hat's gobbled it up and the development that's gobbled it up. but even with that, um the whole concept of jersey fresh which has been promoted in our state and the idea of trying to have local farmers, you know, produce things that at small farm markets that, you know exist in a lot of our cities and suburban areas is very popular in the state of new jersey. and we can't get enough of it. in fact, for many of the urban areas, you know, it's not just an issue of marketing it's also from a dietary point of view. you know, as you know our first lady's been very concerned about obesity, and part of the issue with obesity and diabetes is trying to get fresh produce and nutritious products to people in the you urban areas. so in a lot of our urban areas now we have these farmers' markets, and it's major way of trying to improve the diet and nutrition. so, i mean it's a big thing. i don't even have a single farm in my district that i'm aware

of, but we have rutgers which is not only the state university, but the agricultural school for new jersey, and we've done a lot to try to promote jersey fresh, and it's very popular. the other thing i was going to mention, too, because i heard the secretary, um, we have -- and the mayor knows -- the highest population of indian-americans, you know asian indians in edison and in my congressional district of any district in the country. so i've been to india a few times, and it's interesting what the secretary said because um one of the reasons why india has been successful in increasing its gross national product and, you know joining the more developed countries now is because they managed over the last 20 or 30 years to be food sufficient. i mean people don't realize people still think of the starving indians and i'm not saying that aren't some people who are starving in india, but the bottom line is india's actually food sufficient now. they actually export agricultural products to china

and other countries. and china, by contrast s the opposite. they have to import a lot of their food because their agricultural base didn't keep up. and it's a big part of the reason why india's been successful economically because they've managed to be not only food sufficient but actually start to export. so when he talks about the importance of agriculture and the fact that 87, you know, percent of what eat is, you know, what we consume is american grown, that's a very important part of the economy and job growth and, you know, the whole -- i call make it in america. we think more of manufacturing but it also involves your agricultural sector as well. but that's not what i was here to talk about. i just couldn't help it because we're the garden state, brian. you know, i couldn't help it. >> you're not on the house floor, congressman. [laughter] what i wanted to -- i just wanted to briefly say with regard to the issue of renewables, i'm an unabashed supporter of renewables so it's very hard for me to be sort of neutral or not excited about the

issue. and i really regret the fact um and i've asked you to help us i really regret the fact that in the last few months and in the last few years but particularly in the last few months that we have not um that we're not incentivizing renewables whether it's solar, it's wind power, it's hydropower, whatever it happens to be. because -- and, of course, at the state level you have. i mean, for the most part i know in new jersey, in a lot of states we have, you know, major tax credits that encourage renewables, we have renewable portfolio standards where a certain percentage of your utilities and your electricity, your energy has to be produced from renewables, and i really regret the fact that, you know, we have the tax credit actually expire on december 31st for solar which i think was extremely unfortunate because you need these incentives. and, of course when we tried to pass a renewable portfolio standard on a federal level i think it was a 20% by 2020 that was part of our -- i don't even

dare mention the name. it was part of the climate change bill back in 2009 when the democrats were in the majority. .. with the you believe in global climate change or are concerned about the environment. it is a national security issue. it is a jobs issue. from national security point of view we cannot continue to rely

on imported oil and energy sources from the middle east. is not reliable. i am sure listening to the media in the last few weeks you have seen iran threatened to close the strait of hormuz. we are relying on these energy sources particularly from the mideast faa's from countries that are not our friend and not reliable. at any point these supplies can be cut off and result in taking military action. from a national security point of view it doesn't make sense to continue to rely on imported oil. we have to look at -- even if you don't care about the environment from a national security point of view, it is clearly a jobs issue as well. in my state of new jersey, we continue to have the incentive. i don't usually praise the governor. he is a republican and not one

of my favorite people. any of my colleagues will tell you that. bottom line is he has stressed the state legislature which is a democrat legislature that need to try to not all in moved towards renewables whether it be offshore, wind or solar but also to make the wind turbines, make the solar panel. at the federal level to the extent we haven't incentivized that we are falling behind china in particular and other countries but i stress china which has used subsidies to encourage production of solar panels, wind turbines and quarter the market in ways that most of us continue trade violations but it is our own fault that the federal level we have not kept up not only in terms of incentivizing the use of solar panels but making -- those are good jobs clean jobs.

china is not investing in subsidizing solar panels and wind turbines out of the goodness of their heart. they could care less. they're one of the worst offenders of the environment and pollution in the world, maybe the worst. they realize these are jobs that can be created and the public is supportive of it. most of my district keeps changing but has a lot of areas that are along the coast, on the atlantic. and you might say to yourself, it is tourism oriented. a lot of tourism, on the jersey coast tourism is the number one industry. most people don't realize that. you would think old people don't want offshore wind because it could affect the tourism industry and they don't want to see the windmills and all that. just the opposite. every poll i have seen shows the opposite. i have been a strong advocate for offshore wind and building

of the windmills. i have not received any opposition -- i shouldn't say any but any significant opposition to that and polling shows overwhelmingly people are even willing to pay if they have to pay a couple dollars more. they're willing to do that because they understand from a job point of view, national security point of view, and environmental point of view that renewables are the way to go. brian asked me to come. one of the first -- i will mention my two mayors who are here and i see them. in brian's case he got one of these energy block grants and installed panels on the municipal building and i went there with senator man mendez a year ago and it was wonderful. saves money in the long run. in the case of mayor tested leon

no --castigliano and that plant called avadon which was a refrigeration facilities. >> rooftop solar panel in nation. [talking over each other] >> it is incredible. when we went and we went up top of the roof it was so large you could not see the horizon. you literally look and could see the horizon. >> how many kilowatts? >> i think i have it here. and i wasn't going to mention it but it says it is 4.26 megawatt system expected to reduce carbon emissions by 3,750 tons annually and would be equivalent to five million trees or taking a million suvs of the road. they told us within a few weeks

after we saw it it wasn't going to be the largest anymore because there was another one somewhere else but it was -- >> it is and receive energy grants and we have already gone out and have a company with solar panels on that complex as well. >> we have these climates awards. you also enter your city for -- we give out climate initiative awards. all of this where we have good projects. a wonderful project. >> i am not going to continue on. what i want to leave you with is i just regret -- i'm trying not to be partisan. i am trying. i just regret the fact that we haven't been able to make enough progress on the federal level and also feel we're running out of time because we didn't renew the tax credit. didn't move forward with the

renewal portfolio standard and the problem is this is all in twilight in the whole issue of global climate change and whether if israel or not. the only thing i would say is if you can't look at it from that perspective, in new jersey we can because people understand on a bipartisan basis that we have to undress the concerns of global climate change. my staff person told me -- to the right -- he said last night he walked a dog -- i wasn't in washington. last night he walked his dog at 11:00 and was 60 degrees on january 17th. to me the notion that it isn't really crazy. you can put that aside and just talk about the national security concerns and others things and not even talk about climate change or any of that if you don't want to.

we need your help to talk to your representative is because we are moving backwards not forward. thank you. >> thank you very much congressman. questions. >> we are running out of time. if you forgive me, secretary and chair, i want to talk about tarzan. running out of time. i can't let the meeting go without talking about what i consider a victory for clean energy and that is a bunch of us 103 mayors signed a letter to the president asking him not to permit the tarzan and although the congress of mayors took a position they get resolution in 2008 asking to examine more carefully and i just heard that the president today is going to make an announcement that he is not

going to allow the permit for the tarzan line. i consider that a victory for clean energy. didn't want the meeting to go by without saying that. thank you to everybody who worked on that. >> thank you. do we have other comments or questions from the congressman? anything from california? yes, please. >> congressman, what do you think the prospects are renewing tax credits or getting to r p s standards. appears most of the state's have gone down that route. most of the local communities have recognized it but it seems there is a difference between what is happening locally on the ground and in washington d.c..

>> i hate to be so pessimistic but this is entwined in the issue of global climate change to the extent there are members of my colleagues and the presidential candidates as well who denies this or feel that this is somehow related to the global climate change issue from an ideological perspective. very difficult to do any of that until after the presidential election. i just don't see it. unfortunately. thank you. >> let me ask one question, congressman. and after that we have representative that will ask to speak. my question goes to the green

block grants. we can't get them now but is there anything we could rally around as mayors and especially this being an election year, where we could get some traction on something? >> i sound like a broken record but i think if there was some way to separate the whole issue of renewables and green energy from the global climate change debate, start talking in terms of jobs and national security, stay away from the global climate change environmental issue. if you could somehow accomplish that, then i think we could start moving in the right direction. it has to get away from that because that has become an ideological battleground that makes it impossible to move forward. >> let me on behalf of the conference of mayors and energy committee thank you for coming out. [applause]

i don't know where brian went. give him a hard time. he invites you. he is coming back right now. we are saying goodbye to the congressman, mayor we are noting that you had a question or comment before he leaves. >> take questions off line. >> thank you very much. [applause] now i am going to direct our attention to a gentleman who has been waiting patiently, but he knows to wait when there's a congressman or secretary of a department because currently you are an undersecretary, i believe. acting secretary. and he is secretary of energy which is the subject of this committee. so why don't i without further

ado open the floor to you and please cover as many areas as you want to because we have a lot of interest in this field and desire to make a difference. forgive me if i mispronounced your name but -- you have the floor. >> i realize i am continuing lunch so i will try to cut down by 20 pages of review. let me say thank you, mayor pulido for inviting me. i'm here on behalf of steven chu and the department of energy. a little on my background. i am acting undersecretary for energy. >> we just gave you a promotion. >> i hope i get a pay raise as

well. for all my professional life i have been a scientist and engineer and educator at the university in the bay area. not stanford but berkeley. i have been part of the innovation ecosystem that is out there which has created a lot of wealth, a lot of technology. i come from that perspective and looking at the energy field. i would like to fold in front of you some of the challenges. let me just get to the transportation sector. transportation sector, we use only one fuel, oil. we import 50% of the oil that we use this is something people don't often comprehend the. we pay $1 billion a day. often nation don't share the

advantage. not just in national security issue, is an economic issue. as you know, disturbances is in place with libya or the middle east or the strait of hormuz creates fluctuation in the oil price which is a killer for business. we send our young men and women in uniform to protect the supply chain. so national security and economic security, naturally people suggest why not use our own resources? we should. but we have 25% of the world's consumption and roughly 3% to 5% of the reserves. if you look at the equation, in the long term we have to think long-term, we have to find alternatives. otherwise we will be putting our children and grandchildren's

future at risk. so the other alternative is electrification. we are the biggest technological barrier is low-cost electrical vehicles. white electrification? we produce our own electricity from our own natural resources. we don't buy from abroad. very little. we have found a lot of natural gas. we should be using natural gas in the transportation sector. we are starting to do that in the long haul trucking. to do that, means innovation because the cost has come down. electrification, just to give you an idea, need low-cost batteries. in 2009 the u.s. had less than 1% of the manufacturing in lithium ion batteries. we invented the lithium ion battery. if we do nothing we will be

importing batteries. that is what will happen. the recovery act was a down payment to create an infrastructure for manufacturing and we have the capacity to go to 20% and do much more. another statistic. in 1995 we have 45% of the manufacturing volume of solar affordable panels. that is the discussion. today we have 7%. we have left other countries take the lead from us and we have to take it back by outinnovating them. let me give you a few examples. i need an energy besides two jobs in the department of energy and one is secretary and the other is an agency called advanced research project safety for energy which is a parallel to a darker one -- when bar code was created in 1958 in response

to the launch of sputnik. when it was felt the soviets were taking a technological leap and that was a national threat. what did president eisenhower and kennedy do? they invested in science and engineering education, created the apollo program and nasa and an agency called darpa which was part of dod and out came innovations we all use today but you may not know. the internet. the gps and what the military uses, stealth technology. when arpa he was signed in by president bush and launch funding by president obama, to take that route, take quantum leaps in energy technology and out outin of a to manufacturing -- let me give you a few examples of that. next generation batteries will be with emi on batteries that will make electric cars that are

longer-range and lower the cost and gasoline based cars so electric cars can be sold without subsidies which is obtainable for business. new microbes go directly to oil and do not rely on sunlight because if you want to make oil at night or only allows sunlight it can now be there. we import everything from china. we use them in motors and generators. this is infrastructure we are talking about. china hinted it could turn up the supply which would make you vulnerable. and investing in technology that eliminates the need for magnets while making it twice as good as the ones we use. this is the way to compete. eliminate the need and make it better. new engineers, directly produce gasoline like oil.

