[laughter] i stand here today older and wiser than during my first such opportunity those years ago, but with a heart full of pride, a head full of ideas and with a state full of new opportunities to grow and prosper as never before. last year we, like many other states, faced serious budget challenges and unacceptably high levels of unemployment. 89 programs were funded with one-time money that was due to run out to the tune of $900 million. in other words, it amounted to nearly one-sixth of our entire general fund budget. more than 100,000 iowans were out of work and seeking jobs, and thousands more had simply given up hope. my charge to each of us was simple, yet significant; to restore predictability and stability to our state budget, to insure our decisions were sustainable for the long term,

to set the stage for a period of unprecedented economic expansion. together we took these challenges as iowa minneapolis always do. -- iowans always do. and while the process was messy, as it always is, and though none of us got everything we sought -- as we never do -- we took the necessary steps to put the state's fiscal house back in order, ended our dependency on one-time revenue, funded a balanced budget using ongoing revenue and passed a biennial budget that funds most areas for two years. [applause] >> here in iowa we're a model for the nation on how republicans and democrats can

work together for the common good of our people. iowan withs deserve a budget that works, a budget that focuses on the essentials, a budget that reflects the character and ideals of iowa's hard working taxpayers. and together we delivered just that. so take this moment before the hard work of this session begins and congratulate your fellow legislators for a job well done as i congratulate each of you. [applause] now with our fiscal house much improved, our fiscal year 2013 budget already substantially completed, we have a tremendous opportunity to focus the next few months on two critical priorities. first, creating new jobs and careers for iowans to significantly raise family incomes. and second, adopting common

sense solutions for our schools to give our children a world class education. we must share the urgency of iowans to revitalize our economy and improve our schools. we must commit long term to make iowa ready to support the jobs and careers of the future, the very careers that will keep iowans home and bring new economic opportunities to our state. this past year we took the first steps towards improving iowa's economic health. together we created the iowa partnership for economic progress which will lead our state's efforts to encourage entrepreneurs and small businesses. in addition, i signed an executive order that requires a jobs impact statement on any proposed administrative rule. these are the first steps on our path towards renewed prosperity that brings greater opportunity to all iowans. while improvement is being made,

there's still much work to be done, and it's going to take the cooperation of every member in this chamber to provide the opportunities that iowans deserve. the all-or-nothing politics that often prevents the leaders from making progress on many important issues in washington, d.c. and in other state capitals does not have to happen here. in iowa we have a shared responsibility to do our work differently, to work in the best interests of all iowans and to shed the partisanship that makes good policy so elusive. the simple truth is iowa no longer competes against other states to attract new jobs, careers and economic development and investment. we now compete in a worldwide economy. we must compete with brazilian ethanol, with chinese production of technology and with every other emerging nation ready to claim our economic mantle.

we've seen, i have seen firsthand the economic and educational growth around the world. this past september i traveled to korea, china and japan as part of a trade and investment mission. while in beijing i met with vice president chi. he actually visited iowa in april of 1985 as a party official. he's now the vice president, and later this year he'll become the president of china. out of that meeting, one thing was very clear: for iowa to compete in the future, we must compete globally. on that trip i met with companies in each country that i visited. i was able to communicate a message that iowa is open for business and poised for growth. a message that iowa is full of hard working citizens who are ready to work. as a result of those efforts, we convinced the south korean

company cj to invest $324 million in the fort dodge area and bring 180 great jobs to iowa. however, companies -- [applause] however, companies abroad should not be the sole source of our growth. american companies have seen the work that we have done collectively to enhance stability in our state through our fiscal discipline. as a result, numerous companies have announced their relocation or expansion plans in iowa. cargill purchased the plant in fort dodge and will create over 100 new jobs and provide another market for iowa corn. alcoa is investing nearly $300 million in their davenport factory where they will begin producing automotive aluminum to meet the rising demand for

lighter and more fuel-efficient vehicles. the combination of our strong agriculture, bioscience, manufacturing and financial sectors means iowa is better positioned than most states for economic expansion. [applause] but i believe being better is not good enough. we must strive to be the best. i am convinced that iowa stands at the precipice of major economic expansion, but that expansion is not guaranteed. our opportunity for unparalleled growth is like the opportunity that a good iowa field affords a farmer. but work must be done before a harvest can be reaped. our job creators are ready. the question is, are we? are we ready to plant the seeds for growth and prosperity?

if answer is yes -- and the answer must be yes -- then we must develop the permanent, the permanent tools that job creators, career builders and hard working iowans so critically need. and that's why today i am proposing a four-point plan of action, a focused initiative designed to help create the jobs we need today and the careers that we need tomorrow. [applause] the first piece of my action plan should be of no surprise to anyone. this year i will submit to the general assembly a revised plan to reduce commercial and industrial property taxes by 40% over the next eight years. commercial property taxes in iowa are the second highest in the nation, and i believe there

is an agreement within this chamber that these taxes must be reduced. not because they cost businesses too much money, but because they cost iowans jobs. [applause] >> what has been lacking in this discussion, i believe, is an understanding of the consequences for small business owners who struggle to keep their doors open and their workers employed due to this back-breaking business burden. today sitting with my family is ying suh. i met her at the summit, she's a leader who's helped hundreds of

immigrant entrepreneurs start or successful businesses in iowa, including her own. ying and nearly 500 other iowans met to discuss their businesses and their dreams for success here in iowa. i was honored to address their summit and to recognize 125 immigrant entrepreneurs who started a new business in just last year here in the state of iowa. ying, thank you. [applause] >> ying is a relatively new american citizen. ying has a growing cpa business. but she does not own her own office space. rather, she leases the property,

and she -- like thousands of other small business other thans across iowa -- feels the brunt of our high property taxes through the net-net leases wherein she pays the full cost of the property taxes attributable to her footprint. ying, we're proud of you, and you represent thousands of other hopeful small business owners, iowans who are in most need of commercial property tax relief, these start-up small businesses. [applause] thank you. will each of you commit to permanent property tax relief solution for ying and for all of her fellow small business owners and the tens of thousands of iowans seeking jobs? [applause]

>> passing our plan will give iowa business owners permanent relief and a fighting chance to compete. in addition, our plan prevents a shift to other classes of property by limiting local government spending and by cutting in half the annual growth limit for residential and agricultural property. the second piece of my action plan is to give our iowa economic development authority the tools it needs to create our job -- to help lead our job creation efforts. last year the legislature directed us to create a replacement for the grow iowa values fund, and we are proposing a new $25 million annual investment in our high

quality jobs program. the high quality jobs program has a proven record of success and a documented return on investment of $2 in new tax revenue for every $3 -- $1 invested. this gives the iowa partnership for economic progress an important tool in attracting high quality businesses and careers to iowa. in addition, my proposal will be structured so that the state investments in this program will decline over time and so the program will be self-funding within ten years as a direct result of the jobs that it brings to iowa. the third component of my jobs and careers action plan will encourage those small businesses that supplying key components to our strong manufacturing sector to grow their facilities and create new jobs in iowa. often major manufacturers have large supply chains filled with companies that produce vital

components for the anchor manufacturer. manufacturing must remain an important part of our diversified iowa economy. i will offer legislation that removes the barriers that discourage suppliers from bringing their businesses closer to their best iowa customers. we have major anchor manufacturers like john deere in waterloo. let's develop a supply chain cluster wherein surrounding town attract those smaller support businesses that feed john deere. without question the jobs that such suppliers will bring to places like hudson, la port city, parkersburg and denver are equally as important to those communities as the jobs that john deere provides to the citizens of waterloo. the final piece of this jobs and careers puzzle involves the dilemma faced by many iowa rural communities when a local anchor business is put up for sale.

when hometown businesses are sold to out of town, out of state or out of country buyers, the local community often suffers. we must work to keep iowa companies in iowa even when ownership -- even when an ownership change takes place. this is not just a tool for iowa businesses, it's a tool for iowa communities. iowa communities where these companies represent so much more than jobs, where these companies represent our families, friends and our way of life. many of these companies have operated in iowa for years, operated by owners committed to the local way of life. and when those owners wish to retire, they must have options to keep their companies local. i'm proposing legislation that will encourage the formation of employee stock option plans to encourage the sale of these local businesses to the very employees who have made the company a profitable success.

[applause] our plan will encourage more iowans to own a stake in their company, to reap a greater share of the fruits of their own labor and to help protect the quality of life in their community. employee ownership is great for the iowa communities in which these businesses, jobs and careers exist. my four-point action plan to create jobs, with that, we need today -- it'll help us create the jobs that we need today and the careers we need tomorrow. and it is essential that we have your bipartisan support to get this done. [applause]

but we can't leave any discussion about iowa's future without focusing on our most precious natural resource; our children. with four young granddaughters, i understand the importance of commitment, a commitment at this time when new technology and other forces are rapidly reshaping the labor market. our children's future depends on whether they learn the knowledge life skills needed to succeed in the global economy and be well informed, good citizens of the 31st century. -- 21st century. our state's future depends on whether the quality of our schools matches the best performing schools anywhere in the world. today we have with us in the gallery students from van meter, ankeny and capital view elementary here in des moines. i asked them to be here because today we take a crucial step towards insuring that they have opportunities to pursue their dreams by being among the best

educated anywhere in the world. [applause] >> thank you, students! [applause] the bottom line is, education must be a greater priority in our state because if our schools are not the best, then we will fail our young people, and those young iowans who follow them. last week lieutenant governor kim reynolds and i unveiled our updated education reform blueprint. it is a product of nearly a year of hard work. that work included an education

summit that brought together the best minds from iowa, the nation and the world. then it was followed by a release of the initial blueprint to start a statewide conversation on how to give our kids the best education. at that point we hit the road to hold an unprecedented number of education town halls to engage students, parents, teachers, job seekers and other iowans in a true give-and-take dialogue about the future of iowa's education system. with the final step being revising the blueprint into the actual reforms that are before you now. here are some of the steps we need to take together to turn iowa's good schools into world class schools. one, we need a great teacher in every class room and a great principal in every building. and that starts by being more selective in who becomes an educator. a b college grade point average for admission to iowa's teacher

preparation programs is not asking too much. two, all perspective teachers seeking a state license should demonstrate content and teaching mastery to assure they are ready for the crucial work of teaching our children. three, school administration manager programs should be changed to provide more time for principals to be instructional leaders. other staff can take on some of the management tasks to free principals to observe and coach teachers in their classrooms. four, iowa department of education will continue to improve the iowa corps, our state standards for math, science, english and social studies. but well-rounded, healthy students need more than just these core areas. the department will work with educators to develop new standards for music and other fine arts, character education, physical education,

entrepreneurship education, applied arts and foreign languages. five, new kindergarten assessments will assure that students start kindergarten ready to learn and leave prepared to flourish in first grade. six, end-of-course tests in core summits will demonstrate that high school students are ready to graduate. these will be resigned -- designed with teachers and will emphasize not just content, but being able to apply it. seven, all juniors should take a college entrance exam, and the state will cover the cost. in addition, we should have the option -- they should have the option of taking a work skills readiness test. this will tell us whether iowa students are college and career ready for life after high school. eight, let's assure that children can read by the end of third grade, otherwise they will

fall further and further behind. an intensive focus on literacy means working closely with families and providing more support for reading and writing in schools starting in preschool, continuing through kindergarten, first, second, and third grade. because reading is so essential for later success at school, it's just unfair to promote an illiterate child. [applause] nine, iowa has some highly innovative schools, and we should encourage more schools to be innovative. youngsters need more opportunities to engage in real-life experiences including internships in science, technology, engineering and mathematics. doing well in these subjects is the gateway to fast-growing fields with some of the best

paying jobs. whether students are headed for career training or a two or four-year college. to encourage such efforts, iowa should establish an innovation acceleration fund. schools and partners will identify education problems and innovative solutions. competitive grants will fund the best ideas which can then be scaled up statewide. ten, online learning that complements learning in the traditional class room should be promoted. so should competency-based learning that personalizes education for each child and begins the process of moving away from the time-based, industrial model for education. let's do all of this and more for our children with a bipartisan consensus, with a bipartisan consensus that will stand the test of time. [applause]

don't iowa students deserve a world class education? we have a decade of hard work ahead of us. so let's get to work, because this

>> imagine schools among the best in the world providing our children and grandchildren with endless opportunities to pursue their dreams. these are not empty aspirations. rather, they are part of a grand vision for restoring a healthy iowa. as the lieutenant governor and i traveled to all 99 counties last year, one thing was absolutely

clear to us: iowa must strive to be the best. whether in other -- where in other parts of the nation uncertainty has become the new reality, it is imperative that we make iowa the center for stability and innovation. as we work -- [applause] ask and let us never forget as we work together for these goals, iowans are going to hold us accountable. we have an obligation to exceed their expectations, to begin building on our foundation for growth. i believe our aspirations for a better tomorrow can and will ignite our capacity to innovate. so let's be innovate innovative today. let's provide the permanent tools that our small businesses and hard working taxpayers so

critically need. let's commit to new jobs and career opportunities for all iowans. let's give our children the best education in the world. let us, republicans and democrats, rural and urban, all iowans become a beacon of hope for the rest of the nation and show them how a motivated people working together with the best interests of our children in our hearts and a set of new tools in our hands can solve our common problems and bring iowa unprecedented economic expansion, unparalleled economic and educational opportunities. that is our challenge. that is our mission. that is our obligation. [applause] thank you, god bless you. god bless the great state of iowa. [applause]

[applause] >> just ahead, another state of the state address by illinois democratic governor pat quinn. after that, aol cofounder steve case and others speak at a live forum examining ways to expand economic growth and job creation. then the aspen institute hosts a live forum on israel's future in the middle east and the threat posed by iran. and later the senate returns at 2 p.m. eastern for an hour of general speeches followed by debate on authorizing federal

aviation administration programs through fiscal year 2015. this past week house and senate lawmakers continued negotiations to extend the payroll tax cut for workers. they'll continue their work on tuesday with a fourth public meeting. the cuts expire at the end of the month, and all sides agree it should be extended. the talks are focused on how to pay for it. >> i don't hear a fundamental disagreement in the philosophy that if people get a ged that enhances their lives and enhances the ability for them to get a job down the road. i don't hear a disagreement with that. i hear an excuse as to why not to do it, but rather the fundamental philosophy of trying to rearm people with an education so that when they go into the work force, they have an additional tool. >> to link a social insurance program designed and for 70-plus years functioning to provide financial support when you lose

your job to a requirement that you have to be in this training, i think, first of all, won't work for some of the practical considerations, but second, i don't think it contradicts the notion that you're suggesting and i agree with, that the more education you have today, the better off you'll be in this economy. ..

[inaudible conversations] >> ladies and gentlemen, please take your seats. please be seated. mr. governor. >> thank you. {>>} president cullerton, speaker madigan, leaders radogno and cross, attorney general madigan, secretary white, comptroller topinka, treasurer rutherford, members of the general assembly, our distinguished guests and fellow citizens of illinois, i'm here today to report to you on the state of our state. but before i begin, i know i speak for all of illinois in wishing our senator mark kirk a speedy recovery.

