tax system is antiquated that we are not keeping it in the global economy and competitive fast-moving. we need to reformat epi mengin the corporate tax code is in exceed love that since ronald reagan 86 and 45 the tax code in a substantial way and during that time every one of our oecd meeting the other developed countries in the world trading partners reform to the map and it's not just about, it's once it is the word in april but it's about the complexity. so if we are going to compete globally, and you mentioned 95% of the consumers outside of the united states interesting statistic is 80% of the purchasing powers of the company that makes most of its money overseas the same with the fortune as it grew we are

competing with one hand tied behind our back. the fact we have a different global tax system, we tax on the worldwide system that means other companies have an advantage that are headquartered in japan or germany or china and on the individual site it's gotten to the point is this so complex and difficult to work through that is a disadvantage to the company's the subject risk. i am still the order of the subject risk company and that's the way that 85% of the businesses operate in the individuals because they've probably been through that, too. the knees to be supplied as well. there is a growing consensus on how to do which is to lower the rate and broaden the base basically meeting getting rid of a lot of the so-called tax breaks, some call the loopholes and preferences which is a nicer way to say it but the bottom line is it has been riddled with more and more exceptions which

means the effective tax rate might be lower than the statutory rate but in fact there's a lot of insufficiency so that economists love to look at it and say we want to allocate resources more efficiently and to do that you have to broaden the base so we have a good opportunity to do that on the corporate side mentioned 35% rate taking that to 25% it can be that we have a score of the joint committee that can be bipartisan. this certainly wasn't a super kennedy worked on this and with regard to the individual rate. controversy for the 2001, 2003 tax code is ending at the end of this year, so the so-called boesh tax cuts or indian. that is the 5 trillion-dollar tax increase most of which no one wants to see happen. my view would be what's not only not let that happen but let's reform the coasts of that is

almost irrelevant issue to what expires and what doesn't but that's more pro-growth and they did factoring and gives us the ability not just for the cost to is that represent but also to be more competitive in the marketplace. >> let me bring the two of you into this conversation and brought it also put the tax reform includes not just a broad base but also what investments we need to make and i apologize i have since and rules on my mind these days because as mentioned again. speed by the way, some symbols, domenici, they're very similar on the three brackett. >> what was interesting about all of those efforts of the addition of cut and invest. but as we are reforming the tax code so that we can be more competitive in the general

proposition, we are also selecting those kind of investments with the more advanced or nt, skilled workers, 10,000 engineers, you know of a particular period of time. so if you think about tax reform from the statement local level and listening to the national conversation, is about the tax code itself or does it also included the investment in paris this we need to make tall levels? who wants to take that? >> our key for growth when you take a look over the last 18 months between ford motor company and ge, we have over $2 billion of investment in the community and 4500 new jobs. so that is anywhere in the world. how that came about is the partnership between obviously the company tried to get, number one, but the state and local level coming together with

incentives, tax incentives to make the transition much easier for them coming and then a wonderful partnership between the companies and their organized labor as well it's basically a result in to the two-tiered labor system compensation system which some people are critical for the bottom line for the system is you are not talking about having a 25-dollar our job or 15, you're talking about having $15 or zero and our job to lead its this recognition of the global standard for productivity quality and safety so the state of local governments come together in the partnership to make it happen. >> i would echo that to a large extent, rather as you mentioned doesn't start from the high level of manufacturing experience but when general electric was looking to the manufacturing facility to compete with a number of other

states, and you know, you put your incentives on the table but i think to a certain extent that fits the ante. that isn't the root of the game. with the businesses are looking for is a partnership in the predictability that comes from that partnership and i don't think the incentives were the highest but we were hard to convince eg we would be the best partners they ever had even the and connected -- >> it's all in that niche at the level to be this committee and i think the same thing our electronics of the global headquarters from new york to colorado next year and again it wasn't the incentive we went out of our way to say here is an advanced manufacturing company, large company no one has heard of, the fortune close to the $20 billion a year and they are going to bring a whole string and cluster of electronic manufacturing with them at want to be close to them. those kinds of opportunities and

when you talk about taxes, these are the things we haven't gotten to be in business what gets rewarded gets done and yet we don't reward the companies for creating jobs in any real way and that is if you sit back and look at it that is probably the single most important thing that most of our citizens care about right now is jobs, quality-of-life starts with a good job and yet we have to find our way in addition to taxing the profits or other measures finding a way to provide incentives and some sort of reward for those businesses to create jobs in this country because we know in many cases they have a disadvantage to do that. >> if i could add anybody can put incentives on the table and feel like okay, what's next. there comes back that time and time is what is your work force? do you have the defense manufacturing, is your powerpoint from the high school to ph.d. one that is supporting it is in a factory? how we partner to get on that? some of the things you for today are being done better in the

foreign countries than are being done here said that as a whole culture we are trying to for now with our economic advancement movement. >> ken listed on this point for one second and then come back? work force. it seems, senator, you mentioned this while you talked to the solid the large manufacturers. it keeps coming back to we have the skilled workers. it strikes me that we have got several issues here. one is what is the perception of been factoring in the united states? people think these are the old character manufacturing jobs, dirty, not technologically sophisticated. there are still these perceptions about manufacturing particularly in a culture that is sort of celebrated by some other sectors so there's both of the perception issue. do you on the ground level and to you at the national level find this is an issue and secondly can you deliver the predictable continuously workers

even out of high school or community college and helping the engineers of the offense to institutions and how that gets wired? as you talked to the firm's, what seems to be the central barrier and how much does this cultural issue or perception come up as something we need to tackle at the national scale. >> with b.c. briefly i mentioned a visit of 100 factories in know how you the last few years and winter time and time again is even as the time of relatively high unemployment, and again, lower now than a was a couple years ago, but people can't find the skills they are looking for and j has done a study on this and i think 82% of the manufacturers say they can't find the fuel they are looking for from some of the skills or not there because there isn't the community college and there isn't the connection with the universities and so on but some

of philip think is perception. there's the small in effect mean that's working on this to convince the next generation of workers working in the manufacturing is a cruel thing to do it in ohio the average manufacturing is $67,000 a year, so these are high-paying jobs and as you know, these gentlemen who tour the and all the time are increasingly high-tech jobs so even a few years ago i go to the main factor in where there was one operator for a million-dollar piece of equipment in the they thought that was pretty efficient and now that operator has three or four different machines that he's operating all through a monitor and computerized and all require not just the ability to work but to understand the software to fix the problems and these are high tech jobs that require a lot of training and therefore, you know, higher salaries and so part of our challenge i think is to change the roughly produce to

streamline and consolidate and make it more efficient and this is this frustrating hearing or to these guys are doing it the state and local ally don't think the federal government is digging its part but even when you get to that we have to change the image of a factory and make it something that is more attractive for the next generation coming up? >> to the senator's point we are working on exactly that. when we talk about the perception of the modern manufacturing 60% of americans understand and believe that in the factoring is critical to the economic growth and job creation of this country and the perception of the doctrine has the mission overtime. when my grandfather stood in line to get a job in manufacturing coming effective and that iran 80 years ago was very different than today. it's cool, use that word all the time talking to young people is