there is a project up there that takes the metabolic pathway of allergy, and -- algae and puts them in tobacco plants that grow that. if it big tobacco coming together to save the world. can do better than that. just like president kennedy's moonshot. remember the moon shot? we started a son shot initiative. this was not to send a man to the sun and return him safely. i don't think that is possible. but to reduce the cost of electricity from sunlight. so that it can compete with other forms of electricity generation. that is the goal. so the u.s. will become competitive in solar and have a local market. i could go on and on. the grid is reliable just to give you one number. the average asset on a grid

$1 trillion of assets on the grid. the average age is 42 years. two years beyond its lifetime. we are sitting on this major investment opportunity and major opportunity to create the next generation technologies which are ahead of anyone else in the world. so we are investing in solid state transformers. solid state transformers. the transformers you see when you drive along a highway are big substation transformers. eat we buy them overseas. there's a back order and they are the ones that with due respect to edison, their the ones that were invented in the 1890'ss. almost the same design. we have not changed them for the last 200 years. we have invested in quantum leap, solitary transformers of materials of silicon carbide.

and the world's biggest producer of silicon carbide. it is not silicon electronics but silicon carbide. these projects are translating science into quantum leaps of energy and technology there too risky for the private sector but successful, they will create the foundation for entirely new industries to provide our nation with security. just like the internet did. in the 1970s research started in 1968. most people don't know that. it took 20 years to scale. there was no industry based on the internet at that time. we looking at a technology where it didn't even exist. and create the foundation for that. let me ask what innovation is vital we must look for wasted deploy the technology and create an ecosystem. at the local level we see cities and stalin new cleaner technologies to $3 billion of

energy efficiency. philadelphia street department converting green traffic signals to 27,000 red l e d light at the end of their life. savannah, georgia using funds fretted chanced system chilling water for data center. san antonio, texas conducted energy audits and upgrade lighting for 800 small-businesses across the city using these grants. let me end by default. why is this innovation necessary? there are not sufficient. to compete globally. how do we compete against china? how do we compete against other nations? you have got to think of this as a system. there is no one silver bullet no parole. what do i mean by that?

think of an airplane. each component of an airplane like the engine, the fuel, the wind or the fuselage, each is necessary that each by itself is not going to fly the plane. our energy economy is silicon. let me tell you, five components that are necessary for energy economy to be robust and be competitive in world. and i think you all can make a difference with this. number one, the innovation that are just talked about based on science and engineering r&d. that is number one. number 2, manufacturing. innovation from manufacturing or scaling of volume with cost-reduction to address not just the domestic market but a large and growing global emerging market. again the message is invent locally, make locally sell

locally. financing. this cannot happen without access to capital. access to low cost and long-term capital. this is not software that will go public in five years. it will take longer. access to low-cost long-term capital to finance manufacturing and the clement, we need to find ways to reduce cost of capital and financing. with private or public. both are important. markets. when i spoke about global markets, we need to use domestic markets to prime the pump and create demand for innovative technologies. the standard is a perfect example of demand -- we need to do the same for energy efficient buildings, as a clean energy standard the president has proposed and hopefully congress

will match. finally deployment of energy technology that generates and stores energy. you need these five components. i would say these components must work together and get a line. the victors are pointing in opposite directions nothing moves. it is a half point in the same direction so the same technologies that are innovative can be manufactured and deployed and the market can be created. you as mayors of so many cities are ideally positioned to create this ecosystem and create economic growth. that is how you compete in the other parts of the world. i will forward to engage in you and learning and having ecosystem's created around the nation. thank you. [applause] >> let's go around and if we have any questions for the

undersecretary, let's go ahead and engage. monroe. >> thank you for being here. very interesting, your comments. i have a question. one of the things i don't hear enough about with energy is the concept of energy waste to energy and conversion technology and the waste issue is huge and gets bigger every day and this could be a way to reduce waste and create energy. what is the energy department doing? >> a lot of things going on. there is a lot of material waste and there are businesses of waste management which are using material waste to make useful products. paris agricultural waste. agricultural waste is mostly the

stuff that is -- besides the usable part of the corn and other plants. that is agricultural waste. there is a tremendous amount of r&d going into cellulose which is basically sugar, very hard to break but to break -- they become the precursors, the feedstock for whether it is oil or other bio products, building blocks of that are sugar and other small molecules. there's a tremendous amount of research going into how to create that. to give you an example how to eat grass. they have the enzymes to breakdown plant material the personal use that in the body. we don't have that. if you could create that environment in the gut of a cow you could process these waste materials and make useful

product. a lot of research goes into the genomics of the enzymes. tremendous amount of waste heat just to give you an idea, we use about 100 quarts of energy per year in the united states. won court is a quadrillion btu. out of that, 55 quarts is wasted heat weather is our plant or the manufacturing plant using natural gas or a cement plant or some other. 55 of those 100 is wasted as heat. if you could use a little of that and produce electricity directly or use it for power, that is a tremendous amount of benefit. we don't know how to store the heat. we store electricity but we can store heat. those are the kinds of innovations that are going on the personal investment from the department of energy. that i believe what you hit upon

is the way to sustainability. if you only take things and produce them as waste you know you have access to energy, access -- waste. no one has really done enough to close the loop and make it sustainable. sustainability, that is where we should be going. >> thank you. mr acting undersecretary. any other questions? if not i suggest we adjourn because we're getting really close to lunchtime. so we are already behind. thank you for coming. [applause] >> republican candidate rick perry dropped out of the presidential race today and said there was, quote, no viable path forward. during his official announcement

he also endorsed newt gingrich. you can see those comments tonight at 8:00 eastern on c-span. right after that c-span's road to the white house coverage continues with the ron paul campaign event at the college of charleston, south carolina. hundred of students gathered to hear the congressman speak. you can see his remarks at 8:10 eastern. republicans aren't the only candidates campaigning. tonight president obama speaks at a fund-raiser at the apollo theater in new york. see those comments with a musical performance and supporter al green at 9:30 eastern also on c-span. public pension advocates talked about the dangers of having millennial land baby boomers competing for the same jobs in the same market. we will hear how state budget cuts could impact public pension. recent proposal on potential effect on a lives of public civil servants teachers and

police. this is one hour and 15 minutes. >> good morning. thank you. we wanted to welcome you. appreciate you joining us today. i am executive director of the national public pension commission, dortmund marks. the national pension commission was formed in 2007 as a nonprofit organization working to preserve the retirement security of millions of teachers, librarians, nurses, firefighters and other public workers. in states across the country there have been an unprecedented number of pension cut proposals by governors and state legislatures of of the expense of basic retirement security of millions of hard-working americans. for many like vilsack who is

here today the changes are taking place after they retire. the purpose of today's panelist to separate fact from fiction as we look at the fight to protect retirement security around the country. let's start with some facts you may not have heard. 30% of public workers do not receive social security and these modest plans than they faithfully with their life savings, verily source of income in retirement. without a modest income from these pension plans they face poverty. 80% of pension funding comes from employee contributions and investments. not taxpayers. the market crash of 2008 and the great recession, not pension benefits are the cause of tension shortfalls. by and large if the economy has

recovered so have pension funds. national institute estimates these retirement plans keep five million older americans out of poverty and support 523 american jobs. our panel of experts will explain the benefit these plants have with the local economy and how recent proposals to diminish retirement security will affect millions of teachers firefighters, versus, cops and a dedicated public servants. joining us today on our panel are two statewide elected official, new york state comptroller, janet cowell, also with us is dean baker who could direct center for economic policy research, and hank kim, executive director and counsel of the national conference of public employee retirement benefits. last but not least is delores bresette, retiree from rhode island to story underscore is a danger of the pension cutting

plans. there will be a brief question and answer period after our speakers have concluded their remarks. so our first speaker, new york state comptroller tom dinapoli who was elected to a four year term as state controller in november of 2010. first taking the position in february tom dinapoli transformed the way they do business and dealing with reforms to make a more effective, more efficient and more ethical. he pushed for an increase in transparency and accountability and identified billions of dollars of waste, fraud and mismanagement. as state fiscal watchdog controller dinapoli emphasized he has been an out on and -- outspoken critic of official gimmicks and other budget practices. his accomplishments and his initiatives are many. our first speaker, new york state comptroller dinapoli.

>> thank you to the national public pension commission for convening this illustrious panel. and the other members. always a pleasure to be with my colleague, janet cowell who does such a great job. i will share some thoughts from the vantage point of our experience in new york when talking from a national perspective each state has a slightly different story. in new york we have a good story, strong story in terms of our pension fund. my main point is to provide counter point to what is often misleading information that we follow on a daily basis in much of what we read and what we hear about. certainly there have been problems with the state pension plan in some cases. very often when you look at the

history you find plans that have been underfund in the good times so you come to this historic market in 2008-2009 and you really have the numbers with a real difficult situation in managing pension obligations. that is not the story for most of the state plans. from new york perspective we are marking the 90th anniversary of the retirement fund which is the fund that supports the new york state and local retirement system. we will be around in the future. at an end of the last fiscal year in new york different from every other state or fiscal year ends march 31st rate of return was over 14.5%. certainly when you consider the historical loss we had in 2008-2009 we're seeing better results and the numbers at the end of the fiscal year with $146,500,000 our highest level

since the meltdown of 2008-2009. since then we have seen tremendous volatility in the markets and continues very tepid recovery from the great recession. we will see where we stand on march 31st. we are seeing better fiscal return going back a few years ago. the reason -- there are several reasons the retirement fund is a strong one. we have certain key institutional factors that have been the dynamic since the system was established. decade after decade in new york state government and local government leaders still government employers were part of the system have made their payments. we have skipped payments. we haven't given holidays or employers not to pay in the system and that made a big difference. we also used very conservative actuarial methods so we could be sure that we are going to have a

well-founded fund into the future. certainly in terms of the criticisms out there you hear frei'ss like pension costs are unaffordable, systems are unsustainable. we need to put all this in perspective. certainly in new york -- i am sure it is true for other states, we are facing rising contribution rates right now but we have to keep in mind that is largely driven by the market lost of 2008-2009. we do five your average investment return to our calculations. we still have a couple years to work through but we're past the midway point of absorbing that shock and that loss of 2008-09. also in terms of context if you look at the data out there, center for retirement research at boston college has taken

pension contributions from state employers to 3.8% of state and local spending on average for new york. the numbers 2.4% operating fun. any increase when there is ever pressure on budgets and certainly a challenge. in terms of percentage of state operating funds in new york still talking about 2.4%. 2 underscore one of the points, paid by the investment. in the last 20 years including the meltdown of 2008-2009 eighty-three cents of every dollar benefits new york retirees have come from investment returns, not from employer or employee contributions better than the national average in that regard. certainly often an issue was made of individuals with very high pensions, six figure pensions. in new york costs are higher and wages are higher and the

benefits might typically be higher because of cost-of-living but putting it in context from the new york experience less than 1/2% of the 380,000 retirees seeking pensions from us have pensions exceeding the one hundred thousand dollars but for 1/2%. the average annual n.y. state pension excluding police and fire in our system we cover municipal workers local governments outside new york city, paid workers, police and fire is 6% of our membership. the vast majority are the employee retirement system. average annual pension is 19,150. that is the average pension. 76% of our retirees receive pensions less than $30,000 a year. i think the numbers tell a different story in terms of what the reality is for the majority