[applause] we're all pulling for you, mark. and i know i speak for all other one away and all of america in thanking our service members in every branch of service who have volunteered to protect our democracy. we're here today because of you. we are especially proud of the servicemembers in the illinois national guard. in the early morning last december 18, a convoy of the illinois national guard's 1644th transportation company led by their commander captain michael barton, crossed the desert of southern iraq into kuwait. their unit had made 73 dangerous convoy trips between kuwait and iraq.

they drove nearly 4 million miles. their convoy was one of the very last to leave iraq. the war was over. and today, captain barton's wife kelli, and their daughter myleigh are with us. on behalf of a grateful nation and a grateful state, thank you kelli, thank you myleigh, thank you captain barton and thank you servicemembers of the illinois national guard. you are our heroes. [applause]

i'm very proud to be the commander in chief of the illinois national guard and i'm proud to be governor o our state, illinois. it was almost exactly three years ago to this day that i took the oath of office at this podium during one of the darkest moments in illinois history. one former governor was in jail. another was under arrest, impeached and removed from office. both my predecessors had disgraced themselves and brought profound embarrassment to the people of our state. at the same time, our nation was in the throes of in massive economic crisis, caused by disgraceful conduct increased on wall street. our large and small businesses in illinois were reeling. our automakers were in dire straits. across illinois, families were losing their jobs, losing their

homes, watching their savings disappear. we were off course and adrift, lacking leadership, and weighed down by a culture of corruption. on the day i became governor three years ago, i promised to restore integrity to illinois government. and we have. through tough new ethics laws, campaign finance reform, and establishing the ability to recall a corrupt governor, we have made illinois a more ethical state. but we didn't stop there. by legalizing civil unions, by raising the standard of care in nursing homes, by abolishing the death penalty, by protecting the funerals where military men and women who gave their last full measure of devotion to our democracy, we have made illinois a better state. all the while, we have helped everyday people by building and growing illinois.

we have invested in our state, making it a better place to do business. and we have invested in the people of illinois, helping our working families and improving education. the results are in from major export growth and the largest public works construction program in state history to solid gains in education. we're back on course, illinois is moving forward. [applause] we all know that the economic storm is far from over. while we have downsized illinois government more than ever before, we continue to face very difficult decisions to restore financial stability to our state. suffice it to say, we must have medicaid reform and public pension reform in the coming

year. [applause] we must have. we took the first step on pension reform in 2010 when we enacted landmark changes that will save taxpayers billions of dollars. but there's much more to do. fixing the pension problem will not be easy, but we have no choice. we must do it together in a way that is meaningful, constitutional, and fair to the employees who have faithfully contributed to the system. that's why i've assembled a pension working group to propose a solution that can be enacted this year. i will have more to say about these serious matters during my budget address three weeks from today. but we must always remember that strong economic growth is essential to resolving our

financial challenges. cuts alone will not get us to a better budget. we must build and grow our illinois economy like never before to keep illinois moving forward. [applause] in the past three years, we've worked together to strengthen our economy and make illinois a better place to do business. we've reformed our workers' compensation system. the reforms we put in place will protect the safety of our workers and save illinois businesses at least a half billion dollars every year. we've also reformed our unemployment insurance system. we've preserved benefits for unemployed workers while saving businesses $400 million dollars. we've cut red tape for employers that need environmental permits. and we've worked with our union partners to overhaul workplace rules at mccormick place to

lower the cost of conventions. already, new conventions are picking illinois and putting our people to work. each of these landmark reforms shows the power of bringing everyone to the table to repair broken systems. that's moving forward. but we've just begun. [applause] we've not just made illinois a better place to do business, we've also invested in our public works, our highways, our bridges, our railroads and our schools, to make illinois stronger. we've created good-paying jobs while laying the foundation for future growth. thanks to our illinois jobs now! plan, illinois has the largest capital construction program in our history. over the past three years, we have been building, repairing, and modernizing. every day, you see the fruits of

our labor, all across illinois. we have improved 5,948 miles of highways and 842 bridges. in southern illinois, we're building new lanes on route 13. in rockford, we're building a new morgan street bridge. and in east peoria, we're building technology boulevard. we've also built and renovated more than 400 schools from western illinois university's new riverfront campus in moline to the new transportation education center at siu in carbondale and from the repurposed cole hall at northern illinois university in dekalb to the new electrical and computer engineering building at the university of illinois in urbana-champaign. we've invested in more than 40 public transportation projects. we're working with chicago mayor rahm emanuel to rebuild the cta's red line.

we're working with rockford mayor larry morrissey to build new passenger rail from chicago to rockford. we're working with elected officials in the south suburbs and will county to build a new airport. [applause] and we're building high-speed rail from chicago to st. louis and a new bridge across the mississippi river. [applause] all these projects and many more have created thousands of jobs. i want to say thank you to the men and women of illinois who are doing this hard work. here in illinois, unlike other states in the midwest, we believe in the right of working people to organize. [applause]

the hard work is why illinois is moving forward. speaking of hard work, i woul like to salute our secretary of state jesse white. for the first time in history, we kept fatalities on illinois highways below 1,000 for three consecutive years. thank you, secretary white. [applause] there's a passage in scripture, if you save one life, you save a whole world. and i want to thank secretary white for his commitment to highway safety and to saving lives. we all know that automobiles are essential to the success of the

illinois economy. our automakers and their suppliers are thriving today because state government has rose to the occasion and help meet their needs. three years ago with the ford plant on the southside of chicago had only one shift. in 2010, ford added a second shift and now they have started to hire for a third shift. thank you, ford. [applause] tomorrow i'm traveling to the chrysler plant in belvidere to announce the creation of hundreds of new jobs to manufacture the new, 21st century dodge dart. thank you, chrysler. [applause] the reason that ford and chrysler are creating new job

right here is because of our skilled workforce. illinois is not only a land of skilled workers. it's also a land of creative entrepreneurs. people like karrie gibson and her company, vintage tech recyclers in romeoville. our investment helped karrie grow her recycling technology business from 1 person to 77 employees. thank you, karrie. [applause] illinois is also a land of technology. we're in the process of laying 4,100 miles of new broadband fiber optic cable to light up 5,000 of our schools, libraries, businesses and hospitals with world-class information networks. we started illinois' first venture fund to encourage

investors to jump int des cutting edge technologies. we've renewed the research and development tax credit, which helps businesses bring new ideas to market. and our innovation council launched an open data initiative which has made more than 5,200 illinois data sets available online. we're going to lead the nation in putting more public data online, in one place, from communities and universities all across our state. already, young innovators like touré mcclusky and elizabeth park have designed smart phone apps using our data to help everyday people. and both of them are here today. i want to thank you, touré and thank you, elizabeth. please stand up. [applause]

we're going to continue to think big in illinois. today, i'm announcing a $2.3 million dollar investment in 1871, a new technology center at the merchandise mart in chicago to foster and launch digital start-ups. today, i'm also announcing a $6 million dollar statewide competition to build ultra-high speed broadband in neighborhood all across illinois. through this challenge, we want our neighborhoods to become gigabit communities with internet connections more than 100 times faster than today. communities that will foster the job engines of the future. illinois is already a leader in green technology. we lead the nation in operating wind turbines with 404 and

we are still growing. we believe in wind. [applause] we're also working with argonne national laboratory, the university of illinois, the university of chicago and northwestern university, to develop the next generation of energy efficient batteries. even as we've fostered innovation and the industries of the future, we've also increased export opportunities for illinois businesses to move their goods to new global markets. the illinois economy is the 18th largest in the world, and our state has tremendous potential to grow a whole lot more. we have aggressively pursued export opportunities, from our mighty agriculture to our mighty manufacturing. a quarter of our soybean crop is sold to just one country, china.

illinois farmers are feeding china's new middle class. thank you, agriculture, and thank you illinois farmers. [applause] our manufacturers like john deere in the quad cities and caterpillar in peoria had outstanding years. caterpillar's increase in sales and revenue last year was record-breaking, the largest percentage increase in the last 64 years. and a lot of it was driven by foreign demand for caterpillar products made by illinois workers. we ought to thank caterpillar and thank those workers. thank you. [applause] more exports to more foreign markets means more jobs for more illinois workers.

our exports have jumped 30% this year, almost double the national average. and today, to strengthen that growth, we are announcing an export advisory council made up of private sector leaders and chaired by navistar ceo dan ustian. this council will help us reach our goal of doubling our exports by 2014. navistar has recently added more than 500 new jobs, and it employed more than 2,000 union construction workers to renovate its new corporate headquarters in lisle, illinois. since 2010, employers like navistar have added almost 100,000 jobs to our economy. illinois businesses have created almost 20,000 manufacturing jobs during this time. us news & world report placed illinois in the top 5 business

friendly states that are gaining business. that's good. [applause] careerbuilder ranked illinois as one of the top ten states to find a job. and last year money magazine rated illinois as the top state for making a living. now that is moving forward. that's good. we want to keep that going. [applause] and definitely, in this age of corporations and big money, we can't overlook the millions of illinois consumers who need advocates to look out for them. i want to thank attorney general lisa madigan for joining me in our never-ending battle to protect illinois consumers. thank you, lisa. [applause]

i think we all believe in fighting for the moms and dads and children of illinois. that's why for the first time in a decade, we significantly increased tax relief for working families. thank you barbara flynn currie, representative john bradley, representative david harris and senator toi hutchinson. you help get the job done with your colleagues. [applause] by doubling the valley of the illinois income tax credit and improving the personal exemption, we are providing targeted tax relief to a million working families and their children. people like rhonda jones. rhonda is a single mom who is raising five children on the south side of chicago. she works as a public high school counselor for a modest salary. she knows what it's like to live from paycheck to paycheck.

year after year, the federal and state earned income tax credit has been her saving grace. she uses that extra money to help pay bills and support her kids through school. three of her children are now in college, and two more are on the way. thank you, rhonda. thank you for being a great person. [applause] from the moment i took office, my goal has been to advance education for everyone. so we passed landmark education laws that are a model for th and higher nation. laws that improve school report cards so that parents have more information about the schools that educate their kids. laws that set clear benchmarks for teacher evaluation and put performance above tenure. and laws that lay the groundwork for a longer school day and a

longer school year. our education reforms put the children of illinois first. that's moving forward. and i want to thank senator kimmel live third and representative linda chapa la via, and the many others who helped lead this effort. [applause] we also took a big step forward by passing the illinois dream act to help high school graduates from immigrant families. in the years to come, more kids will go to college. more kids will chase their dreams. more kids will grow up to be illinois residents who work hard and contribute to society because of the dream act. i think it's very important that we understand that we all have a stake in the future of illinois. indeed, we are custodians of that future. we owe it to the next generation

to continue our progress of the past three years. to create jobs and grow our economy, we must continue to invest in illinois and help everyday people. with this in mind, i am proposing the illinois jobs agenda for 2012 so we can build and grow our economy today and tomorrow. the illinois jobs agenda includes three targeted tax cuts that will help build and grow our economy by helping our employers, and helping our working families, and helping our veterans. first, i propose that we permanently abolish the natural gas utility tax in illinois. this tax is an unfair, regressive tax that is not based on the ability to pay. regardless of income or whether or not you're making a profit, you pay this tax.

by abolishing it altogether, we can provide targeted tax relief to both consumers and businesses. the elimination of this tax will save money for households and cut costs for employers across illinois. illinois will be the only state in the midwest without a natural gas utility tax on manufacturers, retailers and everyday families. in addition, we need to establish a child tax credit in illinois for parents raising children. there's no more important mission in life than raising a child. investing in our families is good for illinois. the illinois child tax credit will provide $100 of direct tax relief every year to the typical family of four. this targeted tax relief will stimulate consumer demand, which is 70% of our economy. and it will create jobs for our

local merchants. finally, we must adopt a tax credit that helps our veterans find employment. unemployment for young returning veterans in our country is 30%. that's shameful. our military men and women are heroes who have served our country and they deserve our everlasting gratitude. veterans are committed, disciplined, and experienced. they know leadership, and how to accomplish a mission. we need these heroes in our workplaces. so today i propose a hiring veterans tax credit. we will provide a significant tax credit for every unemployed veteran of iraq and afghanistan that a company hires. this tax credit will help businesses create jobs. and it will give those jobs to the veterans who have sacrificed so much in serving our state and

serving our country. [applause] the illinois jobs agenda fo will also move our state award by investing in education. the best economic to a state can have is a strong, innovative education system. jobs follow brainpower. so i want to thank lieutenant governor sheila simon for doing an outstanding job on her community colleges report. she visited all of illinois 48 community colleges. she has proposed many, many good reforms that need to be implemented this year. sheila and i have a mission. by 2025, we want at least 60% of adults in our state to have a college degree, an associate degree or a career certificate.

right now, we're at 43%, better than the national average, but it's not good enough. if we want 60% of illinois adults to have a meaningful career certificate or degree by 2025, we must invest in our students from birth to higher education. that starts with investing more dollars in early childhood education. [applause] learning begins at birth and those first years of a child's life are the most important. our youngest and most vulnerable citizens need our strongest support. research has shown that withou and early childhood learning foundation, children fall behind in school. illinois, we can't leave our

youngest behind. that's why i'm calling for a major investment in early childhood education this year. we've got to do it. [applause] last week, our president, president obama, called for states to raise the minimum attendance age of students in schools to 18. president obama, we hear you in illinois. we know how important it is to do everything possible to keep our kids in school to earn that diploma. and that's why we must answer the president's call. we must raise the minimum school attendance age to 18 and we must work together this session to do it. we can do it. [applause] now, at a time when student loan debt is more than credit card debt, too many deserving

students don't have access to higher education. while nearly 150,000 illinois students received state map scholarships last year to attend college, just as many qualified applicants were denied because of lack of funding. so today i ask the members of the general assembly to invest in our students. i urge you to act in the coming year to make a significant investment in more state map scholarships to help our bright young students attend college. [applause] we cannot leave our high school graduates unprepared to compete for the jobs of the future. and our students won't be prepared for college and 21st century jobs if we don't educate them in 21st century schools.

so i also call today for a major investment in our classrooms. this investment will create jobs now as we upgrade classrooms with modern labs, smart technology, digital books, high-speed internet access, and 21st century efficiency. these investments in our students will keep illinois moving forward. [applause] the illinois jobs agenda fo this year includes a commitment to affordable housing, which is a vital to our economic recovery. while we've helped thousands of families stay in their homes and find affordable housing, we must do more. so today, we're launching the illinois foreclosure prevention network to connect struggling homeowners with every resource available, from counseling to legal assistance to mortgage relief.

in the coming week, i'll join with cook county board president toni preckwinkle to announce a major housing initiative that will help return vacant properties to good use. that will move us forward. finally, we have to move forward on clean water. clean water is the lifeblood of our people and our communities. illinois is blessed with abundant water from lake michigan, to the illinois river, to the mighty mississippi. but many illinois residents are living with aging water mains that are nearly 100 years old. and scores of wastewater treatment facilities are in dire need of repair. the illinois jobs agenda for 2012 will put thousands of people to work replacing broken water mains, building treatment plants, upgrading sewers, and cleaning up environmental threats. we're going to be working with

mayors from chicago and the starburst to every part of downstate. we're going to invest in our clean water initiative. we believe in clean water. it's very important that we understand that we work together for something as important as clean water. members of the general assembly, the illinois jobs agenda is a comprehensive jobs initiative for the people of our state. to create jobs and grow the economy, we must enact targeted tax relief for illinois employers, families and veterans. we must invest in college scholarships, early childhood education, and 21st century schools. we must invest in affordable housing for our residents and clean water for our communities. i look forward to working with you to find the proper funding to meet these urgent needs. by investing in illinois and investing in our people, we are

building and growing our economy. we are moving illinois forward. now, i know that no reform is easy. reforming our medicaid and our public pension systems will require political courage. by the same token, no major investment is easy. moving forward on the vision that i have laid out today will require true partnership. we have real challenges to tackle. like all of you, i recognize the severity of our fiscal situation. but cuts alone will not resolve this situation. we must build and grow our economy. now is not the time to pull back, to abandon our children, to abandon our parents, and to abandon the unemployed among us. their well-being is our common cause. [applause]

and our commitment to them requires that we join as partners to invest in our stat and invest in our people. i am proud of what we accomplished together these last three years. abraham lincoln once said, i like to see a man proud of the place in which he lives. i like to see a man live so that his place will be proud of him. after three years of hard work and tough decisions, illinois is back on course. illinois is moving forward. and illinois is a place that we can be proud to claim as our own. i look forward to working with you in the coming year to make the people of illinois even prouder of our state. together, we can make the will of the people the law of the land. thank you very much.