technologically driven and its efficient. we are working in the states that have implemented the program called dream it and do it and it helps young people experience modern manufacturing and understand its potential but i want to rewind a little bit to your initial question right before this. it's not just trade association or covers and mayors and certainly businesses that can change the perception. it needs to start of the top and there has to be the commitment from the federal level from the president from congress to increase manufacturing to understand its potential and it has as mentioned earlier the high used multiplier effect of any dollar invested or job that is created, and we have to have that commitment from the top to this president's credit he's outlined a commitment to

manufacturing in his state of the union speech. there are many members of congress that are talking about manufacturing and there are certainly governors and mayors in raising the promise that there is no coordinated effort. when i worked for a governor on day one he had his cabinet down and said he will be my competitive in this cabinet. everyday you will try to think about things that are going to create jobs in this state and enhancement factory that are going to enhance attracting business to our state and if you are doing anything else, quit doing it. and we have to have that commitment from the top down the of the president whoever that is has to work with congress on a daily basis to talk not just about tax reform which is incredibly critical but triet, workforce issues where 5% of the manufacturing jobs go unfilled as the senator mentioned. research and development all of those critical components that are outlined in the manufacturing renaissance document that you read me to be

part of a comprehensive package to at its manufacturing in this country and to ensure that we increase it for many generations to come. >> the one thing that i would add on to that, it is an important topic we also have to figure out how to translate that into the culture. the books described again and again they would rather be a hair stylist than two advanced manufacturing even though they know they are going to make a third or half the money they like the validity of the culture. somehow we have to brand that to be in the schools. kids don't believe they will be able to go to college and they want people to get advanced manufacturing jobs so how do we get more incentives? the talk about double the number of internships and beginning to connect those to scholarship incentives. that is the kind of stuff that somehow even how the media of the social media we have to be thinking and be very intentional about how we make this appealing and attractive to lead to a

certain extent even the toughest neighborhoods the sitter around reading us magazine and people magazine and they don't believe, they don't push themselves like the code. to cut off the record and pretend i didn't say that part of that is our job, right? as the trade association of manufacturers making sure people have the opportunity to see what happens in the manufacturing facility. when i visit a manufacturers of the country all three of you probably experience the same thing the work force oftentimes has been there 15, 20, 25 years because they love with the deutsch. they are working with their hands, they are innovating new methods of ways of doing this and they are competing in the global market to this but they love that challenge and take it all in. >> every time i could in manufactured large or small, you mentioned flexibility on the labor rules. increasingly workers feel like they have a stake in the acid that is critical to our success read a lot of that has been that

the state and local level aide that's important. earlier you said states are competing with one another and work to get local level helps because it is a rising tide to lift. i think that's true, the competition is good because you are competing now not with indiana but you are competing with indiana and ohio and winning but if you have to go over to louisville. but that is really exciting and that's good and my only point is i think there's a federal overly that isn't keeping up with that and there has to be an intentional focus and a concerted effort to put competitiveness number one in manufacturing has to be the top of the list given the multiplier effect to this pathetic as a cultural overlay as well. >> people look at work or

education as tuille reverses this is a churning of lifelong learning. i'm learning how to operate in the broader society. when you go to the companies invested in the world. the self directed teams, people are learning how to operate in the problem solvers as the leaders and followers so when you look at the workplace is a place i go into engage and i'm always cui to be learning new things that are giving me the new capability and theoretical to provide for my family. that's great for the work place but its huge for our country and they still translate into the churches and the neighborhoods and the way we look at our nation working together for something bigger than ourselves and i and interpol part of that

and that is so polar from the toy and i have to do this in the magazine or whatever it might be i think we have to celebrate that type of culture and say here who is br as the folks from denver this is our country and we will emphasize that i don't think enough as the journey of working together the disparate you are starting to see that if you look to the super bowl and see the ads that were being played and you are starting to see that happen. >> this is very interesting trajectory because again in d.c. eight in the state capitols and city hall the conversation ceased to be very programmatic. what are we going to do on tax or work force or etc and what we are describing here is a cultural shift where we begin to dignify where it began and talk

about craftsmanship. one of the most interesting things i see the country is high schools that are beginning to bring down what we used to call the vocational services, so some inner-city high schools where we are teaching them in the factory because of the jobs. >> one of the things john mentioned that working in some parts of ohio is where business partners with a high school so at the high school level bringing the kids and internships and co-ops there is a company doing this in the cleveland area and the indicate that it's working with to get these kids were excited about the disciplines but also to develop a work force so they do go on and get a degree and in the coming back to the school

and they are working in the summer and so on so i did there is an opportunity for the companies to be engaged in a relatively low-level in for the kids to see what a job is. our country and our communities that have been connected and don't have educational support and are disconnected and this is getting bigger every day and they may not even the way job is. so some of the mentoring aspect that we've introduced to people to the young kids that may not have been called the radius where they lived before to see what an office looks like and what the social skills are required to get a job. we have agreed with the society that doesn't understand. >> i think the adding of the culture shift is critical or else will mccaul the policy

reforms of the world and we will still have the perception of manufacturing which is not accurate but is deeply held in the country. a couple other issues raised i thought would be good to air since we have a lot of work going on. energy. so the notion that the united states can have predictable energy as a platform is an enormous shift but we have some issues to deal with. how we do this and get beyond the polarization? but the concerns people have about the environment in ohio. >> ohio is exciting as you know because we have these kinds and in the west they are used to having these natural gas finds

periodically in ohio we are becoming a producer of natural gas and oil and we will be a net exporter in the next decade and it's a huge opportunity for jobs. the specific manufacturing jobs doesn't pay a lot it needs to be a steel capital. the u.s. steel has expanded as well. we also make the other structural steel for the platforms so there's a huge opportunity here, and i do think the entire middle issues can be handled among the committees that said we work with us because we are so interested to ensure the hydraulic tracking can be successfully done and it is properly regulated so it doesn't get into the groundwater and so on. the companies that have been doing this for 50 or 60 years are good at it and they felt a lot of these issues and to have good regulations in place. some states need to work on

that, but i think there's an enormous opportunity here and i don't see that there is a huge disconnect here between what the kennedys want and what the industry wants to indian fighter the requires them to do so i think it is a great opportunity for the effect of not just the extraction of the resources but it's great for us to this but i couldn't agree more it's a great opportunity. we talked about the competition being valuable but also the collaboration and putting in the time spent with people to create the relationship, deepening the relationship creates trust and the issue there, in colorado they say that the collaboration is the new competition, but the environmental community and the oil industry to become more

