treasury for my analysis. and that first told me that people are trying to characterize this meant as a simpleton in the newspapers just don't understand. another story that follows up that was when we were in the early stages, we had already passed 81 tax act in august of 81, but after that jim miller would know, his predecessor kind of fell off the reservation and wanted to change a budgetary policy and kind of go against these principles reagan had sent. but we used to have a tremendous number of late evening task force meetings over, in the oval office or the cabinet room, to

deal with these issues. and budget director at the time would be servicing a plan to reverse the tax program. and don regan would always come down to my office and say, i want you to come over with me because i served in the background work on this, to have this debate. and i will never forget one evening in the cabinet room we had this task force, i was just getting up against the wall behind don regan who was treasury of secretary of the time, and this whole purpose of this meeting was to corral reagan into a decision to reverse part of his tax program. dave stockton, the former budget director gets up and makes a presentation, which was an attempt to backed reagan into a corner, and had been rehearsed quite a bit before that. reagan comes in, and as was

pointed out by jim and others he was always extremely respectful to people. came in, sat down, welcome everybody to the meeting. there were only probably 10 people in this room, and he listened to the presentation, everybody was expecting him to make a decision. at the end he smiled after the presentation, i'll never forget, took his jar of jelly beans which was always sitting on a cabinet room table and passed them around and said everybody have a jelly bean. and he smiled, and then he said, i'll take this under consideration. and he got up and walked out of the room. and i'll remember the stunned look on some people states as saying, he didn't make this decision. we set this up for him to make a decision. of court he had already made his decision with these four principles. and so nothing changed, but that in many ways that was internally how things are governed because his principles established the fundamental spirit a lot of

people try to debate changes, but he really withstood those through his fundamental principles. the last one i am a, when i was vice chairman of the fed, and i had many meetings with paul volcker, because at the time he was chairman, i was vice chairman, paul volcker used to tell me on his monitor national monetary claims, if you remember the first part of the reagan administration before the policies really were enacted into law, the economy was in a deep recession. 1982 was probably the depths of the largest postwar recession since the one we're in now. unemployment rate was hovering near 10%. the monetary policy was still very tight. to break the back of inflation which as ed meese has pointed out was near 12%, an annual rate. you can't imagine what that was like now.

you probably do if you're around them. some of the and people can probably imagine what that was like economically at the time. with interest rates hovering near 20%. economy was in terrible shape, and volcker would say to me, you know, it's very lonely over here at the fed, because i'm used to to the central banking as an independent institution. politicians are always trying to manipulate the federal reserve board to favor their policies. and so usually the pressure is to stimulate monetary policy to lower interest rates to try to get things going so they can take credit during their four-year term in office. and volcker told me, to my surprise, not only was i not getting that kind of pressure, but i was actually been criticized for not having policy tight enough.

and he said it was amazing because i could conduct a very tough monetary policy and a very tough time to break the back of inflation. now, how many latest you know would be willing -- i mean, that's leadership, someone who's willing to tolerate those short-term conditions, knowing what the long run result would be, even if it occurred after your term in office. reagan at eight years in office so he saw the fruits of that labor before his term was up, but he made those decisions and supported a tough fed policy, not being sure that would come to fruition in his term. that's the kind of leadership this man had. >> thank you, manley johnson. i've been listening to all for a few, and i think one of the things that strikes me is that, you know, president reagan clearly has very clear ideas

about what he thought government should deal. but here today to talk about legacy, and i think of the few that is held more and more widely today that essentially holds that the federal government in particular, government in general, federal government, in particular is something that is almost to be looked down upon, that is something that should be not just minimize, but cast in a negative light. and you hear that in a live conversation out around the country. you are hearing it to some extent in the presidential campaign. it needs, what was president reagan's view of the role, the proper role of the federal government? and people who work in the federal government? >> ronald reagan always thought very highly of the people who work in the federal government and a great respect for them. but he did feel that federal government had expanded them,

and ensure he would really feel it has to they far beyond what the founders had in mind. he had studied the founders. he had read a lot. that was always his habit from childhood. he read a lot about the founding of the constitutional and that sort of thing. he recognized the fact that the constitution was both the structure of government and the principles for operating it, and also there was a limitation on government. he fell, that's what he said it was government policy that got into the recession that we had in 1981. a lot of people miss state what he actually said. they quote him as saying government is the problem. he didn't feel the government was the problem on everything. and he felt the government was a problem for that particular situation. so he had come at the same time, he understood the role of the federal government which was essentially to protect the people, provide for defense, provide for the things that were truly national in the subject matter, but at the same time

there were limits on the federal government and i think one of the problems today is sometimes people have forgotten those limits be given go back to what ronald reagan had in mind we would have a stronger more effective government doing the things the government should have, should be doing. and at the same time would not have been intruding as much as it is on the states. and so i think that was really his view. so it combines both those ideas. on one hand government wasn't very important part of the country, it had a role that was very important. should be well led, the people to work for the government should do a good job, and at the same time we should not forget that it is a government of limited powers. >> you think he believed there were to part with a government that were unnecessary? >> absolutely. he would start with the department of education. he always felt there were 5000 people in the building that not one person taught a single student anywhere. that was one of the things he was very sorry. he felt there were some things which the government could

perhaps provide money to the schools and to the states to operate education as always have been. if you go back to the founders, one of the things the founder said was particularly not the problem of the federal government were things like education, and so that was one he would immediately took action. he did try to abolish. interesting enough at the same names of congress who voted against establishing the department of education in 1978 were unwilling because of the pressure groups and the powerful unions that had come in were unwilling to vote to abolish it or change it structure into some sort of foundation in 1982. >> jim burnley, at the department of transportation when you were there under president reagan, did the department feel appreciated by the american people? did the employees of the department feel, or did you feel i think of some federal employees today feel, that they are again, not appreciate?