of people who are -- that pension whether it is 19,000 or $30,000 make a big difference in people's ability to continue to have security in their retirement years. there have been many initiatives to reform or change the pension structures across the country. 39 states made significant revision to the pension plans in the last year and a half and that includes new york with a new tier enacted in 2009. certainly discussions of contribution rate and controlling issues and over time that ends up in pension calculations. these are reasonable areas for discussion. the big concern is the more extreme proposals that suggests eliminating benefit pension plans and substituting them with 401(k) plans. they were never intended to replace pension and were designed to be a savings vehicle

to supplement pension and social security income and have proven to be inadequate to provide retirement security. look at we as institutional investors have to deal with as part of the market meltdown boston college center estimated 1 for in dollars loss from 401(k)s during that meltdown of 2008-2009. that is not going to be made up for too many americans. we saw anecdotally many stories of elderly seniors who had their retirement savings wiped out and having to return to the work force often for minimum-wage jobs to provide shelter and food. i also think there are other reasons to be concerned about 401(k)s. evidence have shown the benefit plans cost less to manage in savings accounts for a number of reasons. individual's investing their own money usually pay higher fees and usually get lower rates of

return and don't have the same access to financial expertise at large institutional funds in terms of pension dollars. individuals must base asset allocation on their age whether they are nearing or in retirement and the benefit plan can base its allocation on market conditions. individuals typically have to make decisions with the assumption they will live into their 90s. institutional plans like ours can manage assets based on the average mortality rate for our members. moving to 401(k) accounts for the economy. money spent by retirees have a stabilizing impact on our economy. in new york 77% of our retirees continue to live in our state and that means retirement benefits we pay out are recycled into our state's economy. that equates to $6.5 billion in benefits spending that stays in

new york. we estimate that generates $9.5 million in economic activity. $1.3 billion of property taxes that are paid. so i think it is a win/win. in need to not just look at the clock but the benefits of having a strong system. i really think besides undermining retirement security to move to 401(k)s it adds uncertainty to the economy at a time we need more 70 in the economy. certainly the issue of retirement security is one that we need to focus on a more effective way. long-term consequences of having more and more americans not with retirement security and more and more americans living longer has the potential to cause government agreed deal down the road. if people can't provide for themselves where will they turn for help? these days we have different family structures and generations ago. government is the provider of last resort. it does become government cost if we don't provide retirement

security. lot of talk this presidential year about focusing on the middle class. president obama in his recent speech in kansas talked about that. we have in your a lot about it. part of that discussion needs to be about doing a better job of insuring and time and -- retirement security. i would like to see a national commission convened to elevate this discussion and start from the premise of where we have benefit plans in the public sector, where are the ones that are working and what do we need to do to have them work. the ones that need fixing, how do we shore the mop? we need to look at the best practices and what opportunities we can provide to be short trustees are understanding what best practices are following them and look at the reality that the private sector we are seeing continuing decrease of the defined benefit plans. what can we do to offset that? are there opportunities? as some suggested there are ways for public plants to allow

others to participate. it is an issue worth giving serious attention and we should take the time to look at it. i think it is the challenge we must face and the solution of saying we should dismantle the plans we have because of the current difficulty long term is not a solution. creating more challenges and more costs down a road. >> thank you, controller dinapoli. i would like to introduce north carolina state treasurer janet cowell. elected in 2008 she is the twenty-seventh most popular elected treasurer and the first woman to hold the post. at the state fiscal advisor, treasurer cowell oversees $70 billion in pension fund investments affecting 850,000 public employees including teachers, firefighters and other government agents. cowell oversees the state health

plan for teachers and state employees which provides health care coverage to 664,000 teachers state employees and retirees. cowell and her staff manage the issuance of $7 billion of debt each year and held city's, counties by monitoring their financial condition will providing professional and technical assistance on audit and financial reporting. directing government operations from a hands-on experience as a member of the north carolina senate and raleigh city council. state treasurer janet cowell. >> thank you for having me here today and hosting this press briefing. always good with controller dinapoli. north carolina has a different story from new york but also a good story to tell in terms of state finances. even with some of the recent economic difficulties we have seen. north carolina has maintained its aaa bond rating from all three rating agencies and has

the no. 5 best funded pension that has been a hallmark of our aaa bond rating, the fact that we have such a solid pension. as a state we have a proud heritage of making conservative financial decisions and media obligations. part of that is impressive given where the state came from because of where we came from. in the 1930s as many southeastern states we were one of the poorest in the nation. we have 160 defaults at the lower level and we set up at that time a very centralized and accountable financial structure for the state that served us well in public finance realm but also in terms of pension. our pension is 70 years old. started in 1941 and we have a very centralized state health plan and that has served us well. i want to talk a little about some of the things that have contributed to having a solid

pension and benefit system in north carolina. and what led to that. i do recognize as tom dinapoli said pensions that have challenges and i would argue that i think all of these issues, each locality differs so much that while certainly i support governmental accounting standards and the work they're doing we worked closely as treasurer, i share the investment committee for the association of state treasurer and we work closely with gaby as they fought about ways to make more transparent and accountable pension systems around the country. we support with that. i was opposed to the 1-size-fits-all strategy that comes to these pension issues. each locality is different and needs to work for a how to

resolve legal there have been built on congress dictated accounting standards board preempting rights of states and localities'. that is not the solution room. going back to north carolina the centralize oversight and accountability. run these plans, that is about $6 billion for the treasurer's office. cremate conservative decisions around development. wasn't tom dinapoli outlined our average pension is $20,000 for our folks and there are less than 300 individuals out of the 200 retirees in the system that make $100,000 and some are basketball coaches.

most highly paid. we also from accounting standards have very conservative assumptions built into the plan. our employees contribute 6% of their pay every month into the plan which is higher than many other national plans and we have 7.25% actuarial target rate of return which in the united states is lower even though there have been actions recently to lower the target rates of return. it is one of the lower in the country. we have automatic cost-of-living adjustment in our plan which is something come back to in a moment. we have these conservative assumptions and decisions. we also met our obligations. 69 out of 70 years we have met full annual required contributions. this past year despite 15% budget cuts in north carolina

they met the entire required annual contribution. i wrote 100 handwritten thank-you notes to the general assembly colleagues thanking them for their support of the pension plan even in hard times. so while it is true we have a solid plan there's always something new to learn and in north carolina we pride ourselves on our educational institutions and the pension plan. there's always new things to learned. we put together when i became treasurer back in 2009 a future of the retirement system commission. we had taxpayer advocates, employees, citizens experts chaired by bob clarke of nc state university. we talked about how to improve the system. are there ways to change? this was created in 1941 and the work force has changed. there were a couple things and one we're working on, there was

a thought that short-term employees might want the option -- we have a ten year period that is more conservative than other systems in the country and there might be teachers and others who work for a short time who might want an optional choice. that was not all the league passed by the general assembly but was one of the recommendations. another was to fortify and make sure we have good supplemental savings options. we don't have a guaranteed cholla still if we get into a high inflationary environment supplemental savings may be part of the picture and we doing administrative programs. we are working on a centralized option for the hundred thousand teachers in our state there. i think those were two of the things and as was mentioned in the opening i know this was not about the health plan but as of january 1st about three weeks ago we took over the administration health plan and also a point with the governor and others a new board. and our first health plan

meeting in that area we do have a large unfunded health-care liability which is a son of the liability versus hard liability of pensions which is $32.8 billion. obviously sizable but in the first meeting with that health plan on using pharmaceutical subsidies for medicare part d. we saved $6 billion on unfunded health-care liability. so i will say one of the challenges, we have sent out a press release and got no coverage on that but i am saying it here. [laughter] >> never miss an opportunity. but i just think as controller dinapoli said, there are a lot of fear mongering and trying to add up these numbers and tell people oh my god it will be the end of the world and there are so many ways to impact these numbers and it takes our state health plan board working together at a local level able to make a very sizable impact on

an unfunded liability and when meeting. .. so we will be a little bit higher i again commend the zest for years as we address the 08 losses but that is about the cost of a match in a 40 -- 401(k) system. we have tried to educate people that there really isn't a super jim alternative unless you were to have a 401(k) defined contribution system with no

match, and then we really are kind of suboptimal you when competing with private sector jobs. so there is not really a cheaper alternative. in the short run it actually could be more expensive because we do have these short-term employees who don't vest and you would be paying full freight for them, so there is actually a higher cost for the first second decade of the d.c. system that many of them don't realize until they get these facts and numbers. so, justin closing again i feel like north carolina has a proud heritage of sound financial management of meeting their obligations and really trying to work across all the different branches of government, state and local to make good decisions. a big we're proud of our pension fund and proud of the poorest we are making, even of the state health plan site command appreciate you having me here today and will answer any questions after we finish with the other speakers. thank you. >> the queue treasurer janet

cowell. our next speaker is hank kim executive director and general counsel of the national conference public employee retirement systems to allow the largest pension trade association in the united states the core mission is centered around advocacy chesty education and researchers is still to this and trustees. having received his bachelor of arts degree of political science from the university of medicine -- university of wisconsin at madison and his doctor of jurisprudence from indiana of bloomington school of law. a member of the district of columbia bar. hank kim. >> they keep a good morning. one of the benefits of falling to great elected officials and great experts in public pension plans is i can almost conclude by saying, does so. but i think what my role here today is to put sort of a national perspective on the tension that public pension plans to been getting provide a little bit more additional data

regarding the advantages of maintaining pension plan for public-sector employees and then i would like to spend the remainder of my time talking about what comptroller thomas dinapoli alluded to, which is obviously the public sector employees represented roughly about to present of the workforce, but what should be the case for the remaining 90% of the work force who are in the private sector? and so, you know, we at the national conference a public employee retirement systems have a proposal bob breen retirement security, similar to what we have in the public sector, to the folks in the private sector. so as both the comptroller and treasurer have mentioned there are innumerable advantages of maintaining a department pension plan or public-sector service. so some of it has to do with the

efficiencies that are built into a defined benefit pension plan. the organization by the name of the national institute of retirement security, which is a think tank for retirement issues has produced a number of research publications that outlined the efficiencies of eight. -- defined benefit plan. and what the -- what one of the research shows us is that the defined benefit pension plan in the public sector is efficient more efficient by nearly 50% to than any other form of savings for retirement. the way that breaks down is that as the comptroller dinapoli mentioned, 15 percent of the efficiency of the private -- defined benefit plan can be agreed to cooling of the longevity risk. if you have a solely as your retirement security basis a

401(k) you have said, to be prudent, save for the furthest edge of your life span. somewhere around 85-90 years of age. whereas with the pension plan to because it is pulled and the science of actuarial science has, you know, improve over the last 100 years. when you have a large population actuaries can fairly accurately predict what the population you know, the population will expire you know before age 85 and how many will live to continue past 85. because of that we can really take advantages of how we invest and how much money we need to taken in order to and have enough funding for the pitch and benefit that were promised. the other is that 5 percent of the savings comes in the form of

diversified investment of an organic plan. again, because we are not you know -- the pension plan is not just investment but individuals literally hundreds-thousands of individuals we don't need to change our asset mix as individuals age. and then the most benefit comes in the amount of 26 percent, from superior investment performance that is derived from professionally managed assets from being able to negotiate lower fees from money managers, and just the economy has scale that are built into pension plans that are literally in the hundreds of millions to hundreds of billions of dollars. but to let's sort of bring that macro to more of a personal

sense. i have a set of twins. their six years old and my son is just beginning this year started taking tight window. and we go there once a week. and after his class is over most weeks we end up going to a local restaurant right next to the karate taizhou. anyway when we go when my daughter is fond of noting that there are group of senior citizen men who are there almost on a weekly basis just sitting around ordering, and drink coffee and just tell you know, catching up apparently. and just of curiosity i just happens to ask what is your background? we see you here almost on a weekly basis. and, you know, the reason that they can afford to come you know still keep their sort of

daily, you know call routine is because they are participants in social security and three of them happen to be public employees or former public employees to get a pension. that just spoke volumes. that in this, you know, great recession where there is so much uncertainty in the market if you had this solely as your means of retirement security a 401(k), i don't think you would be able to do that and continue to support the local businesses and the local economy. beyond that, you know, some of the biggest household names in american for instance, fedex starbucks, callback restaurant, staples the fact that they are known nationally and internationally can be directly -- directly attributable to investments that public-sector pension plans of made.

