a look at some of the major ports that we have here, this committee might think about taking a look at the major ports that actually export to us to see what conditions there are. there's a difference between mumbai for example and singapore and that allows us to understand how is a difficult to get into this 100% scanning issue and that is 5% or so that peace can. and we understand the approached the evidence that is one of the people who pushed the past for example. but there is the uneasiness at least for me for what is going on for the abnormal patterns with the risk analysis and then taking a look at that. so i think that we are -- i

think it is very difficult to get to 100% screens, but at the same time there is still a lot out there that we are missing. for example, it is my understanding that of the cargo containers security initiative port determined high risk the customs and border protection scans or otherwise the result of 96% of the shipment that goes overseas. that means 4% of those in fiscal year 2011, a little under 2,000 shipments were high risk cargo that were not examined before they arrived to the u.s. 20 minutes away from long beach. that is a big concern if there is a dirty bomb or something else in there. i really do want to push it out and have that happen out there. so, that's one of the questions i have is can you please discuss that particular issue and then

my second question would be secateurs in a public, has testified that the requirement of h.r. one recommended by the 9/11 commission could not be met for several reasons including that the technology does not exist for 100% effective and efficient cargo screening. so is that the department's position today but we don't have the technology to do an efficient and effective fast 100% screening? and it's also my understanding that the domestic nuclear detection office is developing a plan for evaluating and testing the new one tomography as part of the advanced technology demonstration program. this program is being installed in the street part, but, to demonstrate as the private public project in the operational environment, so it has the department taken a look to see if they want to participate in this test to see

if in fact that technology works and whether we can get it put in here to the u.s. cracks so those would be my questions, madam chair. i will give you a chance at those. >> okay. i will take your first, congressman. your numbers are correct on the 96% of exams are accepted in the see if i ports of examination. the 4% as there are challenges sometimes in the timing of the request. some of our partners are not able to respond during the hours that we need them to be for the container is laden. >> it does mean it gets lead in without an expression even though we've asked for it. >> the rise in long beach let's say could stomach correct that happened about 1780 times out of 10.5 million total cargo shipments to the u.s., so it is a very tiny percentage that we've targeted with sesir to foreign governments are not able

to respond. >> but it's still 2000 and if it happens to be one of those that get put on a truck that goes through the freeway in my neighborhood -- >> understood to be the definition of high risk doesn't necessarily mean that it is a risky shipment. in fact, we have not found a terrorist weapon in all the shipments that are targeted. these are based on all these in the chain based on intelligence factors and most of all the vast majority of no concern. so, you know, to your point, we would like to get to 100% of the response, the 96 level is our highest historic plea that we've achieved. we continue to work with our partners to try to get to that 100% level on the part. >> to get to the other two questions first let me just agree. i think that i would recommend to the ports of you seen one part you have seen one port. they are so different and one of the things that's been challenging to us is that the

diversity of a terminal operation and the one part can be different from another operation on the same quarter, and so in terms of the cost of the technology and things like that, it's not just that but it's also how you configure your operations on the terminal is the footprint, all of those things may be affected and they are all problematic. >> report was made in a different way, you have a different footprint and you can't put the same standardization and. stomach and they were not -- they were not designed for screening. >> the challenge that we were looking to do this in foreign countries and the diplomatic challenges we have to think in the pilots if you look at them we had labor issues, we had what i just described the operations from the terminal operations challenging in the other parts of the u.k., so there are foreign diplomatic challenges,

not just the technical ones. and i really don't want to belabor the point and i will get the second question about the technology really have to look at technology as a possible solution down the road. we always want to look at that as a possible long-term solution that helps drive down cost and increase efficiency and may increase also the speed at which we have a good flows through our ports. so we are looking for that and we are partnering with other agencies and within their own strategy looking to do additional investments in technology and technology development and we will see where that goes in the long term. >> is it still the department's official position that the technology does not exist to do the 100% screening? >> the technology that we have -- well, no, there's technology that exists today that has challenges come all the ones i just described, and including july descendant described such as false positives.

>> could you answer for the record and in writing the third question that i have about the shreveport situation and what you know about it and whether you think you're going to get involved in that. thank you, madame chair. islamic thank the gentlelady and now recognize mr. brown from georgia. >> thank you, chairman. this hearing as well as many as a point about something i've long said here in this committee that is that the department of homeland security has a totally wrong. we are spending billions of dollars and wasting billions of dollars looking for object instead of looking for those who want to harm us. we would be much better off as a nation from a much more secure as a nation if we would spend the money and human intelligence focusing on those who want to harm us. we have to stop patting down by ground ma and children and start looking at airports for those who want to do us harm through the sector. we need to stop looking at all

the technology to try to get to 100% when we can only get 5%. i really focusing on those entities throughout the world that want to harm us and we are not doing that. we are wasting billions of taxpayer dollars. we've given them a false sense of security. we are giving them a message that this country is going to be free from having dirty bombs as ms. sanchez was talking about. wasting the tax payer money and it is actually a posture is to continue looking for objects. we need to totally change our focus on whether it is with shipping and ports across the country around the world will need to start focusing on those who want to harm us. having said that, the questions, just a couple of questions. why is there such a lack of specifics in the administration's the five new national strategy? global supply chain security cracks anybody?

>> the strategy represents the highest level of fidelity for what we need to do to accomplish our interests in ensuring the security and resilience of the supply chains. there's obviously a much richer and deeper problematic implementation that goes underneath that and what the strategy tries to convey is the idea of all of the proceeding programmatic and strategic efforts that have gone before but the strategy builds upon. it might have been bea labor and oftentimes in the strategies to talk about all of the authorities and everything that goes before that we tried want to do that because we wanted people to read it. that said, we would be happy to give you a more detailed brief at some point of all of the things we are doing and have been accomplishing in the last year. >> please, do. there's been a great difficulty dealing with your lack of specifics. why is the administration going against the 100% scanning and in

some cases have even played the mandate but hasn't requested that congress repeal the mandate? >> at this point, we are looking -- one of the things we've done in the last several years which i think is important for people to recognize is put in place programs that actually allow us to do much better risk-management, and if you look at the atf that my colleague of eskridge, the advanced jargon center and the information, the ten plus two that allows us to do much better analysis, we are probably -- i don't know they yawn but much further, the road in terms of our ability to identify high-risk and interdict high risk cargo than we were five years ago. and so in many regards, we are moving in that direction which allows us to be practical and

responsible of the implementation of the law. >> in the kennedy we've looked at a number of the technologies that have been developed. you've utilized some just sitting in warehouses. i would like to have from the department a rundown of how much money has been spent on technologies that have been used and discarded as being affected and how much money has been even spent not even to utilized and houses. if you please provide those the data i would be interested to see those because i know from the science committee perspective there been a lot of technological proposals that the department as purchased and have never been deployed. but i encourage the department to change tracks to but we have to focus on terrorism instead of

focusing on objects. tsa takes great pleasure in talking about how many weapons have been found in airports and talking about the success that we have had the effect of service on their plans. we are not doing our job to keep america's a. the department is looking the wrong direction and we're looking at objects. we need to look at people. those people and groups that want to destroy us and i'm not talking and looking at every muslim and at every person from miller eastern descent to me to get terrorists instead of looking for the objects that the department of homeland security is doing now. we are wasting billions of taxpayers' dollars in doing so. as a, i encourage the department to change the tracks. i told the secretary that she is

wasting money and whole philosophy of the department is totally wrong. we need to look at terrorists and the people who want to harm us instead of trying to look at objects and people in this country are getting on airplanes and ships and we aren't even looking at those other things from just the aircraft. i you back. >> the chair now recognizes the gentle lady from texas ms. jackson lee. >> thank the chairman and the ranking member. and to the witnesses at me ask this first question of every one. i was trying to catch the gentleman from georgia's comments of wasting money but i know that you can't put a price on the loss of life. obviously the issue of property

can sometimes generate enormous catastrophic impact on communities. so let me ask the members of this panel representing a number of entities that are involved in the believe requirement of the mandate of the 100% cargo screening that was supposed to take place january of 2012. secretary heyman, do you have the resources, and please don't tell me this is not in my area you are here to talk about the cargo screening etc., and it is your impression that the department has the resources, the money right now to make good on the mandate of the 100% screening. >> no, ma'am.

>> we are always getting this, mr. mcaleenan? >> thank you. >> my good friend >> that works, congressman. a distinguished name and your answer to that, please, sir. ischemic my answer would be the same. >> admiral? >> we are not in the container screening and i don't think that was introduced was the for an assessment system of 153 nations but we don't to trade with and another piece of it and then we are in that it with the cbp and screen 28.5 million people last year getting back to the congressman from georgia's question is looking at those people one or their holes in the fence to say in the form where there are not good access control point where someone can enter the facility and then

introduced an object into a container that isn't in the manifest. and then screaming people on the vessel that me to the same looking at history and then impose history on the vessels that may enter the u.s. port. and that will only comes down to what stopped the threat before it enters the u.s. parts and what isn't stopping at term. so we currently have the resources to do these assessments. we have roughly 60 individuals that are dedicated to do the and formed part assessment to read our to alleges the resources that would take to actually stop the threat before it enters the u.s. water. so that is where as you heard our comment time again that is where the rubber meets the road. >> so you have the personnel right now and the resources. is there a time when you expect those resources to run out? >> we've been able to advance those objectives working with foreign partners, particularly

in the european union to the estimate and this is under the coast guard funding? >> it is. >> mr. caldwell, you are likewise with the government accountability to read to you think dhs may need an assessment of the resources they have to meet the mandate that was given to them? >> not 100%, no, ma'am. >> is anyone in your shop looking at that issue? that is part of what may be the potential problem treat stomach every year we do analyze the budget provided by congress and the committee such as this. islamic the most recent budget that you've analyzed. what is your guess on that? nicoe recent, the most recent one we may have cut because we don't have a budget as we speak. >> can i be very specific? >> yes you can, sir. >> the 2012 budget versus 2011 was a 50% reduction in the

international progress requested in the administration. >> thank you very much. what we've requested from the administration and then ultimately what occurred paid do you have a next step on what they actually received? >> part of this was a shifting of the funds from the people like d.c. yes i back to the national targeting center and from our perspective the gao. some people need to stay in the parts to have relationships with those countries that in general for the targeting purposes it would be cheaper and more sufficient becerra the national targeting center. >> if you would indulge me for one last question i would appreciate it, madam chair. the study produced by the panel's indicated authority day closure of the part of the jersey would result in the economic impact of the u.s. gdp of over almost $5 billion loss of 50,000 jobs.