[applause] [applause] [inaudible conversations] >> a nonprofit group founded by house majority leader eric cantor and majority whip kevin

mccarthy our part of a discussion this morning on job growth and the economy. the panel includes executives from venture capital from such as aol cofounder steve case who is also a member of the president's jobs and council. we are expecting two panels during this for. proposal expected to get underway in a couple moment. the second one will start at about 10:45 a.m. eastern. that's and we expect to hear from congressman cantor and mccarthy. [inaudible conversations]

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

>> [inaudible conversations] >> we are live this morning for discussion on job growth and the economy. among the speakers today, house majority leader eric cantor and majority whip kevin mccarthy. they will be in panel two of this discussion. just to let you know the house will be in session this afternoon starting at noon eastern. legislative business will get underway at about 2:00. mayors are expected to work on several suspension bills and initiative was a commission to oversee the sale of surplus government real estate. both are expected at 6:30 p.m. butyric you can see the house live on c-span again starting at noon each of the senate will gavel and today at 2:00 eastern. at three they will start work on debating the conference report

to h.r. 658, the for your authorization of the faa, federal aviation administration program, through fiscal year 2015. at 5:30 p.m. they will take a final passage vote on the report. you can see the senate life of course always here on c-span2. [inaudible conversations] >> good morning. thank you for coming out. i appreciate it.

early start for many of you. i'm john murray, president of the yg network. we are a center-right policy and issue advocacy organization dedicated to issues like economic growth, free markets and job creation. we are an outgrowth of the young guns movement that began back in 2007, when fred marx coined the name in a piece for "the weekly standard" about eric cantor, kevin mccarthy and paul ryan. i want to welcome you all here this morning. i want to thank my team for putting on this great bit. and also want to thank our friends from the job creators alliance come independence today, as was the panel. we are here to focus on growth. growth means a stronger economy. growth means more jobs, and

growth means a better future for all of us. today, you're going to hear from some americans, top growth experts, business leaders, policymakers. our goal is to bring to the forefront ideas that can be part of a debate in washington about the best path forward that will yield real results. thanks again for coming, and i want to take a moment to introduce our moderator, david thompson. is a best selling author, advisor in speaker who wrote a book "blueprint to a billion," which focused on how america's most successful growth companies made it to the top, companies like microsoft, google, ebay, staples, tractor supply, starbucks, just to name a few. he's been described in "investor's business daily" as a google uncovered patterns behind billion dollar firms.

he has been studying growth and is a leading expert in this space for more than 20 years, working a company such as nortel networks and hewlett-packard, along with mckinsey and company. again, i want to thank you for coming today. we are going to do a number of these events through the course of the year. this is just the first, but we think we will be very, very important voice in washington as we engage in debates throughout 2012, and beyond. so, dave. >> and. good morning, everybody. the question i had during the 2000 recession is what is truly the success pattern of a growth company. the rising tides and in recession we know what happened. i wanted to be a better ceo of a growth company and i started to do research on how to beat the odds of failure. because the odds of failure are greater than the odds of success. little did i think i would end up writing a book and meetings

and very audible high-growth company ceos along the way. so how do you come from mckinsey and company? i've found that i wanted to find a quantitative research pattern, and i want to find something that others to follow, including myself. little did i expect to be here today. and i'd like to introduce my panel. and what's in common with this panel is they are all high-growth company ceos of different sizes in different industries. on my right is yarko j.j. -- yarko j.j. sos, the president of check-6, a consultant primary running a firm at the energy industry. what's unique about j.j. you hear is he is from the international guard. we are applying top gun flight techniques to safety of the energy industry. along the way, i had to go find different companies in different industries and a call upon -- now with high land consumer finance as managing partner and his the founder of staples.

i really love talking to tom because he built the first staples, and nobody came. and 20 years later, it's a $20 billion country. does that sound like a classic onto the real problem? and then on my far left, retired chairman of the national i met him and i wondered how could a company grow a billion dollar business to compete with wal-mart as the number one retailer in rural america. is it possible for a small company to take on the big live and grow its business? was in common with each of these three ceos is they are role models for america's best growth companies, and they use common growth fundamentals. so, annex 45 minutes i'm going to try to demonstrate that to you, that we can create jobs using common growth fundamental and common management practice. so to structure our time for the next one hour i'm going to show

you a couple of charts on growth companies and then each of the ceos will provide, and then will be a question and answer period. on your right, i've written three books and a research report trying to quantify america's growth companies. and one lesson i've learned is that we all of you grow through the lens of our own experiences but if you're from wall street you see growth about market cap it here today. and if you're in finance and the cfo is always about cash flow. what i found is that sales often called revenue ourselves, customer demand is the hardest line item for a management team to achieve. so i started by looking at the pattern of sales growth companies from an million to a billion. and there are small businesses they are small, startups, continued to grow. there's a not average many of the. so there are these company

revenue growth companies, one, two, four, eight, 16, 32. and when they break out of being a small business, they go all the way to a billion. and there's the need of the curve. in canada they call it the hockey stick, which turns out to be on italy 50 million in sales. and i'm here to tell you that the odds, if you have high sales growth rates, after 50 million you say the odds recovery going to a billion is over 80%. it is possible to grow a billion dollar business as soon as 50-200 million in sales. it is a statistical fact. and i hope that these ceos will demonstrate that today. whether you look back in history at, now facebook are staples or tractor supply, and soon i hope check-6, you'll find they all had this common pattern. if you normalize american growth

company since 1980, at 50 million in revenue they all have exponential growth. you find the time to a billion is four, six, and 12 years. every country that has gone public since then has fallen in one of these time frames to a billion. this pattern was true when i founded five years ago, it's been true for the past five years, it is true today, with a company like facebook that is on the inside trajectory to 50 million to a billion but it will be true the next decade. the implication is whether you're a startup, a small business, or a midmarket business, how can you achieve compounded are mathematically exponential sales growth. which means you have to have an innovative product, a lot of customers. that is the definition of truly a growth company. the cause of sales point am going to show you is job

creation. sales is more correlated with job creation than any other growth or business fundamental. it turns out that of 11,000 public companies since 1980, in america, and i studied some coverage because you can find a number, this is true for private companies, of all sizes, only 4% made to a billion in revenues like starbucks and staples and tractor supply. and they account for two-thirds of the jobs created. two-thirds of the market value, 70% of the sales, and oh, by the way, 72% by the taxes paid by all new public compass. i call that the law of disproportionate income. a $1 billion revenue business is equal to 1000 small businesses in terms of job creating. so it's about success rate because 60% of these companies are no longer in existence.

our challenge is not only creating more small businesses and startups, by getting them to grow to a billion and beyond generating revenue. they are the role model, and we have a success pattern to follow. if we look at the sales growth companies from small businesses all the way down at 39 in revenue, all the way up to apple, so i'm not here to say size of business, i'm here to say they all grow, are growing their sales across all sizes. there's a very cyclical pattern to revenue growth or sales growth, and it's eight years p2p. it's been that way for the past 60 years. i found it works with standard and forced to come up with analysis. what's also been interesting is through the recession, we've had a rising number of sales growth companies except for this point, for the first time a woman all the way back in 1984 when bill gates started microsoft. that's why we have been struggling with this recession.

we should've had more growth companies through this recession, and its impact for job creation. the good news is we have now bounced back and win out off at the 2003 level recession and that's why we have this conversation going on about we have growth but we don't have job recovery. is effectively coming out as a rabbinate growth recession. were now starting that recovery very. and oh, by the way, for you in washington, a footnote, every presidential election tends -- through every recovery come if you are on wall street they would say the thought leaders are different in every recovery, and the need to tell you that a business on the middle and growth fundamental, we are changing in this recovery. this recovery is different than the last one. the last one in 2003 was primarily led by consumer spending and real estate which was consumption driven. this recovery is being led by more economic driven industries like health care, software

services, energy, pharma and biotech and capital goods. why? because we spent a lot of money in health care. there's room for innovation and growth. it's not as dependent on consumer spending, which to me is really good news. many of these companies you may know, and many of them you may not. and the hidden diamond for us are the companies you don't know. they are the next growth leaders for america coming into the next growth cycle. it's really important, and i can't stress enough. now is the time to create and fund and grow a growth company to create jobs. not for years from now. a sense of opportunity and a sense of urgency that this is the time. that being said, we have challenges. we're the number one nation on earth for the number of sales growth companies. with 50% share in 2003. today, we have 14%. we are not growing, sales growth

companies of all sizes, startup, small business, midmarket and large businesses, at the rate of the rest of the world is. we are still number one, but north america, asia is not generating 30% of sales growth companies and north america's generating 18. to get back to becoming the growth leader, we need to spur the growth. that being said, i want to share this with you, just looking at the public data. so this employment comes from annual reports. the number of jobs created by sales growth companies has been positive every single year in the past decade, independent of up or down cycles. in 2008, sales growth companies created 400,000 jobs. positive net employment in every second year. i don't think it's a classic definition that we can say that instead of growth creating jobs and every single year.

our challenge is to create more jobs, and going into the '90s, the 97 buried when we hit 1000, and that curative effects of adding 11,000 jobs to these countries, or 11 million. in the '03-'06, it was six me. we are on a path to do more. so here's my challenge to you for our discussion today. the number of jobs created is directly proportional to the number of sales growth companies. we need to great either 1000 total, which is about one-eighth of the public we traded stocks go up or 800 or six or. and we want to say 2 million or 119? the implication is growth, what i call systematic. it's like we would use the term growth engine. what does that mean? we have to put a spark in every cylinder. we have to think about firing on all cylinders for america's rose engine to restart and grow. the faster we have a gas on that growth engine, the more companies we will create, the

more jobs we will create. there is no -- i'm here to show that when we talk about growth, we see it as a system, as a growth engine. and in total, it's almost a growth economy, but back to growth fundamental. so it's something i'm starting to call growth economics and i started think about writing a book because it is not about gdp. it's about growth, fundamental. these companies are the leaders and the rising time to lift off of its effect when these companies grow, their suppliers grow. and their customers grow. it's a whole supply chain. so on that note, i would like to thank you very much for my introductory comments, and j.j., which you'd like to open up? >> sure. you tell us a bit about your company and your perspective on growth been okay. wonderful. if i could get -- think the good morning, everybody. again, my name is yarko j.j. sos. woody guthrie called check-6.

we are pretty unique in the check-6. we teach and apply the best practices, tools and techniques from military aviation, commercial aviation to space operation. we bring them to our clients which are primarily focused in the oil and gas business, in particular drilling. the question always comes down, you know, why our fighter pilots and navy seals go into drilling rigs to train the cruise? and the answer is, the scope and complexity of the operation is remarkably similar. the hazards that are faced every day our similar. and in terms of bringing value to the client, you know, some of the value we bring comes in treating a culture of debriefing and constantly improving operation, constantly sharing lessons learned, bringing standards of protocol, i.e. the checklist culture which there's a lot of talk about that, and then finally training. a time that flying a

multi-million-dollar jet, the training pieces match but yet these drilling rigs or multi-million-dollar operations and the training behind how to get somebody to be competent and confident of success behind it has an area to improve as well. so we have been in business about five years, start out with three people around the card table, we got a phone call saying hey, how do we get this top gun stuff out to the drilling rig? and now we employed close to 100 employees and contractors. we were number 100 on the 500 list for 2011, and you know, it's been a great ride on the growth cycle bringing a value to our clients, but there's always a way we can be better and i'm quite have the opportunity to share, from my perspective, how a small company has been affected by what happened here in washington. so this is really what we bring to our client. people who have had an amazing experience with training on,

funded by the u.s. taxpayers. we have, you know, and a lot of them probably 80% of our coaches are ex-navy fighter pilots, top gun instructors. we also have quite a few army and special forces, u.s. navy seals. unit, u.s. air force pilots as well. and the neat part is, you know, they grew up in a system, and the system was around in ensuring rapid improvement and high stress operations. and that training, that culture is what we can bring, is how do you ensure that when the chips are down, when you're in the heat of battle, you have a standard way to think about things to approach operations, and decide hey, do we continue this overdue relief to fight. and that's again part of what we bring, and there's a tremendous value in that because this experience is priceless, and

putting somebody in this caliber out in a high reliability at high risk operation is a really neat thing. here's what some of our class, you can see it's all the major or many of the major oil and gas operators. and as the blueprint says, you need a marquee client. our first marquee client was diamond offshore, and they decided they wanted to change their company culture, and for those who don't know diamond offshore is a drilling contractor, has about 44 rigs, drill all over the world, and they felt that they could do better, just by bringing on this new culture. so we worked with him for about three years to come that we moved on to a lot of the super majors, and that's again, blueprint to a billion, clients with the need to have resources and they're willing to apply them in order to -- but moving on to the theme of the day, what are our growth constraints? ..