and, again you know, these are the engines that create jobs. on a yearly basis distribution from public sector pension plan produces about $360 billion worth of economic stimulus on a yearly basis to the united states economy. i mean, when we are talking about doing away with public sector pension plans that is the type of economic stimulus that we are pointing with. and, you know, in this recovery, i don't think that we should be undermining any sort of economic stimulus that our pension plans are providing. >> and as the treasurer and the comptroller mentions, yes, there are some pension plans few who you know, armed funding difficulties but again the vast majority of state what plans are in good financial shape. there have been some question as

well with the state itself city and county plans are. and we have conducted a national survey of the engine plants two and 16 plans responded 83 percent of the respondents were local plants and what the survey found out was that the average funding status from our members was 761% funding stance. and according to ratings if your pension plan is 70% or above that is inadequately funded system. so i think their is a lot of data about statewide plans but even though local plants are recovering well from the recession. bell, in terms of where they're needs to be reform i think the plans and the participants more so than almost anybody else are

interested in making the plants tenable. you know, obviously this is their lifeline. we want to be part of the process. we want to up worked with the taxpayers and elected officials to make sure that you know, the plan does become sustainable. i think what we object to is when plants and the participants are unfairly attacked as the cause of, you know, fiscal will. when you know, the pension plan is politicized solely for partisan politics, as it was done in wisconsin early last year or the employees of the pension plan -- the employee's the pension plan to be some is being blamed for budget woes as was done in new jersey.

plans and the participants are going through a seemingly unending cycles of pension reform as has been going on in new hampshire. i think they're in their fourth and fifth iteration of pension reform out there. or when, you know, there has been you know, cases made that, you know, there needs to be concessions made to make the system whole and the participants in that their unions to make concessions but instead of actually using the funds to bolster the plan some of the money or a lot of the money is diverted for other budgetary needs. i think those are some of the instances where the art members and participants object. so let me at this point shift a little bit and talk once again about the needs of 90 percent of

the work force the folks who are largely in the private sector. and if there is a retirement crisis in this country i think that is where the real focus ought to be paid attention to depending on various estimates there are upwards of eight and a half trillion dollar retirement savings deficit in the private sector. i think largely that deposition be attributable to the fact that in the private sector at least over the last 30 years there has been a lag of the retirements tool missing. our firm belief is that retirement security begins with social security it has to include personal savings including 401(k), but in the private sector, what has been missing is the third leg, which is the pension. end, we have some disturbing

trends coming down the pike. not only are we faced with that city's deficit but we have about 705 million baby boomers who are on the cusp of retirement age that over the next 10-15 years the bulk of the baby boomers will be retiring. i think most people are aware of that fact, and that -- but the demographic fact that i think many americans are aware of is the millennium generation the generation that came of age in the new millennium. that group that number around 80 million, even larger than the baby boomers. they're beginning to enter the workforce and if we cannot have or you know, this baby boomers over the next send us 15 years cannot afford to retire. and there are plenty on to their

jobs, not because they love to work, not because they can be productive, but solely because they cannot afford to retire. we're going to have 75 million baby boomers and 80 million of millennial competing for a limited number of jobs. that has huge economic consequences for our country. listen retirement security is not a luxury. at the national level it is about managing the nation's work force. and we have done a very poor job of managing the nation's work force of the last 30 years. so the solution that we are proposing is that desk businesses in the private sector particularly small business owners who employ less than 15 employees to reestablish pension plans to take their eyes off the ball of making their businesses grow, making, you

know making sure that they can stay competitive and diverting by establishing and running a pension plan for their employees. i don't think that can happen. what if at the state level we have up public-private partnership where states would create a state wide pension plan for the private sector employers and employees particularly for small business owners. and to we know just don't have the time to have a pension plan for their employees. it would be a sustainable plan. we would use a career accumulation methodology to make sure that folks can have retirement security, that individual participants would have accounts so that they would

have the ability to is sicily have portable pension plans and also provide flexibility that the business sector needed. and we have been pulling on the concept, which we call the security was pension. we pulled over 500 small businesses throughout the country. and 82 percent of the response said that the concept of the secured choice position was something that they favor. so you know, we think that, you know we have at least one potential solution. we have all white paper available on this concept. we have it available in this room and also you can download it from retirement security for all. and, i think that is a good way of ending. you know, it really ultimately boils down to retirement

security for the american public. and our feeling is that the defined benefit pension plan to regardless of whether you're in the pit to the public sector of private sector, has to be part of it. thank you. >> they keep. our next speaker is dean baker co-director of the center for economic policy research. frequently cited in economics reporting and major media outlets including the new york times, washington post, cnn cnbc and the national public radio. offered new grit to of the numerous books. his block features commentary on economic reporting. he received his ph.d. in economics from the university of michigan. >> thanks. i am really glad that hate raise this point about the private sector because i think to a very large extent that really is the crisis that we should be talking about. somebody may have caught this a couple of months back. the pure research into came out with the study, and what it

shows of was with the old rebates to buy baby boomers 161-162000. they have more money than young people but it they said, wow look at all of this money they had. no one seemed to put together, that was everything i read 161, this included equity in your homes. the way i liked the book that is the median house price in this country is about 161,000. that means we have the older baby boomers some love already retired they take everything they have accumulated in a lifetime that's it. half the people of the love that. that seems to me a really to a really big problem. take is exactly right. that is what we should be talking about, and it is unfortunate governor christie from new jersey. talking on back.

that is a pre statement. most don't have been since a more. but that is a big problem go rather than someone saying, oh, yes. you will ticket out of the public sector workers as well. we have to be thinking along the lines of the proposal that is being discussed the that will be the proposal. but, you know, i think that is the way we have to be thinking. pinching coverage to the private sector. which, of course as most of it at this point. >> i want to make formal wayne -- four main points. as sure falls we hear so much about in public sector pensions, again just overwhelmingly the story of the crash the collapse in 2007-8, this mismanagement. there are cases of mismanagement, no doubt about it. secondly, that even with, you know, the downturn, the crash the shortfalls are manageable. there will be places where it is a burden, but in general it is

manageable. third, pension funds are making reasonable returns pretty much across the board. there is not some. but the ones that the state returns and all of the thomas of libya's of returns i have seen, the assumptions are very, very reasonable. the last point is to emphasize the point that people have made here, there is not a free lunch. if you talk about getting rid of pensions this will cost more. this is economic sense. it is not just going to be a free lunch. it is not a way to get money from nowhere. the first point of the shortfall. fairly simple arithmetic. at dec. up to some calculations. as system was supposed that we just assumed that states continue to contribute to the princes of the way they have the prior five years. they continue to do that. and let's assume that all of them were sitting in government bonds. if well, the defense would have been over $800 billion. in other words cumulate the

pension up to up its own funds would have more than 800 million. well, different estimates. you can take a cue. most of them are around $1 trillion. roughly $1 trillion shortfall 800 billion of which is due to the plunge in the market, the crash in the economy. so i mean, in my mind that makes it pretty straightforward. the vast majority of this shortfall is due to the downtrend in the economy in the market. you can say okay. the people managing the fund should have seen it. i wish everyone had. the fed transcripts released last week. they're totally clueless. so, you know, okay. the state treasurers, the people managing the funds in general were not eligible. but that is the reality. so you know, this is a once hopefully in a 70 or 80-year event. if we're lucky cholesteric elite. so they missed it. it was bad. no doubt about it. but a lot of people missed it. most directly responsible for managing the economy they missed

it. that is where the shortfall came from. is a manageable? well, there is an industry in washington to make things sound bad. at all levels, federal pension federal government level i heard someone had an estimate i used to think it was 14 trillion. welcome if you throw in the liabilities to a $200 trillion to this is scary. well that is silliness. we have ways to measure the debt and make it meaningful. so, you know, what is relevant? of course, the size of the economy. and of this year, but over a 30-year rise, that is where you have to make it up. the arithmetic is fairly straightforward, two tenths of 1%. it is not trivial but imagine he had two tenths of 1% increase in sales tax? no one will be happy about it suppose you're going to do it now. not to say it is the only way. that will not bake prep the state. it will be nice, but that is you know we have states to the bill have to do that because they're just fine.

patients that are almost fully funded. well above any sort of safe zone. they don't even have to do that, but the point is that we are not talking about some shortfall. some states will have to take action. might have to require workers to pay more. get some assets down the road. maybe they will have to raise other revenue we're not talking about the novel. again, we just have to keep those numbers in context. the third point, the rate of return assumption most we hear here that north carolina, seven 1/4%, very conservative. the average is a bit underrated. there may still be. most of them are under. usually a little bit under. the big issue here is the rate of return assumption depends on what the return is in the stock market. the price is on the side market. but 8% return, back in 2000, released. because at that point the price

was over 30. and i would beat up on somebody. i wrote that at the time. so you had -- you have return assumptions. currently the rate of the price to earnings ratio in the stock market taking trend in earnings, 13 or 14 to one. this is a very, very reasonable assumption. no calculated. put in more pessimistic assumptions and see what you get. you have to get a certain assumptions previous and long-term economic growth projections are somewhere in the ballpark. the congressional budget office, office of budget, really telling a story where you don't get rates of return on the stock market that would justify the 8% return on the assumption. basically of falling price-to-earnings ratios which trends. so you know, it is a very, very realistic assumption. very hard pressed. really play route to try to was

a pretty loopy story to say the rate of return assumption should be lower than that. okay. the last point the whole issue about why defined benefit plans make sense long ago the person he taught me this, i don't know whether they're republican or democrat. there was an asymmetry. if i am a worker, will retire at some point. these are big uncertainties for me. i have a really big concern i have to be very conservative. that is a very big risk for me. it really doesn't matter. you know what to sit there and go hey, we just lost over much money. but the point is your not like to go on a business. the fact that we have states, governments, corporations for that matter we would have bought 20 years ago but the fact that you have long lived

entities, to then the market risk makes very, very little difference. for your average worker it makes a very big difference. the whole point is defined benefit pension is a great value to a worker. it is not a gift. so if we think of the labour market, you know, workers deciding between working the public and private sector the they're willing to take lower pay in the public sector, and we could document that. really get straight wages. showing that wages on average adjusted for education is lower in the public and private sector. that is offset in part and sometimes a whole. one of the benefits, of course, is the defined benefit pension. giffords is sick, okay, the defined benefit pension, we will just give you 401(k), will that is not as valuable. what does that mean? well, you're going to have to pay. he will have to pay that worker higher wages. is a certain sense you're getting a free lunch with that story. here it is. you have something. the list is a very the consequence.

it does not matter to the york that the market plunged. did matters usually to the worker. so you can by the state bearing that rescue are giving something of enormous value to the worker that is a very the consequence to the state which means they have to pay less in wages. the idea that somehow we will get rid of the tensions and have 401(k) that come out ahead that simply does not make sense. so in conclusion i just say that we have a crisis to that has been invented. there is not a crisis. there are issues. no doubt state and local governments do have serious problems, but the pension system as a whole is performing very well and as a people and said, we have be very thankful. public-sector workers are able to get by. they have a decent pension. very few of them are living high omaha. there is what you would want. specified working doing an honest work. a decent return.