>> i think there was an appreciation that emanated from the oval office first and foremost. if we felt underappreciated it was when the media would go after us about maybe aviation issues first and foremost, which is a perpetual opportunity for selling newspapers and running up ratings. it wasn't a disconnect at all of the white house. it was a very different dynamic that we felt we were being fairly criticize. but pickup for them all on general meese is a point about his sense of where the line should be drawn. of course, he had been a governor for eight years, of a state that, i've forgotten what it would've been, ed, but seven or eight in the world of its gdp if it were a country. he had an appreciation for federalism, and the proper role of, vis-à-vis the federal government. he saw a role for federal

taxation, for example, on fuel, to have a highway program, to help transit to an extent. in fact, he signed in january 1983 a bill that increased fuel taxes by a nickel because he agreed we were under investing at that time. but you fast forward four years to january 1987, when he vetoed the highway transit bill. and the primary stated reason for that was that congress had intruded, in his judgment, into the decision-making that should be made at the state and local level, by using earmarks. now, this congress has abolished their marks, but in the last time we transit bill, which was enacted in this country, a multi-bill, with 2003. there were over 7000 earmarks for highway and transit

programs. president reagan thought it marks were out of control genuine 1987 because there were a hundred and -- 154 it marks. and the most legendary and notorious one was for something called the central -- in boston. the central artery was in marked at the next to the overall cost, to cost, 2.8 billion dollars. go look it up, you'll find that it ended up costing, including interest costs, over $22 million when it's finally finished. the citizens of massachusetts will finish paying for the bonds in the year 2038. so president reagan thought 150 for earmarks was way too many. and that particular caremark sort of symbolized everything that was wrong with congress trying to micromanage how this federal aid was going to be uzbeks of the bill was vetoed.

and democrats controlled the house by a substantial margin. he knew he would be overridden in the house but it takes two-thirds as you all know of the vote it in the was a fighting chance that an effect that beta was sustained. it fell one vote short, but then senate majority leader robert byrd pulled a brilliant tactical maneuver so that it stayed open so he could try to shift the vote and then have a second override vote. that's exactly what happened. the freshman senator from my home state of north carolina, terry sanford, into a three days time was one way or another persuaded having voted to sustain the veto, change his vote to override and went straight back to the senate floor, overrode, and the rest truly is history. that's how we went from a 2.8 billion to 22 billion for that one project. but that's where, again, from my perspective, captures the

dynamic even late in his administration of trying to manage the federal role in a way that recognize what the proper role in his judgment for the states was. and act on the. it just wasn't rhetoric. he acted on it. >> jim miller, how do you see, when you think back about president reagan, his view of the role of the federal government? >> well, i mean, as ed has articulated he believe the role of the federal government is limited. in fact, he was a firm believer in the 10th amendment, that those rules, those authorities and responsibilities not enumerated in the constitution are reserved for the people in the states. he followed that out, and that's the bulwark of his policymaking. he articulated principles, rules very simply, i want to get back, i think something that manley was saying. i think he was asked one time by

sam donaldson, what do you think of the cold war? he said well, we win, they lose. and in the situation room at the national security council meetings, you would have people say well, we've got to do this, we've got to go easy on this, we've got to be careful about this, and we have to get in here and given there. and he would say if the soviets want to wage a cold war, it is a war they will not win. that simple. and we had to follow those simple principles, guiding principles. they were easily understood. back to manley's point, it was easy to understand where he's coming from. it was easy to prepare a budget from president reagan because you knew what he would come out. it was easy to go into fees various budget appeals, because

i felt quite confident when an agency appeals that budget, and there were very few appeals, that he would come out on my side not, it was not my site, it was his side. you knew it i had a time when he wanted to comment. now, the application of those principles sometimes was difficult. there was a lot of discussion about issues. where to go, what to do? i mean, it was a lot of discussion. i saw this though at the very beginning of the reagan administration. i was sitting in one of the very first cabinet meetings. i was one of those people sitting at that time sitting up against the wall. and the issue before the cabinet was whether the president would sign an executive order allowing economic development in wilderness areas. and there was discussion around the table, and nearly everyone said that's a good idea, mr. president. we want to increase economic

activity, let's allow economic activity to take place in these wilderness areas. but from some of his comments it was pretty apparent that he was going to say no. and in the end finally, secretary of industry, jim edwards, made a last stab at trying to persuade the president to change his mind. and he said, mr. president, i still to understand why there is need in the air to breathe than us humans. and without missing a beat, the president said, shot back and said jim, have you ever smelled a bear? [laughter] >> i don't know how to top that. that was good. manley johnson, what would you say, just continuing in this vein, was the economic decision, the decision that affected the