whether in new york, in my home town of the port of houston, houston port or any of the other major ports across the country and the terrorist incident that closes the nation's port would have a devastating economic effect in the u.s. and around the world. understanding these potential economic growth impacts, potential economic impact can we afford not to increase the security of the maritime cause on the shores, and i want to point that to the assistant secretary of the commissioner. >> thank you for that, congressman. that's right. this is one of the reasons the strategy is being put forward. the disruptions to the ports, the disruption to commerce and the supply chain is going to happen at some point. we've seen it recently with the tsunami and we've seen it recently with the volcano last year and terrorism to read one of the things we tried to the strategy that is different and is important to recognize is the international solution that is

to say we've gone around and are going to multi level organizations, world customs organization like the universal union. we are working bilaterally and saying we need to raise the standards. no one government, no private sector, nobody's going to be able to solve it on its own credit has to be a community effort and that is why one of the things we are going to be working on and have been working on is the international deutsch >> have you given up on the 100% screening? >> we are continuing to operate on the wall. >> can the commission finish the answer to those? >> i would say we must maintain a robust approach as to enhance the cargo security and you to continue to improve and we take the gao very seriously and as testified to improve the program over the course of the past five or six years and deduct the scsi recommendation that they remain $35 million a year without the

security with the program so that is maintaining our structure and expanding and improving it is absolute essentials. >> i thank the chair and the ranking member and the witnesses and yelled back. >> the chair now recognizes the gentle lady from california ms. richardson. >> thank you. first i would like to start my comments by thinking ranking member for supporting my participation today in the hearing. second of all, for the record i would like to note that the representative rohrabacher this the one that represents the port of los angeles and long beach which is known as the complex and it is the largest port in the united states of which i will be focusing my comments today. i also want to know for the record that out of the full homeland security committee hearing on february 25th, 2010, i questioned secretary napolitano on the progress of the 100% container screen buhle june 16th, 2011 as the chairman

of the subcommittee on the emergency communications prepared this response, myself and committee members submitted a letter to the secretary regarding the impending deadline of the screening and then again on march 3rd of 2011i asked secretary napolitano about the 100% cargo screening. so this has been a concern of mine for quite some time and with all due respect to some of the folks here who are testifying for those of us that live in these communities, the port complex itself is in mr. were looker's district however all of the land portion and all of the impact of the port meaning trucks and activity for the simple the port of long beach is in my district. so i take it pretty seriously. madam chairman, for the record i would also like to point out not speculating ideas, but according to the university of southern california homeland security center the preliminary economic report was performed back in 2003 due to the strikes we had,

the labor strikes in 2003, and it was recorded at that time that $1 billion a day was lost based upon the closure of the port. so, with respect to the people who are testifying when we say a number of 16, 20 billion, what ever it is, when you keep in mind that we lost 11 billion in 2003, and that was a labor issue, that wasn't even if there were infrastructure damages, so i'm not putting aside the cost that we need to consider these costs which leads me to my first question and if you can do yes or no as much as possible as i would appreciate it. mr. heyman come to your knowledge, has the department conducted a feasibility analysis based upon cost as mr. caldwell has referenced? have you guys dennett? yes or no? >> we haven't done the full capability study. >> okay. thank you. my next question would be mr. heyman, to your knowledge of

any steps been taken or are any steps being taken at this time to achieve the act of the 9/11 recommendations of the 100% scanning in the department? >> yes. we have submitted the report to make sure you get a copy on that. >> let me make sure you're clear on the question asking. this will directly reflect what steps you are taking to achieve the 9/11 recommendations of 100% scanning. >> this report reflects all of the sea port requirements and how we are implementing it. >> and how you are working to achieve 100% scanning? >> the report talks about what we've done to achieve the 100% scanning to this point. >> okay. commissioner, is it true cbp relies upon the host governments with their customs personnel in relevant from countries to resolve issues of containers

that are deemed high risk? >> yes, we work with authorities that are sovereign in those parts and often times observe the anticipation. >> is it true the cbp doesn't require scanning of the parts? >> is it true that you do not require scanning of the high risk containers out of these areas? >> our csis folks are operating with request as opposed to the requirement authorities. >> so it is correct as my question that you do not require scanning at the ports; is that correct? >> we do not have the authority to take action on our behalf. >> okay. again, building upon ms. sanchez, it's true 4% of the cargo identified the parts have been identified as high risk and have a right in the u.s. without being scanned; that's correct? >> that's correct, 750 shipments last year.

>> mr. heyman, you testified about these wonderful international relationships. however, when i asked the secretary, when i also asked ambassador kirk in these trade agreements that we've recently approved, was there any effort to work with these foreign countries to establish a scanning process and the answer in both of those was no, it didn't, no, would get back to us. do you know anything on that? >> i do not, but i could get back to you if you like. >> finally, madam chairman, i would like to build upon mr. brown's request of not only requesting the information of the cost of some of the technology of what is being done, but to supply the request of the folks here who are testifying to supply to us details on what steps have been taken, what technology is currently being considered, when has that last been reviewed, and what future technologies are they considering to meet this request which may require a classified briefing? >> thank you, chairlady --

>> did you accept -- >> without al-awja action d'aspin okwu concluding? okay, without objection from certainly. the chair now recognizes. >> thank you, madame chair and ranking member really am appreciative of this hearing as i mentioned to you yesterday on the floor. my friend, congress member and i have found the report caucus and we actually sent a letter to the chair of the homeland security committee asking for a hearing such as this. and i am very pleased that we are holding of a spirited and i've been very interested in the testimony. but i think sitting here this full-time and listening to the question and answer i'm not feeling any better about where we are in this country in terms of the port security.

and i echo many of the comments that my colleague ms. richardson just made, and while either one of us actually represents the port of long beach los angeles, those ports we call them america's the five ports because it's about 44% of the trade that comes into this country comes through those port complex, and both of our districts border ports. many of our constituents live minutes from the ports, and any attack and natural or man-made would be devastating, and to the national economy has ms. richardson said in 2002, we had a labor dispute. everyone knew it was happening. there was already efforts under way to divert cargo from the west coast ports and yet we were able to determine that it was to 2 billion-dollar a day hit to our national economy.

so, and it lasted ten days. do the math, and we know what i did. also, not to the national economy, but the global economy. we heard that many businesses throughout asia actually were extremely impacted by the loss of cargo moving in attendees. some of the businesses we even heard never recovered from that. so i think the threat to our national economy, the global economy is severe, and i have real concerns. i've always felt like the most vulnerable entryway into this country is through our seaports. and after 9/11, i feel we've focused in this country rightly so on securing our airports. you know, and we didn't really take into account the cost. we didn't really take into account the inconvenience of i think the traveling public knew exactly what it was going to

entail to make it through security. they would have probably balked at what we were recommending that it was important to the safety and security of the travelling public as well to our commerce to it i don't feel like we've done the same our ports, and i know there's a lot of vulnerability still. i'm one of those the would like to see us get to the greater percentage of scanning. that's also imperative. also a lot of what you are seen on is a lawyer approach, knowing what is in the manifest, be leaving with the manifest, and the bleeding when it reaches our shores nothing has happened across the ocean to have tampered with any of that cargo recently if implemented design a to the port of los angeles there has been twice on the anniversary of 9/11 the national

media company actually shipped deflated uranium through the port, and it was discovered in los angeles. also now since we've implemented this there has been a couple of containers that have come in that harbour folks from other countries. one was the 19 chinese in a container that was discovered by the choreman in los angeles, not any of these efforts that are under way. and in terms of cost, you know, the cost that would impact a recall me if something were happening at one of these major ports is significant. but, you know, we were sending a lot of money on our war per month it was 12 billion per month for both of the wars in iraq and afghanistan. so, and we believe that was worth it. we believe it was worth it for the national security. l.i.e. really think this is at that level to read and i feel like we are vulnerable. i think we've all talked about

how much we want a greater percentage of screening, and i think you've answered where we are at. and i think that you've heard this morning from a lot of members of this committee that we really are interested in seeing you get a higher percentage of scanning. let's talk about not -- if something might happen, let's talk about when something happens and the port disruption. it was touched on in terms of recovering. and i know that i am going to be introducing legislation that talks about all of the ports in the country having a recovery plan because i think i would make the ports less attractive to an attack if we knew that they could get up and running to get in the port caucus we are going to talk about the recovery plan for all of the parts. what would you suggest that we look at in terms of what would be important for our major ports

to get back up in business after a major disruption? >> thank you, congressman, for your thoughts on this very important subject. we take this very seriously and appreciate your seriousness as well. on the resilience and recovery site, it is something that is not -- it hasn't been embraced or has thought through as the prevention side. that is because largely we are very concerned about prevention, and we have done less on the resilience site. in the united states, that is why we are taking an initiative and building in the resilience internationally on the strategy. in fact we have led the way partly through the apec forum ensuring that the trade recovery procedures are put in place. and one of the main things people will do, and frankly the port should consider is having the appropriate information to know where and when things can opens of the businesses can rely

on the real understanding of the timing and the recovery and the disruption. the sharing of reformation as one of the things we can do a lot more on as it retains to the resilience of the courts. >> let me ask about the point of origin where we've got the manifest a right to the point of destination where we are hoping for the best but nothing has happened on our wide open seas. can any of you speak to that issue? are you 100% sure that when these containers leave the point of origin and when the right to the point of destination nothing has happened and what are we doing to ensure that? >> we try to make it as certain as possible, and to that that is part of the ten plus two filing.

it includes information on where the containers reside on the vessel. it allows us to see if they might be accessible while on the high seas and to determine whether they could be compromised during a lot of under way. so we do the checks when they arrive and are able to compare the seals submitted by the importer and the shipper to this because those? >> u.s. borders and protection of a point of entry. so, in other words, this is a concern and something we take seriously. we work with our partners on the coast guard at the dessel's approach of the u.s. parts, but -- >> do you do checks on all the containers? >> nope. we do targeted field checks and also random operations to ensure the integrity. >> and that is what makes me nervous, too to read again, keeps me a bad night -- keeps me up at night. you're kind of best guess and it's more and more of the ports are going to go automated.