>> they cute. last and most importantly what is often lost in state capitals across the country are everyday folks you're at the heart of these cuts, people like dolores bresette a retiree from relative is here to share her story. >> i work for the state's attorney's seven years. what that half of my life during my career i've paid into the retirement system on time every time. in fact, i contributed almost 9 percent of my salary my life savings. when i retired it was only after i had gone to the retirement board to make sure that my monthly benefits and cost-of-living adjustments could make my family's needs to come and now the state of rhode island has broken the contract on which i based my future. the cost-of-living adjustment that the state has taken away from me as -- as up to $75 per

month we give grocers for my husband and i. we carefully planned for our golden years together and save for years. but let me tell you it was not easy. make that sacrifice, but we did. we thought we would help our grandchildren go to college and at the very best i thought i would be able to keep paying for my 13-year-old granddaughter's dance lessons something i have done since she was two years old . every monday i drive to 30 miles to pick this will grow up and her brother to take her to dance. we stopped at a restaurant to have dinner together, and we can socialize and go over there day and how they are going to school and what they're learning and so on. then we go to dance. then i take them home, another 30 miles of traveling. it is our tradition, as my

grandmother says. now, how do i tell the saloon girl that i may not be able to afford it any longer. how do i tell my grandkids that day may be the ones that will eventually have to help us? i am angry. yes, i am angry. they may agree that something like this to happen after i have worked for all of these years and plans for my future. state treasurer parlando was at the state house one day while i was there. she came over to me, and she introduced herself to me and i shook her hand and i said to her, i am very disappointed in you. she asked me why and that's holder. i told the this is trying to take my future with for me. a planned for this feature, and now you want to take it away from me.

how are my going to be until for the necessities of life a lawsuit breath in the gasoline to was the fourth. she turned around and said to live sorry. as i told her you may be sorry but that this does not help me. that will let help my future. what are politicians failed to do was theirs. normally when someone breaks the contract they're the ones to suffer the consequences. in this case it is the current retirees who will suffer. my pension is my life savings but the politicians of ryland simply took it from me. on the news i actually saw them celebrate the cuts that they made to our pensions. it is upsetting that they can do this test. they don't see us as people. they see us as a number. i am here because these pension debates have real consequences

for real people. tens of thousands of less faith flees to serve the state and have been less than alert. it is hard to believe that we are going to solve our economic problems by reducing pensions for working people. as far as i can tell, that will only make things worse. thank you. >> thank you delores. we have a few moments for questions from the press and we will start with any member from the procedure that is in the audience. if you could just introduce yourself. [inaudible] >> you talk about -- if governor christie can get that message across what can you do? what options do you have? there is a crisis. >> i mean, -- anytime.

you know, it could be used depending. all of these become, you know, public policy choices and options open the were you put your money in perris. i think the you know, the message that i try to convey is that there are consequences to dismantling what has been a you know : in this is what we look at from my point of view, a pre-funding of what ultimately is an obligation down the road. a societal obligation to have all the people that cannot provide. one of the effective ways to do this the path has been through these pension plans. you know, in the short run but slid because of the losses in 2008 and 2009, we have the spiky contribution rates. so if you're managing the state budget, you know, the different

revenue sources for the state that certainly is using up some of that tax revenue. it is about 2 percent of our state operating fund. it sounds like a manageable number. for some of our local and employers is a bigger percentage . if you're the local mayor your community as well. it is not something you control correctly. that is where it does for some suggest a real challenge in terms of providing the cost. but, you know, again toppling context of all of this in the tradition of a very fine comments that have been made already i think it is important for us to keep. where we make policy choices at the extremes we tend to not make the best choices. if you can't late 90's, 2000, when we had historically low contribution rates. the fact that virtually zero in terms of the employer

contribution rates because the return was so strong. the decisions made basically to not contribute very much as someone down in some of the contribution rate. and there was a sense that this would be the permanent in the world. so what did we do? we sweetens the pension. we changed, you know, in terms of not having -- alito kutcher regions will probably the biggest change. there were some other enhancements. of course call what happened shortly thereafter, the dot com bubble bursts. returns are not so strong, especially when you had your own perspective the tragedy of september 11th our state in terms of the financial markets as well. you know, so in retrospect had we not done some of those we might not have had some of the funding challenges that we have today. in the same way you looked at where we are at because of that,

once every 80 years or, that means i'm okay. tuna we have had an historic miltown. and coming you know, to assume that now that we have a very large spike not an our highest contribution rate. one of the higher ones in terms of percentage, and it will still be going up. to assume that that is the world of the future, you know, i think is also a mistake. so you know, i really think that we need to, you know, keep in mind that broader context and get back to understory everything that each of us have said. it is now is just a question of the cause. it is also a question of how you provide a return and security. societal impact, if you have a continued retreat. suddenly because we are public-sector that is not being insensitive to the fact that there are others out there to don't have that security who

feel very vulnerable and probably angry. it is not unusual for people to say, hey, wait a minute. instead of the brady everybody down to a lower you know, common denominator what we need to do to keep in place those that have some of that security and others. some of that in the short run may involve it. there are other and that is all you know, fair game for public policy but then the most extreme federation where there are many voices saying the only way to add to this is by eliminating define plans its really is not the efficient way to provide this. this lending voice. we cannot only looked at these benefits.

80 percent of our retirees continue till live there. the may factory in a private sector has been shrinking. the folks who were their are the public employees to have given their lives in continue t communities. we need to factor that into the equation as well. we are an economy that depends on spending. people did not feel that they are secure. i don't know how much revenue that this company gets from other good grandpas but if she suddenly feels she may appeal to a full of the tables you will be cutting becker spending in a host of areas. that has an economic consequence that hurts all of us, and we need to have a much broader perspective about what this is all about and not to say on the front-end it is costing us more money. my last point.

what we do know is a little different. we have a cost is a protection. it's that going to limit the pressure because it will affect future employees. if we have a problem a problem cellist, crisis, when everyone to call it with increasing contribution rates that have of impact on taxpayers cutting back on its benefits will not address the problem that we have today. you can project out for whatever value it is the 30 years from now but if the problem is increased today changing the benefits for future employees at a time when there's a lot of firing going on it will take obviously a number of years before it has a different impact. they're coming up with a solution so what a problem.

>> the eight. $5 trillion in the private sector. what a challenge governor christie and other policymakers do is, we still have a little bit of window. let's start at least thinking about and having a serious discussion about how to close this eight and half trillion dollar deficit that we have in the private sector. >> how would that work? would you do it through the existing system? create a whole other type? >> you know, our proposal is just one of many, but the way we envision it is that it would leverage the existing infrastructure of the statewide a pension plan. essentially you would have a sister plant at the state level for the private sector employees >> political. >> yes. basically, the -- yak because it would have a board of trustees that would have representation from the state that is sponsoring it from the employers and the participating

in also from the employees that will make contributions in to the plan as well. >> next question. >> bloomberg. i had a question. you mentioned about the proposal the public-private partnership with a pension. you mentioned that each person would have an independent account and be portable. what would happen if an individual or to move out of state are to be transferred out of state by his or her employer. >> just to repeat the question so that we get it for everyone who is not in the room this is about eight kim's proposal for public-private partnerships and what would happen with portability if someone were to leave the state. so in a perfect world each state would have won so there would be a transferring of the assets. if it minutes since the state had one and the employee left the state and went to another state that did not have again

we would leave that detail of to the state itself : but in our conceptual model of what would happen if they cannot import that to their new domicile then they could keep their accounts frozen in their old state called possibly even make contributions to it if their new employer chooses to participate in the other states plan. and me tomorrow we have this very much similar to a 529 plan where you sit for educational purposes while states are not allowed to advertise other states. it does not mean that residents of one state cannot invest in the 529 plan of a different state. >> with a state line. could you comment on the efforts that are building on the hill to address public pensions? am talking about senator hatch's

discussant recently? in particular he has been challenged in some state by a republican primary republican state senators to lead the effort to change their public pension system to a hybrid system. is that all that is going on, or is he just shoring up its credentials for or what do you think is behind this? >> if it is okay i will turn to hate him or dean baker to talk but the policy components of your plant. you know i can't comment on the political components. i think what you're hearing here though is that these you know, public workers to put their life savings into these plans depend upon them for retirement many of whom don't get social security. these public plans it helps local economies generate jobs, keeps people on poverty. the defined benefit plans are more affordable than defined

contribution plans. from a policy standpoint i think, you know, that is the argument we are trying to make here. i will turn it over. >> i think that question should be posed to senator hatch in terms of what his motivations are. our response is that at the very minimum to untangle some constitutional issues and we are somewhat concerned about that. >> getting back to the politics and the public pension you mentioned the proposed coming up this year unless something radically different happens. that would be employed until next year. that makes it more political it seems, it would be more politically vulnerable. a big number in front of the balance sheets saying how much more we have to pay.

so what vincent, like a ready prius story in you just go get the jetstream. >> and i can commentary that think we have had those discussions. you want transparency and you want when people are making decisions for them to fully understand the long-term consequences of decisions. at the same time you have one of the negatives that can be deceiving for certain plants are states that have -- yes to more politicians. is it even going to make a difference? so all those debates have taken place. i've become i feel good about the direction and i think there has certainly done hundreds and hundreds of comment letters. so in general i think you have to tilt toward the transparency and then i think that is where we ought to go. >> i think we have some folks of phone. >> we do have one question from

new york daily news. please go ahead. the line is open. >> high. my question is for the controller. how're you doing? you mentioned in your remarks before about the dangers of eliminating or moving to eliminate defined benefits and going to up 401(k). the was wondering how you felt about the almost propose. ♪ proposal that there was an initiative to have an option for of 401 -- 401(k) plan. i was wondering do you feel that is also a danger at least in plan? >> i think it is to be emphasized. the government's proposal does not abandoned or move to eliminate the plan in new york. i think that is a strong positive. i think the challenges in terms of providing retirement security the defined contribution plan are challenges that i addressed in the past and would continue to have concerns

in terms of what that will do for retirement security for people who will rely on that as a primary source of their retirement income. >> do you think it is a good idea? >> i think i have been pretty clear in terms of the king added from the point of view of retired -- providing retirement security for the defined contribution plan as not the better way to go. >> we often hear this. and the formal plan to love and certainly at the national level we regularly hear proposals that would give people an option. obviously all of this plays out depending on how you structure that option. so the structured option that makes social security like all the way bad and basically undermines the system where you can structure an option that might be more consistent when was case there would have a defined benefit plan. i have done exactly an idea how this proposal would be structured but the really would be the key in terms of what my results. >> we are just about out of time, but i would say that many

of our panelists are available for 1-to-1 interviews. and that just want to say, thank you again for joining us. as we look at the battles that are about to take shape across the country you know many of them are about income inequality and they're basically taking center stage not just in budget battles in states but also in the elections that will occur. and the truth about it is the security of millions of teachers and cops, firefighters and other dedicated public servants to put their life savings in these pension plans are poised to be a critical debate, and we hope that the national public pension coalition and that the panel here can be a valuable resource for you moving forward. thick you very much for coming. [applause] [applause] >> tomorrow here on c-span2 state of the state addresses. over the last month governors have gathered in their state capitals to deliver remarks on the condition of their states. we will show you five speeches, beginning with south carolina

republican governor nick caylee at 8:00 p.m. eastern. after that, roger andrew cuomo of new york and virginia governor, chris christie. then we will head of west. the state of the state address is friday night here on c-span2. now, a discussion on a recent voter turnout trends in previous elections and turn up predictions for 2012. from this morning's washington journal, this is 35 minutes. >> and now joining us on the washington journal is curtis longtime political person here in washington d.c. and director of the center for the study of the american electorate out of american university. >> no longer. >> no longer. okay. just the center. >> just the center. okay. well if you would you have a new report out on voting trends,

and when you look at 2012 as a turnout year what kind of turnout do you expect in 2012? >> i expect a fairly low turnout. we have had increases in turnout in 2000, 2002, 2004, 2006, 2008, in 2010. it is not going to continue. >> why? >> well, because the republican party is deeply divided and whoever gets the nomination will have a vote of because the democratic party is supportive of obama but disappointed because yet people were driven by a year in 2004 and i hope in 2008. there is none of that in the present climate. the latino support president obama they are worried about