economy that has had the longest, that has lasted the longest, had the greatest impact over time during his administration's? >> i'm not sure there's one simple thing, but i will try to characterize. first you have my story monetary policy. i think, i think, you know, his firmness supporting a strong federal reserve policy restrained money to break the back of inflation has had a long lasting impact. we enjoyed the low inflation rates and low interest rates did it as a result. but i think one story, you know, alan greenspan said this to me one time. i was asking him, what do you think reagan's greatest impact was. and he said, you know, to mean it was when he confronted the air traffic controllers at the beginning of his administration. and he confronted this important

public sector union and fired all of the air traffic controllers who were striking, and everyone thought well, you know, this is sacred. they can't touch it because it's such a sensitive area. he replaced them all with no damage to the safety record. and greenspan always said that was a defining moment because it sent the message to ceos and business managers all over the country that they would not be political interference with the downsizing and restructuring that needed to be done that was so obvious in the '70s and early '80s to be able to be globally competitive. now, that was greenspan's view. i actually think that was a defining moment, too. i think it was very, very important, because that was carried through it even through

bush and into the clinton administrations, where businesses continue to be able to restructure their corporations without a lot of political intervention and. .. in the top tax bracket. things that come to a grinding halt -- people were spending all

their time sheltering income. tax rates were reduced down to 50% with the '81 tax act at the top rate and all the other will brackets moved in proportion down. there were tremendous exemptions for the lowest levels, and then in '86, the top tax rate -- the brackets were shrunken down to three simple tax brackets with the top rate at 28%. and in fact, many -- there were huge explosions at the lower levels. all of the evidence over the years of people who study this very carefully because it has taken a long time to carefully measured the data has shown very clearly that through this result, which was a very fair across-the-board approached that the highest income earners have paid by far a much larger share of total taxes and the lowest income brackets have paid a

lower share, and this is because the economy has improved and increased and there's been upward mobility in the system as well. so to me this is my most personal context so that is the biggest legacy but i want to mention these others. >> of course that brings to questions to mind. one is the impact some of this have on deficits. what was the president's view at at least president reagan's view on deficits and the importance? >> he felt the deficits were a bad thing. we should be paying as you go. at the same time we were trying to build our military and he said if you have to choose between having deficits on the one hand the work no deficits but being able to strengthen the military, so we did have deficits during that period of time. they are minuscule compared to today. 3% of the gdp something in that

neighborhood. >> to wonder 21 billion. >> right. at that time we felt there was very bad, so as a result of that he continued to work on the deficit and we had a declining deficit pattern over the last three budgets he had the responsibility for to which a great deal of credit goes to jim. >> does anybody else want to comment? >> i want to comment, judy. i think he was quite concerned about the deficit he saw them serious, this issue, this confrontation would trump his concern about that. he wasn't willing to back off the tax program and, you know, just to deal with the deficit people forget i think the deficit probably got a lot over 4% of gdp at the peak. but when he left office a was

around three per cent of gdp. just to put it in perspective, today we are hovering between eight to 10% of the deficit to gdp ratio, and you know, i know ronald reagan would have been totally horrified by that prospect. what he would have been horrified about is the ratio of spending to gdp, and how many resources the government was taking him that produced the deficit. >> but you know, he was willing to take risks because he signed the grand hollings bill, which if there were not as assistant reduction of the deficit with mandates across-the-board cuts in spending including in defense, and the congress established targets for reducing the deficit and then panicked and changed the target of a little bit. so that it was -- so rather than eliminating the deficit by the time that president reagan left

office, it was still hovering at about 150 -- excuse me, $108 billion or something like that. but i remember one of my finest memories on this is when the president was signing the amendment of the grand hollings act, he signed it out of that port there of the oval office overlooking the rose garden, and the speech came to me for comment, as usually i would get copies of his speeches, and he quoted the senator, this general mcauliffe i guess his name is in the battle of the bulge, when he was the -- demanded the surrender and he responded nuts. well, the draft said that like senator mcauliffe, the bottom of the bulge, i would not entertain an increase in the tax rates.

some in congress think they are going to increase taxes. no, i'm not going to increase taxes, nor will i agree to the cut in defense. so i wrote a note and i said just like general mcauliffe, there's some in congress who think i will advocate and agree to a increasing taxes. well, they are nuts. there are some in congress who think i will agree to a cut in defense spending. well, they are nuts, too. i thought that's kind of funny. [laughter] well, i'm standing there behind the president as he is reading his speech. he had a special way in his cards. i looked down and i cannot believe it. he kept of those words in there. and howard baker said to me, she said jim, what did you think about that? i said i thought about was a great speech. [laughter]

he said i thought there were members of congress the were going to vote when he said that. >> i have a final question and then we're going to open up to audience from the -- questions from the audience. you talk about tax increases. the time came during his presidency he did agree to some tax increases as part of a larger package. ed meese, talk about that and how that came about. today taxes are so much in the air and i think a lot of people look back to president reagan as the originator. >> what happened is he was persuaded by some people in the administration at that time to go along with a compromise, passion of a compromise with tip o'neill and the democrats. and the compromise was supposed to be that there would be $3 of deficit reduction for every dollar of tax increase. well, as a result, what happened was the congress quickly passed tax increase and we never got

the deficit reduction, the spending reductions. as a matter of fact, somebody had estimated most states might have squeezed out with 58 cents rather than $3. ronald reagan always said that was the worst mistake he made during his administration was agreeing to a deficit, agreeing to a compromise that allowed them to raise taxes first and then supposedly come with the spending cuts. and i think that is a pretty good lesson for us today also as we look at the situation that we are facing at the present time. >> but he did believe that the two could work together; is that right? >> clearly, you know, when we went from the 81 tax act where rates were cut across the board and depreciation allowances were dramatically accelerated because we were in such a deep recession to try to get business going, you know, as you know when you watch things go through legislation run clean proposals they turn into sausage. so there are a very messy things