>> opened up, you know, opened up florida, virginia, new jersey to drilling again. we were all high-fiving in our office. and then, of course, macondo happened and, you know, not only did the, not only was this shutdown bad, but, for example, diamond offshore, they moved all their rigs overseas. so not only did our clients not work, they left. um, and that caused us a 40%

drop in business. the other place where we feel we could take this and get some help here in is on to the faa model of how industry and government work together. we have many of our consultants have experience in the airlines, american airline, united airlines, southwest, delta, and the faa model of how the government and the industry could work together on training, on competency, on standards is a really good opportunity, we feel, going forward. a specific example is in aviation there's a program called psep which is, essentially, a self-reporting program on errors that nobody saw. and then the airlines share this information; the faa shares this information, they debrief around it. what are things that we are seeing happening that nobody be catches, and how are we going to prevent these errors in the future. rolling that type of program out is an opportunity, we feel, that would allow not only safer operations, but better oversight

for the government and improve the general execution of an industry that, you know, is, quite frankly, very safe until, you know, something really, until there's a high consequence of an error in operations. as i mentioned, um, you know, the other piece we bring is training. we actually start up a software company, taking tools and techniques on how the pilots for the new joint strike fighter, the f-35, are going to be trained in a distributed manner that is easy to use, and we're building this type of training for oil and gas clients so they don't have to fly people in from all over the world to a training center to train. we can actually do it over the internet, virtual reduction, virtual remediation. and that, a software business for us is a capital limitation. because we've been self-funding it, and the easier access we would have to capital would be a tremendous opportunity to get some good training products out the door. so that's kind of our story, short and sweet. it's been an exciting ride.

we actually handed out david's book as a bible to everybody in our management team a few years back, and it works. i mean, it works. and, you know, we can, we're very happy to use the resources that have been paid for by the taxpayers in america to produce these tremendously capable and competent leaders. there's a demand for that experience out there in the business world. it's just a question of creating, of getting that demand out there to the right clients at the right time. >> thank you. >> thanks. >> tom, my favorite story, staples, is a classic entrepreneurial problem, and i know you have some prepared comments. but you built the first staples, you had all the successful ingredients, and nobody came. >> that was a problem. but over time what happened is that the few people who did come noticed that the copy paper they used to pay $75 for was $25, and the pens they were paying $3.68

for were .99 cents. so they tell their friends, and next thing you know they're telling their friends, this is a pretty good deal and, of course, now it's a $25 billion or so company. since having done that and getting involved with petsmart in its early days and car max in leader cantor's district which have all become multibillion dollar companies, i know professionally -- i now professionally invest in about $50 million rev lieus, companies -- revenues, companies like lululemon. pink berry run by a former f-16 instructor. something about traveling the speed of light allows you to manage a fast-growing business more effectively. and that business does a great job, pink berry, hyper growth throughout north or america and now throughout much of the world. we're here in washington, i want

to reflect back to what has changed since the staples and the petsmarts came into this world, and how much harder it is today not because of anything entrepreneurs have done or haven't done, but because of what people here in washington have done to support growth. and as part of the job creators alliance, you can read about the job creators alliance.org, you can see what's going on there. it is much harder today. let me just give you a number of examples. i remember when we started out staples, we had some venture capital, and this goth, by the way -- this government, by the way, has tried to turn it into a four-letter word as best they can, but i wouldn't have gotten off the ground had it not been for venture capital. mitt romney, and a bunch of other firms invested as a group. but not long thereafter we went to a bank, and it was a small regional bank. and i said, look, guys, i'd like to get a loan. and they said, well, you're not making any money.

i said, well, that's true. why should we give you a loan? i said, well, i've got $8 million worth of paper and legal pads that are bought at an incredibly low cost, and the worst case for your $6 million loan, you're going to have more than that value in paper clips and legal pads the next few years. and the bank gave me a loan on that basis. today they'd have bank regulators, inspectors crawling all over them, and there's no chance in the world it would meet the loan criteria of today's banks. because we in the government, though we talk about, oh, we want small business lending, when the rubber hits the road and the bank inspectors hit those banks, the companies that are great companies, and they'll tell you right up front this is not the way to do business, it's just the bank inspectors in such a way that our reserves are so high, we can't afford to do business with you anymore. stock options. we started out staples, we gave every single associate in the

company stock in the company because they all felt like owners. it was a great thing to do. well, for years congress had been effective in fighting the accountants' anal drive to expense stock options. a few years back after the world scandal, the dam broke, and now we have the expensive stock options. on top of that, every young company like yours has got to pay $25-$50,000 a year to value those options so we can expense them properly. no money changes hands, this is just bureaucracy for the sake of bureaucracy. now, on top of that, so now you don't have the ownership anymore. now you've got all these regulators that say you can only give out a certain amount of your equity to your options or else you're going to get dinged by the public institutions and get in trouble. so we're -- while in china they're making stock options very fashionable and try to

create ownership, we're going in the exact opposite direction. instead, what we're going to do is create jobs here in washington. we're going to create a $300 million bureaucracy to regulate financial abuses once we figure out what they are, and they've got jobs, they've got $109,000 person in there who's director of the new elizabeth warren financial services -- i can't think of the name. [laughter] the accountants weren't bad enough, now we have an organization run by a former congressman who has regulated the accountants. if you could read some of these reports about regulating the accountants, if some of you could stay awake long enough to read them which is a challenge, you would realize this is an absolute, total waste of taxpayers' dollars going to no end other than to further more bureaucracy here in washington. but it gets worse. we've got an nlrb who's intent on making it hard for business. so too busy posting signs in

your lunchroom to make sure every employee knows they can form a union, in case they weren't aware of that. and then we've got dodd-frank. and let me start with sarbanes-oxley which is, arguably, worse. sarbanes-oxley comes out, again, a reaction to scandal, worldcom, a bunch of misstatement of earnings. so now they come out with this mass i have bill which -- massive bill which should be called the accountant enrichment act. all my companies that want to go public are going to spend over a million dollars in one-time fees to become sarbanes-oxley compliant. and then close to a million dollars in additional fees every year to make sure things alike, that there's no duplicative passwords and all-important things like that. that's not what happened at worldcom. the pass words and be computers were not what got them in trouble. that was fraud. it's a total waste of companies'

money all done allegedly in the public interest. then comes dodd-frank. and dodd-frank, do they talk about opportunity and employment in dodd-frank? no, they talk about risk. a bunch of idiots on wall street traded mortgage-backed securities and created a mess for the american economy. as opposed to putting regulations in place for them, the lobbyists are too good, they now put a broad form across all american business talking about how we've got to prevent risk. so, for example, every board of directors now every year has to go through a thorough assessment of all the enterprise risks to the business. spend two or three minutes going over the draft of this, committees reporting back on it, and what could happen? well, the world could come to an end. what happens then? we could have a major recession. what would happen then? and you've got to write all this up and talk about it and think about it. furthermore, you then have to go

into your compensation policies and determine what risk-inducing incentives are in your compensation policies that would create, take people, take inordinate risk. well, dammit f be we want to create jobs and opportunities, we ought to be taking risks, and our boards of directors shouldn't be spending their time twiddling their thumbs. there should be a force to have them look at opportunities for growth and how to grow their enterprises. and there's nothing in dodd-frank or sarbanes-oxley that talks anything about that. i've gone on too long, but i could go on for hours more on this stuff, so thank you. >> you do, actually, have a lot in common. it's called velocity. if you think about it, for a company to grow quickly, you have to have speed, velocity which means you have to haves processes with no friction. because if you're going to double every year, you don't hire forward. you're trying to leverage the people you have in order to create the job for level of growth. and whether you're flying a jet

fighter, you're looking out six miles where you're going to fly, and when tom is talking about risk, you can look backwards at risk or forwards at risk. it's your perspective of growth and how are you managing. and you can clearly hear the different cultures coming into play, risk versus growth, velocity versus safety. and it is a tug-of-war that we find in our growth engine right now. joe? >> first of all, i want to say i agree with everything tom said. he's right on target in all these key issues that are frustrating to us in business. i'll tell you a little bit about the tractor supply story. i've been with tractor supply for nearly 30 years, most of the time as president or chairman. and it's an interesting business and an old business, and it's gone through tremendous growth since we went public in 1994. the business is focused on the needs of people that live in rural areas, and we made a huge strategic shift back in the 1990s to stop focusing on agriculture and start focusing

on hobby farmers. hobby farmers are people who live in rural areas and got a couple of acres and a pickup truck and a dog and a cat and a little bit of time on their hands. and that changed the dynamics of our business and put us on a growth path very different than our competitors. and the second big factor in the our success was focusing on creating a very, very powerful culture focused on ethics, focused on developing the right people, focused on education and the bottom line is we wound up with a very low personnel turnover rate and still that have that low rate today. so when you take those two factors of a unique and special customer and building a powerful culture, that's what put us on a growth path. we went prick in 198 -- we went public in 994, last year we finished at 4.2 billion in sales in a rural business that not many people understand. we went from 180 stores to 1 is 00 and from 2,000 employees to 16,400 employees.

the list of frustrations that you have with regulation is, i mean, tom went down the line very clearly. i was making a list last night about all these things that we grew up with a long time ago, we learned how to deal with osha and the eeoc and the nlrb and erisa, and now in the last decade or so they've loaded on top of us hipaa and ada and all the rest of these things. and, you know, we grew up absorbing those things every couple of years something new would come down the road. if you're starting a business today and had to deal with all these things, it's very difficult. and the bottom line is then you've probably got to hire a whole team of lawyers to get you through all these processes. all these various and sundry acts were undoubtedly done for good reasons, but the cumulative effect paralyzes business, and it takes you, as tom said, it takes you off track instead of paying attention to strategies and developing your business and

your people. you're worried about crossing the ts and dotting the i and following all this regulation. and i can't imagine what it would be like trying to borrow money today compared to what it was in our day. we had a hard time borrowing money when we got our company going, and today you hear stories about it, how it's nearly impossible. i retired from tractor supply about five years ago and created a leadership institute for executive education in nashville, and in that we have had hundreds of students come from all sorts of different industries. and they're pretty high-level folks. they're 35-50-year-old vice presidents typically. and to hear their frustration about the kinds of things they run into day in and day out from all sorts of businesses. we have people who are in the barge business and in manufacturing and book printing and banks and health care and so on, particularly health care. those folks are just paralyzed by what's going on. and the health care people that i talk with, they're almost like a government business instead of

private industry. so you just look at this, the cumulative effect of all this regulation tends to paralyze people in business, and retailing's probably not as nearly badly affected as so many other businesses are. >> thank you, joe. at dinner last night j.j. and i had a great discussion about tax. and, you know, there's a cause and effect. management teams are actually quite smart. they're interentrepreneurial. give them a problem, slow them down, but find a way to work around it. and we'd love for you to share how you think about taxes and the complexities because now that there's an interaction effect, now that those are moved to international markets, you're sending ex-navy seals globally. >> right. >> take it from there. >> right. so compliance for us, as was mentioned, you know, it's become a full-time job for about four people. and we, you know, have, we have a bunch of attorneys on retainer and accountants on retainer to

just try and manage compliance. but for the complexity of doing operations, you know, our growth in the u.s. is relatively simpler for us than when we, for example, a client hired us to work in to land, and now we have to come mine with polish tax laws, u.s. tax laws, you know, all these regulations. and it's great to be working, and we work for probably 15 different countries around the world, and, you know, and it's great for growth and generating revenue. but the complexity of all these operations has become very expensive for us on the tax side. and it's, it -- whether, you know, the other pieces, every attorney and accountant gives you a different opinion, and you can just pay for more and more opinions on what's going to comply with the law, and the bottom line is it's still on us as the directors and owners of the company decide, okay, we're going to do this on the tax side, or we're going to do this on the accounting side because

fundamentally, you know, we're the ones on the hook for it. and it's just been a tremendous -- instead of focusing on sales, we spend a lot of time focusing on compliance. >> that interaction effect, spending money there but then you've been looking for money to finish off some software. >> yes. >> that can help you grow your business and hire more people. >> yeah. and, again, as was mentioned, we have a great relationship with our bank. it's our best bank out, you know, it's a regional bank in oklahoma. they've been tremendously supportive, but, you know, to get to where we are now, um, you know, we've completely encumbered every asset personally and the corporation has just to have, just to have a line of credit and a small amount of loan. and now, you know, the next step for us is either going the venture way or continuing to self-fund our growth, and self-funding your growth is about the slowest way you can move forward. and so we are, we're looking for, you know, sparks from the outside that aren't going to cost us 25% of the company.

but the banks really can't help us with that because of all the compliance regulations they have. >> no. customers are looking -- >> yeah. customers are actually, you know, we have a major client that wants this simulation and training piece rapidly, so they are now, hopefully, going to step forward and provide us the capital to do it. because they want this product out in the field now because they feel it would have prevented a major accident if they had had it on site, and the drilling crews were able to do training on site vice the current requirement of every two years at a school. so they are looking to give us the resources to complete this project, but, you know, if we -- it could -- if it had been out the door six months ago, this accident probably never would have happened. >> the risk on, there's an interesting analogy. the risk on drilling for oil and the cost of failure causes friction in drilling for oil. >> right. >> it's that fear of an airplane crash, it's that fear of an accident.

and the sophistication of our management skills like flying a jet fighter helps reduce that risk through your training -- >> yes. >> -- software tools, crisis management. >> yep. yeah, it's currently the system is set up where the expectation is, the risk is managed by experience. but with the tremendous growth there's been in the energy business that brought on a lot of new people and also with the, in the early '80s when the oil -- when the price of oil collapsed and the industry didn't grow for 10 or 15 year, there's a big what they call a big gap in experience. um, so they're trying, they're bringing on, you know, literally chevron's got to train 500 new managers a year that have zero, very little experience in the industry. and so how do you bridge that gap from having an experienced-based culture to a culture that's involved around training, and that's where our expertise comes in in setting up training programs, competency programs and these products to

deliver software and simulation. um, so it's -- that culture change so curing, and they have the resources to do it, it's just a question of, you know, having the capital to bring it to our clients, and they're finally helping us out with that. >> i learned something from you when we were talking about leadership in that there are 20-year-olds on carriers moving billions of dollars of assets accident free. >> yes. >> and they're not there based on experience. >> no. but it's the whole culture of how they train. in the navy there's a checklist for everything, they debriefed everything, and, you know, a lot of other industries are moving that way, and we're excited to be part of that. >> and that's really importing one of the techniques from the military into management. >> absolutely. >> really helps reduce the risk. >> yep. absolutely. >> so it's that sophistication of risk management that allows us to free up the velocity. >> yes. >> and that's, i think, our challenge across all the industries and regulation. how sophisticated are we?

were there tools and techniques to import from different industries? the best ideas were imported from the different industries to help companies grow, and here's one example. from tom it was the shopping cart, came from the supermarket business that was tom's idea for office products. >> yeah. but i'd say that as you look around at growing and you talk about international, a crazy tax code for all your ex-pats which figures out what they owe in different countries and to keep them happy is probably extremely difficult. moving across quarters to vancouver, it's created thousands of jobs here in the united states, if you have any idea what it's like dealing with our homeland security environment, they literally have got a full-time lawyer on retainer in washington, d.c. just to deal with immigration issues. their cfo was going to new york to make a presentation to a bunch of investors.