him because there has been more deportation in the administration then at any time in the future and the past. so there are all of these things that essentially likely will produce lower turnout as well as the fact that people in the middle and the independence they have no real strong feelings for either party at this point. so we have paid huge number of people who feel that the country is in the wrong direction. increasingly and number of people who feel a pox on both your houses, and i think all of that will serve. >> here is a chart that your group put together. looking at presidential election turnout from 1948-2008. you can see 1948, the turnout of the electorate was about 52% jumping up to 67% and then the

higher markair is 65 or 64 and and a half percent or so in 1960. and then it looks like the second hi mark is -- >> 2008. >> 2008 at about 62 percent turnout. >> that's all right. >> if you were to predict what would you say turnout is going to go here? >> i think it will be in between 55 and 58, something like that. it is going to go down. there is a wild card, and the wild card is americans elect. whether, indeed, people will be looking for other solutions. you know, that way in the future but that could mitigate said decline in turnout. at this point you have to be looking at a pretty sharp decline. >> the most -- the most reliable voters. >> in 1980 a friend of mine but

for the book. using census data. and that book is sicily said that people who vote most people who are more educated. people who are older the people who are more residential is stable, and people who are married who also at this point have people who are at the higher income. >> what about regionally? >> regionally in the u.s. what you have is the self being lower and turnout than the rest of the nation. >> why? >> well, because they're cutting out. you know, the contrast, you know, prior to the voting rights act of 1965 was stark but because of the voting rights act in 1965 african americans were

enfranchised and conservative and people raising concerns moved to the republican party. so what you ended up with was two-party competition that you never had. but it is still behind -- it is still behind the scenes. most of the -- most of the rest of the nation is higher but prior to the 2000 -- the increases, most of the western nation was declining in turn up with the south was increasing. >> current population trends, which party they favor? >> long term. the democrats. >> why? >> well, because we are going to be a majority minority populations large the because

of latinos but the republican party did not have many roots there and does not have many roots among african-americans. the second thing is their are places where essentially the republican party does not have a prayer at this point with their current advocacy. they almost cannot win. they have lost most of the ground that they used to have in the far west. they are even having trouble now in the far midwest of the industrial base only in vienna that seems to be reliably republican. so what they have is the fact -- the south. and the south is going to be less republican at its edges where you have a latino

migration and places like virginia with the northern virginia is a growing area in the area around norfolk is a growing area. so the republican base is going to narrow. and unless they chase their advocacy to be more inclusive and more moderate you know, they are likely, on the long haul you know, to be losing ground. that does not speak to this election because this election will be decided by the unemployment rate in make diligent to more july. >> when people -- in this country is a recession does that encourage or discourage? >> under normal circumstances it discourages voters because their a real mobilizing. there are places where we have had significant increases since

1960 during that decline with 1982 when we had a recession in 1992 when we were coming out of the recession. and tell you know, 2004, six come mandate particularly 2006 and 2008. the problem by now is the people did not see a hope of coming out of the recession from either party if you get to make -- may come in june, or july, and we are not looking like we're coming in a recession that will be hard for people to vote for president obama. at the same time people dulce economic policies of the republican party offering much so. >> i also want to give a talk about congressional elections in the midterm. and this is a charge to your group has put together, the center for the study of the american electorate. and you can see turnout here is

a lot lower than in the presidential. in fact, in 1998 midyear turnout was about 30 percent, but it has been increasing up through 2010, approaching 40%. do you see this trend continuing? >> i don't see any trend with an increasing turnout continued. there is an underlying problem of declining motivation. we have had a decline in the quality of education and the quantity and quality of civic education that only now has begun to be reversed. we have two political parties at this point that not ingates in the electorate and people feel you know, one party is to the right of the american center and the other party is not effective

. we have the way that we conduct our campaigns. an overwhelming glut of attack advertising that denigrates each candid and undermines people's faith in the political process. we have coverage of campaigns and politics which increasingly is demagogic and adversarial. we have the impact of technology . distorted but television. television lights to say it praise the world's community into your living room, what it does most profoundly it brings you into it. it atomizes our society and makes people spectators and consumers rather than -- but at least with the advent of television we had three networks the nightly news and share information. then we get cable and satellite. it gives you lots of wonderful things, and lots of wonderful

sources to love with 95 percent of the channels you don't get any intersection with politics or public affairs. you can watch espn, as i often do all day every day without getting $1 up. and then you get to the internet which is a self tourist medium with millions of websites of with politics and public affairs is not the choice of everybody or even the choice of a large group of people. and by a large they go with the separate website. there again is no comments and never shared information. then you have the ipad and iphone and facebook in my space all these things that create personal networks of personal choice is that further fragment our society. for all of those reasons we

have an electorate that except for time soon we are in crisis, people do not participate. >> curtis gains is our guest the director for the center of the study of the american electorate and has been doing that for quite some time. one of his earlier positions was as political director or staff director for the presidential campaign of eugene mccarthy in 1968. the senator from minnesota. we're going to go to calls. the number sabine of the screen. very quickly some political news. rick perry is dropping out of the total campaign and endorsing newt according to political. he will be endorsing did gingrich. that london i was reading they're just a minute ago. and the most recent polls show that did gingrich's gaining quite rapidly on mitt romney in

south carolina. also want to point out that rick santorum tomorrow morning will be a guest on this program 7:45 a.m. the, he will be taking your calls in south carolina. first call-up for curtis gans comes from greenville, tennessee. valerie, please go ahead with your question,. >> caller: yes, thank you for taking my call. i would just like to inquire of your guests why he thinks that there are so many of these groups that are set up for study in the yeah states? i feel like we are getting less and less truth and more and more opinion and many of the progressives in the country seem as if they can predict the future and the studies are often very been to in one direction. all of the liberals it together all the environmental risk together.

and that just feel that their promises are based on their own opinion come almost an ideology that not all of a share. and i think we can compromise with those they share a different world view. >> i think i there are studies done by the heritage foundation, mike cahill. there are studies being done by people with, you know, points of view and being done by people without points of view. who are seeking truth. i like to think of myself as that. my work for last 36 years has been deeply non-partisan. wherever my personal political ben this. there are a lot of places that produce -- and even the places with some bias environmental or

libertarian or conservative or liberal they often produce information that is useful you know so long is your ticket with a little grain of salt. we cannot have eat too much research. what we want to have as good research. >> next call comes from dover delaware. please go ahead. >> yes. how're you doing? i would like to mention about felons voting. if you could give me a little history on that because i know most people think that felons can vote, but in every state its different. you know, to my understanding most can vote after a certain time. can you give little information our history on that? because you can even have a business as a convicted felon in the past and even vote.

you pay taxes and days of that nature. everything as an american citizen and live amongst these issues and have the knowledge of thinking that you can vote. >> we get the point. we understand. >> the picture is a mixed picture. only massachusetts allows balance while in jail, it's about. several states believe that once you finish your penance to society and return to society you ought to have the right to vote. it is my position also. but some states either deny felons a right to vote after return to prison or create obstacles to their participation or create long waiting times for their position.

>> i think once they have been released into society done their time of being restored all other sat -- aspects of citizenship the right to vote should be included. >> there is something else that you have written about voter i.d. you have a chart here that shows where voter ideologues are and where -- how different states look at them. this stage the you see here in green all require a photo id. the states in yellow require a fight the. but they can sign an affidavit. it necessarily need a photo. all other states that you don't need a photo. isn't it important to the integrity of the voting process to have voter i.d. laws to back. >> it is not necessarily important to the integrity of the process to have photo id

laws. on the other hand, it is also not harmful to the political process to have voter i.d. laws, provided they're paid for by the state and distributed widely. now, the people without voter ideas tend to be people that don't drive, people who are poor if you only make them available to the department of motor vehicles, it is not a very good thing. but the principle of having an idea you know, i'd be, it's not a terrible thing. people on the liberal side wants to the nine day any sort of fraud exists. that is not true. it does not dominate our political process but i know, you know, a famous person who was a contributor to mccarthy campaign who voted both in michigan end in maryland. i know the new jersey newspapers

praised people who voted in the new jersey camp in florida. when they did the investigation into the campaign, you know, in which florida sanchez beat robert dornan in california they found a legal said voted but not enough to overturn the results. you know, we handed it in places, and it's not wrong you know, to try to protect the integrity of the process but it is wrong to note -- make its us that it really is -- is -- it makes it hard for people to get these ids these places. >> the director of the center for the study of the american electorate. next call from comes from nancy in kansas city. i commented. >> side. i am just wanted to make a quick

comments and ask a question. my comment is, i am a professional have a degree, and i am around 60 years old. i have waited for obama to do good in this country and i have not seen him do anything that helps this country. and so therefore i have voted republican this year. the question i have for him is don't you see a surge in republican people wanting to vote republican this year? wanted to make a change this year? and the demographics of the way this country is being run. >> i don't see a surge in either direction. as the republican party that is divided the most assertive elements, and it is more moderate elements. whichever wins that battle, the others will have less motivation to participate. why don't agree with you that

president obama has not done anything for this country. lydia's son several things for this country. what he has now been in will to do is turn the economy around and create jobs. that may be a terminal failing. people will be asking why we are not moving in the right direction of unemployment and if we want four more years of this. but what we have on the republican party is a desire a disillusioned about both parties and we have a disappointed democratic party. all of that is not necessarily lead to an activist polarized election. >> the lead story in the new york times, if you have not seen it. obama is faulted by swing voters in a new survey wendy have a quick chart. i want to get your interpretation of this. here is the chart that the new york times put on the front

page. president obama's approval already among registered voters democrats 77 percent, republicans 9% to my independence 37%. >> i think again the dominant issue in our country right elbow is the economy and jobs. there has not been much movement therefore the people who are independent don't have a strong feeling that a he is going to change if you essentially re-elect president obama. he has as far as i am concerned come until sometime between may and july to see it turning of that unemployment situation. if he doesn't and we're still in the 8-9% range and 15-16% on

people out of the labor force working part-time people will ask the question, do we want four more years of this and i think a wallow will have a very difficult time being reelected. >> if you were working for the president and ten months out or nine months about use of these numbers colleges billion note, is the overview numbers to a 77 percent approval by the democrats or republicans 9% and then the pinnace 37% which should be worried? >> of course. at think obama is worried right now. he is worried that the and people will turn out in the same the general lack of enthusiasm and lori halley will persuade sufficient numbers of those independents to show up for him. then you know, if i am in this position i am scared too.

is not a slam-dunk head for the divided republican party you know who will provide adequate opposition. >> mike on our independent line. you are on c-span. >> that is it due jersey, northwest new jersey. >> a beautiful country. >> estimated is. not all just s fog jungle. you're absolutely right. first of what to think you for the agenda to talk, but i want to commend you. your assessment is extremely accurate. as a middle-class income person i think this serves away from voting is the impatience with the fact that we are presented by both parties. we don't really have a choice. two people, both associated with

heavy funding from special-interest. they do not represent the middle-class, and that is manifest in the fact that you have the democrats who want to dominate the americans the big government and the republicans who just want to dominate the whole world. and consequently we show up in our federal budget takes taxpayer money away from middle-class. they don't have education funding. my question is, sir would this not be the right time for a ron paul who seems to address book those shoes? eight third-party candidate to stimulate a resurgence toward the electorate to come out and finally have a choice that has somewhat of a made middle-class which currently there is a representation? >> well, i think people are unhappy with both political parties. i don't think money dominance either political.