in that were not a part of the intended result. i think reagan never had any problem with cleaning up the tax legislation from things that from pork and unintended consequences of tax legislation. and when he accepted -- when he pushed for tax reform and 86, you know, he clearly was willing to broaden the tax base by eliminating a lot of tax loopholes in order to get the rate structure down considerably. now, his principle behind that was revenue neutral. and so, he said, i don't mind taking on some of these sacred cows of the loophole closures to broaden the base to get tax rates lower, but i want it to be on a revenue neutral basis, and so those were the kind of

principles he operated on. he was certainly willing to take into consideration all kinds of complicated changes in revenue structure, and i think that he believed in evidence as warned him out by the right kind of incentive structure and the tax code over time you raise more revenue. this wasn't a simple -- some people criticized him for believing in a simple principle that you cut tax rates and you get more instantaneous revenue. i don't think he ever believed that. he never articulated. his view was always you provide the long-term structural incentives to the economy and eventually the economy will perform at a higher level which will produce more gdp and income growth and higher income in the future which would generate a larger tax base. and evidence has definitely barnett out. >> even in that compromise of the 1982, he refused to allow any changes to increase the income tax rates which of course

as manley said was pivotal as far as the future. >> one last thing i must ask of you and then i do want to turn to the audience. there's a lot of discussion today about frankly a lack of civility in american politics about how increasingly you just don't see the two political parties working together. and meese come you mentioned president reagan working with tip o'neill. the famous stories about how the president would have speaker o'neill over to the white house for a cocktail to talk about the problem. they didn't agree on many things but they were able to work together. the german from the ways and means. there are a lot of stories like that. but today, 30 years later, we don't see a lot of cooperation between the two political parties. i just want to ask all of you, whoever wants to comment on this, what was his view towards working with the other political party, how did he feel he was

selling out clearly he didn't feel he was selling out to sit down and work out problems. you didn't see it my way or the highway. >> he learned quickly that you got more out of dealing with the legislature by working with them than being hostile or having animosity coming and i think that it was hard for him to have animosity against anybody. he liked people and he never talked about enemies. he may have talked about opponents were people who don't agree with us but he never talked to the other party as enemies. of course from the other party but -- writing the thing that was important is he always had respect for the people, even those that didn't agree with him and almost naturally people more or less reciprocated. >> he always had a respect for union workers. he was the head of the screen

actors guild. he saw these people as the backbone of the country, yet at the same time with the air traffic controllers i think he didn't like the idea of holding the country hostage. >> if i may interject, the tax code in the union had endorsed ronald reagan because they were very upset with the carter administration so not only did he respect the unions, but this was a union that supported him but nonetheless it was against the law and that is where he drew the line. just as with tip o'neill, as you remind us they had a wonderful civil relationship but i spoke a little earlier about the central earmark and there was a going away gift to tip o'neill. he was retiring at the end of that congress the speaker, so this, to be to this required taking into account that relationship that had reminded

us of, but again, this was a step too far just because the along together, that doesn't mean that you did something you thought was fundamentally wrong as a matter of governance and uz 28. >> with open up for questions from the audience. there is a microphone right here in the center of the room. please step over and give your name if you don't mind and ask your question. >> can you step closer we can't hear you. is the microphone turned on? raise your voice and we will hear you. >> [inaudible]

>> we just elected a governor in mississippi -- >> just be elected governor in mississippi who is a president reagan disciple. i just want to ask you all what advice do you all think the president and governor ronald reagan would give to our newly elected governor since he is here today? [laughter] >> what advice would you give to the new governor of mississippi, who wants to start? >> can i mentioned that the outgoing governor of mississippi was a disciple of president ronald reagan. in fact he worked in the white house. he was a great man. in terms of advice, i think he would say utilize the responsibilities and authorities have under the constitution of the united states, and he would urge congress and the president to give the state governors more

flexibility and authority to carry out these programs that are so costly because they can carry it about more effectively and at less cost to themselves. >> i think one thing that a piece of the device would be to make it clear what your objectives are, what your vision is for mississippi, and then communicate that to the people so that the understand. i think that was one of the keys to ronald reagan. he would have these chats with the public many times going over the heads of congress, going over the head of the news media directly to the people through the medium of television, and he was very effective in mobilizing the people behind this idea, and that is why he was able to persuade congress that many of whom or not necessarily an agreement with his ideas, but they understood the people were behind the president and what he wanted to do in the 1980's. >> yes, next. >> thank you for being here today. one component --