transparent. there has been a level of almost hysteria of people worrying a lot of fluids and so some terrible misleading stories of the media it ultimately about a month and a half ago we got the head of the leadership of the environmental defense fund side-by-side with the senior vice president of halliburton and they agreed to the regulations that would allow halliburton to protect trade secrets and yet get the environmental community full trust in the chemicals they will reveal what the competition of the chemicals are like coke. coke is the most valuable how can we not get there and i think that challenge is how we get to that level of trust so now we are asking our oil and gas companies to do in the water wells close to where they are going to dwell. take a water test a sample it. we know, greta we can't find an example of flagging. we've been doing it since the early 80's. we can never find an example of

getting the ground water in colorado. the jobs over the last several decades we know there's been a couple of places on the east coast where that has happened for the operators but having to give the public more assurance will be more chemical industries and create all kinds of jobs in different levels, but there is a disconnect their. >> the president said we need a strategy and he's right. the 20% differential that i mentioned earlier has actually won the interesting facts in the first time. we have a cost advantage on energy right now, but we need to drive the number up because the will help in all other areas and the senator, the governor talked about tracking. we have to get the policy right and get all of the regulatory policies right. we have to get it done because the potential in the gas is an

enormous. we've done a study with pwc that shows that it will create 1 million manufacturing jobs in the next few years and did you think that the spinoff that occurred from that there is enormous potential and that doesn't even take into account all of the benefits that businesses will derived from the lower cost energy so we need to focus on that and we also need to take the politics out and congratulations on that great achievement. a lot of times we take the politics with energy policy, the keystone pipeline is a great example. we need to make sure that we are trying to encourage every type of energy supply and development we can because it does mean jobs in the future. there is no question about that. in the meantime the private industry is as dry and innovation.

ge appliance, the water heater introduced friday, agreed reduction in the whole energy cost goes to the show, 40, 45 miles per gallon as well so while we are dealing with all of this the businesses are listening to the consumers saying we want to spend less on energy at the same time. >> this is about a global competition. you mentioned the legislation in new hampshire is helping them to be able to have the tools they need to move towards the efficiency technologies and people are making -- fewer people and more efficiency and this is the energy side of how we are going to get more competitive and be able to not just expand exports but also be more competitive in this country in those markets to the way the market shares cause of the energy efficiency is something

with the united states lags not just japan but also the european competitors at the emerging markets so we have a great opportunity there to do more. sprigg we might as well talk about the politics. there seems to be more on this panel and whenever we get federal officials of the governors and mayors we seem to move towards the pragmatics base as opposed to the partisan space so if we took the manufacturing and the prior payable it basically just went through the core set of recommendations for the national policy of also frankly for the state and local. can we think about a place a year from now beginning in the newer administration whoever is elected where there is a small

set of system it changes that can occur in the national scale on the manufacturing potential is that outside of the realm of possibility or are we in the three to five year cycle where the states in the cities have to innovate and eventually washington will be able to scale up in harlem the division is this one of those issues where we can get beyond partisanship because it seems like the way that we are talking about here it is going to be against these kind of practical almost non-radiological. >> i said at the outset there's a huge opportunity with the challenges we have in the economic structures and i mentioned energy there's no reason this can't be bipartisan. the president's own jobs and

competitiveness council has made recommendations as has the evidence in manufacturing group if you look at its regulatory relief which includes some of the things we talked about earlier. the other ministration the hoped they would, the corporate tax reform they will recommend they are going to the territorial system and it's looked at overseas the administration is talking about doing it and as a result of all of us ought to be working towards a consensus. there is a growing consensus on the tax reform side and other regulatory side so my hope is we will be able to make progress if not this year than right after that election regardless who is elected. estimate for the state and the city perspectives taking that as a 2012 not on what happens at

this level what are you all pushing towards it and are year from now what do you want on the priority list? >> when you have a company if you have these competitors and are dysfunctional as a company you think if you or china or germany and watching this as a country right now bickering over all these things, they love it especially when it comes to manufacturing and manufacturing policies. so the have the industrial policies the are not playing the rules we have and are not fair to be so how does our capitalism and laissez-faire economy evolves as well if we feel we can learn something from germany's's alignment from education, universities, are in the and with china is doing and

infrastructure as well so i would like to see what we learn and how we have to resist as a result to get on stock with american manufacturing? >> i would echo that and say i think in the short term the innovation is going to happen in the cities and a lesser extent as the former mayor i can take some credit but it is why do we get more business people like greg to run the office and how we get more of the risky reward thoughts that go through the decision making and get that extend to need lifetime public service as well but we are going to see the innovation short term in the cities and to a lesser extent the states and the big changes have to happen and the federal level. >> a year from now we need to have said the table, all of us here. any business that may affect

treynor this fonts' can occur after the next election so that's the final word. >> i want everyone to think the panel and i have some housekeeping to do. but you all. [applause] >> he focused on the need for an educated work force. this is a little more than a half an hour. >> [inaudible conversations] speed ladies and gentlemen -- [applause] >> governor hill lee barber is a

term governor of mississippi as i mentioned this morning he's been a great partner and attracting business and has been focused on the work force training as a way to make mississippi competitive pc fantastic leader of the national stage and around the republican national committee and things like that, so a great job in mississippi. the one story i would like to tell as i was responsible for the business council in 2005 and this is kind of an association of the 125 biggest companies in the united states and we happened to have a meeting two weeks after hurricane katrina and i invited the governor of louisiana at the time and governor barbara to come and speak to this group, the governor of louisiana didn't come. governor of mississippi came and with no notes for an hour described to the ceo in the room

the crisis management by that time is only two weeks after the disaster. the leadership lessons with that but looked everybody in the alladi and so i'm going to make mississippi a pro-business state and he lived up to everything that he said he was going to do and then some so it is my pleasure to introduce governor haley barbour. [applause] to respect to mention the business council it proved to be the case it's going to be the private sector that we have in the area here after a mega disaster and that is why two weeks after the storm i talked to the 125 biggest companies of the united states because despite the help we needed it

received from the federal government for the sister states and the charities and everything else of the end of the day if you are going to rebuild your community that is what has happened general electric and to tell the police were to be i'm going to talk to you about manufacturing, about america being a competitive in manufacturing has from the perspective of a governor come in and if i don't get but one thing across i went to get across the tell a great story. some of you here are old enough to remember ed sullivan. remember the ed sullivan show on monday night half of the tv sets would be tune did to it sullivan

he had conrad held in on his show and created the hotel chain, the kind of business icon and he will walk down the stage and you can't tell the american people but one thing what would you tell them? he hesitated and said your shower curtain inside of the tub. >> if i can't get but one that saying across to you we in america need to emulate what we tried to do in mississippi and that is don't give up on in this factoring because we don't have to. i come from the poorest state in the country. a small state a state where when i was a young lawyer 40 years