i am a sort of apostate on the conventional wisdom of campaign finance reform. i don't think ron paul is the answer. i think he carries too much in the logical baggage. in certain aspects of his advocacy it is not presidential perry that he has served as a good line on some issues. think he has raised some issues in accordance, but i don't see people seeing him you know, is the person who could be president. i may be wrong. maybe there will be eggcrate crown fall for ron paul. i basically think he has you know, at best within the republican party you know, but between 20 and 25 percent support of the son of the republican party, not very much of all. >> if you have been watching this program from the beginning you saw that we spoke at 7:00 a.m. eastern time with a reporter from the des moines

register about the situation in iowa and their report that rick santorum has actually done the lead. vestron, the chairman of the gop has come up. nowhere -- no winner has been declared but he has certified will be discussed at that point that rick santorum is currently ahead by 34 votes and that eight of the 1774 precincts are uncomfortable. no winner will be declared but that the current accounting rate rick santorum is ahead by 34 -- 34 votes. any comments? >> i think it is old news. at the the train has moved out of iowa and gone to new hampshire. the news right now is south carolina. i don't think it changes anything. i think people looking you know at the vote in iowa on the night of the election sun neck-and-neck. they now see neck-and-neck.

you know, it does not matter which nec is slightly higher which knows is over the tape while the other knows is this much behind. you know, it doesn't chase that. >> okay. rick perry is dropping out of the race today and according to political he is endorsing newt gingrich. is that affecting? >> i think it will help meet gingrich. and it will help consolidate the more conservative elements of the republican party around gingrich whether that santorum. you know, i think that is what who may emerge out of this, you know, out of the south carolina primary. there is a wild card which is you know, only beginning to service news which is the second life as a lot to hold a press conference. >> she was injured the by abc's brian ross. >> right. >> predicting -- currently it

looks like abc may have some excerpts from the interview tonight and then the full finger on monday, that's kind of the current -- >> well, but whenever, you know, that is a wild card right now because we don't know what she said and how much damage it may do to the former speaker. but right now it looks like south carolina is a 2-horse race if gingrich should be able to overcome romney's lead we are likely to have a fairly long primary process and i would not be surprised down the road whether somebody else got then whether -- >> two is that somebody? >> well, you know, i think right now there are a lot of great ideas in the republican party that are not happy with the choices. there will -- the graybeards in the republican party are willing

to accept from the because it looks like a person who can give obama the greatest a petition, but there is no -- there is no enthusiasm. and when you look at the polls you're looking at, you know, at most recently showing that there is much less enthusiasm for this than there was for 2008 republicans within the republican party. so you are having problems. having problems, you know, with speaker gingrich the history of shooting from the lip and you're having, you know, problems with some of the baggage that governor romney has and his inability to connect with the electorate. i mean, i think the whole republican nomination process really hinges on south carolina.

if he wins clearly i think he has a fairly clear path the nomination. if he does not win i think a lot of things are for grabs. >> our guest director of the center for the study of the american electorate. dan from louisiana on our independent line, you are on c-span. go ahead with your question a comment. >> yes. i am listening to this conversation this morning. it has been -- i have been a long time you were a c-span. at one point they do a great service in that showing us what is going on in congress in committees with those. but this washington journal program, i have watched to degrade. this gentleman here who is -- comes in the name of the study for the center of the study for the american electorate you would nothing there were partisan, but this man is obviously partisan from the right-wing think-tank, and i

think this -- c-span could do a great service to the american republic by showing that there are two opinions, but there is only one truth. >> think you for calling in this morning. are you are right wing think tank person? >> i operate my center on a strictly non-partisan basis. my history and my personal views are liberal. i try not to get that let that infects rye do in terms of study in the american electorate in making judgments about the election. and surely not the right one person. >> used to work for eugene mccarthy in 1968. >> yes. >> data into the presidential race. was he the first president to canada to be involved in the

vietnam war? >> the first presidential candidate to be opposed to the vietnam war. wayne morris a kung bury people in the senate i started before there was -- i created this theory organizing something called the johnson group. and we did not have a candid then. what the candidate but he chose not to. and they had considered before and know had the basic to go to and decide to run. then he was the person that was willing to challenge president johnson on more. he has my loyalty ever since. >> atlanta michael, a democrat.

good morning. >> good morning gentlemen. our you doing? >> i think of doing all right. >> that's good to hear. in a normal year i would agree with everything you pretty much said. however, we have a president that debt over 50 percent of the popular vote, 300 plus a look torre votes and can't get simple legislation through the congress. i mean, people are not dumb. receive what is going on, and i don't think the election is going to be that close. >> well, the answer is i don't know. you know, tell me, again, there are things that he has actually done. you may agree or disagree. you may agree or disagree with the financial regulation. i do think that george bush park and barack obama did say this for economic collapse. there are things that he actually has done and then

positively, but he has not been able to turn the economy around and there are people including myself. it was not adequate enough. the impossible to get it through because he has an obstruction in congress. i don't know whether it is closer not. i mean, again tell me what the economy will look like in june, july may june, and july when people really make their decisions about the economy. if it's going in the right direction obama has a reasonable chance of being reelected. if it's not he has almost no chance of being reelected. >> curtis, here is the study that the center for the study of the american electorate has just put out. the headline, elections of 2004,

2008 and 2010 produced near record turnout. lower turnout expected in 2012. beyond 2012 long-term geography favors democrats and if you are interested in reading this study for yourself you can go to us csa electorate dot blocks bought dot com. we will put that address up on the screen so that you can see the full study. >> you can even download it. >> you can download the study. when did you and your association with american university -- >> beating last year. >> by started with something called the committee for studying american electorate an independent nonprofit. and in 2005i hooked up with an american university. 2000 you know, the beginning of 2011 and left.

voluntarily. >> our guest here and the washington journal. we appreciate your time. >> the queue for helping me. >> republican presidential candidate rick santorum. also university of south carolina professor mark tomkins on the history of presidential politics in south carolina. michael crash at the boston globe is the author of a new book about mitt romney. end of discussion about america's health with a of words on the of the national center for health statistics and dr. pier vigilance of the george rushed to university school of public health. every morning at 7:00 eastern. as economic uncertainty persists british politicians now debate the fundamentals of free-market economics in an attempt to address what went wrong at the end of the last decade. we will hear from prime minister

david cameron who outlined his conservative party's plan during this 35 minute event.÷÷÷ [applause] [applause] >> they cute. thank you very much for that is direction, and it is great to be here. i think this is a brilliant innovation. you take militarily and use space in central urban locations and make it available for entrepreneurs and special-interest. it is an absolutely key facility for people who have a great idea who want to build it into something that can start in some fully fledged office, and i think this is a great idea for the government to take up to think about and use space that we have so that we can help build a more entrepreneurial and social of charles society that we all want to see. these are difficult times. we have to deal with the legacy of the deficit and the debt. the eurozone is in deep and continuing trouble.

yesterday unemployment rose again. across europe the economies have stalled. here in britain this is an active government. rolled up, doing everything that we possibly can to get our economy moving. the biggest work progresses the 1930's helping 3 million people. a massive drive apprenticeships spirit major initiatives on regional growth, infrastructure, enterprise but today many people are questioning not just how and when will recover but they're questioning the whole way in which our economy works. so the economic challenge starts with dealing with our debts with achieving growth. it mustn't in there. we must aim higher than just coping with the storms are affecting international. i believe that this current diversity, we must aim to build a better economy, one that is

truly fair and worthwhile. in my argument today is this. we will build a better economy turning our back on the free-market. you will do it by making sure that market is fair as well as free. one, of course, there is a role for government regulation and intervention, the real solution is more enterprise, more competition more innovation. in this debate about the kind of economy that we want to see my position is very clear. i believe that open market and free enterprise are the best imaginable force of improving human wealth and happiness. there are the engine of progress. they generate the enterprise and the innovation that which to live in poverty and that to people opportunity. then i would go further. where markets work, open markets and free enterprise and the actually promote morality because they create a direct

link between contribution and reward between effort and the outcome the fundamental basis of the market is the idea of something for something an idea that we need to encourage not condemn. we should use these prices of capitalism's to improve markets but not undermine them. i believe conservatives in particular are well-placed to do this. because we get the free-market we don't is failings as well as the strengths. no true conservative has a net you believe that all politics and politicians have to do is just stand back and that the cabalism representative. we know there is every difference in the world is when a market that works and one that does not. i. control globalization can slide into monopolization, slipping his side the personal, local. but we are in a party that in the stands out to make up was a

work. cost of defending our open economy against the economic. so where others see problems of markets there is a chance to weaken them. .. for the east india company with william pitt abroad and at the of government. the same spirit of responsibility helped drive the

campaign against the slave traders. the appeal that led to the -- the forest up the price of food and the is -- backtracks which began to set working conditions. of course it's true that great campaigns for reform drew starring so many other movements too. but social responsibility watching over business correcting market failure, recognizing obligations that is in part of the conservative mission from the start. and a large part of my leadership has been about renewing that commitment and that long-standing tradition. corporate social responsibility and environmental responsibility have been constant themes in the arguments i have made and the policies i have developed. soon after i was elected leader i said that we should not just stand up for business but also we should stand up to big business when it was in the national interest to do so. three years ago i argued that the previous government's turbo

capitalism had turned a blind eye to corporate excess while we believe in responsible capitalism and a government that would make it happen. the second principle, popular capitalism, is just as important as the social responsibility. we need to open up markets. when you to give more people engaged in a jointly popular capitalism which is what you see when he you walk through the space here today in new zealand house. conservatives have always believed in an ownership society. consist of themes and the ambition of building a nation of shareholders, savers and homeowners. they championed this through homeownership giving people an acid of their own. market -- did the same with share ownership of the right to buy -- and three years ago in deb aust i called for new popular capitalism one that would recognize the role of capitalism in which frees people to make something of themselves to own a home, to start a

business. today this mission of improving markets and ensuring they are fair as well as free informed by the principles of social responsibility and generally popular capitalism should have three things that it's hard. first, we need to be clear about the specific mistakes of the last decade. second, we need to put the right rules and institutions in place to correct them and third and i think this matters more than anything else, we need to open up and surprised opportunities so that everyone has the chance to participate and benefit from a genuine market economy. we need to boost competition back in the price it and encourage the venture spirit to challenge the status quo. that is how we will build a fairer and more worthwhile economy. so first what went wrong? the last couple claim to have gotten rid of boom and bust but what really happened was it allowed a boom to get out of

control. this series was if you like the result was a series of lethal imbalances in our economy between north and south between financial services and manufacturing, between the people who got huge reports of the top or welfare on the bottom while everyone else seemed to get left out. the truth is the last couple have made a pact with a system that encouraged a debt economy because it needed to pay for spiraling welfare costs and and a top-down interventionist state. it tolerated orkut failures because at heart it didn't accept the markets could be made to work properly. seem frightened of challenging vested interest believing too often that the interests of big business were always one of and the same as those of the economy as a whole. this left us with a level of public spending we can afford and a model of economic growth that wouldn't work. understand why this has made many people totally disenchanted

with markets and even angry. far from abolishing boom and bust with the hat was the biggest boom in the biggest bust leaving everyone with a share of the debt but when things went well only a few seem to get a share of the profit. too many people found they couldn't count on their savings. they couldn't afford to buy a home. the word about how they would pay their bills in old age and the city which should've been a powerhouse of competition and creativity became instead a byword for some financial wizardry that left the taxpayer with all the risk and a fortunate few with all of the rewards. so instead of the popular capitalism we ended up with an unpopular capitalism. the next question is what needs to change? my answer is that we need to change the way the free market works. what would stop the free market from working? me to reconnect the principles of risk, hard work and success with reward.