>> can you tell us your name. >> i'm a student from motor game. >> given the legacy one component that is often seen today is that a fiscal conservative. given at the time of unprecedented budget deficits and a decrease in taxes and increasing defense spending, do you think that ronald reagan should be labeled a fiscal conservative? >> should he be labeled a fiscal conservative given deficit -- >> i mean the deficit for themselves, 3% was in president of the time i think post more time. >> 3% was not unprecedented by any means. i certainly think he was a fiscal conservative. again, you know, all in perspective the budget deficit was never large. now, you know, i will say this within the ronald reagan

administration, we had huge debates about $50 billion. i mean there was a lot of money. you know what the size of the deficit is today? its $1.4 trillion. >> we didn't know what trillion was. >> the total federal budget, the total federal spending was less than a trillion dollars when i became. >> we had huge debates about 50 billion-dollar deficit and i mean, this administration was very fiscally principled, and he established that principle, but again, i will say he definitely had priorities. he wasn't willing to compromise. did he know the consequences and the deficit? i think he did, but i think that his view was very long run. that's the one thing you have to remember about this president. he took long run view. he didn't think about how things would work during his term in office. he thought about the long term of the presidency and his feeling was to get the structure

right to address these policies crackly this is the fiscally prudent thing to do and i think of was born out over time because the deficit of the gdp ratio did decline over time. he never closed out the deficit. i think that he really would have preferred a balanced budget and i think that he was disappointed in that. he was always disappointed that we hadn't done enough on of restraining spending. >> and he supported the balanced budget amendment. >> i was out on the cabinet department and to the extent those of us outside of the white house complex felt underappreciated from the earlier question, it would be the day that the omb director miller sent pass back and was omb's first answer to you about when your budget should be there would be submitted to congress in the fall in january by the president and was on a feeling

driven by the notion that we had to keep a tight lid on domestic spending usually buy the notion we needed to cut it by several percent. but you've got to remember when you are looking again itt's ronald reagan never had a republican majority in the house of representatives. and the last two years the congress was entirely space, and he was rebuilding our military. so, our domestic budget would propose cuts with the congress invariably would give the appropriations higher than the president had asked for. >> when i asked whether the employees of the department felt appreciated i meant by the american people i didn't mean by the white house. >> yes, next. >> i'm a professor of political science at the university of notre dame. when i think of the legacy of

ronald reagan, i think of the revolution and the thing that strikes me is how bloodless that revolution was. literally a the end of the cold war ending with peaceful collapse of the soviet union, but i think that the ronald reagan revolution or the reagan agenda domestically was also quite revolutionary, and it triumphed figuratively speaking without a lot of blood. a lot of the agenda has now become sort of the political center of gravity in american politics. i would like to ask the panel thinking ahead to 2012 what are the lessons of the revolution for the next american president who presumably wants to be able to make major changes in the direction of the country but do so in a way that doesn't leave a lot of blood on the ground? thank you. >> i would say that one thing

would be to look at what is happened over the last two or three years which covers both administrations and that is the tremendous growth of the federal government particularly in terms of spending. and if i were to give advice to the president i would say let's go back to a base here. maybe it's 2008, maybe it's 2,009. take that base here and see where we've grown during that period of time and then gradually been able to decelerate the federal spending back to some increase by inflation and population increase of adjective factors like that but get control of the budget i think that is the first step in a new president is going to do. islamic tuna president reagan very well. if he had been president, nm fair question if he had been president in late 2008, d think he would have gone along with the program to rescue the banks? >> i doubt a very much. i think that he would have taken a long view and worked with the

fed to find a way to handle. he wouldn't have gone along with this so-called stimulus package and then attempt additional so-called stimulus. he actually faced this in 1987. if you remember the bottom dropped out of the stock market at that time and there was panic and people came and said they stopped trading the stock market a period of time people said you got to have massive expenditures and correct this. he said listen the market is going to settle itself you just have to be patient and make sure we don't do things that are selling or rash, and he was willing to bend to lead the country in holding forth during that period of time and what he had predicted happened. >> following up on that because i was the vice-chairman of the fed in the stock market crash. people don't realize in 1987 the drop in the stock market in one day was 23%. i mean, we haven't seen anything even remotely comparable to that even in 1929.

there was general panic. probably more intense for a short period of time than news all and 08 yet he held firm on that and i will never forget because, you know, everyone was panicking. wall street was calling down demanding we close the new york stock exchange because all the traders managing the floor were losing a huge amount of money having to be responsible for making the markets. ronald reagan held firm. the stock exchange was calling demand asking to close the exchange. we were all on the phones with howard baker and others. we had to threaten and he was agreed to this the president had the power of executive order. you had to keep the stock market exchange opened and he insisted

that the stock exchange remain open and i will tell you if we hadn't kept the exchange is open in 1987, we would have had a total meltdown because things did turn around and people started buying the stock index futures leader in the week and had we not had the exchange opened, we would have never cleaned up that mess. i would just say one more thing on the monetary side, you know, she stood a very firm on the monetary policy and, you know, believe in the soundness of the monetary policy and his entire term. he provided the leadership to make tough decisions. >> could i add something? when president ronald reagan saw the pa, he saw the opportunity to make it large. today our political leaders see

the policy and tend to think in terms of how to cut different slices and that's one reason the politics so nasty this because the fighting over slices of pipe. the very nature of the negotiation over the pieces of pie is going to be more nasty them sitting down and figuring out how to make pie grow larger. >> more questions. >> my name is dennis campbell. i'm an independent financial advisor and longtime employee of the reagan foundation. my question is for mr. johnson. paul volcker has generally given credit for breaking the back of inflation in the 1980's with the acquiescence of the reagan administration. you previously indicated something a little stronger. strong support from the white house. i wonder if he would elaborate a little bit more on the reagan's administration view on the fed and the degree to which their opinion way in or influence your decision at the fed with regard