ago the companies that came to mississippi came looking for strong backing low wages and general electric is a great example of that because we can compete of the governor for different times when i was governor one of the company's clothes and plants in mexico and move the work to mississippi in and we do that all over the united states. before getting into that deeply i want to comment on what a great partner general electric is to say that our state is a good partner we like to think that we are. but it's easy to be a good partner like general electric. they have the facilities in the state one of which when it was announced i think those of you that recognized mississippi's

image, and i understand mississippi suffered with a negative image most of my life. but they decided to open this plant and general electric for the engines and they make the fan blades lot that i had any idea what that was when we were trying to get the company to the vice chairman of the word came down with the announced that they were going to open this and he said this is the most sophisticated manufacturing general electric does anywhere in the world but i can assure you 20 years before that people would have been flabbergasted when they heard the second half, yet we are going to do it in north mississippi. but in fact we do in the factoring in blades and assemblies and about 60 miles south of memphis let's just

leave it at this: they've doubled plant size in the four or five years that it's been open. i remember when the head of the aviation came for the opening and this very significant facility somebody said on the team we put twice as many lockers here as we were supposed to. that is for the employees who work there to have. we spent a couple of hours of the plate and the manager spent some time each day and as we walked out he said we are going to feel all of the lockers and only filled all of the lockers having that many employees, the expanded since then the importantly for us to build another sister plant. since then in south mississippi. analysts bill is about 20 miles

from the university of southern mississippi, and part of i think success for manufacturing in the united states is a strong tie with higher education. i talking a little bit about work-force training and our community colleges but let me mention first hour universities. the university of southern mississippi which is a few miles for more than 30 years has the power institute. now, those of you that don't know what polymer is should run for governor of mississippi because -- [laughter] i will never forget when i went campaigning 2-cd institutes i asked i said what is a polymer if he gave me an illuminating answer and said it is a repeating molecule.

agreed. [laughter] what does that have to do with anything? of course it is the heart of the composite industry, and we have a composite center now associated with the defense industry of the mississippi gulf coast. to do such things is pete that old bird or smoke when you have a naval vessel the ability to keep from having a smoke down in the ship is obvious once you think about it. well, that is a company that was spun off by the university. they went from research and development to application to the commercialization that is what you need in the research universities to. we have the universities in the last eight years to have begun more and more and more to go on

past research and development and application in the commercialization and she is a great beneficiary of that as well and proud to say is a great benefactor because they help invest in the polymer institute which allows us to focus state efforts on of its manufacturing with advanced materials. the composites that are used to make the family believes and assemble these are just an example of that. we focus not exclusively by any stretch, but we focus on the three clusters for the manufacturing side. the aerospace, automotive and energy. prt of all of the above energy state. today they have a coal-fired

generation facility in mississippi, two and a half billion dollars that will burn late nada colquitt it is a low-grade coal that when i was your weep people had on the land and felt it was a nuisance. we learned how to burn it well enough to generate electricity and now this will be the first power plant in the united states that will have carbon capture and sequestration of the commercial scale, and it will commit at the rate of a national gas-fired power plant. but that is the kind of advanced manufacturing we are trying to do in the industry. jeff and i were talking about we have the new solar panel manufacturers like ge has one in

colorado. we have a couple of them in mississippi. we make the dynamic. what is this i would ask? you know how you can buy glasses give some turn into dark glasses but when you are in delight they are clear? you can make windows out of that except you can design them and control them so it's like it is today, 30 degrees and sunny you need to keep them clear to take in the heat but it's like it usually is in mississippi, sunni and 95, then they can be darkened simply by the way that you set the glass. to use technology to say ten, 11, 12% of the energy bill. we make petroleum out of what. obviously it is a petroleum

substitute. it's not a greater petroleum, but we make motor fuel out of lead and fedex has an agreement to put in their trucks were both refined into gasoline that can be dropped in to your gas tank to be used with regular gasoline. one of our agreements with the company said we would not give them any state support unless a major company agreed they would refine this product with regular petroleum which they do. so we are in some a pretty sophisticated and advanced manufacturing of different types in a state that's never been known for manufacturing. the big russian steel company has a steel mill in mississippi. it is a bill on the front end.

uses a big furnace to melt down the steel but it is a pretty sophisticated bill on the back end for all the different products they do. for the 600 some people that worked here for about 550 of us it is the first that the ever saw yet it was the most sufficient steel mill in north america for the last two years, and we are very proud of it and also called the first year was open before the recession started to beat the average was $92,000 a year. not for the executives but for everybody that worked there primarily because of all of the overtime. i mention that because manufacturing jobs is the highest paying job in my state, and we have a lot of different kinds of manufacturing. the car from seattle washington, the maker of the peter built his

the engine manufacturing plant in columbus mississippi. for years anybody that has been in the trucking business, you ask for the caterpillar engine they make their own engines. they decided to do that after they bought the european truck and when they cited the first, again, columbus mississippi. where the european aerospace systems build helicopters for the united states army. just up the road for the mrap, though protected vehicle that has replaced the humvee in the middle east, as i say we are not a state with a history of manufacturing like a midwestern states, but as she e. will tell you, we are a great place of

manufacturing. we have succeeded in replacing thousands of low-skilled low-paying jobs with high skilled high-paying jobs witnessed in the year 2010 of the per capita income in seven years that got up 30% even though there were fewer people that were working in employment was down about 2%. but incoming was up 40% and it's largely because of repaying the manufacturing jobs was toyota, nissan with more shipbuilding, aerospace and so on. i was the mississippi state

university and a professor said to me you know, our businesses have three choices. they can innovate, in a great war and evaporate. that is a pretty cold way of telling the truth. if you are going to stay competitive in the global marketplace, you have to innovate. but innovation requires people, work force that can deploy technology and make the integration work. one of the perverse facts about that is generally innovation destroys jobs. generally innovation means it takes fewer people to produce the same about or even more units of what ever it is to produce and that is just the

fact. however, that is how you stay competitive in the global marketplace. if you want to talk about america's staying competitive, we have got to use more innovation. we have got to keep going but that we have to learn how do we create other jobs? how do we create things that we were not doing before? that's not easy. but i can tell you essentials to it is to have a quality work force. let me just close by saying something to every governor that's been involved in the economic development today, the first thing the customer wants to the first thing the company is looking for is a quality work force. when leota chose mississippi in 2007 for its eight north american assembly plants in the economic toll of that project in the united states out here, the first thing out of their mouth

was we think this goes to the quality of the work force. i think general electric will tell you they like mississippi and continue to expand in mississippi because of the quality of the work force. obviously education is the underpinning to the quality work force. but don't let that confuse you into thinking everybody has got to go to the university. everybody has to be on the back of the track because that isn't true and it's wrong. i don't know what percentage but the small percentage of those in the university today need to do that to perform their job. what they go there for us because they need to go there so they can get an interview for their job. but the diploma is the certificate that this person is

considering for the job. even though most of the time very little relationship what you learned the university in my case drinking and chasing very little relationship. i am a lawyer so maybe i have more relationship than i thought the fact is we don't hire people to learn that the need to do but we are millions of people in the united states to do what they learned in the work force training. yet we of stigmatized work-force training and work force development training in the united states that it is almost shown the in our high schools. i can tell you how you got to be in the shop to the kershaw bid is too high in 1964 when i was there.