when people take risks with their own ideas, their own energy in their own money, when they succeed in a competitive market, when anyone can come along and knock them off their perch at any time we should celebrate entrepreneurs to succeed and create wealth and yes get rich in that way. we should support business leaders who are earn great rewards for building great distances, for doing great things with their company, for our economy and for our society. that should be a proper functioning market for talent at the top of business. that will inevitably mean that some people will yes, earn great rewards but that is a world away from what we have seen in recent years where the bonus culture, particularly in the city, has built out of control with a link to tween risk hard work success and reward has been broken. this is not the politics of envy but the government of the bank of england reminded us this week excessive undeserved onus is

reduced lending available to small businesses. large rewards for failure when companies were suffering means even less is left over for customers at. so next week the business secretary will set out detailed proposals on executive pay including any necessary legislation to follow. but there is a need for new rules. but we should be clear about what will do most to bring back true responsibility. we need to make the market work and we do that by empowering shareholders in using the powers of transparency as well. that is why i welcome this week's decision by fidelity worldwide to add their voice for better policing on boardroom pay. it's responsible action to make markets work and a thread that runs this government. regulation is part of this but again i think the last government got regulation the wrong way around.

smaller companies were often strangled in red tape by the banks were allowed to -- we need to turn the tables on this so we we are acting to make tanks work for the people and the firms who rely on them implementing the vickers report to separate investment banking from retail banking. we will ensure banks are properly capitalized as losses should be borne by investors not by taxpayers. completely overhauling financial services regulation polishing the failed apartheid system and putting in place a system that will work and protect the consumer. we are fundamentally reviewing the private finance initiative to strike a proper balance between risk and reward to the private sector are going we are also busting open the cozy collusion between big is as this and big government that has locked small business out of public sector contracts, market worth 150 billion pounds a year. none of this should mean more regulation. it means less not better recognition.

we need strong frameworks that people can understand not endless but ineffective red tape. that is what lies behind the new anti-abuse ruled that the chancellor is examining potomac the tax code simpler, not more complex and stop abuse at the same time. at the end of all of this this government will have reduced regulation of that increased it. the third part of the mission to improve market to make them fair as well as well as free is about enterprise an opportunity. capitalism will never be genuinely popular unless there are genuine opportunities for everyone to participate and benefit. of course this means a greater emphasis on equality of opportunity. you can never create a fair economy if there are people who are automatically excluded from it through poor education or if there are people who approach the only way to live their lives is to depend on state handouts. people need the capacity to succeed. that is why this government has

made the education revolution it's priority with academies free schools, rigorous exams then a complete intolerance to failure as we saw this week with the abolition of the idea that you can have a school to less than good being called satisfactory. we are starting the funding system in education in favor of the poorest with a premium that means disadvantaged get more so every time a child or preschool meal -- works into -- walks into a school that school knows they will get more money for teaching that people and as a result will be able to help turn their lives and prospects around. in an age where we are having to cut public spending we are investing more in early years childcare. also we are intervening comprehensively in early and families in families that are failing to help children who otherwise would get a poor start in life. the popular capitalism also means believing in what i call the insurgent economy where we

support the new innovative in the bold where he gets a chance to thousands upon thousands in our country who aren't in business yet but who want to be whose ideas and energy and his whose enterprise and ambition is the first crucial springboard. intelligence, ingenuity, energy. i believe britain is -- with potential. we need to and they fear that says this is opportunity only for a few. i admire almost more than anything the bravery of those who turn their back on the security of the regular wage to follow their dreams a startup company. to take a risk quit your job create the next google or facebook and wind up a billionaire then -- and if if you took a punt invested your money and that hugely risky source and made a fortune and let's also recognize people who take risks who don't succeed the

first time who often find the first investment does not fail doesn't succeed but who persevere. we have to recognize that is a process leading to success, not a failure in itself and we should be open to that and we want to see it happen and encourage it. that is why we are taking a whole series of steps. we are improving entrepreneurial relief so founders of companies get to keep a bigger slice of the gains that they make. is why we lost the out of print or visa so the best and brightest would-be entrepreneurs around the world to start their business right here in the u.k.. is why we have implemented some of the most generous tax incentives for early stage investment of developed economy and launching a new campaign to start up written helping people take that brave step into business or themselves. it is a basic truth that if people will support its growth and shared success. but the reality is that even if our countries grow richer,

participation has actually shrunk. yes we are boosting shareholding by giving tax relief to people who invest in new small businesses and for this olympic year of 2012 we are taking another step that hasn't been commented on. we are effectively abolishing capital gains tax for people who this year are prepared to have a go and at at it best in a startup. i don't think we should stop there. to build a fair economy we need more shareholders, or homeowners, more entrepreneurs. that is why we are reinvigorating the right to buy a canceled, and transforming the fading housing market. as the prime minister said on monday we need to help encourage different models of capitalism. employees have a much more direct space and the success of their company. this is an issue that i have long cared about. back in 2007 i established the conservative cooperative movement which now has over 40% of mps as members. in a government where we are

providing new rights for public sector workers to create mutuals and own a stake in their success with employee led mutuals not delivering almost a billion pounds worth of health services i think it's right to take further steps. we know that raking monopolies, encouraging choice, putting up new forms of enterprise is not just right for business. is also the best way of improving public services too. there are over 12 million members and the u.k.. it is if to be if you like it vital ranch of popular capitalism the right now there are too many barriers in the way to extending and improving that record. there are over a dozen separate basic pieces of legislation that at add cost and complexity to the process of the day i can announce that we have simplified it new property bill we will be putting before congress. in these difficult economic times i want to achieve more than just paying down the

deficit and encouraging growth. i want these times to lead to a more socially responsible and genuinely popular capitalism one in which the power of the market and the obligations of responsibility really come together. one in which we improve the market by making it air as well as free and in which many more people get a stake in the economy and a share in the reward of success. that is a vision of a better more worthwhile economy that we are building an economy where people who work hard get rewards that are fair in the chu conservative sense of the word an economy where people build control of their destiny whether starting their own business or shareholders in a company they work for indeed a part of a cooperative. an economy where everyone has a chance to pass something onto on to the next generation. that is how we will make markets work for all of us to spread well, to spread freedom and to spread opportunity. thank you very much indeed for listening.

[applause] thank you very much. we have some time for some questions. let's start with james with the bbc. >> prime minister, changed fromñ bbc. will you act to prevent the bosses of poorly performing3ñmñ state-owned banks receiving milliono pound bonuses?o >> the short answer to that is yes but first of all the storysx in the financial times this morning? is actually not accurate. there has been no meeting of the committee at the world bank of scotland.

i think it's right there should be a small cash bonus available for those people with a 2000-pound cash bonus. that would apply to anyone at the top as wares anywhere else. and terms of the broader question of the chief executive and the rest of it as i've said there has been no meeting of the renumeration committee. that would be a proper process. i can tell you if there is a bonus it would be a lot less than it was last year but the processes that are set out should be followed in the proper way. tim from the daily mail. >> thank you primus. [inaudible] and if you agree what is it that you're going to do about it?

>> i think it is right that there is a proper process to be followed as something of this order. there their sepulture committee in terms of honor that exist and will examine this issue. i think it's right that it does so and do a proper process. abizaid got to take into account the financial services authority report which i think his material and important because of what it says about the failures of rbs and what went wrong and who is responsible for the rest of it but there is a committee and they should do the work rather than the prime minister himself. >> thank you prime minister. anyone watching the speech today might ask if you can't act on the company of which you own 83%, are your words not worthy but ultimately meaningless? >> i have acted if you've just heard. there will be a 2000-pound cash limit on any bonus for anyone

whether they are at the top of that company or at the bottom of it. that is the actions of this government took last year and the action we obviously will take again this year. that his action. as for the rest of the process the renumeration committee needs to meet, discussions and to be held in decisions need to be made but clearly the british government is a major shareholder and has a major interest in this and i think you just heard, has a pretty clear view. >> thank you prime minister. you are right to comment on that good tradition of corporate and responsibility. sometimes we can experience that is rather patronizing, sort of kindly business leaders telling us enterprise leaders how to run a business and actually i think we could tell them a bit more about how to motivate a sustainable business so being practical to helpful suggestions number one, how about

encouraging components to take social enterprise onto their board and number two, let the bankers take their bonuses, tell them to give that to charities or social enterprise is. >> some great ideas there. the principle behind what you are saying i think is entirely right. i think for too long in this÷÷ country corporate social responsibility was seen as something that businesses should tack onto an otherwise sort of straightforward profit-making model and every now and again give money to this charity or that's so true enterprise and say well done. i've been making this argument since i became the leader of the conservative party which feels like 100 years ago but is only six. what business does should ungar prayed corporate responsibility the way it treats its customers the way it engages in the world and when businesses sometimes say to me i think you are taking this argument it that far i said

to actually go sit in a classroom with young children and see what their aspirations are for the businesses they want to work for consume products by, deal with all the rest of it and you will pretty soon find out corporate responsibility is not something businesses should do is an add-on. it should be the core to the whole way they do business so from that outflow some consequences and one of which i think your first idea is saying to businesses as you look at who you want to have on your board actually the awful word mainstreaming of of the whole thing if you have someone who really understood what social enterprise, what social responsibility is all about. the second suggestion on bonuses i think is also a good one but i think the point the governor of the bank of england made is important which is if banks decide to pay out more in bonuses or pay out more and evidence they are going to effectively be reducing the

capital base on which they can make lending decisions. i think we all know that one of the problems in our country today is actually the difficulty of getting ahold of bank lending and that is why the government has taken quite an intervention is, quite a strong stance through the agreement which was very much my initiative sitting down with the banks and saying look, you want some predictable rules on tax and what is going to happen in terms of banking. you're only going to get that if in return you actually set up the sword of lending you will be doing to businesses large and small and i think it's important we hav/ñe done that. actually those targets are pretty well on course to be met. as to the question for the corporate movement the press can defend themselves and we will call it a day. >> thank you prime minister. your announcement today of a cooperative will is very well committing a historic decision that would clean up a fragmented

and costly process so it would be good for corporate business and there are over 12 member owners moving in their individual shareholders indeed in the u.k.. this year has been cleared by the united nations as the international year of corporatism -- cooperatively some and the framework. i think you're the first country, the u.k. is the first country in the world to get that commitment underway. but i wonder whether you have a message for the 12 million members of cooperative's large and small up and down the country this year? the first of all thank you for telling me i am meeting the international obligation which i was not entirely aware. [laughter] i am very grateful for that. i think it is important to clear up a lot and make it easier if you want to encourage the creation of new co-ops large and small. clearly trying to get the paperwork is a sensible thing to do. i think my message to the

12 million is to keep on doing what you are doing. i think we want to see a spread of different business models and as i said not just in the private sector but also the public sector. we are doing a lot of work to encourage me position of some public services. i think trying to give people a greater sense of ownership and what they are doing is usually important. if you ask people about what it is that makes them satisfied at work and happy and all the rest of it, it's obviously your job security but it's also about whether you feel you have a real stake in what you are doing. i have been often had my leg pulled for talking about happiness and the rest of it but i think it is important and i think there is a growing understanding that it is about the control you have the influence you have, the setting you are working as well as the

vital things up pay and conditions. let's have -- no, back in the back. >> prime minister, to go back to as you just described the out-of-control bonus culture. what about the non-state-owned banks which as you well know are the vast majority in the city. you have no control over them. you have adopted treaters today to exert a perhaps moral situation they should be paying their bonuses to charity. you are totally powerless over for example goldman sachs guimard you? >> with the government is doing is recognizing but not legislating for a pay level in every business and every company in the country. what you can do is try to make this market for top pay work properly and frankly it is not working.

today -- last year you saw 49% increase in the value of pay in the management but you only saw a 4% increase. as i said in my speech reward and success have become disconnected. >> when responsibility is enough for you prepared to use the state to limit the power and influence of the the capital? >> the answer to that is a straight yes. if you have an example where despite asking participants in a market to exercise responsibility they don't think clearly you have to intervene with the law and most conservatives believe you have the market without law, there are all sorts of practices that you have to ban. for instance, insider trading or what have you. now obviously a conservative hopes that you'll have the maximum extent of responsibility

allowing you to have a minimal extent of law whereas i would say some on the left tend to believe you need a maximal law because we can't ever trust anyone to behave responsibly in any way.