to the monetary policy. >> well, the white house -- the reagan administration and president felt strongly about the independence of the fed. there are always people -- a good example of this is there were a number of people in the administration that wanted to replace paul volcker who felt like -- i will be honest the members of the administration probably didn't think he was tight enough because they wanted strict money-supply targets in post, and from time to time the money supply numbers for the drift above target and we were in the deficit of the recession in '82 and reagan held a very firm and supportive of the fed as i've said plenty of times,

and so there was no pressure from the white house. i know when i was there we never had any pressure from the white house, and as i gave you this example in the '87 stock market crash, you know, there was never a call from the white house demanding the we cut interest rates during that period. they did understand what was important which i think was the case in 08 and 09. the need for liquidity to support the banking system to avoid runs on banks and people pulling deposits held in the period of fear. there was always supported, and i think that that was important of the 1987 and in 2008 and 2009. but i know he never would have supported, and i know i never would have given him advice was on the extent of the bailout, and i totally -- i don't know

that those people protesting know what they are protesting about, but they simply appear to be an entire wall street andean clydebank but i do sympathize with a piece of that because i do think we've let the banking system get to the point where, you know, institutions are too big to fail and there is too much capitalism going on in the system. i don't think that ronald reagan would have never supported that in the 80's there was the savings crisis and we had the third world debt crisis in the banking system and in all of those cases banks were restructured. we did and just pull the rug out from under the bank's. it might produce a panic. but institutions were allowed to fail and if they appeared to be too big and might create systemic risk, they were gradually field. and i think that we are making that huge mistake today, not

letting these monolithic institutions fail that have already failed, and i think that is seriously harming our financial system in the credit crisis. >> does that sound like you agree with ed meese that even president reagan had he been president in 2008 would have been not inclined to go along. >> he never would have been in support of crony capitalism. >> we are out of time. i apologize to those of you standing in line to ask a question. i want to thank all of you especially i want to thank our panelists, jim miller, ed meese, jim burnley, manley johnson, i know we are all honored to be here coming and we thank the reagan foundation and notre dame university and the roomy center for democracy for hosting the symposium. thank you very much. [applause]

>> [inaudible conversations] dannel conversations [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations]

it's located near arlington national cemetery just across the potomac river from washington, d.c.. the marines in the memorial statue are erecting a 60-foot bronze flagpole, the 32-foot high sculptor was inspired by a pulitzer prize-winning photograph of one of the most historic battles of world war ii. a small island located 660 miles south of tokyo was the last territory that the u.s. troops recaptured from the japanese during world war ii.

>> i started telling about my symptoms, you know, jumping up

in the middle of the might come running outside without even knowing what was going on, a car would honk behind me i would be out of my car just angry attacking the car behind me, and he said to me have you ever been in a war? and the hit me so hard and in the middle of this room with about 80 people. i started bawling, snot coming out of my nose. have you ever been in a war? got me so simple. he said you've got ptsd. have you ever heard of it? occupy washington, d.c. organizers her a panel discussion wednesday proposing changes to the federal budget. the group has held protests in washington, d.c.'s freedom plaza since october 6 asking for an end to what they call the corporatism of the american

economy. this is about two hours and 15 minutes.www >> yes, i like this microphone better now. >> thank you very much.ççççwwwç okay.çw welcome evçwerybody to freedomçk plaza.w those of you who have not been here before, this is occupied washington, d.c. sometimes protests. is this microphone to about? n think it is a l aittle bit toa loud. a little bit of an eco. for anyway, we have been out here ad for about a month now, and we have had dinner, protests, teaches, great speakers from cornell west.lots lots of good people have come out and what we are doing todaye

is something that we think is dportant because there is a a debate going on right now in t congress that weh is eff track think is we off track a corrupt, really corrupt to the core, and it can't deal with the real problems that this country faces, and so this so-called super committee up on capitol hill, i would say is an occupied super committee up there because they are occupied by corporate power. they are occupied by corporate power. now, we're calling this is occupying super committee, but i think we're liberating. what we are is a liberated center in an occupied city, occupied by mass wealth and corporate power to limits government. welcome to freedom plaza. that's what we are here, and we had here with not by ourselves, but there's another occupation in mcpheerson plaza. i thank both for staying out for

doing incredible citizen work to change the debate. occupations are happening across the country, and people are finally stepping up and taking responsibility for the direction of the government and the economy. it's refreshing to see, and it's great to see people doing their constitutional duty. we, the people, in order to form a more perfect union. that's our constitutional duty, and we're exercising our freedom of speech, right to freedom of assembly, and in doing that to show us how far we are off track, 2700 people have been arrested, not violently protesting across the country to just redress their grievances. we have serious greechtions. this country is way off track. we have an empire economy that works around the world in wars. we have a domestic economy that's dominated by big business wealth where the people's voice is no longer heard. we are here to redress the

grievances and build an independent movement. this is just the beginning. this is just the beginning. what you're seeing happening in freedom plaza and your own cities around the country is the beginning of an independent political movement to hold both parties accountable and if necessary run can dates ourselves and take this government for the people. we believe in participating democracy, and that's what this is about. participating democracy versus concentrated corporate wealth. we'll announce plans on our website. you can go there and sign up even if you can't come here, you can be a part of it. occupy washington, d.c. is announcing big events. among those events are a bus tour, for example. planning to go out into the country and build this movement. we'll have people put on events, teach people how to do occupations, teach people about the issue, and that's starting