you know who was in shock? you smoked. if you got caught smoking they sent you to shop because bad kids went to shop. the average auto mechanic was five years experience in jackson mississippi twice as much as the average income for the person of works in mississippi. how many of you think got sent if they learned to do that by their accounts vernon high school? i think about my own family, my son is 32, 15 years ago my bride of 40 years said you know he's decided he's not the way to go to old miss, he's going to go to the community college and learned trade. what they have said that the beauty parlor? what's wrong with you? [laughter] that is literally what they would have said, what is wrong with you? we have to be stigmatized in

this country if we are going to take it vantage of what we can have for the american competitiveness because it is essential if you do not have a workforce that can deploy the technology and put in place the innovation you cannot get productivity increases that are required to stay competitive, i will close with that thought. if we are going to be a country competitive in manufacturing, we have to remember to focus on that, not the exclusion all else but we have to focus on that. my old friend in mississippi fred smith, the ceo and founder has a saying. he says the main thing is to keep the main thing the main the thing. the main thing is to keep the main thing the main thing.

if we expect to remain competitive in manufacturing, the main thing is for us to invest smartly in the workforce that companies like general electric will be proud to have working in manufacturing in the united states to stick with the main thing. thank you all. [applause] >> it's more fun to hear speeches like that when you're out of office, isn't it? [laughter] it's more fun giving them when they are out of office, too. i have a couple of questions. first, you know, we talk about big business like ge but there is a lot of small businesses in mississippi and round the country in the growth. how do you keep small business competitive and what you have to

think about that may be different in that regard? >> first of all most of our jobs are created on small business. we shouldn't forget the tide between the small business and bigger business because a lot of the small businesses that exist on the bigger customer race is we shouldn't forget that but we have a tax system that isn't fair to the small businesses because most small business in the united states get taxed on the individual rate. they are partnerships, corporations or proprietorships right now it's what 38.9%, and then you add what is we did he added colin for the health care program. they take too high of the rate of taxes and it needs to be reduced. they suffer morning you for a regulation. ge -- you have 3,000 people the

deal with regulation. it can be the difference between the profitability and non-profitability. when you run off the cost of health insurance, and we are talking about today health insurance cost goes up 10% it's a whole lot easier for a great big business to spread the cost than it is for a small business. how does the small businessman higher more people when he is being threatened with a $1.5 trillion tax increases, largest in history on the employers and he doesn't know the cost of the health of insurance to provide it and then finally with the government is going to do to the credit we are kind of guessing as we go along so they have a harder time getting credit and the have a harder time keeping more of what they are. >> i can tell you the university of mississippi is one of the

great high-tech schools. when you look at only when you have to do mississippi but other governor cecil with budgets and things like that how can we manage our streets and still preserve this great college system that's been the source of competitiveness for a long time? spent a lot of people don't like my saying it but florida university today has about $5,000 a year for the basic cost of going and that's got seven times in the last eight years because state spending has not, it's actually gone down in the last eight years we have federal and state money for programs a majority of the college students in mississippi to the get some form of student aid. some of our students are a very high percentage so it is still a

bargain and we need to keep it a bargain. ..

two or three things you would be pounding in terms of how do we get the economy going and get people unified behind that task? >> trent lott used to be the republican leader. we went to college together. he was a third-year law student when i was a freshman. we were students together. the difference between governors and senators. senators talk about doing things and governors do things. a democratic governor was here of a purple state and i am a blood-red governor. and i'm far right in that circumstance. you can't imagine how much we agree on. because we're both results-oriented. people elected me to get things done. we had a huge budget surplus, the part -- i mean huge budget

deficit. the worst state in the nation with lawsuits. we have a very anemic recovery. it is just caught my totally by surprise, the january unemployment numbers have been haled as if this is some great surge. if you read the data, about 250,000 people got a job in january. and the obama labor department says, in the same month, more than 450,000 people, almost twice as many, quit looking for a job because they became so discouraged with their inability to find one. what kind of recovery is that? what kind of recovery is when 1.2 million people dropped out of the work force last year, that three million people dropped out of the work fours in

the last three years? there are two million more unemployed today, but that's because you don't count the other three million that quit looking. to me, one of the most encouraging things in my governorship is when the labor participation rate -- that is, the rate, the percentage of adults who are looking for a job or have one -- went from 60% to 64% during my eight years. that's because some people thought i might can get one. i might can get a job. it keeps our unemployment rate higher than it would be otherwise. but nationally, the country's come down to meet us. from 67% of people in the work force, to, again, about up to 63.7%. just incredibly low by historical standards because people can't find a job.

i spoke the other day at washington, and 2,000 college students, and i told them they need to be concerned about old people like my age are clinging to their job. the percentage of people 55 and older who are working is historically very high. and that means the jobs are not opening for young people, and sure enough, the percentage of people who are under 30 years old who have a job, is historically low. and those are -- the ones who do have a job are not going up because they're being blocked out. why? because the 64-year-olds are scared to death. they're scared of this -- i would say rotten economy, anemic economy. weak in the. it's growing a little bit. it's better than it was two years ago. but main street, it's very hard

to tell the difference between the recovery and the recession in shreveport, louisiana, or jackson, mississippi, or particularly a small town where i live. >> you came out of the crisis called hurricane katrina with your reputation -- went up. right? so what's the one thing we can all learn about leadership you learned during hurricane katrina? >> well, the think i would say is, be lucky enough to represent a strong, resellent, self-reliant bunch of people, us because they were the real heroes of katrina. the courageous, compassionat people of our state. they weren't whining or hoping or looking for a handout or nobody to blame they got knocked down flat. and the next day they got up and hitched up their britches and went to work, and importantly, they went to work not only

helping themselves, they went to work helping their neighborsment the stories of selflessness and putting other people before themselves are so myriad on the mississippi gulf coast, and remember, this hurricane had hurricane force winds 240 miles inland in mississippi. we had 102,000 homes that were uninhabitable and fewer than 60,000 of them are on the coast. more than 40,000 of them were inland. a third of the fatilities were inland. it was not just the coastal cal okay -- calamity. people were grateful for the help. that's the most important thing. my job was to help people have confidence that if they return to their community, their communities could be rebuilt.

that meant open schools, housing, even if it was a fema trailer -- don't think a fema trailer is what we call a trailer. it's not a mobile home. it's a camper like you go hunting in. we had families that lived in enemy for -- lived in them for three years. 600 square feet. my wife made denny hastert come in one to prove to him a grown man, particularly one my size or his -- a grown man could not turn around in the bathroom of a fema trailer with the door closed. so we needed a new housing crew. our job was to make people feel like if i go home, biloxi is going to be normal again, or better than it was. that's all these people needed was some hope. >> last question.