i am concerned that the loading and unloading of the cargo by automation as opposed to real folks is also i think presents a bit of a rest. >> thank you. >> i want to thank -- term my microphone on. i certainly want to thank all the participation from the members today. it has been i think one of our -- well we've got a great hearings but this has certainly been a good one. i think a lively one. a good discussion. i certainly want to thank all the witnesses for your testimony and thank you all for your service to the nation and i know i speak on behalf of all the members as we are obviously working in very extremely bipartisan fashion about the national security. and my staff get sick of me saying this but i say all the time and try to remind certainly myself that the first, with all

the issues the congress faced first and foremost responsibility of the federal government to provide the common defense that is actually in the preamble of our constitution. .. >> this subcommittee is very, very interested in assisting you with the resources that you all need to do your jobs and the mission that we have tasked you with, and you're out there every single day, and it really is, for us, as i say to prioritize

our spending here, and i say that from a bipartisan stand point because it's interesting the administration is proposing a 50% reduction, but yet i understand the makeup of all of that was, expensive to have officers oversea, ect., so we have to -- we're not looking for a sound bite here. we're really trying to understand how we prioritize our spending and do what we need to do to keep the nation safe, particularly to the points. again, i appreciate all the witness, their testimony, and with that, i would mention also that the hearing record will be open for 10 days. if there's additional questions, we'll get those as well, and without objection, the subcommittee stands a-- adjourned. thank you very much. [inaudible conversations]

>> we been in business about five years. started out with three people around the card table trying to -- we got a phone call saying how do we get this top gun stuff out to a drilling rig? now we employ close to 100 employees and contractors. we were number 100 on the 500

list for 2011, and it's been a great ride on the growth cycle bringing a value to our clients, but there's always a wait we can do better and i'm glad to have the opportunity to share from my perspective our small company is affected by what happened here in washington. this is really what we bring to our clients. people who have had an amazing experience with training funded by the u.s. taxpayers. we have, probably 80% of our coaches are ex-navy fighter pilot, top gun instructors. we also have quite a few army and special forces, u.s. navy seals. u.s. air force pilots as well, and the neat part is, they grew up in a system, and the system was around ensuring rapid improvement in 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 we continue this or do we leave the 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 of this caliber out in a higher reliability and high-risk operation is a really neat thing. >> here's what some of our clients -- many of the major oil and gas operators, and as the "blueprint to a billion" says unita markie bly and -- life. our first client was diamond offshore. they decided want to change the country culture. diamond offshore has about 44 rigs, drill all over the world. they felt they could do better,

just by bringing on this culture. so we worked with them for about three years. from that we moved onto a lot of the super majors. and has again in "blueprint to a billion" we have clients with me that have resources. and they're willing to apply that. but moving on to the theme of the day, what are our growth strengths? we don't grow and less -- sales drives our growth. over the last year and a half, the domestic regulatory uncertainty around oil and gas has been a big damper to our growth. i could literally hire, we have a stack of probably 40 resumes of competent former military people that we would bring on board if we had demands. but we just don't have it. when the president, back in early 2010, i believe edward,

opened up, said we're opening up florida for drilling again, we are all high-fiving and her officer and, of course, my condo happened, not only was the shutdown bad but for example, i might offshore, they moved all the rigs overseas. not only did our client not work, they left. and that cost us a 40% drop in business. the other place where we feel we can take this and what we did get some help here in washington is on the faa model, how industry and government work together. many of our consultants had experience in airlines, american airlines, united airlines, southwest, delta. and the faa model how government and the industry can work together on training, on competency come on standards is a really good opportunity we feel going forward. specific example is in aviation

there's a program, essentially a self reporting program on errors that nobody saw. and then the airlines judges information. the faa shares this information. what are things that we are seeing happening that nobody catches and how are going to prevent these errors in the future. rolling that type of program that is an opportunity feel that would allow not only safer operations but better oversight for the government and improve the general execution of an industry that is quite frankly very safe until something really, until there's a high consequence of an error in operations. as i mentioned, the other piece we bring is train. we start a software country taking tools and techniques on how i is for the new joint strike fighter, the f-35 are going to be trained in a distributed manner that is easy-to-use, and where 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 do it over the internet, virtual structure. and the software business for us is a capital limitation because we have been so funding it but the user access to it with capital with a tremendous opportunity to get some good training products out the door. so that's kind of our story, short and sweet. and excited by. we actually ended up david's book as a bible to their buddy and a management team a few years back, and it works. we are very happy to use the resources that have been paid for by the taxpayers of 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, updating that demand out there to the right client at

the right time. >> tom, my favorite story, staples, i know you have some prepared concert the you built the first staples. nobody came. >> that was a problem. overtime, it happened is the two people who did, notice that the copy paper that used a $75 for was $25, and pins were 99 cents. so they tell their friends to the next thing no by word-of-mouth its most powerful marketing it is, this is a pretty good deal. and, of course, then it took care of itself and the company grew and now is at $25 billion or so company. since having done that and got involved with pets mart and its our days, carmack's, all multibillion dollar companies, and now professionally invest in businesses -- that are growing

fast. [inaudible] also run by a former instructor. something about traveling of the speed of light that allowed you to manage business more effectively. ron does a great job. but we are here in washington, i want to reflect back as to what has changed since staples and pets mart came into this world. and how much harder it is today not because anything our governors have done or haven't done, but because of what people are in have done to thwart the growth. you can read about the job creators, job creators alliance.org. you can see what's going on there. it is much harder today. let me give you a number of examples but i remember we started out staples we had venture capital. discovered by the way is tried

to make venture capital and four letter word the best they can. i wouldn't have gotten off the ground if i didn't have venture capital. not long thereafter we went into a bank, and a small regional bank, and i said look, i would like to get a load the bases well, you're not making any money. that's true. well, why should we give you a loan? well, i've got $8 million in paperclips and legal pads that are bought at incredible low cost, and the worst case for 6 million-dollar loan you have more than that value in paperclips and legal pads. the bank gave me a loan on that basis. today, they've had bank records and inspectors crawling all over them and there's no chance in the world it would make the loan

criteria of today's banks. because we the government talk about all we want small business lending, when the rubber hits the road, the bank inspectors hit those banks, i can say the companies -- great copies and they'll tell you right up front, this is not good for business. our reserves are so high we can't afford it. stock options, we started off staples, we gave every single associate in the company stock in the company because they all felt like owners. well, for years congress was effective in fighting the account angel tried to prevent stock options. years back at the world cup stand and so forth, warren buffett made a couple speeches, the dam broke and now we have the expensive stock options are on top of that every young company like yours have to pay 25, $50,000 a year, have accounts come in and value those profits. it's a non-cash charge, 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 have all these regulators that say you can only give out a certain amount of your equity each year in options, or else you'll get dinged by the public and get in trouble. so while in china they're making stock options very fashionable. we're going the exact opposite direction. instead what we're going to do is we will create jobs here in washington but we will create $300 million of bureaucracy to regular financial abuses to figure out what they are. they have $109,000 person in there who was director of limitations avenue elizabeth warren financial -- i can think of the name. and we have the professional -- the accounts weren't bad enough, now have an organization run by former congressman, who is

regulating the accounts. if you could read some of these reports about regulating the accounts, someone could stay awake long enough which is a child, you would realize it's an absolute total waste of taxpayers dollars going to no income other than to further more bureaucracy here in washington. but it gets worse. we have an nlrb whose intent upon making it hard. so i suppose going out of hiring people, too busy posting signs in the lunchroom, in case the forgotten they weren't aware of it. then we have dodd-frank, and let me start with sarbanes-oxley. sarbanes-oxley comes out, again, reaction the scandal, worldcom, so now they come up with this massive bill which instead of going sarbanes-oxley should be called the account enrichment acted as basically every emerging topic of all my companies want to go public.

spend over $1 million in one time fees to become sarbanes-oxley compliant. been close to a million dollars in additional audit fees every year to make sure things like, there's a duplicative passwords in your foreign office. they changed every month. all important things like the. that's not what happened at worldcom. it was abroad. this thing hasn't stopped any project. it's a total waste of companies the money, although not allegedly in the public interest. then it comes to dodd-frank. dodd-frank, the talk about opportunity, employment at dodd-frank. know, they're talking about risk. mortgage trade back securities. as opposed to putting registrations in place for them, lobbyists a good. they now put one across all american business, talking about how we 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 risk to the business. the draft, reporting back on it, and what can happen? well, what happens then? we could have a major recession. what will happen then? you have to write all this up and talk about 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 the risk. well dammit, if we want to create jobs without to be taking risk. we shouldn't be avoiding risk. our board of directors should me sitting there spending their time twiddling their thumbs having lawyers right of risk assessment. there should be forced to have them look at opportunities for growth and have to grow their enterprises. and there's nothing at dodd-frank or sarbanes-oxley that talks about that.

i've got to longer i could go on for hours more about the stuff. thank you. >> you do have a lot in common. because if you think about it, for a company to grow quickly you have to have speed, velocity which means you have to have process youth with no friction but if you're going to double every year you don't hire country try to leverage the people you have. winner of flying a jet fighter you looking out for six months, you're looking out six miles from where you're going to fly. when tom is talking about risk, you can look backwards at risk or forwards at risk. is your perspective of growth and how are you managing. you conclude he is a 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. >> first of all, i want to say i agree with everything time said. he is right on target and all these key issues that are frustrating to us in business.