in the future. we'll also planning with a bunch of occupations around the country, national occupation of washington, d.c. next spring, the american spring is going to bring the occupations together into washington dc beginning march 30th. join us there. now dc. national occupation of washington, d.c.. put that on the schedule and plan to be here for that. that's tens of thousands of people camping out in washington, d.c.. what we're going to do today is we told the speakers, we have great speakers as they get prepared to speak. we told the speakers is we do not want to be limited by political reality in washington. political reality in washington means what the corruption requires, what the people who fund the campaigns require. we are breaking free of that political reality, and we're going to go into reality reality. reality reality is two things. it's evidence based solutions to the problems the country faces

and believe me, there are solutions that are easily put in place, and they are not being put in place because of the political reality that limits choices here. the second reality is we want solutions, and we want to confront the problems and solve them. you know, president obama's faced health care, but not solved it. it's worse. he's confronted the financial crisis and made the big banks bigger rather than broke them up. he made the federal reserve powerful, bailed out the banks over and over through the federal reserve and trash ri, there's bailouts, and main street is struggling. the problems have been raised, but not dealt with. we'll put forward solutions to solve the problems. the problem with the super committee on the hill is their members have raised tens of millions of dollars from entrenched corporate interests. in fact, a report -- cut 1.2 frl, and that's something that's doable between a combination of

tax changes, cuts on military spending and other efficiencies. it's easy to reach the 1.2 trillion mark. it's not impossible at all, but unfortunately the committee on the hill exemplifies what's wrong with congress. a report came out last week from the public campaign, national people's action, that compile the amount of donations received on the deficit committee. $41 million from big finance over their careers. $41 million from big finance. do you think that big finance will be challenged? of course not. they will not be challenged, and you also see a revosming door. at least 27 former aids of the super committee are lobbying now on behalf of financial firms. they are hearing from their former aids coming back as lobbyists, as well-paid lobbiests. they received money from jp mar -- jp morgan, chase, and since

2000, the finance energy spent $4 billion trying to influence the direction of congress through lobbying and elections. the ten biggest contributors, the first is club for growth. thars a group that advocates low taxes for the rich, corporations, and cuts to social spending, cuts to the social safety net. a lot of candidates are now called tea party candidates because they were co-oped by the republican party. we're facing up to that. we're not going to let the democrat front groups co-op that movement. we're going to stay independent. we are not co-oped. you won't see them called occupy democrats. that's not going to happen. the club for growth candidates are tea party candidates. other donors, goldman sachs, 519,000. citi group, $630,000 to members

of the committee. i hate having papers. jp morgan chase, bank of america, general electric, $340,000. these are the people who control this committee, and we've seen last five years 1.7 million in donations from political committees with ties to weapon contractors and the health care try industry. those are two of the biggest issues on the block up there. if they fail to meet their deficit reductions, there's automatic cuts to the military and to health care, and their lobbying aggressively up there, and our view is that a bad deal is not worth making. if they will make a bad deal to please corporate interests, it's not worth making. let the cuts go in place and fix it as the 99% take more power. we're not going to get anything out of the committee or the cuts. they are too corrupted to make it happen. they are limited in their choices. they talk about cuts to social services, cuts to medicare,

medicaid, social security. that's where they are going with this. they are not going to cuts because of the military or tax increases on the wealthy. you'll hear a lot of views on that today, and i welcome you to that, and from a week from now, we'll put out our own report with real reality reality recommendations on how to really solve the deficit crisis and get this economy going, and the critical thing is to solve the deficit, we have to get the economy going. it's a critical ingredient to solving the deficit. when you have people paying taxes, less people using services. you win on both ends -- income and spending, and so solving with jobs crisis, this economic downturn is a critical step in order to solve the deficit of problem. i'll introduce our first speaker from the economic policy institute, andrew fieldhouse discusses how to raise revenue

through change of the tax structure and create a fair tax system and raise sufficient revenue and close the divide and get the economy moving. andrew. [applause] >> thank you for that introduction, cell phone. the united states suffers from an unwillingness to pay the bills, not inability to pay the bills. all too often, there's prominent policymakers make views we're broke or compare the united states and greece. like last summer's artificial debt ceiling crisis, 24 is nonsense. the united states is not broke. income per capita jumped 66% over the last 30 years, and it's projected to grow another 60% in three decades. on the corporate side, inflation adjusted profits in connection withed 7% -- increased 7%. while productivity surged 73% since 1973, median income rises only 15%. the market distribution of robust productivity and national

income gains is incredibly skewed while regressive tax policies have simultaneously exacerbated a trend of quality. since 1-9d 79, the top 1% of households saw average tax rates fall from 37% to under 30% even as their income more than doubled. that calls for restoring a greater degree of productivity to the tax code rather than dismantling government. the long term challenges stem from political disagreement over the size and role of government and the financing of the social contract. to clarify, much of the concern about the deficit has nothing to do with the deficit and everything to do with opposition to taxation particularly taxation and raising revenue from upper income households. the u.s. experiment with trickle down economics failed the vast majority. the top 1% of households captured 65% of economy-wide

income gains leaving the bottom 90% with 13% of gains. trends were exacerbated by tax policy as the bush tax cuts gave gains to those at the top. in 2010, 38% of the bush tax cuts went to the top 1% of households, and roughly half to the top 5%. yet the bush economic tax cuts never trickled down as they were promised. the bush economic expansion proved # to be the worst since world war ii in terms of economic growth, employment, and wage and salary growth. real median income for working families has fallen 10% since 2000. 24 is a cost -- this is a costly experiment. the bush tax cutted added $2.6 trillion to the public debt, half the debt accumulated over this period. last december, congress paid another $670 billion for a two year extension of current tax