he was held up at kennedy airport for six hours on the theory he needed a work permit to give a speech. and the lawyer intervened, they finally got him out of custody. this is cfo of the one of the fastest-growing companies in the world. that's how we're treating people at our borders. if you hire foreign people now, try to get them work permits or kids from universities as opposed to now finding venture capital in the united states and starting a company up on route 28 in boston or silicon valley or suburban maryland, they're going back to india, they're going back to whatever country they came from and starting companies there. we've got to be asking ourselves what we're doing to growth in this country, and 80% or 90% of the problem is right here in washington, d.c., in my opinion. >> so you train, teach and coach management, a lot of management teams leveraging your experience -- [inaudible] what techniques and ideas do you

see that you've applied that we could apply to get everybody on the same page for growth? >> well, i think it's -- in our business it's a matter of selecting the right people and then building their skill base to get where they need to go. a couple of issues that came up before that i was thinking about as we were talking here, when we talk about sarbanes-oxley, for example, which costs, you know, every company a million or two or three a year to comply with, why don't we push back, and why don't we try to get that kind of thing repealed that's not doing any good? all it does is cost us money, and they keep layering these things on year after year after year. we need to push back and say, all right, let's take that away away. another experience that we had that was just terrible, we were hit with a shareholder derhode islandtive lawsuit which cost us millions of dollars to defend in which we had done absolutely nothing wrong, and it was all because of a disgruntled employee. if we could put in place loser

pays on lawsuits, we'd eliminate this stuff. this country spends billions of dollars defending against nuisance lawsuits every year. >> there's a funny story. one time we were doing something in europe, and our lawyers advised us, oh, do you want to do this under german law? wouldn't it be much safer under american law? i said, absolutely not. any law in the world other than law. [laughter] the fact of the matter in germany, if you get sued, there's independent magistrate who finds the facts. there's not hundreds of thousands of dollars worth of discovery in every lawsuit. a magistrate finds the facts, then you have a trial based on whatever facts he finds. in canada if you offer to settle a lawsuit and the person suing you turns it down, if it ends up you do better than your offer or he does worse, he has to pay your legal fees. england, of course, it's loser pays. any legal system in the world's better than our legal system. our legal system's great for one

group of people; lawyers. period. and we just continue to let this stuff go on. and we haven't even mentioned obamacare coming up. if you're a retailer facing obamacare, you're way better off financially for your lower-tiered employees paying the fine or the fee than buying insurance for them. now, many companies won't do that because it's not the humane thing to do. but the incentives are set up to do exactly that. and then the insanity is, and this is true for all -- i have a lot of retailers, we have people in the stores. for the lower-tiered associates, there's a law in place. and this is, this is incredible. in the 2700 pages of nonsense that obamacare represents, there is a rule that says that for these, the lower-tiered associates, there may not be -- you have to pay out 90% of whatever the premiums are in

claims. so let's say you're clever and find a way of saving money. there's no incentive to do so because you've got to patch it right back on. so the capitalist system of finding a better way in america is thrown out the window through an act of congress. this stuff is insane. and yet we in the business world are subject to this stuff every single day. >> thanks, tom and joe. there's, obviously, a lot of focus here about operations of the business. but one of my pet projects is opening up markets, and i'd love for you to spend before we open up to questions and answers, your revenue is really dependent on how markets are opened up; energy licenses are moving to new industries -- >> right. >> or exports. >> right. >> department of state. could you share with us the dependence of your growth on opening up markets and customer demand? >> sure, sure. so, obviously, it is demand-driven, and typically with an outfit like ours or a business like ours clients are a

little hesitant to go, yeah, we're all in, and here's or a giant contract. they give you a little test pilot project, see how you do, see what change in performance there is, improvement in operational efficiency, and then the client will say, we like that. we now want you to go all over the world with. for example, that just recently happened to us with chevron. they said we want you to start working all over the world for us, and now we get into the -- what we have utilized is because we have a lot of our employees work for the, in embassy staffs. the network of u.s. embassies around the world and their government -- what's it called, the foreign contract officers and stuff, that actually has really worked out for us in terms of getting at least some basic knowledge of how to operate in the this new country. and then from there we have to go, and once we get some basic information from each of the country sites, we now are able to at least start moving down the path of getting the

contracts in place, understanding the tax situation and figuring out how we're going to get paid from all over the world. but for, we recently just had a project that's about to go in liberia, and we were almost not going to get the job because we couldn't figure out the legalities of getting the money into the country. and that's a challenge we face all the time. and the help we get from -- it's an impediment to growth just from a tax and contracts perspective for a small company like ours. and these, and the majors will go we want ya, but then you've got to figure out how to get into the door there. >> thank you. thank you, j.j. and joe. i'd like to open it up if you have any questions for a couple minutes. we'd be glad to answer your questions or comments. it's always silent in the first seconds after -- >> you need to give a prize for the first question. >> an autographed book, how's that?

no? >> well, i'm actually excited -- [inaudible] my name's john, thank you very much. i found it very informative. question for you more on the regulatory side. you talk a lot about some of the labor issues. how about the environmental side as well? when you open a company, dealing with getting the permits, local permits or, i think there's a supreme court case pending now on clean water act violation, stuff like that. tell us more about those sort of things that some of us could take back to the hill and, you know, kind of carry that message back. >> we don't, we don't -- [inaudible] we haven't run across any real issues with environmental regulations. ours is all in complying -- we have employees in almost every state in the country, so we're complying with all the local labor rules and the federal labor rules, it's much more

consuming for us than the environmental piece at this point. in the leadership education program that i'm working with now which is hundreds of students i've had, the number one issue you hear about the regulation is the epa. over and over again from a variety of different industries, and i can't be specific about what those are, but that's the number one topic talked about. >> and i've heard that a lot from ceos, trying to balance their business models with regulations. and somehow depending on the type of industry and the situation inside the company, it's got to find some balance. and it's the same rule for everybody. and when you're a small company and you're high growth, you need velocity. those are a different set of needs and, i think, a different interpretation than a larger something that's more stable and a lot of infrastructure. and i hear that a lot from different ceos, but i can't give you the detail on it. >> if you can think about the regulatory environment as being

a boat going down the river and you keep putting more and more rock into the boat, being more and more regulation, sooner or later the boat's going to sink. and we're close to that point, and people are reluctant to get into business because there's so many obstacles. and it's time for us to start throwing the rocks out of the boat. >> i don't think the ceo, growth ceos are opposed to environmental regulations. it's probably the way they're being implemented and the quantity and the timing. so we get back to growing the system when you're really small, you know, at what point do you implement what. and i'm not sure -- i think everybody's treated the same, and the challenge here is how do we get the job creators, the growth companies to create jobs? because that's what we want, but at the same time we're trying to balance it with risk and environmental regulates. and i would suggest we need to ask that question and reinterpret growth companies, ceos and management teams with a discussion on these regulations to find out how to better get them aligned. i'm not sure there's an alignment to do that.

that's a good question, thank you. >> question over there, david. >> thank you for taking my question. i'm penny starr, i wanted to ask you if a republican becomes president, what should be their very first priority when it comes to the economy and creating jobs? >> you have a broad view, tom. >> i think repealing a number of the onerous legislative efforts of the last two years, i'd probably start with obamacare and work my way down from there. >> do you have any comment? >> incentivizing the right behavior which is capital markets vice, you know, more compliance. >> just start repealing all these onerous regulations, same as tom said. >> well, i'm going to suggest that we need to treat our growth companies as a system, and we

need to increase the dialogue of growth company management teams with those in washington to find those high-impact, easy-to-execute, very focused initiatives to start growth and then ways to -- [inaudible] what i don't want us to do is to start in the first 100 days finding the high impact difficult to execute, and we don't do anything. and the only way to do that is better link this conversation with your conversation and get those initiatives in line. and most importantly, that if you take -- make changes in regulation or policy, that the job creators can actually go hire people from that effort. the worst thing we could do is create change for the sake of change, and the job creators aren't creating jobs from it. something isn't aligned. we need alignment. we need everybody on the same growth page. and i think that's going to be one of our challenges coming through the fall. how do we all get on the same page. because clearly at times we're not (make it simple. i mean, do you want tractor

supply to open stores, or would you rather they take their capital and do what obamacare and his 2700 pages dictates which is to open a lactation chamber in every single store they have? that is in obamacare. now, i'm big on breast-feeding, my wife breast-fed, i'm all for that. but i don't think every retail store should have to build a lactation chamber which is what obamacare -- >> really? >> yes. you can't make this stuff up, joe. [laughter] >> i'm trying to! >> hello, i'm steve antler. i'm wondering if any of your companies calculate the cost of regulation, especially what you perceive to be unnecessary regulation. and then translate that to the cost on the customer who's buying your products. because in truth, companies don't pay for the cost of regulations. i pay for them as a consumer of your products. the american people are paying for this. if we keep connecting the cost of regulations to what each of us as consumers pay, that might have some incentives to members

of congress to stop feeling the need to passes new -- the agencies' new regulations and congress' new laws. do you have that data, could you collect it? >> i have some anecdotal information. we were not in california until about seven or eight years ago, and we spent a lot of time studying how to get into the state of california and put stores out there, and the regulations out there are just onerous as everybody knows. and, in fact, we had to carry different merchandise. about 10% of the products we carry in california come from different sources and have to be treated differently than in the other states. and the fact of the matter is, it just became very clear you were going to have to charge more. and the california residents, whether they realize it or not, most retailers are paying more because the retailers have these additional expenses, and they have to lay them off on the customer. we charge more in california and so do, i think, all retailers. >> the company i retired from was chrysler corporation. chrysler corporation came very close to putting on the maroney

label on the side of a vehicle when you buy a new car what the lawsuit tax premium was in alabama. we came very close -- i didn't win that battle. i wanted it on the maroney label because i wanted our alabama consumers to know how out of control their legal system was. i think if consumers would know the costs you're passing on to them, then it's in their interests to stop the regulation as well. >> the reality is most of the companies we're involved with are spending 70 hours, 80 hours, 90 hours a week per individual trying to figure out how to grow their businesses in spite of all this regulatory ma as. -- morass. if some washington think tank were to spend the money and take the time and figure out the cost, i don't think it'd be that hard to figure out. the companies themselves are not going to do it. but if somebody helped them, it'd be a great exercise to figure out. >> let's talk about that could be a project for the job creators alliance, tom. let's talk about that. >> very good.

we'll take one more question. >> i'm rich cohen, i'm a reporter with congressional quarterly. following up on the other question about presidential candidates. can you give us, gentlemen, give us your sense of -- if i can put it in these terms -- the political marketplace these days and the salience of your points or the openness to, the risk if at all that you face in making these points in the marketplace and how, for example, the obama administration and democrats are responding to what you're trying to do whether -- and your confidence in taking them on. >> well, i can try. through my lens growth is systematic. it's going to take broad set of initiatives to restart our growth engine, a spark in every cylinder. and when i hear one initiative, one, pick one -- taxes,

electronic textbooks, just go on down the list, it doesn't matter, it's one. we're not treating growth as a growth system. we need to put a spark in every cylinder. how are we speeding up drug approval? how are we improving risk capital? how are we matching up the talent from the military to j.j.'s organization? but, you know, saying there's an incentive of a couple thousand dollars for j.j. to hire a navy seal, the system doesn't work because he doesn't have -- >> david, we have an administration in washington now where i don't think anybody's ever held a job in the private sector. >> well -- >> a consequence. and i think if we had a new administration which had people who had actually been there creating jobs and work inside the private economy, we'd be far better served. [inaudible conversations] >> so in the ab pence of that, we need to have more of these dialogues and set priorities. your best of intent you're trying to grow, but growth through a different lens. we have growth through a

different lens. there's got to be a middle ground, and we've got to treat it as a car engine. there is no -- [inaudible] and i think that's one of the big divides of where we are today and where we need to be tomorrow. thank you very much. panel and audience, for a great discussion. >> thank you. [applause] we're going to be taking a break now and hosting a second panel in a few minutes. thank you. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> well, there's more the come in this forum on jobs and the

economy. in a few moments, we'll hear from house majority leader eric cantor and majority whip kevin mccarthy, the founder of the yg network. joining them will be executives from are venture capital firms, and that's live starting shortly here on c-span2. until then, your calls from this morning's "washington journal" on whether president obama deserves a second term. >> host: president obama said yesterday i deserve a second term, now, this interview comes pretty much at the same time as a new poll published in the washington post on this monday morning, and the headline says obama opens clear lead over romney in this new poll. dan balls and john cohen write:

>> host: his ratings on handling the economy and job creation remain negative with intensity continuing to run against him. nonetheless, here's what the president said to matt lauer yesterday. >> i deserve a second term, but we're not done. look, when you and i sat down, we were losing 750,000 jobs a month. in fact, we had found out just a few days before we sat down that we had lost that month 750,000tt

jobs. now we're creating 250,000. we've created 3.7 million jobs over the last 23 months. we created the most jobs since 2005, the most manufacturing jobs since 1990. but we're not finished. and we've got to not only boost up american manufacturing so n thatot not just the auto indust, but all american manufacturing is building again and selling overseas, we've got to make sure that we're pushing american energy' and that includes not just oil e and gas, but clean energy. we've got to make sure that the skills of american workers are the best in the world, and we're making progress on that front. and we've got to return to old-fashioned american values.an everybody getting a fair shot, everybody doing their fairione share, everybody playing by the same rules. and that means, for example,ody regulations to make sure that wally street is following the same rules that main street's doing. but we've made progress, and tha key right now is just make sure that we don't start turning in a new direction that could throw that progress off.new >> host: president there fromw yesterday leading up to the

super bowl coverage. money section of "usa today" reminds us that the job gains that were announced friday,mind 243,000 new jobs, are fueling stock gains, and investors are hoping that the hiring continues. if you look at the opinion pages of "the new york times," though, paul krugman writes that things are not okay on this monday morning. pau our economy remains deeply depressed, mr. krugman writes, as the economic policy institute points out, we started 2012 with fewer workers employed than in january 2001. zero growth after 11 years, he writes, even as the population and, therefore, the number of jobs we needed grew steadily. ye.

>> host: paul krugman in "the new york times" this morning. we'll l hear from the head of the rnc in a couple minutes, bul let's get some of your calls in first. so the president says i deserve a second term. harry from pittsburgh,sayi republican, what do you think? >> caller: i'm 5-5, is 64, ii shouldam be a center for the boston celtics. i mean, everything in the guy's done -- the unemployment numbern are stacked. they're not really unemployment. i mean, everything he's -- first time in my life, i think we've got a president determined to destroy this country. >> host: why do you say that? >> caller: everything he's doing.do y i mean, he's going against the catholic church, he went against jerusalem. e mean, everything he's doing,go he's just -- these people the

election, he ain't prosecuting them, you've got holder, the guy on the border killed, one of our guards. i mean, and nothing's being done about it. >> host: okay. that was harry from pittsburgh this morning. we've got lines for republicans, for democrats and for independents. this morning we have a larry from hernando, mississippi. larry's a democrat. good morning to you. >> caller: good morning. the president deserves a second chance, here's why. the republican party started two wars, and their medicare problem, deficit that they gave over to the president, now, why in the world would you want toty put these people back in office when they destroyed the deficity destroyed theou economy, i mean, and pushed it onto obama like it was his problem?ean, so anybody with any sense shouldn't want to put these any people back into office with the same policies because you end up with the same thing again.

it's just ludicrous. thankes you and have a good day. >> host: thanks for calling, larry.udic as we dig deeper into this segment, the president having said yesterday i deserve a second term. here's a little bit more on the poll from "the washington post" today. t northbound little bit more from l from "the washington post" today. the point out of that americans are divided evenly as to whether the president's performance warrants a second term. but when you go down as little bit further, they do talk in deeper terms about the president's ratings. i'm so, you see the overall performance is a little higher, but as you start digging

deeper, it goes down a little bit. we have an independentd online anan, good morning -- on the line. dan, good morning. caller: i did not want to read on anybody. the first time -- one, come on. no one is trying to destroy the country. attacking the catholic church in jerusalem? no. the guy is trying. i was democrat -- i am 46 years old, most of my adult life i and democrat and now i do not trust any of them. but, you know, the approval -- yes, and economy, things are growing. it is going to take time. we knew when he was elected it would not elected -- was not be resolved in four years. nobody deserves anything. if he wins it, great. and he will probably be my vote. who else do we vote for? is there anybody else that you would really trust taking this

country over in the dire straits we are in, still in? i would have to go with obama right now. if somebody gives me something better, gives us a little better outlook, i will think. but, no. i could not vote for anybody but barack obama. host: ok, independent voice from illinois. in addition to the phone calls you can email us a journal@c- span.org and also by twitter -- here is the chairman of the currency reince priebus tng >> host: we'll do that in just a moment. do want to get another call in or two first. o get another call in. larose, a democrat from tennessee. caller: good morning.