i was celibate about the tractor supply store. 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, gone through tremendous growth since we went public in 1994. that business is focused on the needs of people that live in rural areas, be huge and strategic shift back in the 1980s to stop focusing on agriculture and stopped passionate and start focusing on hobby farmers. they live in rural areas and have a couple of acres of a pickup truck and a dog and cat and a little bit of time on their hands. and that change the dynamics of our business and put us on a growth path very different than our competitors. and the second big factor in the success was focusing on creating a very, very powerful culture, focused on ethics, focus on developing the right people, focus on education and the bottom line is we wound up with a very low personnel turnover rate and still have a very low

personnel turnover rate today. so you take those two factors, unique and special customers and building a very powerful culture, that's what put us on a growth path. we went public in 1994. at the time we were doing 400 million in sales. laster we finish at 4.2 billion in a row business that now many people understand that we went from 180 stores to 1102000 employees to 16,400 employees. the list of frustrations that you have with regulation, 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 flsa and eoc and the nlrb and erisa. and now in the last decade or so that load on top of us at the l.a. and sf l.a. and all the rest of these things. we grew up absorbing those things every couple of years, something he would come down

through. you're starting a business today and had to do with all these things it's very difficult, and the bottom line is you probably have to hire a whole team of lawyers to get you through all these processes. at all these attacks were ungodly done for good reason, but taking the to the effect is one that paralyzes basis invitation as tom says, it takes you off track and set paying attention to strategies and building your business and building up and you're worried about crossing t.'s and dotting the eyes, following all this regulation. i can't imagine what it would be like trying to borrow money today. compared to our days. where hard time bar in mind when we got our company going and today you hear stories about it how it is nearly impossible. i retired from doctor supply about five years ago and create a leadership institute for executive education in national. in that we've had hundreds of students, from all sorts of different industries. and they are pretty high level

folks. they are 35 to 50 year old vice president typically. and to hear their frustration about the kinds of things they run into, day in and day out from all sorts of business the way people go in the barge business and 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. health care people that i talk with their almost like a government business instead of private industry. you just look at the cuba to the effect of all this regulation tends to penalize people and returning a are not as new as pallet affect as many other businesses are. >> thank you, joe. at dinner last night j.j. and i had a great discussion. there is a cause and effect of management teams are quite smart to every entrepreneur give them a problem, slow them down, they will find a way to work around. i would love for you to share if you don't mind how you think

about taxes and the complexities. because now there's an interaction effect. now that those offshores are moved international market you're sending x. navy seals globally. taken from their. >> right. so compliance for us as was mentioned, you know, it's become a full-time job for about four people. we have a bunch of attorneys on retainer and accounts on retainer to just try to manage compliance. so the complexity of doing operations, our growth and yes is relatively simple for us than when we for several a client height for us to work in poland. now have to comply with polish tax laws, u.s. tax laws, all these registrations. and it's great to be working. we work for probably 15 different countries around the world, 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, you know, the other piece, every attorney and accountant gives you a different opinion. and you can just pay for more and more opinions on what's going to apply, comply with the law. in the bottom line is it's still on us as directors and owners of the companies to decide okay, we're going to do this on the tax i, or we're going to do this on the accounting side because fundamentally we are the ones on the hook for it. and it's just been a tremendous, instead of focusing on sales we spent a lot of time focusing on compliance. >> spending money there, but and you've been looking for money to finish off some software. >> yes. that can help you grow your business and hire more people been as was mentioned what a great relationship with her bank. our best bank, a regional bank in oklahoma. they have been tremendously supportive, but to get to where we are now, we have completely

encumbered every asset personally and the corporation has just to have a line of credit and a small amount of loan. the next of force is either going to venture way or continuing to sell the fund our growth and self funding or growth is about the slowest way you can move forward. and so we are looking for sparks from the outside that aren't going to cost is 25% of the company. but the bank really can't help us with that because of all the compliance regulations. >> now customers are -- >> customers are -- with a major client that wants the simulation and training peace rapidly, and so they are now hopefully going to step forward and provide is the capital to do it because they bought this product out in the field now. because they do it would've prevented a major accident if they have had it on site. the drilling crews were able to do training on site, the current requirement of every two years

at a school. so they're looking to give us the resources to complete this project, but if it had been out the door six months ago we, this accident might never have happened. bedecked the risk, there's an analogy, the risk of drilling for oil and the cost of failure causes friction and early for oil. it's the fear of an airplane crash but 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 and software tools, crisis management the american yes. it's currently, the system is set up where the expectation is the risk is -- they have brought on a lot of new people and also in the early '80s when oil come when the price of oil collapsed and industry didn't grow for 10 or 15 years, there's

what they call a big gap in experience. so they're trying, they're bringing on little chevron has to train 500 new managers a year that have zero, very little experience in industry. and so how you bridge that gap from had an experience-based culture to a culture that is involved around trained him and that's where our expertise comes in, and setting up training programs, setting up competent programs. and in these products to deliver software and simulation. and that culture change is occurring and they have the resources to do it, it's just a question of having to capital to bring to our clients and they are finally helping us out with it. when we're talking about leadership, there are 20-year-olds on carriers moving billions of dollars of assets, if they're not there based on experience. >> no, but it's a whole culture of how the trinket in the navy does a checklist for everything.

they debriefed everything. a lot of other industries are moving that way. we are excited to be a part of the. >> and that's really important one of the techniques in the military into management. >> absolutely. >> really helps divert the risk be back absolutely. >> this case of risk management that allows us to free up the velocity. >> yes. >> and that's what i think our challenge is across all industry, regulars and. how sophisticated are weak? with her tools and techniques. the best ideas are imported from different industries to help companies grow, and here's one example. for tom i enjoyed it was a shopping cart, came from the supermarket business that was tom's idea for office products. >> yeah, but i would say as you look around, talking about going international, you're probably dealing with a crazy tax code, which you have to figure with her in different countries and to keep them happy is actually

difficult to moving people across the borders, based in vancouver but it's created thousand jobs here in the united states. if you have any idea what it's like getting whether homeland security department, they literally got a full-time lawyer on retainer in washington, d.c. just to do with immigration issues. they are cfo was going to new york to make a presentation to a bunch of investors. he was held up a can the airport for six hours under three he needed a work permit to give a speech. and only the lawyer, they got him out of custody. this is the cfo of the fastest growing company. that's how we're treating people at our borders. if you hire foreign people now, trying to get them work permits him or kids and universities, as opposed to now find venture capital and the united states and start a company up on we 28 in boston or silicon valley or in maryland, they are going back

to india, they're going back to whatever country to come from, starting their companies there. where they don't face the same hostility to read after cells were doing to growth in this country. and 80% or 90% of the problem is right here in washington, d.c. >> you trained, teach and coach management, a lot of management teams. what techniques and ideas do you see that you apply that we could apply to get everybody on the same page for growth? >> well, i think it's a matter, in our business is a matter of selecting the right people, and building their skill base to get where they need to go. a couple of issues that came out before that i was thinking about as we were talking here, when we talk about sarbanes-oxley, for example, which cause every company a million or two or three a year, to comply with, why don't we push back, why do we try to get that thing repealed?

is not doing any good at all it does cost money and they keep layering these things year after year after year. we need to push back and said all right, let's take that away. another experience we had that was just terrible, we were hit with a shareholder derivative lawsuit which took us way off base and cost us millions of dollars to defend, which we had done absolute nothing wrong and it's all because of a disgruntled employee. we can put into place loser pay on lawsuits, we would eliminate all this stuff. i don't how to put a dollar figure on it, but this country spends billions of dollars defending its nuisance lawsuits every year. >> a funny story, one time we were doing something in europe and our lawyers advised us, they want to do this under german law? in would be much safer under american law the absolute. i would rather have any law in the world other than u.s. law. so the fact of the matter, in germany we did so, this independent magic finds the facts, there's the hundreds of

thousands of dollars worth of discovery in every lawsuit. a magistrate finds the facts, a child based on the facts they find it in canada if you offer to send a lawsuit and the persons and 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 is loser pays. any legal system in the world is better than our legal system. our legal system is great for one group of people, lawyers, period. and we just continue to let this stuff go on. and we didn't mention obamacare. if you're a retailer facing obamacare, you are way better off financially for your lower tiered employees paying the fine, or the fee, then buying insurance for the big many countries will do that, it's not the humane thing to do but incidents are set up to do exactly that. and then the insanity is, and this is true for all, i have a

lot of reduce the the lower tiered associates, there is a law in place. this is incredible. 2700 pages of nonsense that obamacare represents. there is a rule in there that says that for 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 are clever and find a way of saving money. they're so incentive to do so. they're going to tax it right back on. so the capital system of finding a better way in america is thrown out the window to an act of congress. this stuff is insane. and yet, we in the business were are subject to the stuff every single day. >> thanks, tom and joe. there's a lot of focus here about operations of the business but one of my pet projects is opening up markets. j.j., i would love to you to

spin can't afford open for questions and answers, your brother growth is really dependent on how markets are opened up. energy licenses, moving to new industries, or export, states. could you share with us the dependence of your growth on opening up markets and customer demand? >> obvious he is demand driven, and typically what's announced unlike ours or a business like ours, clients are a little hesitant to go yet, we're all in an usage i contacted they did a test pilot project to see how you do, to see what change a performance there is, safety and operational efficiency and then the client will see we like that, we now want you to go all over the world. 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, what we have utilized, because we have a lot of our employees work in

embassy staff. the networks around the world, what do they call, the foreign contract officers and stuff, that has worked out for us. in terms of getting at least some basic knowledge of how to operate in a country. and then from there we have to go, and once we get some basic information from each of the country sites, we are now able to really start moving down the path of getting the contract in place, and figure out how we're going to get paid from all over the world. but what reason i just had a project is about to go in library, and we're, we're 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, it's an impediment to growth just from a tax and contracts perspective fo for a small company like ours. and the majors will go we want you but you've got to figure out

how to get into the door. >> thank you, j.j., tom and joe. [inaudible conversations] >> welcome to the yg network some of the i am david thompson, moderator, author of "blueprint to a billion" and i like to introduce our distinguished panel this point. eric cantor, leader of weekly standard represents virginia's seventh district in congress, house majority leader and co-author of the best selling book young guns, a new

generation of conservative leaders. the most powerful person in washington. tim scott, represents south carolina's first district on congress house rules committee never, one of the two freshmen of the elected committee. susan story, southern company services president, ceo, former gulf power president and ceo and a jobs creator of alliance member. and tom stemberg, general partner, former and retired ceo, founder and chairman of staples, and also a job creator alliance number. and then finally steve case, revolution chairman and ceo, america online cofounder and the case foundation chairman pitt to quickly summarize what a great panel this morning involving joe scarlett, tractor supply, tom

stemberg, and j.j. sos, check-6. we talked about growth. and 3 cents, summit of our first battle is about growth, we all do it from her own perspective of experience, and we need to define growth as companies that achieve high sales growth. high sales growth, kevin innovative product, meet customers needs as measured by revenue. it is the hardest line item for a measure came to fight. sales growth is the driver for job creation, when you look at the behavior of management team. it allows them to make a profit to reinvest and hiring employees to meet future customer demands. the second message is that the revenue growth cycle are cyclical, were coming into the next growth cycle, but what the industries of the types of job creating growth companies, because they are synonymous, are different. the 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 at retail. and then finally, we need to optimize our regulation and polish to improve the velocity for allowing companies to go to create jobs. america used to have 50% share of the world of sales growth companies. and by that i define as companies that are small businesses because every small business is the heart of america's growth, but some of the small business 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 are still that of one nation for sales growth companies, but we are not the leader. more sales growth companies will create more jobs that will get us back to full employment on the next cycle. the gap to get to full employment in the next cycle is bigger than we think. we forecast into when not going to get there, unlike the peak of the previous growth cycle. our challenges are daunting, therefore no one global slovic we need a system solution like restarting america's growth engine, the spark in every silver. so our theme today on our panel, artist in which panel, to talk about what of those parks in every silver to take a systematic approach. and so let me open up the panel with eric. eric, washington plays a key role in driving job creation and world compass but what role does washington play in this environment?