policies. increased borrowing increased the need that ensued last summer. the bush tax cuts are partially paid for with roughly $1 trillion in domestic spending cuts and defense cuts enacted year to date. continuing the bush era tax cuts costs $3.8 trillion. this represents the difference of the fiscal outlook over this period, an extension of all current policies costs $6.5 trillion, more than the bowles-simpson plan cuts over the next decade. this leaves revenue levels at grossly inadequate levels in the coming decades because the tax code defunds government. this was aptly demonstrated by the house republican 2012 budget proposing financing of the tax cuts with $4.7 trillion to cuts in domestic spending programs

coming from low income programs. this dismantling social programs is a choice, however, not a necessity. the tax code was more progressive in the 1950s and 60s when the fruits of growths were shared. the cut off has fallen from $3 million to just $380,000 today. simultaneously, the top marginal tax bracket fell from 90% in the 1950s to 70% in 1970 to just 35% for most of this past decade. declining corporate taxation, born by shareholders and business owners contributed greatly to progressivity. the share of economy fell from 4.8% of gdp to 1.8%. tax policy must be reformed to raise revenue fairly. here are a few principles for

the corporate and individual tax reform i'd like to see. first and foremost, income derived from wealth and investments should be treated the same as income derived from work. the single most regressive future of the income tax is a preferential treatment of capital gains and diff deppedz. the top 1% of the earners will pay 70% of gapes this year, but pay a rate of 15% well below the 35% rate paid on wages and salaries. similarly, additional tax brackets should be restored to the income tax. consolidating tax brackets and tax rates at lower rates and revenue levels maybes no sense given the distribution trends of the last 0 years. similarly, bolstering the estate tax makes sense with wealth disperties. it's thee most progressive tax, but it's been entirely e vis rate the over the last decade, another trend to be reversed.

progressive tax reform falls in the 1% of earners, the top tent of 1% because that's where the gains have been, but the 99% has to pay more too. the bush tax cuts were unfair and ineffective, but their reach expanded beyond households making over $250,000 a year. letting the upper income tax cuts retire is a good first step, but adequately funding government maintains three-fourths of the tax cuts as president obama proposed presents quite a challenge. tax reform and simplification benefits from limiting or wholesale eliminating tax expenditures like the home interest tax deduction. they are divorced from the policy objective, and their benefit increases with filers marginal tax rates if filers receive any benefit at all. any reform of tax expenditures, however, should maintain and expand a refundable income

support like the earned income tax credit we have today. 234 a different -- in a different vain, carbon should be priced. it makes sense to tax something harmful than work and savings. a dividend to take the sting and renewable energy and trade deficit benefits from pricing the extraalties of carbon. financial speculation and leverage poses a prime target for corrective taxation. small taxes on financial transactions dampen trading volumes ending the high speed training adding no value, but increasing risk as we saw with the 2010 flash crash. dean baker is pushing a transaction tax for year, and it looks like the european union is moving in that direction. financial transaction taxes can recoop the societal costs imposed by the financial crisis and raise revenue upwards of

$800 billion in a decade according to the tax policy center. senator harkin and congressman defasio introduced the fill to have a 3% tax on every $100 traded raising $350 # billion over the next decade. that's enough to finance a meaningful jobs program or fund programs for a decade. lastly, congress seems to be moving towards complete tax reform to lower loopholes. without raising revenue, however, corporate tax reform rewards all businesses for decades of successful lobbying by some. as noted earlier, the share of revenue extracted from corporations has fallen dramatically for years. should they embark, the taxing of interest should be reconsidered and limited. the current tax treatment of interest encourages high degrees

of leverage in the finance sector although this could be addressed directly by taxes leverage. in summary, tax policy can and should be used to alter the market distribution of income, tempering inequality and alleviating poverty and correct social externalities and increase financial speculation. tax reform has to raise more revenue in the coming decades. america is not broke. we can afford economic security programs, public investments, and a serious jobs program. putting people back to work and creating taxpayers is the first step in a reduction strategy. conversely, premature spending cuts, the recipe for deficit reduction strategy with fiscal balance remains as european nations are discovering. ignoring prolonged mass under

employment or turning medicare into a coucher comes to mind. taxation is the price paid for a civil society. by restoring a higher degree, we can ensure that price is born fairly and raise adequate revenue to fund our government. thank you. >> thank you. [applause] thank you very much. what we'll do as far as participation of the audience, at the end of the speakers, there's a question and answer session, but in between each speaker, there's time for a two to three questions or comments. if anyone wants to do that, go to the mic up here now if you want to participate. if you don't want to participate, we'll go to the next speaker. any questions or comments on tax policy or impacts on you and your circumstances? >> go ahead. let's keep it moving along. anyone else, get in line behind her so we can keep moving

forward. >> my question is are taxes -- if there's a chance to reroute, i'm worried about how the environment is being affected by corporate greed. will there be a possible change how tax rates are paid to positively affect the environment. >> absolutely. ten minutes with a challenge. reinstating super fund taxes makes sense. waste clean up should be taxed based on people creating waste rather than general revenue. that's a change in tax policy of the last decade that made no sense. taxing carbon makes sense. if you believe in free market solutions, you would assign property rights,