thank you. i am so proud of president obama. he is the first president in a long time that has done everything he could for this country. he was left a mess, a total mess, and he has done a lot to make things better. joe biden says, gm is alive and osama is dead, but he's got no cooperation. what we need to do is get a democratic house in there that will work with him and give him four more years to go ahead and get this mess straightened out. host: do you think it democratic congress is realistic this year? what do you think will happen? caller: i don't know. i am hoping. and if we would have had -- the first two years, if we would of had -- nancy pelosi put through about 400 bills that died in the senate because the filibuster

was threatened. if we can get somebody to work with this president -- he is the smartest thing to hit washington in a long time, at least in 13 years. host: appreciate your thoughts. another democrat here. emma from dallas, texas. good morning. caller: good morning. host: good morning. caller: good morning. and i on? host: what would you like to say? caller: yes, he deserves a second chance because when he come into office it was a mess and everybody knew it was going to take time for him to be able to do what he needs to do, and besides, republicans have spent all of the money that was in there and talking about he is running a debt. he has to run up the debt and order to -- and you know what? i think republicans will cheat in this election like they did

back in 2010. host: based on the, the president made "i deserve a second turn," would have this twitter messageh from twitterero who we heard from before -- a twitter message from americanhero. back to the poll, they go back to the president obama-mitt romney potential match up. the question the ask in the poll, regardless of whom you support, which candidate do you trust to do a better job --

here now is the chairman of the rnc reince priebus on the strategy. [video clip] >> we have gone down two or three tenths of a percent, to take the leap that our country is on the right track, that spending is down and the deficits are cut in half, as the president promised, that the debt will not bury our kids and grand jury -- grandkids, and we offer felling the american dream for middle-class americans? i do not think it is the case. look, i think we are hurting in this country as far as the economy. people are not better off than three or four years ago and we have an economic disaster is in america on unfunded liability and debts and deficits coming out of our years. we do not have enough time to go

through each of these things, but clearly we are not on the right track. americans do not feel like we are on the right track. and i think what republicans want to make sure in the messages, if you work hard and play by the rules, we want to make sure you get to live the american dream. that is the message. host: as we continue to take calls, here is "the hill" version. scott, republican. good morning. caller: good morning. i believe the cancellation of the keystone pipeline alone, that one decision is enough -- should be a enough to inform people or convince people he does not deserve a second term. gasoline and diesel are at least $1 a gallon more than they should be and would be if we had a realistic pro-american, pro-

enterprise energy policy. the central planners and all of this garbage that fails at every move, the central planners trying to tell was what sort of energy we are going to use instead of letting the free market determined that, is costing the american people billions -- just and energy prices alone. he is a complete failure when it comes to economics. he is a socialist ideologue and >> in its entirety in the c-span video library. we are going back live for a forum on jobs and the economy. we expect to hear from house majority leader eric cantor and majority whip kevin mccarthy. we'll also hear from executives from venture capital firms. >> welcome to the yg network

summit. i'm david thomsen, moderator, and i'd like to introduce our distinguished panel this morning. house leader eric cantor, leader in the weekly standard who represents virginia's seventh district in congress, house majority leader and co-author of the best-selling book "young guns: the new generation of conservative leaders." ranked as the most powerful person in washington. tim scott represents south carolina's first district on congress house rules committee member, deputy whip, one of the two freshmen of the elected committee. susan -- [inaudible] southern company services president and ceo, former gulf power president and ceo and a jobs creator alliance member. and tom stenberg, highland consumer managing fund general partner, former retired ceo founder of staples and also a

jobs creator alliance member. and finally steve case, chairman and ceo of america online cofounder. to quickly summarize, we had a great panel this morning involving joe scarlet of tractor supply, tom stemberg, and we talked about growth. and in three sentences, a summary of our first panel is that growth, we all view it from our own perspective of experience. and we define growth as companies that achieve high sales growth. high sales growth infers that you have an innovative product that meets customer needs as measured by revenue. it is the hardest line item to achieve, and it truly defines a growth fundamental. sales growth is the driver for job creation when you hook at the behavior of -- look at the behavior of a management team. it allows them to make a profit

to reinvest in hiring employees to meet future demands. the second message is that the revenue growth cycles are cyclical, we're coming into the next growth cycle. but what the industries and the types of job-creating growth companies because they're synonymous are different. previous cycle was consumer driven, primarily retail and real estate. this one is more infrastructure driven; energy, capital goods, software and services. and then retail following because the money being spent to create those jobs is creating employees with investment that they can go spend. money on retail. and then finally, we need to optimize our regulation and policies to improve the velocity for allowing companies to grow to create jobs. america used to have 50% share of the world's sales growth companies, and by that i define

it as companies that are small businesses because every small business is the heart of america's growth. but some of those small businesses become large businesses like apple. they all start at a million in revenue. or sales. well, we had 50% share of those companies worldwide in 2003. today we have 14%. we're still the number one nation for sales growth companies, but we're not the leader we used to be. more sales growth companies will create more jobs that will get us back to full employment on this next cycle. the gap to get to full employment in the next cycle is bigger than we think. the forecasts indicate we're not going to get there unlike the peak of the previous growth cycle. so our challenge is daunting. therefore, no one golden bullet will solve it. we need a system solution like restarting america's growth engine regardless of spark in every cylinder. so our theme today on our panel, our distinguished panel s to talk about what are those sparks

in every cylinder. it takes a systematic approach before you hit the gas. and so let me open up the panel with eric. eric, washington plays a key role in driving job creation and growth companies. what role should washington play to foster this environment? >> tom, first of all, um, appreciate the opportunity to be here on such a distinguished panel, i join my friend and colleague tim scott. and really the spirit of, i think, today's discussion is exactly what this town needs more of. and as you say, it is about sales growth, it is about growth and innovation, and, you know, washington can do a lot to inhibit the growth in entrepreneurial activity, it can do a lot to inhibit the formation of capital and can dissuade a lot of people from actually doing what we need them to do which is to go about the process of taking risk. because through risk comes innovation, comes those growth

in sales. so what we also know is we can do some positive things to create an environment where you do have these extraordinary stories of sales growth. you mentioned specific industries that most economists are looking at in terms of going forward. and whether it be infrastructure, energy, technology, services this seems to be, as you indicate, where the high growth is placed or the prospects for high growth is placed. and i think washington's role certainly should be to try and focus, um, on policies, on tax policy, regulatory policy that can aid in those industries' growth. but it's not washington's role to somehow pick another way to go and be jack up the economy. because i think what we've seen when washington's in the business of deciding which

industries should win and which should lose, when washington's in the business of saying that people should be spending their money here or there, it generally does not work. and we have seen policies here over the last three years of stimulus spending, we've seen increasingly intrusive government regulation on capital formation in the iraq arena -- in the health care arena and others that have not worked. and that's why i think you'll see us in the house of representatives talking about new policies, new ways to accomplish what we're trying to do which is to get people back to work. and as you say, small business, small business is something that i believe most people think is the backbone of america. and every business started as a small business. and we know that growth in the number of jobs is really placed on small business growth, and the high sales growth company bees feed that more than --

companies feed that more than anyone else. and so if we keep that in mind and that's what we intend to do -- and tim and i will be bringing policies forward, we're going to bring a bill forward having to do with giving small business favorable tax policies and to cut small business taxes. i mean, there's a bill we'll bring to the floor straight up. it'll be a 20% tax cut for small business. that sends a signal that washington really is in the business of trying to encourage entrepreneurial activity. but, again, i think that the idea that you are focused on in this panel is one that all of us in this town needs to spend a lot more time letting ourselves engage in a helpful way. >> thank you, eric. steve, i'm excited to have you here today. two key words that eric, that i really focused on eric just shared, risk and growth can. you took a risk in founding aol. and you had the velocity to grow. and now you're sitting in the interesting position of looking at the situation today and your

personal experience as being one of the 4% who made it to a billion in revenue from zero. what are the top lessons and initiatives you think can be applied? >> first of all, it's great to be here. when eric asked me to join this event, it was called the young guns, i was flattered because i think of myself as an old guy. [laughter] when i started aol, i was in my mid 20s, and it was the first internet company to go public, i was in my early 30s, but now that i'm in my 50s, it's always nice to be included in a young guns forum. and it's great to have people in washington focused more on the role entrepreneurship has played on forming our nation. a little bit of context. i did start with two other co-founders, not far from here in virginia. 1985, we built that into a pretty significant company. and in the last ten years or so i've focused on investing in companies and partnering in companies including living social, started four years ago with four people, now we have

5,000 people. another company in massachusetts, a card-sharing company that's expanding quite rapidly, so i've pitted from just -- pivoted on just focusing from being an entrepreneur myself but now backing and helping entrepreneurs trying to build these iconic companies and create a lot of jobs. and more recently which is really the context in terms of probably why i was asked to join this, the last year or so i've spent a glowing amount of time on public -- growing amount of time on public policy, getting people focused on the role entrepreneurship has played. america is the story of entrepreneurs. we're not the leading economy by accident. it was the work of not just creating companies, but entire industries that were base here. finish based here. and people when they think about business tend to think of it in an overly simplistic context in terms of fortune 500 large companies, you know, the small businesses on main street. but the real leverage, as everybody said, is these high growth companies that really have the potential to create significant number of jobs. the coughlin foundation research on this, i think, is pretty

telling. over the last three decades, they say 40 million jobs have been created by these high growth companies. so if you want to focus on the economy, you want to focus on jobs, this is the place to focus. and the data recently has been a little troubling, that the number of new start-ups is down 23% since 2007. it's stayed the same level and the same level of people, we'd have more jobs in the economy. so it gives you a sense of that. meanwhile, ipos have contracted, we raisedi think it was $10 million, now companies partly because of sarbanes-oxley go public later and raise larger amounts of money, or they off get sold and don't get public, and job growth desell lates. so two things in particular i focused on. one, we launched a year ago last week, the start-up of america partnership.org web site. 50 companies have committed a billion dollars of resources,

discounted services, sometimes free products to help the next generation of entrepreneurs, and we've launched 18 start-up regions around the country because we really believe providing an overall umbrella of resources and focus is important. ultimately, the real action is on what happens at the regional level. and also in the last year i was asked to join the president's jobs council chaired by jeff immelt and chair the subcommittee focused on high growth companies. we came out with our report, i think it was in september or october, met with the president. and this was a bipartisan group. really, the president, to his credit, said let's get some folks together that really understand what's going on here and divide it into a number of different tasks, and i was focused particularly on entrepreneurship. and what we did instead of reinventing the wheel, we said, look, a lot of smart people have been working on this for a bunch of years, why don't we take the great ideas that are out there, gather them together, prioritize them, figure out which ones can have the most impact and recommend those. and that's what we did.

and many of of the things we recommended then are things that eric and kevin and others have been leading in the house for some time. but the good news here, and i think there's not a lot of good news these days in washington around people coming together and, you know, solving problems unfortunately as we head closer to november, presumably it'll get even more challenging. but there is a moment, i think, in the next couple months where we do now have bipartisan support to pass pro-entrepreneurship legislation. and there's three particular things i'm encouraged by, the level of interest. i should say after meeting with the president, the next month there was a bipartisan bill introduced in the senate by senator rubio of florida and senator coons of delaware, and they basically said let's find the things that both sides do agree on, can we at least get those things passed. a month later the start-up act was introduced by senator warper of virginia -- warner of virginia, again with bipartisan support. two weeks ago the president in hid state of the union out lined priorities, and last week the

white house released the start-up america legislative package which was fairly detailed in the terms of some of the things that need to be done, and they've very in sync with things already brewing in the house and senate. so there really is an opportunity here, but we have to capitalize on it, focus less on press releases and more on working together to kind of forge a partnership around this legislation. so just briefly, sarbanes-oxley is a key one. as i mentioned, the aol experience is less common these days, and that's a problem because 90% of job creation happens after companies go public. so having an onramp and essentially raising -- when that was put in place, people said, look, there should be a carveout for smaller companies. they just picked a carveout that's too small a market cap of $75 million. jobs council recommended it be a billion dollars, the white house proposal last week, i believe, was $700 million. that, i think s the right sum, and there are a number of things that will deal with both raising that cap and having an onramp which is a big deal in terms of

job creation. the second, which also has bipartisan support, again, initially led by the house, is what's called crowd funding, allowing these new internet platforms that have developed to form projects like a documentary, to also fund businesses with sufficient precautions. and so the current proposal that i think has some, some support, some momentum is, essentially, if you're raising less than a million dollars and individual investments are less than $10,000, there essentially would be a carveout to prevent that. that's a really big deal because there are a lot of companies that have a problem because they rely on some of their own money, maybe some informal friends and family money. but getting from that point to real venture capital is quite challenging, so i think this crowd funding legislation is very important. and the third which i think is the most important, but i recognize it's also the most sensitive, relates to immigration. we've got to win the global battle for talent. ultimately, companies are created by great people and passionate about their ideas. we do a great job still as a

nation of attracting some of the best and brightest to come to our great universities, we give them these great ph.d.s, and we essentially kick them out of the country and force them to start companies in other countries that compete with us. it's a little bit like we said why don't you move from china and attend our naval academy, but then we're going to kick you out and go work for the chinese military. that's essentially what we're doing right now. there also is bipartisan support that says, look, let's encourage them to come here, staple a green card to their diploma. the start-up act that was put forth by senator warner and senator moran, as i mentioned, essentially created a s.t.e.m. visa and also a entrepreneur visa. these aren't going to solve all the immigration problems. obviously, there are many things around the dream act and around immigration reform that folks here will debate, i'm sure, for some time. but focusing narrowly on this issue that really is around entrepreneurship and job creation, i think, is important. so i think there is a moment

here. there really is. the opportunity, really, in the next month or two to get something, work on the house, work on the senate, the work that's been done at the white house where there really is enormous overlap. people agree it's important for the nation to focus on, people essentially agree on 80 or 90% of the solutions, so it really is now how do we make sure the politics, particularly in an election year, don't get in the way of the right policy for our nation? many but i'm encouraged. i'm continue mystic, but it really is going to take people focusing together. ernst & young which has its entrepreneur forum of the year every year, asking the previous winners to come to washington later this month, going to march on washington to make this a real cry in terms of pro-entrepreneurship legislation. so we can do it, but we have to get it done. >> excellent. thank you. susan? >> before i talk about energy specifically which is my business, i want to talk about the criticality of energy and specifically electricity to the general economy. the manhattan institute said that in 1950 20% of the gross

domestic product was directly dependent upon electricity. in 2008 it's 60%. so 60% of our gross domestic product depends on electricity. so that is reliability, affordability and that it's clean, but it's an optimizing of those three things. for our business when our communities grow, when businesses grow, when our residential customers have jobs and have more disposable income, our business grows. so when i talk about energy and electricity, it's not just being myopic about our industry, it is the impact that energy and electricity has on the entire economy. remember that as we're making energy decisions, that it does drive the economy. you couple that with from 2007 to 2010 23% of new businesses have been launched. the lowest in any, after any be, during any recessionary period. that's about 1.8 million jobs. so if we're not creating jobs, it's impossible for them to grow.