>> first of all, i appreciate the opportunity be your on such a distinguished panel, joined by my colleague tim scott. and really the spirit i think today's discussion is exactly what this town needs more a. and as you say, it is about sales growth. it is about growth innovation, and washington can do a lot to inhibit growth and entrepreneurial activity. they 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 played for the prospect for high growth is played. and i think washington's role certainly should be to try and focus 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 jack up the economy. because i think what we've seen, when washington is in the business of deciding which industry should win in which it should lose, when washington is in the business of saying that people should be spending their money here or there, it generally does not work. 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 health care arena, and others that have not work. and that's what i think you'll see us in the house of representatives talking about new policies, new ways to a compass what we are 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 the growth in the number of jobs is really place a small business growth. and the high sales growth companies feed that more than anyone else. and so if we keep that in mind, and that's a we intend to do, tim and i will be bringing policies forward. we will 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 will

bring to the floor strata. it would be a 20% tax cut for small business. that sends a signal that washington really is in the business of trying to encourage entrepreneurial act of the. but again, i think that the idea that you're focused on in the spam is one that all of us in this county to spend a lot more time readying ourselves, engaged in a helpful way. >> steve, i'm excited to have you here today. two keywords that i focus in on that heritage is shared, risk and growth. you took a risk in founding aol. and you have the velocity to grow, and now you're sitting in an interesting position of looking at the situation today and your your personal expenses being one of the ones who made it to a billion in revenue. what are the top lessons that can be applied to? >> first of all its great to be your. when eric asked me to join this event, it was called young guns. i was flattered to i think of myself as an old gun.

we took the public pashtun the company public almost 20 years ago. it's always nice to be included in a young gun for. it's great to have people in washington focus more on the role entrepreneurship has played in building our nation, and needs to play going forward. so i'll answer that question all of it in context. i did so with two other cofounders, not far from here, in 1985. we built that into a pretty significant company. and the last 10 years or so i focus on investing in companies, partnering income is including one this picture, living social, with four people, now there are 5000 people. another company in massachusetts, a karcher and comprehend is expanding quite rapidly. i can pivot from just focusing on being and not ignoring to now backing and helping entrepreneurs trying to build these great iconic companies and trade a lot of jobs. and more recently which is the

context, the last year or so i spent a growing amount of time on public policy here in washington getting people focused on the role our partnership has played. the way i look at it, the story of america is the story of octopus. it was the work of entrepreneurs not just reading companies but entire industry that were based year. we kind of lost sight of that and people when they think about business tend to think of it in an overly simplistic context in terms of fortune 500 large compass, small business on main street. but the real leverage is everybody said is a these high-growth companies that really have the potential to great significant number of jobs. the foundation research on this i think is pretty telling that over the last three decades 49th of jobs have been created by the high-growth companies. if you want to focus on an economy want to focus on jobs. this is the place to focus. the data recently has been a little troubling. the number of new start is down 23% since 2007. stay the same level, high the

same number of people can we have to weigh more jobs in the economy so gives you a sense of the. meanwhile, ipos have contracted significant. when aol went public, almost 20 years ago, we raise i think $10 million. now companies partly because of sarbanes-oxley go public later and raise large amounts of money, or they often get slow and don't go public in less companies get sold, they decent rate instead exeter. so the two things a bit of a focus on. one, we launched a year ago a startup american partnership, you can find information going to start american partnership.org website. 50 countries have committed a billion dollars to discount services and free products and so forth to help the next generation of want to be ours. 18 start of regions around the country because we really believe that while they are providing an overall umbrella of resources and focus is important ultimate the real action is what happens at the regional level. and also last year i was asked

to join the presence job council and chair the subcommittee focus on high-growth companies. we came out with our report, i think it was in september or october. i was the president this is a bipartisan group it gets and folks together, the really understand what's going on here in divide into a number different task and i was focused particularly on october nurture. what we did instead reinvent the wheel which is what allows more people who've been working on this for bunch of years, why don't we take all the good ideas that are out there with the help of mckinsey end of the, do an honest broker, gathering together, prioritize them and forget which one could have the most impact and recommend those. that's what we did. many of the things we recommend are things that eric and kevin and others have been leading in the house for some time, but the good news here i think, there's not a lot of good news these days in washington, ran people coming together and solving problems unfortunate as we had close to november, presumably

will get even more and more challenging but there is a moment i think in the next couple of months where we now do have bipartisan support, there's three particular things that i think i am encouraged by tom at the level of interest that i should after meeting with the president, the next month it was a bipartisan bill introduced in the senate by senator rubio and senator coons, and they basically said let's find the things that we've agree on, can we get those things down for a month later the start of act was introduced by senator warner of virginia and senator moran of kansas. ..

>> just briefly, sarbanes-oxley is a key one. as i mentioned, the aol experience in less common these days, and that's a problem because 90% of job creation happens after companies go public. essentially raising -- when that was put in place, people said, look, there should be a carveout for smaller companies, they just picked a market cap of $75 million, too small. jobs council recommended it be a billion dollars, the white house recommended $700 million. that, i think, is a good idea, 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 cloud funding, allowing these internet platforms to form projects like a documentary, to also fund businesses with sufficient precautions. and so the current proposal that

i think has some support, some momentum is, essentially, if you're raising less than a million dollars in individual investmentsless than $10,000, there essentially would be a carveout in terms of sec regulation to permit that. that's a really big deal because a lot of companies have a problem because they rely on their own money, maybe some informal friends and family money, but getting from that point to venture capital is quite challenging. and the third, which i think is the most important but also the most sensitive relates to immigration. we've got to win the battle for talent. people are passionate about their ideas. we do a great job of attracting some of the best and brightest to come to our universities, and then we essentially kick them out of the country. it's a little bit like we said why don't you, you know, move from china, attend our naval academy, but once you get that education, we're going to kick

you out, force you to work for the china military. look, we get these people here, let's keep them here, let's encourage them here, staple a green card to their diploma is one of the key things. the start-up act that was put forth as senator warner and senator moran, as i mentioned, eventually created a s.t.e.m. cease -- visa and also -- [inaudible] 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, essentially agree on 80, 90% of the solution, 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. i'm optimistic, but et really is -- it really is going to take everybody looking at this. ernest and young which has its entrepreneur forum every year, coming 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 on electricity. in 2008 it's 60%. so 60% of our gross domestic product fends on electricity -- 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 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. and we have to remember that as we're making energy decisions, that it does drive the economy. you couple that with from 2007 to 2010 23% fewer new businesses have been launched, the lowest after any -- during any recessionary period. that's about 1.8 million jobs. so if we're not creating them, 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 their 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 who continue to grow and be successful x. the second

piece, and steve also mentioned it, is the skill issue. i've been very involved in education, our company is very involved in education. one of the concerning long-term things is, if we need -- and be mckinsey global institute says we need 20 million new jobs by 2020 to reach 5% unemployment and to meet the growing population that needs to be employ inside this country. so if that's true, 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 feel. so business, government has a real mess, but business, we've got to get in there and help develop the skills we need. so you create the jobs through things you've already heard, i think there are key issues like to regulation. what do we do to make sure we can start businesses quickly, that foreign direct investment chooses to come to this country.

not only do we create jobs internally, but that we're a draw for foreign direct investment. the world bank recently said 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 locate inside 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 sectors, 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, not

only do we have the numbers, but we've got the right skill sets. that's not just college graduates, that's insuring we have skilled technical professionals who are craft workers, physician assistants, those types. >> if you don't mind, i'd like to ask you a quick question. you love education. and, steve, you talked about the ernst & young ceos. it seems to me this is this real world situation happening and we're trying to get on the same payment that the needs are -- page, that the needs are unique. you got to have more velocity, 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. from my time of 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 a 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. from education, what i see as most successful, when i was in florida, i was on the state school board. it was the integration of business into the curricula of the school where superintendents actually sat down with businesses in their commitment and said what -- in their community and said what type of workers do you need? trying to get people up to the level that they could participate in the work force with the skills that they needed. we've got to make sure we do that earlier. one great example, our company's been involved with career academies. career academies are not the standard-vo-tech. we build electricity labs in school. kids went in and soft mores, by the time they graduated, 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, 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 and these communities and the schools and that business is in there not just saying, well, shame on you, you didn't bring this person to us, but we're going to help you dlufer and develop the type of skilled work force we need for the future. >> thank you. >> on that topic, one of the things we've done in charleston county to make sure that happened is look at, we have force protection building the 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 that 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 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 the from a global perspective, we lack it completely. the same thing from the taxation standpoint as well. the overall taxation from the local government to the federal government is over 30% of our gdp. on top of an untrained, unskilled work force, you find yourself becoming a major impediment to job creation in our country. so you look at the opportunities to advance our cause from capital gains tax which attracts more revenue into our country all the way down to your local schools and the integration necessary to create the platform for the future. >> first of all, i commend steve and the others for working, and eric and others for working at changing the policies in washington. what's frightening to me is there's a biggie very generals between the theoretical policies at the top and when the

washington bureaucracy gets hold of out. the risk in compensation is part of dodd-frank. so every public company now has got to write this treatise of how their senior management is not induced to take risk by virtue of their stock options or other incentive bees they got. in theory that's okay. a company in your district, carmax. great, fast-growing company in your district. i'm chairman of the commerce committee. the staff came up with a letter sort of indicating their approach the to this policy. they didn't just come to the ceo, 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 they'll be

impressed with the fact we thought of this. guess what comes back. would you give us a thorough, detailed analysis on why you included your sales associates on the floor are induced to not take undue risk? give me a break. 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 who's dedicated to helping small business as opposed to stand anything the way, no matter what policies we have, it's not going to matter. >> you made excellent points. it is almost as if this town wants to micromanage every small, medium, large-sized 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 free do. it's not through -- 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 sent we don't want policies that this town determines is, um, you know, through a certain industry or this is where capital needs to be allocated that 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 be enforce the law. we don't want this town and its regulators and its policymakers coming in and telling companies

like carmax, aol, southern companies we don't want -- or boeing -- >> boeing can't move to south carolina. >> we don't want this 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. pause of the pendulum that has swung so far and that everyone's worried about get anything trouble, so there's nothing going on as far as access to 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 standing in the way. and that's why for the last several months the house, and