what are the outers of a brokered g.o.p. convention and what would it be like? >> of course, the odds are enormously against it. but the fact it's even in our conversation is unusual. i was at the last contested republican convention in 1976. but it was a convention where there were only two candidates, and neither reagan nor ford had the votes when we got there. they were within 100. this would be different. if we have a contested convention this time -- and i think, we republicans would rather it be called a contested convention than a brokered convention. no offense. but i we have a contested convention this time it won't be two people. it will be three or four, possibly, and depending on what happened, it could even be five.

if there continues to be no apparent winner, you have the possibility of a late entrant-somebody y'all remember jerry brown in 1976. jimmy carter lost eight of the last 15 primaries in 1976. and there are a lot of people that think he was in trouble with his nomination until mayor daly, after the illinois primary -- after the end of the primaries came out and say, this guy won fair and square, it's over, and he had the juice to make it stick. you could get a late entrant, which would be the first sort of indicator that there could end up being a contested convention. all that is interesting to talk about but is very unlikely. >> help me again say thanks to governor haley barbour.

thanks very much. >> thank you. ♪ [inaudible conversations] >> in a few moments a discussion on the cost of incars nation the u.s. in 40 minutes, the president of iran on the anniversary of the islamic revolution. after that, hearing on port security.

>> we must outsmart the liberals. we must outsmart the stupid people that are trying to ruin america. >> it's about one done tre triunited under god. we're not red americans. we're not blue americans. we are red, white, and blue, and president obama, we are through with you. >> around the last table, they can get along and come at our throat as long as we're foolish enough to raise taxes and throw money on the center of the table and then they can get along in the scene after the bank robbery, one for you, one for you, and they're all happy.

>> now a discussion on what it costs to run prisons and keep people in jail. this is 40 minutes. >> every monday here in the last hour of our washington journal we turn to your movement talking about how taxpayer dollars are spent, and that's when we put a special focus on your money and different types of federal programs. state programs out there. we look at a new report looking at how much it costs states to operate prisons. and joining us from new york is michael jacobson. current executive director for the vera institute of justice. there is a new report about what really goes into the cost of prisons for states. can you tell us what is the headline from this report?

>> guest: i think the overall headline is that everyone sort of had a since that prisons were expensive, but they're more expensive than most people imagine because there are so many costs. in a lot of states -- not every state -- that support prisons outside the prison budget. >> host: our average -- one of the stories that came out after your report did, that the annual average taxpayer cost in states where you looked at the cost of prisons, is about 31,000 to the taxpayer. does that surprise you? >> guest: right. it didn't surprise me a lot. i mean, i'd been working in the field for a long time so i know it's very expensive. i think it's important that the 31,000 is an average figure. there's a great deal of state variations. you have states in the south, like, louisiana, or kentucky, that are in the area of half that cost, and you have a lot of states in the northeast, new

york, maine, connecticut, that are significantly more than that cost. but wherever they are, they're very expensive propositions to use. >> host: you looked at the reason why this is making headlines is because there are costs that are not being calculated by the state. what are some of those costs? >> guest: well, the big one -- it's important to remember some states calculate all the costs and show them in their prisons budget. other states, like new york, for example, -- and lat of -- a lot of others have big costs. that tend be toe be things lining pensions and fringe benefits, prisoner healthcare, unfunded pension liabilities. so really depends how states budgeted those cost but we thought it was important to capture all of them so have some kind of comparison across states. >> host: let's put dollar figures on that.

underfunded costs to the retiree health care, two billion. pension contributions, 600 million, capital costs, hospital care for inmates. are these average for across the states? >> guest: right. those are big costs on average outside state corrections budgets. where they are outside states corrections budgets. between, they're not all outside. so you do have those states that i mentioned, especially connecticut and new york, illinois -- that have those big costs that are budgeted centrally so it's not like the government itself doesn't know those are costs, a tax to prison, but we want the taxpayers to get a sense of the real cost, the real price of operating these hugely expensive institutions. >> host: let me put some dollar figures on what you said for these states. new york, 60,000. maine, -- the states with the

highest cost per inmate. 60,000 for new york. maine, of thousand. new jersey 55,000. and connecticut, 50,000. so, what does that mean? what is the solution here? >> guest: well, the real solution -- again, i think it's important to recognize the veriability around the country, and most of the states above the average tend to be in the northeast. washington state is the one exception probably on the west coast. i think our real intent here was not to look at the per-prisoner cost and have states how can we make those particular per-prisoner costs cheaper, and there's a couple of reasons i say that to one a safe, constitutional, well funded prison is an expensive proposition. they're 24 hours a day, seven days, people require every possible need they have, including for that population are, a large degree of physical

and mental health needs. so, on a per-prisoner basis, i don't think there's anything wrong will having a high cost. the real issue is on the bottom line. how much do states and taxpayers need to spend on prisons in totality. and we're of the opinion -- it's not just vera, it's almost unanimous here -- that we overuse prison. we have too many people in prison for too long that are that threats to public safety, and this is a call -- especially in these times -- to really examine that. let's look at how we use prison and spend on prison and try to use that -- it's a very expensive, very punitive sanction, it's perfectly fine to use it for people who require it, but we shouldn't be overusing it. so i don't think states that have a higher than average cost have to try to get a lower than average cost, but they do need to look at their bottom lines. >> host: how are states doing --

do you know how states are making up the shortfall? >> guest: well, states are doing what they do to make up a shortfall, especially now. it's one of the reasons we put out this report. state economies are severely depressed right now. the revenue picture is pretty bleak, will be for a while. states are enacting all sort office cuts to all sorts of essential programs, some including prisons. one of the things that's interesting about the field of corrections, there's a lot of ways to control costs and lower costs and increase public safety at the same time. that's not true in a lot of fields. usually lower costs, if you lay off teachers or firefighters, there's nothing good about that but you can actually shrink these systems and have more public safety and fewer victims and we think it's important for states to look at that and a lot of states have been working hard doing exactly that. >> host: before i get to phone

calls, here front page of "usa today." spending by state and city declines. budget restraint is the most in years. what does this mean? >> guest: a lot of attention on state budgets generally, and certainly for prisons specifically. that one of the reasons we did this. we think states should be very careful about how they look at those budgets and look at the big policy in and sentencing decisions that will really control costs and if done correctly, protect public safety. we don't think states should cut at the margins or eliminate calories or cut programming that keeps recidivism down, but corrections is about 7% on average of state budget spending across the country that's a big clunk of spending. it's gone up more than any other state function in state budgets other than medicaid, and it's now really time to look and take

a really mid-and long-range look how to control those costs and how to drive down crime at the same time. >> host: is this primarily a state issue? do states get any federal money for their prisons? >> guest: there's very, very little federal money in this. i think probably 96% of all dollars that good to state prisons are state dollars. it's about 4% or so of state money. a lot of that was from stimulus funding and that will disappear. so state prisons are one of those more pure state taxpayer-supported functions in the country. >> host: kathy, i want to show you from the institute's report here, for your state of texas, there are -- this is the average daily inmate population, 154,000. 3.3 million is the taxpayer cost of prisoners, and that averages out to be about 21,000. the average annual cost per inmate.