so how do we create those jobs, how do we find ways then to make sure that once they're created, that they're successful? so steve, in terms of talking about two key things for us, you know, there's two things. one is the creation of jobs with companies that continue to grow or be successful. and the second piece, and steve also mentioned it s the skill issue. i've been very involved with education, our company is very involved in education. one of the concerning long-term things is if we need, and the mckinsey global institute says we need 21 million new jobs by 2020 to reach 5% unemployment and to meet the growing population that needs to be employed in this country. so if that's true, the problem comes in even if we're able to create those jobs, that only 34% will have college degrees, and we'll be about, you know, two million shy. but also those degrees may not be in the right field. so business, you know, government has a --

[inaudible] but business, we've got to get in there and help develop the skills that we need. so you create the jobs through things that you've already heard. i think there are key issues like regulation, you know, overreaching regulation. what do we do to make sure that we can start businesses quickly, that foreign direct investment chooses to come to this country? for example, not only do we create jobs internally which energy companies do, but that we're a draw for foreign direct investment. the world bank recently said that the united states is 27th in the world in terms of ease of getting a construction permit. so if i'm going to invest in a manufacturing facility, you know, that's an issue. the price of electricity. in the southeast where our company is, we've been very successful at attracting automotive, steel manufacturing. the last big steel manufacturer from europe who located in our area, the price of electricity was a key part of their decision. so all of this is to say that, yes, we have these different factors, but the sectors are so

tied together that we've got to make sure that when we make decisions on health care or we make decisions on energy or we make decisions on infrastructure that we look at the cascading impacts. and insure that there are not unintended consequences. and at the same time that we make sure that we're investing in our future work force, that not only do we have the numbers, but we've got the right skill sets. and that's not just college graduates, that's insuring we have skilled technical professionals who are craft workers, nutritionists, health care specialists, billions assistants, those kind. >> if you don't mind, i'd like to ask you a quick question. you taught -- you love education, and, steve, you talked about the ernst & young high-growth ceos. it seems to me there's this real world education happening, and we're trying to get on the same page with the need of management teams of high growth companies are unique. and you've got to have less friction, more velocity, more people on the same page and make decisions faster. but from your experience in education, how do we do that

quickly? because it's easy to not be on the same page and just be focused on risk or growth or conservation of capital. and we need to get everything aligned. and that, you know, from my time at mckinsey, a management team working cross-functionally is the hardest thing to do, much less get multiple organizations to work together. >> right. from a business standpoint, i think some tension is healthy as long as everybody is moving to the same goal. you debate, you come out with better answers that way. so there's a healthy tension that i think is very good. but from education, what i've seen most success. , and when i was in florida i was on the state school board was the integration of business into the curricula of the school. where superintendents actually sat down with businesses in their communities and said what type of workers do you need, what type of remediation are you doing. we found in florida that businesses were spending $3.5 billion a year on remedial activity trying to get people to the level they could

participate. we've got to do that earlier. our company's been involved with career academy. career academies are not the standard so vo-tech. kids went in as sophomores, then by the time they graduated, they were able to have a 100% passing rate, but they were just as qualified to go on to college to be engineers or accountants. what we found was the graduation rate was 96%, and this included at-risk kids. it was a school, the schools were open to anyone in the county in the public schools. so i believe that to make good decisions for education that we've got to have stronger partnerships between business in these communities and the schools and that businesses is in there not just saying, well, shame on you, you didn't bring this person the you, but we're going to help you deliver the type of skilled work force we need in the future. >> thank you. >> on that topic, one of the things we've done in charleston

county to make sure that happened was looking at force protection for military vehicles, we had to create an alliance with our technical colleges and our county schools along with the county in order to create that integration so we would have a work force for the future. and we're doing the same thing with boeing now. boeing has come in and partnered with my old high school along with our technical schools to make sure that they create the work force that they need to be competitive on a global scale into the future. and without that integration, we seem to lack the necessary tools to be competitive in our country. but from a global perspective, we lack it completely. and the same thing happens from the taxation standpoint as well. look at the fact that the overall taxation from the local government to the federal government is over 30% of our gdp. you add that on top of an untrained, unskilled work force, you find yourself becoming a major impediment, and in a global economy, that just doesn't work. you look at the opportunities to advance our cause from capital gains tax which attracts more

revenue, foreign revenue into our country all the way down to your local schools and the integration necessary to create the platform for the future. >> tom? >> first of all, i commend steve and the others for working and eric and others for working to change the policies in washington. what's frightening to me is there's a biggie very generals between the theoretical policy at the top and the implementation in which the washington bureaucracy gets all of it. so we theoretically look at the fed, the treasury, we've got an easy money policy. it's not so easy if you're a small or emerging business to get a loan. it has to do with the incentives we create for the bank examiners for covering their butts and, basically, not allowing regional banks to lend money. uh, the risk in compensation is part of dodd-frank. so every public company now has got to write this treatise as to how their senior management is not induced to take risks by virtue of their stock options or other incentives they've got. in theory that's okay.

great, fast-growing company in your district, carmax. the staff came up with a letter sort of indicating their approach to this policy. they went all the way down to the associate on the sales floor. i said, jeez, i don't think this is what the sec has in mind, guys, but i'm sure there'll be impress with the the fact we thought of this, send it in with the letter. guess what comes back? would you give us a thorough, detailed analysis why your associates on the floor are not induced to create undue risk? give me a break. why are we paying the people in washington just to basically be a pain in the butt? i'm sure there's no immigration policy that says we should harass people for hours at our borders, yet we do it every single day. and until we get an administration that's dedicate today helping small business, no matter what policies we have, it's not going to matter. >> let me respond to that because i think you made excellent points.

i mean, it is almost as if this town wants to micromanage every small, medium, large-size business in order to wipe out any risk that may be present in an entity or an industry. and, you know, if we go back and sort of remember what has built this country, what has built this country is, um, the fact that more people from different backgrounds have gotten more opportunity through economic freedom. it's not through a government environment that tends to come in and prescribe what kind of risk profile or scenario is going to take place on the floor of a carmax showroom. and again, it goes back to in a very broad sense we don't want policies that, um, this town determines is, um, you know, through a certain industry or this is where capital needs to be allocated. the role of government should be that we want to create an environment where the laws are

properly and transparently enforced, that everyone is operating under the same rules and that we make sure we wipe out unlawful behavior and enforce the law. we don't want this town and its regulators and its policymakers coming in and telling companies like carmax, aol, zip car, southern companies, we don't want -- or boeing -- >> boeing can't move to south carolina. >> we don't want that because that is a sure way to snuff out the innovation and ingenuity that has given rise to the greatest nation with the greatest prosperity in history. and, you know, it is, it is unbelievable to hear that. and i know that i go home and talk to people that i represent, and it is very difficult for them to access new financing. because of the pendulum that has swung so far and that everyone's worried about getting in trouble, so there's nothing going on as far as access the

capital and business formation. you know, that's -- certainly, there is some. and there are signs that perhaps, maybe, it will get better. but right now we ought to take a thorough look at the things that are stand anything the way. standing in the way. and that's why for the last several months the house that steve referred to has been very aggressive in saying, look, we need smart regulation. we don't need these regulations driven by some ideological pursuit in this town that will snuff out the growth that we so desperately need in our economy. and again, maybe there's an intention to want to do good and that washington can wave a magic wand and make everybody better. but, again, the success that america has bred has been built on free markets, um, and almost chaotic but incredibly attractive, innovative society. it's not through some, you know, some sort of machine that

washington creates that we're here to go and tinker with. we're here to have a set of laws evenly applied to everyone and to insure that those engaging in if unlawful behavior are held to account. that's what should be our goal. >> i should probably have said at the beginning that i bring a certain perspective to this which is i don't think of myself as a republican or democrat. i think of myself as an american and particularly an entrepreneurial american. and my focus right now is trying to build bridges and try to get something done. i think there is an opportunity to get something done. there are big issues facing this nation around fiscal policy and the deficit, around the right level of regulation, some regulation, what's the right level of that, around taxes, what should be simplified, what's the right level of taxation particularly in a global economy? the military issues and foreign policy -- those are big issues. and they need to be batted around, and that's what elections are for, and we'll

have that debate this year, and the american people will decide which side of those issues they're on. but right now there is an opportunity to get something done around these entrepreneurship policies. so i think it's time to figure out how we can come together and how we can work together because everybody, as i said, agrees it's important. everybody understands how america was built, everybody understands the role of entrepreneurship going forward. there now is interest in the house and the senate, republicans and democrats, and there now is interest in quite considerable momentum at the white house around these things. now, that may surprise some of you, but if you look at what was put out last week with the legislative agenda or the state of the union, there's clearly a recognition that the important thing to focus on, and it's time to -- >> steve, i'm going to hop in right now because i know tim wants to as well. but let me tell you, i agree. all of us want growth, all of us want more entrepreneurs, more small business, more volume in terms of high growth sales companies.

it's just the words have not matched the actions. and we're trying to force that. we really are. and all of us want to work together. but, again, when you deal with the sort of rhetoric that has been so omnipresent in this town about dividing, you know, the rich and the poor instead of saying we're all in this together, we need people like you, we need people like you, we need all people in this together. because successful people can help those who are not. and, again, the tendency to want to go and pit sectors of society against one another is very dangerous. and i think tim will tell you, this is the frustration that we want to do some good. it's just kind of set aside that kind of nonsense. >> eric hit the nail on the head really well when he underscores the philosophical disconnect that we have in washington. there's a philosophy that simply says that it is our responsibility to divide the pie as equally as possible and to protect the american citizens.

the other side of the coin simply says that we have to grow the pot, far more important than actually dividing it equally. and the goal really isn't to protect the citizen as much as it is to unleash the individual, and let's see what their maximum potential is. steve, you talked about the crowd funding, h.r. r. 2930, an opportunity for small investors to get involved in the game. the question is, as a country do we want to be a high-growth marketplace? if we want to be a high-growth marketplace, what are the remedies that we can bring to the table? most of the remedies that business owners want have nothing to do with washington. when i started my small business in 1999, i thought my 1992 240sx was an asset. i didn't realize the 250,000 miles on the car was not necessarily an asset. so i went to the bank, and my banker helped me realize you can't get a loan on your car. okay, good. but what he did talk to me about was forming partnerships with people that would have an investment in my business that would have a long-term return

for them. and i went to a couple of my friends, and we had a conversation. and because i had a good relationship, i was able to start my business with a loan from a friend. well, unfortunately, when with you look at the restrictions and the constrictions on capital and the ability to form it because of some of the policies that we have, we can destroy jobs. we simply cannot create jobs. but there is some legislation that we have been working on that will actually move the ball forward, whether it's h.r. 2930 that allows for advertising and marketing to allow folks to invest in the resources to make your company grow. whether it's a simplification and the phasing in of the sec requirements that allows for ipos to happen faster or looking at the regulatory environment. when i went around my district and did a regulations tour, we found that dodd-frank has had a major impact in a negative way on our construction world. so you're talking about 42% of our developers are gone

permanently. finding alone, having a 40-50% requirement of skin in the game is a hurdle too high for most developers and folks to get involved in. i look at the fact that because of the department of energy they want to now regulate your decorative fireplace as a primary heating source. another loss of 10,000 jobs. and over and over again, not even mentioning boeing and the effects of big corporations on big business. the fact of the matter is, if we restrict the formation of capital and eliminate the incentive of the loan money, you find yourself in a quagmire that's very difficult to come out of. .. and hiring people.

>> how do we solve the problem of regulation reforms so that businesses can move pastor as tom brought up. >> well, i think there's two levels. let me first go back to what was talked about 'cause i guess is the core issue. i recognize coming here that this is a strongly republican audience. i also recognize two weeks ago

when i met with the democratic house retreat it was a heavily democratic audience and some of the things i told them they didn't want to hear, maybe some of the things i'm telling you you don't want to hear but i do think there's a moment here and it's time to come together and if you look at the specifics i think there is agreement around the key things that need to get done and can get done so just trying to build bridges around that i think is critical. this is a moment that i don't want to lose but it requires us coming together around these issues in the next, you know, couple months and it's got to start in the congress but ultimately there is now more support than there was a few months ago from the white house so let's capture that. it won't solve all the problems we're talking about here but it will solve some of the problems. the broader issue with regulation -- i'd break it into two parts. some is sort of these macroregulation issues and some of the things are around access to capital which i think is critical which i think sarbanes-oxley is important to focus on. and there are certain industries

such as manufacturing, interstate space and there's a big debate around sopa and how the things that made aol made possible. government did it right they vested half a century ago in some of the basic research, the defense department that essentially created the internet and then at the right appointment -- >> yeah, wasn't it al gore? >> it was a little bit before al. [laughter] >> although he was a big advocate on some of these issues when we were starting. they then commercialized it in the early '90s and that's really when things flourished but adopted a relatively hands off on internet and shopping and it's flourish and debates around tax in different states and because it is now such an important part of evidence life it's not surprising there's a debate and launching a new industry and research the -- the

they are not playing the role they played 30, 40 years so there is a role for basic research. there's a role for university research. we need to do a better job of commercializing it, getting those ideas in the entrepreneurial sector but there's a role for that. and that's figuring out how to unleash these industries so they can start in the united states and grow in the united states. but one of the core points i want to make sure we don't lose sight of is the big focus around on globalization and on manufacturing. that's where a lot of -- and some extent services. the story less told is over the last decade we've seen a real acceleration and a globalization of entrepreneurship. what had been the secret sauce and still is the secret sauce in america is being replicated in other nations they are putting very aggressive proentrepreneurship policies in place. aol and facebook very successful venture capitalists have more people in excel office making investments than in their

silicon valley office. >> this is not a time to get complacent. we really need to make sure that we double down in terms of our commitment to our entrepreneurs and the only way to do that is to come together to pass this proentrepreneurship legislation, whether it's exactly in the house or the startup act but there's a variety of different things we need to make sure we don't put too many ornaments on the tree and not get anything done but get the core issues around talent, immigration, regulation around private funding, regulation around sarbanes-oxley, get a tax policy in terms of the right kind of tax incentives around capital gains. those are the core underpinnings if we get those in place i think we can usher the next wave of american entrepreneurship and remain the world's most entrepreneurial nation but if we just kind of don't capitalize on this opportunity, i think we'll -- >> i guess one comment i would make -- i used to be a democrat

too. [laughter] >> and i realized what these policies mean. i think the stuff you're talking about is all good stuff. the problem is we're taking two steps back at the same time. let's talk about venture capital the business i'm in today. dodd-frank now -- god knows what systemic risks venture capital costs is now going to regulate the venture capital firms like hedge funds and everything else. it makes absolutely no sense at all. we're going to spend $100,000 on registry and now we got a venture capitalist on the republican side we'll make the taxation interest and carried interest a political issue. having said that, though, if you start taxing a venture capitalist at 40% instead of at 15, his hurdle rate is going to change. what is he willing to pay for investment, the valuation for startups are going to be affected and there will be less capital at less attractive terms available at startups so we're