steve referred to, has been very aggressive in saying, look, we need smart regulations. 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, an almost chaotic but incredibly attractive, innovative society. it's not through 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 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 american and particularly a 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, ultimately some regulation, what's the right level, around taxes, 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's 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 interested in the house and the senate, republicans and democrats, and there now is interest in quite considerable momentum at the white house around these. now, that may surprise some of you. but if you look at what was put out last week with the start-up agenda or the state of the union, there is clearly a recognition that it's an important thing to focus on, and it's time to try to -- >> steve, i'm going to hop in right now because i know tim wants to as well. let me tell you, i agree. all of us want growth, all of us want more intrep newses, 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 omni present in this town about dividing, you know, the rich and the poor inted of saying we're all -- instead of

saying we're all in this together, 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, kind of set aside that kind of nonsense. >> i think 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 pie, 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. 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 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 1990 240sx was an asset. i didn't realize 250,000 miles on the car was not necessarily an asset. my banker helped me realize you can't get a loan on your car. okay, good. what he did talk to me about was forming partnerships with people that would have an investment in my business, and i twoapt a couple of my friends, and we had a conversation. because i had good relationships, i was able to start my business with a loan from a friend. unfortunately, when you look at the restrictions and the constrictions on capital and the ability to form it, because of some of the policy that is we have we can -- policies that we

have, we can destroy jobs. we simply cannot create jobs. but there's some legislation that we've been working on that will actually move the ball forward, whether it's h.r. 2940, finding folks to invest this the resources that make your company grow, whether or not it's a simplification and a 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. 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 to loan money, you find yourself in a quagmire that's very difficult to come out of. eric's been saying for the last year and a half almost jobs, jobs and jobs. how do we create an environment that's conducive for job creation? >> a question for you, steve. i really like your report. 90% of job creation occurs after a company goes public, and there have been a lot of great suggestions to get companies to the onramp to go public. we've seen on the panel and again here the execution of regulation so that companies can grow efficiently is paramount right now.g fast. you can't get slowed down, you can't spend more time looking at

risk. it's all about you've got to be planning ahead for next year's growth and hiring people. how do we solve the problem of regulation reform so that businesses can move faster as tom brought up many stories and susan did? >> well, i think there's two levels. let me go back to the core issue. i recognize coming here that this is a strongly republican audience. i also recognized 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 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 really critical. this is a moment that i don't want to lose, but it really requires us coming together around these issues in the next couple of months.

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 pop problems, but it will solve some of the problems. the broader regulation, i break into it two parts. some of the things around access to capital, i think, are critical which is why the crowd funding and sarbanes-oxley are important to focus on. and then there's regulations that relate to specific industries, so what's true in energy or for manufacturing or the internet space, there's a big debate the last couple months around sopa and things like that and how you make sure -- one of the great things about the internet that made companies like aol possible was the government, basically, did it right. they invested half a century ago in some of the basic research, the defense department that essentially created the internet. and then at the right point in time, essentially, figured out a way -- >> it wasn't al gore? >> well, it was a little bit before. [laughter] a little bit before al. although he was a big advocate on some of the issues.

but they then commercialized it in the early '90s, and that's really when things flourished but then adopted a relatively hands-off policy regarding the internet and e-commerce, and that has allowed it to flourish. now it is flourishing, and there are debates around e-commerce and taxes in different states and now because it is such an important part of everyday life, not surprising. but launching a new industry in part funded by basic research, these companies are less willing to do. the bell labs of the world aren't playing the role they did 340, 40 years ago -- 30, 40 years ago. we need to do a better job commercializing it, but there's a role for that. and that's figuring out how to up leash these industries so they can start in the united states and grow in the united states. but one of the core points that i want to make sure we don't lose sight of, and i think you referenced it before, is the big focus now around globalization is on manufacturing. that's where a lot of -- and to

some extent, services. the story less told is over the last decade we've seen a real acceleration in the globalization of entrepreneurship. what had been the secret sauce and still is the secret sauce of america is now being replicated in other nations. we're putting very aggressive pro-entrepreneurship policies in place. excel, an investor in facebook that file today go public, very successful venture capitalist now says they have more people in their china office than in their silicon valley office. this is not a time to get complacent. we need to make sure we double down in terms of our commitment to our entrepreneurs, and the only way to do that is to come together and pass this pro-entrepreneurship legislation. there's a variety of different things, we just need to make sure we don't try to 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, tax

policy in terms of the right types of tax incentive around capital gains. if we get those in place, i think we can usher in the next wave of american entrepreneurship and remain the world's most entrepreneurial nation. but don't capitalize on this opportunity, i think we'll really regret it. >> growth is a passionate topic. i can see there's a couple of you ready to jump in. >> can i guess one comment i'd make, why worry about -- i used to be a democrat, too, but then i started a business. [laughter] and i realized what these policies mean. i think the stuff you're talking about is all good stuff, it'd be a step forward. the problem is, we're taking two steps back at the same time. so let's talk about venture capital, the business i'm in today. dodd-frank now, god knows what systemic risks on venture capital -- it's now going to regulate the venture capital firms like hedge funds and everything else. we're going to spend $100,000 to register. now thanks to --

[inaudible] we're going to make taxation on carried interest an election issue, and there's going to be a lot of consensus we've got to start taxing that as ordinary income. i don't particularly care about that one way or the other personally. having said that, though, if you start taxing a venture capitalist at 40% instead of at 15, his hurdle rate is going to change, his mental hurdle rate, what he's willing to pay for investment, the valuation for start-ups are going to be affected. so we're making progress on one side, the administration is taking it away on the other side, and that deeply concerns me. >> when we talk about regulation, the majority leader mentioned smart regulation, and smart regulation does not choose winners and losers. for example, in 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 you need nuclear, coal, renewables, natural gas and energy efficiency.

jim collins called it the tyranny of the or, and you do need all of those just as you would not have a financial portfolio with one stock even though southern is a great stock -- [laughter] i would not have just southern companies because you need a diversified portfolio. so as 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 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 you don't need short-term incentives for start-ups. in fact, a lot of the r&d that is going on with the department of energy through the decade, our clean coal, our 21st century coal is going to capture 65% of the carbon dioxide. it'll look like a that muchal gas plant. we worked oaf -- natural gas plant. we worked with seed money from doe, but it was our employees, and we put far more money than

we got from the government in this. well, people say china has the, you know, 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 binners are. and when you find who the winners are, that kind of takes care of it, that you don't have to do this forever. >> so do you think that there's a misperception about growth companies? growth companies categorically are doing the right thing, but then, you know, there's always 10% that aren't, so the regulation is going 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 almost 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, um, my immediate reaction was, look, there -- this all or nothing approach that he came forward with is not 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 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 pass put over into the senate's well for them to pick up. and if president could join us, i mean, steve indicated, you know, there's been at least a 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 policy making 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. so if we can set aside sort of this rich v. 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 because that's the way other people can become successful. 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,

everybody wins. the government gets more revenues, the poor get a job, and they get a salary, the middle class grows which is very passionate, and people reinvest their successful -- you've reinvested your profits from aol back into the community to start more growth companies. how do we get everybody on that page which has a bigger impact than being divisive, and steve's saying the time is now. >> i think really the proof's in the pudding for the people of the country. if 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 back to work? and it goes back to, 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. our governor, mcdonnell, and even the governors past on both sides of the aisle have been very effective in attracting investment and attracting

headquarters within 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. go 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's talking about so prominently, that's anti-growth. i mean, come on. we need a buffer rule which says we need to stop the government from overly intruding into the entrepreneurial, innovative spirit of our country. and so if we can start that kind of talk and say we are 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. >> so, steve, like a great business, if you focus on customers, everybody can focus around customer needs. and if customers here are the job creator, small businesses, start-ups, mid market, larger companies like susan's who are creating jobs, how do we get everybody focused on the customer which are the job creators to rally around what they need? >> well, i think we've discovered some of it -- covered some of it. ultimately, it's the private sector's role. the government can trace the context -- create the context, but ultimately, the action happens with entrepreneurs willing to take risk and start companies, and many fail. that's the nature of entrepreneurship and venture cap capital. there can be huge successes like facebook, you know, currently, but there are also many, many failures that aren't as discussed. that's the story, also, of entrepreneurship, and that's one of the -- i think of america not just because of the economy was

built by entrepreneurs, but the people who came over in the first place that came over on boats without knowing what was happening. pioneers willing to take risk. they were somewhat entrepreneurial themselves. so that's what made us unique. it is the envy of the world. not just silicon valley which people focus on, but more broadly the american entrepreneurial ecosystem is the envy of the world. but as i said, the others are figuring this out and stepping up their game. we're, i think, doing the right things in 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 many think tanking in town that really highlight the importance of this issue. if you're concerned about 8.3% unemployment and trying to find people jobs, more entrepreneurial, high-growth companies are your answer. if you're concerned about the economy being sluggish, 2, 2.5%, entrepreneurship, high growth is

the answer. if you're concerned about our competitiveness in the world where people are getting much more aggressive and smarter about this thing. entrepreneurial, high growth companies are the answer. and it wasn't true a few years ago, focusing on this is 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 there's reasonable clarity around the role immigration plays, crowd funding, regulations around capital play, sarbanes-oxley, things like that. so now the question is how do we get things done? folks look at me kind of like i'm so naive and idealistic. do you really think anything's going to get done, particularly as we move into an election year? [laughter] i think something has to get done. we have to seize this moment, and my focus habaneroly on this. obviously, there are many other

issues -- because it is the best way to get our economy moving, get our job creation move, get our national competitiveness moving. >> in our last few minutes of the panel, i want to raise the bar. we have to get 12 more million jobs here to get so some level of full employment. and we're doing great things. and there's a window of opportunity for a few months, but that's not enough to create the millions of jobs we really need to do here. i'd like to say we've been a great nation in the past, but our share of global revenue growth is declining, it's not going up. yet we are still a leader, we can't rest on our laurels, and what we're talking about is good. and there is a window of opportunity. but that's not enough. what do we need to do to raise the bar? this is the moon shot 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. we've got to improve the

velocity, our ideas and initiatives have to be bigger and bolder to really create more growth companies. we're talking another 2,000 growth companies, an average revenue growth rate of 44% a year. we're not talking 5%, and they've got to create two or three thousand jobs per company. 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, um, 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 with 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 is thursday will be 3500 in construction and 800 permanent jobs with an average salary of 80-90,000. >> right, and you said -- >> 21 million by 2020.