go ahead, kathy. >> caller: yes. i'd just like to say that down here just have people locked up for no reason at all, and i think these prisons are privately all -- their buddies are making money off of just keeping people locked up and they're not trying to rehabilitate people anymore. they're just locking them up. just for money purposes, and you know felons want to get out and can't find a job. so they're back in prison again because they have to make a living or try to do something. >> host: okay, kathy. what about the private versus public prisons. >> guest: that's an interesting point she raises. 7 or 8% of all prisons are privately owned. mostly in the south and southwest. there's been a big debate about what -- are they better or cheaper. it's not clear at all they're better or cheaper. one of the things that private

prisons do, however, is that people lobby effectively for longer sentences and more prisoners because they get more market share that way. so there are real player in this field. it's -- and for me they're one of the obstacles to reforms, actually, because it's one of the reasons that your caller said. the prinze keep going. the other point she made is that we do have people in prison -- especially low-level offenders, who have very high recidivism rate and that means the united states, more than half of everyone who comes out of a state prison is back in that prison in three years. that's a hugely high and costly recidivism rate. not good to financeses or public safety, and it's one of the reasons, we think, that state policymakers and the public have to shine a light on reforming a lot of these systems. >> host: here is something from the justice center, about re-entry facts. federal and state correction

facilities held over 1.6 million prisoner at the end of 2009. this amounts to one in every 199 u.s. residents. at least 95% of state prisoners will be released back to their communities at some point. more than 729,000 individuals were released from state and federal prisons in 2009. an increase of 20%, and in a study of 15 states, more than two-thirds of state prisoners released in 1994 were rearrested and more than half returned to prison. tell me about the costs? do you have a dollar figure to put by that? >> guest: well, it's hard to have an exact dollar fig but i can tell you, for the 40 or $50 billion we spend on prisons, a huge chunk of that in some states more than half -- are due to people who have already been in prison who are coming back to prison. that's why that recidivism rate, that failure rate of over 50%, is a huge problem.

it's not just a huge problem for public safety. and that's one of the reasons why states now are putting more and more money into prevention and aftercare and re-entry after people come back. but it drives up the cost of state prisons. so, finding a way to target investments to lower that recidivism rate will result in huge taxpayer dollar savings, and, again, if you do it correctly, lower recidivism rates, you get more public safety, less crime, and fewer victims. >> the next call is from michigan. we look at michigan -- the average daily inmate population, low compared to texas, 45,000. the taxpayer cost of minimummers, 1.3 million, billion -- billion, and the annual cost, 28,000 debt. what's your question? >> caller: i'm from washington state. i used to be a parole officer in the state of idaho and i did my internship in college in the

department of corrections in washington, and to get people to look at this issue for what it really is and that put more money into the dse budgets than the education budgets and that has to do with the fact you have too many of these law enforcement unions that put a lot of pressure on the state legislature and there are no re-entry programs for these people that come out of prisons. they come from extremely dysfunctional background, completely segregated from society, then tossed back out on the street, you know, sink or swim. >> host: let me take your point about unions. do they play a role in the cost and how much states are spending on this? >> guest: absolutely. it's the same sort of political dynamic as private prisons. some public employee unions, the california has probably the most well-known ones, ccpoa -- but new york, and northeastern state, have very powerful corrections unions, and a lot of

them historically have lobbied not just for better benefits of the members -- the members have very hard jobs, it's very difficult work. but they lobbied for things like longer sentences, more tough on crime laws because they result in more jobs. i think that's changing a little bit. as labor issues become less around expanding prisons and more around individual benefits and especially lowering violence in overcrowded facilities. that's a big issue for the labor unions. for some, even more important than trying to expand. a lot of the unions have the sense now that states are really going to take a look at this function and try to reduce costs, try intelligently to reduce the overall size of their systems, but historically there's no question that powerful public employee unions are one of the many -- certainly not the only -- tenantors that prisons have -- factors that prisons have grown.

>> host: here's a tweet from don who said -- he weighs in on the situation in michigan, saying it's costs are low because we send more people to county jail than to private-run state prisons, and we have strong unions here, too. can you talk about county jails versus state prisons? >> guest: sure. and michigan does do that. a lot of states, especially louisiana, i believe, is a state that sends the most -- the highest percentage of its state prisoners to county jails. there are a few problems with that. it's probably cheaper, as your tweeter says, however county jails are just not meant to house long-term state prisoners. they may be closer to families, which is good, but they do not have the mental and physical health programs enemy health treatment that prisoners need. it may be cheaper but my bet is they're probably not as well run, and it would be interesting to know what the recidivism

rates are for people who leave those county facilities. so it is a way to keep costs down perhaps in the short term, but in the long term, i would bet it's not. >> host: up to new york where the average cost per inmate for taxpayers in that state, 60,000. john, democrat caller go ahead. >> caller: how are you doing? well, if there's one thing that i just can't stand, it's hip pockcracy and hypocrites and there's nothing that makes me more ashamed to be an american than this phony hypocritical drug war, which is glutted our prisons with addicts. now, if an addict commits a crime, then he goes to prison. if he steals something to support his habit, send him to prison. but you have a lot of users and addicts that should not be in this system. thank god for ron paul. i mean, i'm a democrat but i'd vote for million in a minute bus he wants to legalize and tax

things like we did with booze. if you don't understand, america, this is a replay of alcohol prohibition, you're a stupid hypocrite. >> host: got your point. let me ask you this. is this a less expensive prisoner -- is there degrees of expense when it comes to the crime that they're in for and the age of the prisoner and the gender of the prisoner? >> guest: you know, once you're in prison, -- again, if you have high levels of, let's say, drug use and enemy health issues, the expense will be higher because it costs money to deal with those problems. once people are in prison, those institutions are responsible for all your needes, and the sicker you are, for instance, the more you'll cost. but everyone is more expensive. everyone is expensive when they get into prison. some are more expensive than others. i think your caller's point, though -- there were a number of

them but one of them is that it is true that the number of drug users in prison -- drug possessors or low-level dealers -- have increased dramatically, probably by 4 or 5 up thousand people over the last 5 or 20 years, and one of the things about that population in generalization especially the low-level users or sellers, there's what criminologist call almost the one for one replacement effect. that is when you put a low-level seller or user in prison, someone else is on the street corner selling drugs, and we know that it doesn't deter people from using drugs. so those are one of the types of folks who states really need to look at. it's not like you can ignore them. they pose serious public health concerns and some public safety concerns, but in the end you want to deal with their drug use, their addiction issues, and all sort office research has