making progress on one side and the administration is taking it away on the other side and that's what concerns me. >> when we talk about regulation, the majority leader and smart regulation and it does not choose winners. for example, on the energy industry -- and the president said this in his state of the union also, we call it all arrows in the quiver. we believe for electricity you need nuclear, you need coal and natural gas and renewables and you need energy efficiency. it's called the genius of the and the tyranny of the or. you need all those just as you would not have a financial portfolio with one stock even though southern is great stock. you need a diversified portfolio. we're actually in all five of those areas. we have to incentivize the risk that says we want to take smart risk, we want to take educated risk. we need regulations that help us, that help us to be safe and secure. but beyond that, the markets

work. and what we'll find is you will see that the winners will come up. that doesn't mean that you don't need short-term incentives for startups. in fact, a lot of the r & d that has gone on with the department of energy through the decade -- our clean coal, our 21st century coal is going to get and captured 65% of the -- they own all the new developments, well, we actually license that technology in china. and while we're building the plant in mississippi, the first one was built a year earlier in china and we're learning from that. so government has a role to provide seed money, incentivize with private industry that then takes that and finds who the winners are and when you find who the winners are, then that kind of takes care of it, that you don't have to do this forever. >> do you think there's a

misperception of growth companies -- growth companies categorically are doing the right thing but then there's always 10% that aren't so the regulation is going to after the 10% that aren't and it's applying to the 90%. >> i don't think it's 10%. >> 20%. ? >> no, i think it's less. >> this goes back to the statement. it's like three steps forward, two steps back. and, again, steve comes with the right -- in the right spirit, you know, we ought to be looking for ways where we can work together and when the president unveiled his jobs agenda back in the fall, my immediate reaction was, look, this all-or-nothing approach that he came forward with is not is going to work because no two people are going to agree on everything. so we ought to try and find places where we have vision in common. and let's go execute it. i think thomas edison said, if the vision without execution it's a hallucination. so we need to go and execute

now. and there are -- there are plenty of bills sitting over there. i think we're right up on 30 bills, the house has put over into the senate's well for them to pick up. and if the president could join us -- steve indicated, you know, there's been at least perceived shift in the rhetoric at least as far as small business is concerned out of the white house, i would like to see some action put behind that rhetoric. again, there's been too much now for three years indication that there was some other motive around the policymaking and support coming out of the white house. it wasn't all growth. it wasn't as tim says, growing the pie. it has really been much more about dividing, not multiplying. and we do need to think about multiplication, not division now. that's what growth is about. and we can -- we should at least philosophically or conceptually be able to agree on that. and so if we can set aside sort

of this rich versus poor stuff and say, look, we want everybody in america to be successful. we know that some are not as successful as others. how do we create that environment? what you do is go to the growth oriented companies 'cause that's the way that other people can become successful. so i like the spirit of this panel. i hope we can just put it into execution. >> eric, i mean, there's no doubt the facts are that at the top of every growth cycle -- when the rising tide everybody wins. the government gets more revenue, the poor get a job and they get a salary. the middle class grows, which is very passionate and people reinvest their successful -- you reinvested your profits from aol back into the community stock market growth companies. how do we get everybody on that page which has a bigger impact than being divisive and steve is saying the time is now? >> the proof is in the pudding for the people of the country. for those who are feeling they don't have an adequate job

opportunity or if they're really out of work, how do we get them out of work? it goes back -- i think your mention of these industries where we know there is a lot of growth potential, okay? and we should go about trying to put a sign up to the world that we're open for business. i mean, that's really what it's about. i look at my state. you know, our governor mcdonald and even the governor's past on both sides of the aisles have been attracting investment and attracting headquarters in this country to relocate to our state because we're open for business, because we say, you know what? we want success. we don't want to punish success. going back to the bad actors that you indicated, we want to punish them. but we need to get the jobs and the wealth, you know, distributed, if you will, in a way that people can believe that we have a growing economy again. but when washington says, no, i want to take -- i want to tax

you because you're too successful, like this buffett tax now the president is taking about so prominently, that's antigrowth. come on, we need a buff-er rule. we need to stop the government from overly intruding into the entrepreneurial innovative spirit of our country. and so if we can stop that kind of talk and say we're about trying to level the playing field and give everybody an opportunity to succeed, we're going to be a lot better off, and that goes to steve's point about finding the sweet spot where we can all agree. >> steve, like a great business, if you focused on customers, everybody can focus around customer needs. and if the customers here are the job creators. small businesses, startups, midmarket companies like susan's who are creating jobs how do we get everybody focused on the customers who are the job creators to rally around what they need? >> well, i think we covered some of it. ultimately, it's the private sector's role.

the government creates the context, it could be good context or bad context it creates the context but ultimately it happens with entrepreneurs willing to make risks and start companies and many fail and that's the nature of entrepreneurship and venture capital. it's risk capital. and there can be huge successes like, you know, facebook, you know, currently. but there are also many, many failures that aren't -- that's the story also of entrepreneurship and that's one of the -- i think america not just because of the economy was built by entrepreneurs but the people who came over on the first place -- came over on boats without really knowing what was happening. were pioneers willing to take risk and they were somewhat entrepreneurial themselves and that's really what made us enviable of the world. not just sylvan valley and the ecosystem is the envy of the world but as i said others are figuring this out and stepping up their game. i think we're -- i think doing the right thing terms of what's happening in the house and the senate, republicans and

democrats, and the white house to try to focus on this role of entrepreneurs. there's been great research from kaufman and great work from many think tanks in town that really highlight the importance of this issue. if you're concerned about 8.3% unemployment and want to, you know, find people jobs, more entrepreneurial high growth -- if you're concerned about the economy being sluggish, 2%, want to get 3, 4, 5% entrepreneurship, high growth companies, and if you're concerned about our competitiveness in a global world where other people are getting much aggressive and smart about this thing, you know, entrepreneurial high growth companies are the answer. and it wasn't true a year ago focusing on this as a key thing we need to figure out as a nation. there is as i've said bipartisan support to try to get something done. there is reasonable clarity. there's still many things there's disagreement on. but clarity around the role immigration plays, the role of funding regulations around capital play, sarbanes-oxley,

things like that. so now the question is how do we get this done? i recognize -- in all the conversations i've had with folks in the last few months, it's like look at me kind of -- i'm so naive, like do you really think anything is going to get done particularly as we move into the election year? [laughter] >> i think something has to get done. we have to seize this moment and my focus has been narrowly on this. there's been many other issues and try to figure out some ways to bridge the divide and bring people together because it is the best way to get our economy moving, get our job creation moving, get our national competitors moving. >> in the last few minutes of our panel i want to raise the bar. we have to get 12 more million jobs here to get some level of full employment and we're doing great and there's a window of opportunity for a few months. but that's not enough, to create the main lanes of jobs we really -- to create the jobs

here and revenue is declining, it's not going up. yes, we are still a leader. we can't rest on our laurels and what wear talking -- we're talking about is good and there's a window of opportunity but that's not enough. what we need to do to raise the bar. this is the moon we're talking about now. our country is in crisis when it comes to jobs. there's not a lot of patience anymore. people are giving up. yes, we're making progress but what do we have to do to really raise the game? we don't have time to keep arguing. our ideas and initiatives have to be bigger and boulder to really -- you're talking another 2,000 growth companies, an average of growth rate of 44% a year. we're fought talking 5%. and they got to create 2 or 3,000 jobs for companies. this is like a big number. this is a big ecosystem effect. >> well, you know, i agree. we've got to be bold. and it's got to be about growth for america, okay? so, you know, all the things that divide us and we've been heavy at that for the last year,

whether it's the fiscal issues and others, okay, and we know that elections are there for a reason, some of those are going to be decided there as was indicated earlier by steve, but, look, we can all agree you need to create how many new jobs -- >> the new nuclear unit, the nrc vote thursday will be 3500 construction and 800 permanent jobs with an average salary of 80 to 90,000. >> and you said by the year -- >> 21 million we need by 2020. >> 2020 we need 21 million new jobs. now, that is our goal. and we ought to put that out there as a goal and we know we've got about 8 years to get there, right? and so what is that? about 2.5 million a year about to go, how do we do that? now, it's going to take immigration because we need the smartest and brightest in the world to come here to help us. look at our graduate and doctorate progress in the

s.t.e.m., there's many outpacing americans here and we want to attract them. we moved in the house towards that end. we started to lift country caps on highly skilled immigrants who want to come and work in this country. we ought to do more of that. we ought to expand the advisories. it will take talent and it will take actual human capital and we got to go and say what kind of capital formation -- what kind of risk is going to be required to create those 21 million new jobs. and let's plug that in. i mean, this is not rocket science. this is about running a progrowth agenda and so that washington again doesn't inhibit the growth because as i said earlier, this country of ours does it better than anyone else. and there's a lot of people trying to copy us right now. but we got it at our core. and so let's set out a plan and let's just do it, okay? now, it's easier said than done in this town because i also have

seen so much effort and attention put on the division rather than the multiplication. and we just all got to come to the fact that if we don't do this, we're not going to have the success story. and so it is about being bold. and it is all agreeing to say, set aside the things we disagree on and let's try in an incremental way year by year get to that goal of $21 million jobs. >> sometimes we look at all the jobs here for america that's great. but also in a global economy, our american workers need our share of the global economy. what that says, for example, in the southeast as it's been a little flat for us in terms of electricity sales, industrial has been doing really well. most of it has been exported. a lot of its been exported. now, we would like for a lot of that to stay inside but that's great to have all these exports, meaning we had foreign direct investment. we had american companies who are selling our goods and products all over the world. those are great jobs.

that helps you through the cycle, the economic cycles you have in this country when latin america is growing or china is growing or different places are growing. so part of what we have to do is make sure -- how do we make sure that american companies and american workers get our share of the global pie, not just the u.s. pie? >> let me just throw that in there, if we're going to be serious and get this plan in place, how do american-based multinationals get their piece? right? how do american-based companies here get their piece of the global pie? well, tax is huge. american-based multinationals right now are operating almost with both hands behind their back, tied behind their back of our tax policies. but you can see also the problems in this town because there's so much rhetoric about saying, well, if you do -- if you implement favorable tax policies for american-based multinationals, oh, all of a sudden they're going to create jobs overseas. well, you know, we got to realize success for america overseas means success here at home. it means jobs. and, again, that tax policy needs to be a part of it.

and i think we have differences on that, but i think incrementally we could say if we could do things, tax wise, to help progrowth companies, we ought to be doing it. >> let me just try to close on an optimistic note, i totally agree with eric, now is the time to kind of focus us what brings us together and there will always be big issues that separate us but it's now time to focus on what can get done and try to get it done but going back to your question, while i'm worried about america's position in the world around entrepreneurship and i gave some of the statistics about the startups being down and the globalization, entrepreneurship accelerating and so forth, the reason i'm optimistic -- if we can get our government to put the right proentrepreneurial framework in place quickly is spending all the time -- most of my time, my day job, 90% my firm revolution is a few blocks here are meeting with entrepreneurs who are extremely excited about the future across all sectors, not just technology but services and manufacturing and all across the nation.

i spent a lot of time meeting with a lot of entrepreneurs and they believe they're going to change the world. they believe they're going to create great companies. the entrepreneurial culture now and many colleges that, you know, 10 years ago maybe they were going to go to work for wall street and goldman sachs and now more and more are interested in working with startups. there's great ideas. health care which is one-sixth of our economy is going to be by consumerization and the decades will be the glory years, huge opportunities of education as it moves to be more digital and shifts the paradigm in terms of what each individual learner can do. those three industries, health care, energy and education are huge pillars of our economy and have not really been disrupted the way media and communications and other industries have. so there's enormous opportunities around entrepreneurship. there's a thirst and a hunger and a passion around entrepreneurship. we just need to make sure we accelerate that by having the right proentrepreneurship

policies in place as opposed to slowdowns. >> we got to watch our time for questions. >> looking for opportunities for common ground. i'm not sure we should be looking for ways to negotiate differences. we can philosophically we're on two different pages but if you look for three opportunities for common ground issues based on what the president said and what eric has led us on fighting for the first one, all the above strategy. here's an opportunity for us to move forward on that. i think the keystone pipeline is a wonderful opportunity to start the discussion. second area, he said not this past speech but the last speech, the second -- i think 2010, he talked about restructuring at the corporate tax rate which is huge, allowing for repatriation is perfect. talk about bringing capital back to the market. $2 trillion. the third is the capital gains tax. he talked about eliminating it for certain businesses to try to help create incentives to go in that direction. i think those are three areas where we already have common ground. if we can get him to move on those issues as he says he's willing to, we already have

leadership that's moving in that direction we could find ourselves having a story and a narrative to the american people about government working together. here's an opportunity. >> i want to piggyback on something steve said we talked about entrepreneurship. there's a lot of great news. this country still has the largest number of patents in the world. so the entrepreneurship is alive and well. we just have to help it grow into businesses. but second of all, steve talked about colleges. i was involved in an effort -- i'm not part of it but there was this school that did these career academies and this young man was a junior in high school, started his own company, by the time he graduated as a senior in high school, he had been certified in microsoft and had his own business with five employees when he walked across a high school stage. so we have people out there starting very young, let's teach this in our schools, let's get business involved. we got the talent. we still lead the world. i believe in innovation and

entrepreneurship. now how do we harvest that. i grew up in rural alabama? how do you then make this grow to where we continue to be the greatest country on the face of the earth? >> tom, thank you. tom, i can see your wheels turning in closing here between eric and -- >> i want to believe but i don't. [laughter] >> look at trade. we talked about trade, the foreign trade. this administration has not done a single new trade deal. it took him three years to approve the ones done by the bush administration and those weren't really big countries other than korea. we talk about the foreign practices act. our countries go to someplace in africa where corruption is rife and we can't compete because you're an executive there. i'm looking at those businesses your choice is not to have the business or you go to jail. you're fighting with one hand tied behind your back.

and then this whole notion of the tax rate -- getting a lower tax rate done for corporations would be great but you can already hear the rhetoric, oh, it's a give-away to the big corporations. here we go again. it's not going to happen. so i'm sorry i'm a cynic. >> okay. >> i understand why there's cynicism and i understand why -- you know, there's a moral likelihood people feel like nothing will happen and so forth. when we started aol nobody including my parents, didn't know what i was doing and thought it was crazy. so entrepreneurs are used to that. i'll close with the quote from the last night's super bowl. i thought there was two great ads was the kaufman ad on entrepreneurship. i don't think the patriots will like it. will it be you and basically talking about entrepreneurism and the other one i enjoyed was the clint eastwood ad.

it's half time and the second half is ready to start. it wasn't just about detroit. it was also what we could do more broadly and i think entrepreneurship really is -- was the key driver in the first half. we need to make sure it's the key driver in the second half. >> well said. [applause] >> i would like to quickly open it up we have room to questions for our distinguished panel if you'd like. >> thank you all very much. it's been a great discussion. and some excellent ideas have come up. i'm peter reagan with the boston consulting group. and for those of you not familiar with us, our leading competitor has been mentioned a few times which is mckinsey. we actually have some great news from a recent study that was done on some client work which i thought would be useful to share with you and i would like to comment on your ideas and give you some thoughts. based on work with clients we found that the economics are actually driving manufacturing back to the u.s. from china to serve the u.s. market and this is due to increasing