>> 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 eight years to get there, right? so what is that, about two and a half 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 and help us. look at our graduate and doctorate programs in the s.t.e.m. areas. there are so many foreign nationals outpacing americans even here now. we want to attract them, and as steve indicated, we've actually move inside the house towards that end. we have started to lift country caps on highly-skilled immigrants wanting to come and work in this country. we ought to do more of that. we've got entrepreneurial visas. we ought to expand that program. it will take talent, actual human capital. and we've 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 bug that in. i mean -- plug that in. i mean, this is not rocket science. it is this about running a pro-growth agenda and so that washington, again, doesn't inhibit the growth with. because as was said earlier, this country of ours does it were better than anybody else. and there's a lot of people trying to copy us right now, but we've got it at our core. so let's set out a plan, and let's just do it, okay? now, that'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've just got to all 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 new jobs. >> and one thing we have to do, too, is 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's been exported. a lot of it's been exported. now, we would like for a lot of that to stay inside, but it's great to have all these exports meaning we've had foreign direct investment, american companies who are selling our goods and products all over the world. those are great jobs that help you through the economic cycles you have in this country. when latin america is growing or china's 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 -- >> and let me just throw that in there. i mean, if we're going to be serious, we're going to get this plan in place, how do american-based multi-nationals get their piece, right? how do american-based companies here get their piece of the global pie?

well, taxes is huge. american-based multi-nationals right now are operating almost with both hands tied behind their back because 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 implement favorable tax policies for american-based multi-nationals, oh, all of a sudden they're going to create jobs overseas. well, you know, we've 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 difference on that, but i think incrementally we could say if we could do things tax wise to help pro-growth companies, we ought to be doing it. >> let me just try to close on on optimistic note, i totally agree with eric. now it's time to kind of focus on what brings us together, and there are always going to be big issues that separate us, but it's not time to focus on what can get done and try to get it done. going back to your question, while i'm worried about america's position in the world around entrepreneurship, and i

i -- [audio difficulty] the reason i'm optimistic if we can get our goth to put the right pro-entrepreneurial framework in place quickly is spending all the time, most of my time, my day job -- like, 09% of my time is my firm revolutions a few blocks from here -- meeting with entrepreneurs who are extremely excited about the future across all sectors, services and manufacturing and all across the nation. i spend a lot of time meeting with entrepreneurs, and they believe they're going to change the world, create great companies. the entrepreneurial culture now in many colleges that, you know, ten years ago maybe they were going to work for wall street and goldman sachs or something, now more and more of those people are interested in working for start-ups. there are still a lot of great ideas out there. health care which is one-sixth of our economy, i think, is going to be revolutionized by technology, and the next decade's going to be the glory years, a lot of things happening

around energy, huge opportunities in education as it moves to be more digital and shifts the paradigm in terms of what each spring learner can do. -- individual learner can do. those three industries are huge pillars of our economy and have not really been disrupted in 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 pro-entrepreneurship policies in place -- >> time now for questions. >> looking for opportunities for common ground. i'm not sure we should be looking for ways to negotiate differents, because philosophically we're on two different pages. 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 of the above strategy. here's an opportunity for us to move forward on that, i think the keystone pipeline is a wonderful opportunity for us 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 of the corporate tax rate which is huge. allowing for repatriation would be fantastic benefit, talking about bringing capital back to the market, $2 trillion. and the third place is the capital gains tax. talk about eliminating it for certain businesses, 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 begin to move on those issues if he says he's willing to, we already have leadership that's move anything that direction, we could find ourselves having a narrative to the american people about government working together. here's an opportunity. >> you know, i want to piggyback on something steve said. we talk 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. second of all, steve talked about colleges. i was involved in an effort, and 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've got the talent. we still lead the world, i believe, in innovation and entrepreneurship. now how do we harvest those? i grew up in rural alabama. how do you fertilize it, how do you get water, how then do you 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 and closing here between eric and -- >> i just, i want to believe, but i don't. [laughter] [inaudible conversations] >> look at trade. we talked about foreign trade. this administration has not done a single new trade deal.

it took them three years to approve the ones done by the bush administration. and those weren't really big countries other than korea. start with the foreign practices act. our companies go to someplace in africa where corruption is rife, and we can't compete because you're an executive there. your choice is not to get the business or go to jail. those are your options. 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 coming, oh, no, it's a giveaway to the big corporations, here we go again, and it's not going to happen. so i'm sorry, i'm a cynic. >> okay. >> i understand why there's cynics, and i understand why there's, you know, there's more likely people feel like nothing will happen, so forth. as a entrepreneur, i'm used to

it. i started at aol, nobody -- including my parents -- [laughter] could figure out what i was doing. i'll close with a quote from last night's super bowl. i thought there was two great ads. one was the kaufman foundation ran an ad around -- >> there was nothing good about that super bowl. [laughter] >> i guess the patriots' fans didn't like it. will it be you and, basically, talking about entrepreneurship. the other one i really enjoyed was the clint eastwood ad where it basically said, it's halftime, america, and the second half's about to start. it wasn't just about detroit, it was also about what we can do more broadly, and i think entrepreneurship 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] >> if i can quickly open up the room for questions to our distinguished panel if you'd like. >> thank you all very much. it's been a great discussion, and there's some excellent ideas that have come up.

i'm peter reagan with the boston consulting group, and our leading competitor has been mentioned a few times which is mckinsey. but we'd actually had some great news from a recent study we did based on some client work which i thought would be useful to share with you and wanted to comment on a few of your ideas. based on working with clients, we found the economics are driving manufacturing back to the u.s. from china, just sort of the u.s. market, and this is driven by an increase in wages in china. and it's not that they haven't been increasing, but they've increased at a consistent rate where now it actually matters. when you went from 50 credibility toss a dollar, it didn't matter. this is very beneficial to states like south carolina in particular and the u.s. as a whole. it's also driven by increases in the yuan. not as fast as we'd like, but it has gone up. we're much more productive than manufacturing workers in europe or in the rest of the develops world, so we think the u.s. can be served better from here. some of the ideas that came up here that we've been suggesting in the top ten issue -- policy

ideas that we've been sharing with the house and the senate and on both sides of the aisle as well as the administration, immigration is critical, mr. case, absolutely. ms. storey, your points about skill-based training is very important. we think it hybrids to germany where you've got college and university mixed with real vocational training, it's very, very important. the whole ideas what we're calling supply chain clusters, so if you get a bmw that comes to south carolina, be able to put -- government be able to support business and education to build the small businesses that'll be there in order to provide the network and suppliers that provide the huge number of jobs that are the multiplier effect. those are very important. a few others, just awareness. you should think about the numbers not just today, but in the future. when we first did this for a fortune 100 u.s. manufacturer, the 2010 numbers said manufacture anything china. the 2015 numbers based on

current trends said manufacture in the united states. so you need to look at the total costs to ownership, going forward. a couple other thoughts on tax policy has come up, decelerated appreciation, it doesn't effect taxes overall. and then, um, as i mentioned, just promoting awareness around this and being able to not just from foreign direct investment, but u.s. direct investment and making sure that happens. so wanted to thank all of you and to share a few of those thoughts. >> thank you. >> you know, david, what's interesting about china, there is a repatriation of a lot of call center jobs, for example, because of technology. because instead of building big call centers brick and mortar, people are able to work at home, and we're seeing more repatriation of jobs back here because of technology, and that's a great trend that we need to build on. >> that's one of the things i've seen. we are a leader in information technology, software and hardware, and if we can use that in other industries as a

productivity tool or flexibility tool, it tends to have a great benefit in terms of job creation. >> in south carolina you'll see that united technologies is bringing back 4 00 jobs from either china or mexico, building some of the otis elevators coming back to south carolina because we've created an environment that's conducive for business restructuring in our state. >> appreciate your research because i think we're coming to the right time, the next cycle. it is a cycle. but it's cope and scale. so it's not necessarily that we're going to create jobs, but how many and how fast. next question? >> hi, i'm with cns news. would any of you like to comment, we're talking about job creation here, and i wondered if anyone would want to comment -- representative cantor, anyone else -- on the keystone pipeline project and its job creation or others in the energy sector like that. >> well, i think tim refer today that. i mean, it's a great jobs project. it's something that this administration, the president

has come down what we believe is the wrong side. if you're for job creation, let's put your money where your mouth is. job creation really belongs in the private sector as this entire conversation has been about. and if we're about seriously wanting to grow this economy, getting to those 21 million jobs by 2020, it's a no-brainer to go ahead and allow for that project to ensue from a that muchal resources standpoint -- natural resources standpoint and certainly from an energy cost standpoint and security standpoint. and as a jobs issue. so that's what it's about. no yes in my mind. >>22,000 new jobs immediately. the question is, are we going to position ourselves and this nation to be a place where jobs come or go across the seas? the bottom line is are we going to be a player or not, and the decision we're going to make needs to be made now. it's not one that can wait until after the elections and those

who are looking for jobs 2, 2,000 more americans -- 22,000 more americans can be working right now. >> hence the cynicism. i think that's fairly telling. >> we can do this. i'm for it. >> i think we can too. the bottom line is do we have the will to do it? the question really about us getting it done, it has more to do with what we see as america's future philosophically. do you see america as a entrepreneurial haven, or do you see it as a place that needs to be insulated and comforted as we go to become the used to be superpower? >> that's a really good closing. [laughter] are there any last questions? we promised to end at noon. i want to thank you all, our audience. one last question. >> bridget johnson from pj media. leader cantor, there was much controversy friday over the jobs numbers, about whether it painted an accurate picture not taking into account those who had given up looking for work. do you think this is being spun? how does the gop have a plan to

confront it, and how do you think it would play into midterms and the presidential election? >> anytime you create a quarter million new jobs a month, that's a good thing. and i think i'd said out front we welcome that good news. and, um, you know, as far as new participants in the market and how that was being interpreted, i don't know enough to tell you yes or no. i did see one study which indicated that it was up until june that you saw it decline in the number of those participating in the job markets, and since then there's been a leveling off. now, perhaps there is evidence to the contrary. but i look at the fact that you're creating a quarter of a million jobs and saying that's a good thing. now, we can do a lot better, and this economy has done a lot better in the past, or our country has. back in the early '80s when you saw us coming off of a recession, you were 3-400,000 new jobs a month.

and going back to what susan says, if we're going to reach that goal of 21 million new jobs by the year 2020, you're going to have -- do the math. you're going to have to have a significant number of sustained job growth throughout this period. so we ought to embrace it, but we ought to always set the bar higher and say we can do better. we can do it. >> thank you. i'd like to thank our panel for a really engaging discussion. [applause] [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> when i first started the book, i always thought this must be an american story. this is about a country that wore shups the religion of self-reliance. this is the legacy of thor row and emerson, but it turns out we're laggards when it comes to living alone. it's, in fact, much more common in european nations, especially in scandinavia, and it's even more common in japan. >> in the "going solo" eric kleinenberg looks at the growing trend of adults who live alone.

also this weekend on booktv sunday at 3, the second cousin of former secretary of state condoleezza rice, connie rice, on her work to reduce gang violence in l.a. and starting a dialogue between gang leaders and police. and at 8:15 georgetown university's bonnie morris on her one-woman play and book of the same name, "revenge of the women's studies professor." booktv every weekend on c-span2. >> in a few moments, former obama administration middle east adviser dennis ross. and the senate's in session at 9:30 eastern. today's agenda includes the surface transportation bill. >> several live events to tell you about this morning on our companion network, c-span3. the senate judiciary committee works on a bill that would permit televising u.s. supreme court proceedings. that's at 10 eastern. media organizations, including

c-span, have asked the court to open its oral arguments to televised coverage. just before noon we begin several days of coverage from the annual political conservative action conference. speakers include house speaker john boehner, governor rick perry and herman cain as well as kentucky senator rand paul. >> fewer than 60 days effective april 1, 2012, japan will lower its combined corporate rate to 38%. that will leave the united states with the highest corporate tax rate in the entire industrialized world. this dubious distinction will make it that much more challenging to attract businesses to hire and invest here at home where we need jobs. >> someone said the seeing tax law made is like seeing sausage made. you just don't want to see it. >> it's time for american businesses to put aside our industry-specific wish lists and to work collectively to support a more coherent and equitable tax policy and corporate

taxation structure. >> this week house ways and means took up the future of corporate tax policy for publicly-traded companies and how to encourage investment and job growth by lowering tax crates and e limb -- tax rates and eliminating special tax rates. follow the discussion online at c-span.org/videolibrary. >> now, the former middle east adviser to president obama, dennis ross, on israel and recent changes in the middle east. ambassador ross stepped down from his post in november. we'll show you as much of this aspen institute event as we can until the senate comes in at 9:30 eastern. [inaudible conversations] >> welcome, everybody. it's good to have back our old friend dennis ross.

this is a michelle smith and robert smith foundation-sponsored round table, also the aspen institute putting it together. i thank you all for being here. looking around the table, i realize that this is a man who needs no introduction to you. that said, i'll remember henry kissinger's line saying i may be a man who needs no introduction, but there's no man who enjoys one more. [laughter] so i will say of dennis that he's written one of the great books, "missing piece," he's worked for george h.w. bush, president clinton, obviously, the current, president obama's administration as well as secretary hillary clinton, worked with madeleine albright, worked with jim baker. but he's here totally, obviously, nonpartisan but also speaking only for himself, not for any of the previous administrations except for the truman administration is the only one you'll feel confident to speak for, especially since you have a new book that's going to start with the truman administration, and we're looking forward to that very

much. dennis, let me start by asking about the view from israel. with everything happening including the hamas reconciliation and the syrian thing and, obviously, iran being the great existential threat, why is it that israel can't do what seems to be a relatively obvious and easy thing to position itself well for the coming crises which is cut a deal with the palestinians? >> well, it's always easier to say to cut a deal with the palestinians than it actually is because it, ultimately, does take two to be able to do any deal. you're asking a question that itself is, um, begs for context. and i know that context is my middle name -- [laughter] my mother didn't know that when she named me -- [laughter] but it actually l is my middle name. and so let me try to set some context because i think the question is a very important one

in terms of trying to understand how the israelis may be looking at a region that suddenly looks like the following. if you're sitting in jerusalem, you look at egypt, and you see what is, basically, the rise of the muslim brotherhood, an organization that is not by any shape or form likely to be friendly towards israel. israel has had a cold peace we gym, but that cold peace we egypt not only insured that it could shape a certain kind of posture in terms of its military, its doctrine, its budget, it could count on what was a stable, secure border. and so now suddenly it looks at an e egypt where the -- egypt where the sinai looks like a no man's land, where the muslim brotherhood may have from their standpoint, from the israeli standpoint very little stake in

controlling what goes on with regard to what could come out of gaza and the sinai into israel. and so the first point of reference is look at how things are changing in terms of egypt, and it's a threat. it looks to its north, and it sees 45-50,000 rockets that hezbollah has in lebanon. it looks farther to the north and east, and it sees syria where in the best of cases it sees enormous unknowns. it can't really know -- even if it assumes as many now do that the assad regime is doomed and is not going to survive, it doesn't know what the process of its demise is going to be, it doesn't know the timing, it doesn't know what's going to happen in syria. the longer things drag on in syria, the more likely you could have a whole range of different kinds of outcomes that from an israeli standpoint could also be

quite threatening. jordan right now, its relationship with jordan is an important and a good one, and the jordanians, actually, are playing a very serious, important role right now trying to preserve a what i'll describe as a discussion process between the israelis and palestinians. there have been five preparatory talks. they're working hard to try to preserve that process. but that is a work in progress, and it's not exactly clear what's going to happen as a result of it. and particularly now with what is at least a new development on reconciliation between hamas and fatah, i think we always have to approach the reconciliation process between hamas and fatah with a high degree of, shall i say, humility? by that i mean, first of all, you should approach this region with a high degree of humility since nobody predicted what actually was going to happen. but we've seen that

announcements don't always translate into immediate behaviors -- >> let me thin you down real quickly. do you think that the announcement this morning is just an announcement, or does it look like that one's more real, the hamas/fatah reconciliation announcement? >> i'll give a very honest answer, i don't know. >> okay. >> and i think anybody who sits here and says they know you should be skeptical of. i would guess that the two sides themselves are not 100% certain of what this is going to translate into. what it does reflect, though, is something that i think is likely to emerge over the coming year, and that is i think it is a step towards elections. i do believe you're going to have elections between -- you're going to have elections, palestinian elections because the elections in this era of awakening have become kind of the symbol of credibility. and i think that it is the pressures on the two sides that are going to grow very high if they do end up having elections. so this brief overview if you're sitting in jerusalem and looking

out leads some in israel to say given all the unknowns, this is the time to hunker down and do nothing. and, you know, for some i would say that's -- it's an understandable posture to have. from my own standpoint, i would say when you're thinking strategically, the one thing you always want to do is never limit your choices. and the problem with hunkering down and doing nothing is that your choices shrink. they don't expand. so from a strategic standpoint, you want to think about how can i expand the available options that i have, not how can i shrink the options that are going to be available to me. because even if range of options are not great, the smaller the number, the less likely they are to be good and the worse they're likely to be. so, number one, from an israeli standpoint, i think don't shrink your options. number two, don't assume the story is now written. by that i mean, you know, take a look at what's going on. there's no surprise that the

islamist us everywhere you look seem to have the upper hand in these, in the non-monarchies. a, they were allowed to organize in the mosque, they had a place where they could speak their minds, they came to embody kind of social justice because they create add certain approach to providing at least limited social welfare. they were authentic because what they reflected in terms of islam. they connected to, in a sense, all classes including the lower classes. they had a kind of credibility, they had a kind of effectiveness, they had an organization, they had an identity, they had an agenda, and none of the secular, more liberal forces had that. >> right. >> so they have built-in advantages right now. but this is a new middle east, and this is not the new middle east that was talked about in 1993. it is a new middle east in the sense that if you, if muslim brotherhood decides they're going to come in and rule the

way ben ali or mubarak did, they're going to find they can't do that. they're dealing with -- >> but you're saying they could, israel could affect this process for the better if it had moved down, moves down the peace process with the palestinians? >> i'm saying -- i'm not sure they can affect it for the better, but i think they can affect their situation for the better, and they'll -- i don't think the muslim brotherhood per se is going to be paying an enormous amount of attention to this issue unless they're trying to divert attention away from not being able to driver deliver. and i think that, basically, follows the model of people like mubarak who said rather than delivering domestic change, what they would focus on when there was anger was to divert attention away. i think the muslim brotherhood is going to have to find ways to deliver because they're dealing with publics who see themselves as is citizens now, not subject. and as citizens, they have the right to make demands, to have

expectations, to hold governments accountable. in other words, i think the muslim brotherhood and others are going to have to govern, not rule. >> uh-huh. >> and i think what this leads to, in my mind, is the israelis look at the palestinians, and if i'm right that there's going to be elections this year, elections are going to be an awful lot about shaping the future identity of the pal palestinians. israel has an enormous stake in insuring that those palestinians who believe in nonviolence and who believe in coexistence are the ones who are validated. >> you came very close both in the parameters and the aspen facility and even camp david of coming really close to what that arab, that palestinian/israeli deal would be. is that still the outline of the deal that could be if they both could get there? >> you know, i would love to be able to say yes. i'm not sure. because right now i don't think the context lends itself very

well to producing a deal. when i say from an israeli standpoint it's important to try to validate those palestinians who believe in nonviolence, it's not was i believe necessarily -- because i believe necessarily the context exists today to do a deal. >> why not? >> i think, for one thing, as i said the context i just described on the israeli side is there's going to be great concern s in the time to be running risk given all the unknowns and who could take advantage of the situation. but look at on the other side. look at the context he's operate anything. operating in. he looks around the region. who are his friends among the arab leaders, where are their preoccupations? with the muslim brotherhood rising, are they particularly interested in a deal wean the israeli -- between the israelis and pal stint grabs, and how would they react to it?

if he tries to do a deal, inevitably, it doesn't involve compromise. does he feel confident given the current context that if he makes the kind of compromises that would be required, even if he's achieving a lot, he's also having to concede something as well. and is that context a context where he's going to feel confident he's not going to face enormous opposition? so the reason i don't want to give up on trying is i think you ought to test that proposition. i say this is a time for humility. those who say either that they know each side can take these big steps or they can't take these big steps, i say i can understand the difficulty of them taking these steps. we ought to continue to try to produce a political process with the quartet's support w the administration's support is trying to produce these preparatory talks. >> you think the jordanians should continue to have the lead for the moment? >> i think that they are proving

that they can, they can be effective. and i would note something. you know, a lot of people will say, well, gee, isn't this unusual? well, you know, for those, i mean, for better or worse -- [inaudible] i actually -- [inaudible conversations] >> yes. you know, the fact is that when we were negotiating the hebron deal, we reached a point where we actually, we hit a block that we really couldn't overcome. and people forget that it was king hussein who intervened and helped us at a critical moment. when we were doing y river -- >> he flew in and -- >> yes. he helped us overcome then what was also a block we couldn't overcome. so, in fact, the jordanians do have a history of playing a quite helpful role at