shown that those folks when they come out of prison, go back to prison in huge numbers. so there's other things you need to do other than put huge numbers of low-level users in prison. big-time dialers? yes. kingpins? obviously. but the folks that are just using drugs, we have to deal with that issue but we know that prison is not a successful response to that. >> host: let me get your response to this headline in "the new york times" recently. the number of older inmates grows, stressing prisons. a report found that the number of imprisoned men and women 65 and older, grew 95% while the numberer of older inmates increased by 63's and the number of all inmates rose 7%. what's the impact on this population on costs? >> guest: it's huge. some states have prisons that are essentially airat --

geriatric prisons and that's a result of all the tough on crime, mandatory life in prison sentences. so we hold people for all of their lives exactly at a time when they're not a threat to public safety. all the research shows, once you hit 50, even before, your days statistically of committing violent crime or over. so we have huge numbers of people in state prisons who are not a threat to public safety, who are very expensive to maintain because they have these health issues. it's a growing problem because prisoners are just going to keep getting older, and that is one of the categories, as you mentioned before, that is more costly than the average prisoner. so, it's a huge problem for states, and again, it's one of the impacts of passing tough on crime legislation, much of which sounds good and intuitive, but a lot of which, like this, has huge unintended, not just social

and social justice consequences, but huge taxpayer consequences as well. >> host: average daily inmate population in the state of maryland, about 22,000. our next caller from -- an independent from bolt more. >> caller: i'd like to say in my opinion, the prison system in general is an evil and inhumane thing to put a human being, a member of our family -- i believe all people on earth are my family members from adam and our mother eve -- that to put one of our family members in jail, two million of enemy the u.s. and god knows how many worldwide -- in a cage, and to tell him he is not worth -- society doesn't want him or is punishing him -- just shows how capitalism got into our veins republics -- we view them as

untouchables, like a caste system. >> host: mike from philadelphia. >> caller: i want to bring up the prisons for profit, but that is one of the callers taking the wind out of the sail on that. also, i have a son, my older son, who spent three years in afghanistan, fighting, came back with a heroin addiction in the short time he was home he got caught buying drugs and got sent to prison and is spending three years in prison. i just want to put up the fact that -- excuse me. just want to put up the fact that how many men and women are coming back with these addictions. we need more counseling and more help for these men and women.

>> host: here's a tweet here. why do we imprison more than any other nation? are the most criminal society on the planet? >> guest: that's an excellent question. no, i don't believe we are the most criminal society on the planet, although you would thick given the number of people we impresent. the figures are we have 5% of the world's total population but we have 25% of the world's prisoners. there are lot of reasons for that. it's hard to even remember this if you're of a certain age, but through the mid-1960s, crime was not particularly a political issue in the united states. it was one of those issues that was sort of left to experts to deal with. it was regarded as a complex social problem, and not one to be politicized. that auld changed in the late 60s and early 70s, through the 90s. both parties found you could make huge political capital by

being tough on crime, stringing length of stay out indiscriminately, and what happen you add that up, here's what you get. the most incarcerated country on earth, with the most tax tear expense on earth and a recidivism rate of 52%. that's where we are today. it's not a reflex -- reflection of us being the most criminalized society these are policy choices we have made. and it's obvious. everybody knows someone who has been a victim of a crime or violent crime. there are some people that need to be away from society, at least for some period of time while hopefully we try to make them better. but by no possible count does any expert on this think we need 2.4 million people behind bars at any one time in this country. >> we're talking about state funding of prisons with the director -- executive director of the vera institute of justice, out with a new report

on the actual costs that go into prisons. we hear from ray next, from new york. >> caller: i work in a prison, and i have close relatives in prison. i have a good insight into what works, at least in this state, and many of the things you mentioned i would agree with. i would say one drug user has a huge crime against a community. they must by jailed after any diversion attempts failed. i believe in the diversion programs for the users. >> host: ray, i'm going to stop you there. that's an interesting point. i want to get your take on it. a ripple effect to one drug user, one drug dealer, in a community. >> guest: that's a very important point. and i'm not suggesting we don't deal with drug users, and i think at your caller said, a lot of programs initially that

are alternatives to incarceration, that are either drug treatment programs or mental health and counseling programs and community supervision, which is very important, and i think ray is right. if someone can't follow the rules of that, if they break the rules once they're given that chance, then they have to get further sanctions, which might including going back to prison. but defaulting to prison, using prison from the get-go, we know it doesn't work, but all we have to do is look at the figures but you want to deal with folks with drug issues can both for public health and public safety. the real issue is, what do you use first? what's the first line of defense. we know from an effectiveness standpoint, it's not prison, although it might ultimately be prison. >> host: in the state of ohio they have an average daily inmate population of 51,000. and the cost for taxpayers there per inmate, 26,000.

richard, an independent. in ohio. go ahead. >> caller: good morning. mr. jacobson, i was kind of curious whether you can elaborate on the privatization stuff. basically privatized correctional facilities are still taxpayer funded. they're not like in the state of ohio at one point we had state liquor stores and they privatized those and now you can go into your supermarket and purchase your liquor there. but there you're selling a product. when it comes to incarcerating prisoners and stuff, i mean, they're not making a product and making the prisoner sustained in terms of costs. not because i want that. that's boring on slavery. and it's not really private, it's taxpayerman. when you look at the states with the most amount of inmates incars arrested -- and happened to mention texas with 150,000 --

does texas have the most private prisons? i ended up testifying at one time here in ohio in front of a legislature about 15 years ago on this privatization issue, and my concern was, what kind of a system are you building where basically you're making money, a profit motive? you're funding that profit through taxpayer'sman and then the people that are making the profit are using that money to lobby the politicians for longer sentences, or new crimes for incarceration. it's a vicious circle. could you please elaborate on that a little more? >> guest: i'm happy to you make several good points. i don't know if texas has the most private prinze, though they might. i think new mexico might have the highest percentage of its people in private prisons. but you're absolutely right about the cost of private prisons, whether a prison is public or private, taxpayer dollars are picking up the bill.

the taxpayers or taxpayers are told by states that use private prinze that private prince are cheaper. i don't know that's true, and one of the big issues in private prisons, a philosophical issue so doesn't have uptake -- is corrections a field that should be privatized? when you run a prison you're responsible for every aspect of that person's life and you have the able to use lethal and deadly force. that's a huge amount of state power to be put in the hand ops private capital. it's a huge responsibility. it comes at a cost. whatever that cost is for private prisons, a lot of -- some of that profit goes into those folks trying get more private prisons so it is a cycle. but it's a significant cost, and just isn't a size. now whether a state uses public or private prisons or both, all those cost are reflected in the

straight costs you see. >> host: to his point that private prison is still public money. >> guest: absolutely. that's why in our costs, the costs you're going over now, whether a state runs public and/or private prisons, all that cost is wrapped up in the taxpayer cost of prisons, and that's why they're folded in. from a taxpayer point of view, whether it's a public or private prison, that money is still coming out of your pocketbook. >> host: andrew in new york city. go ahead. democratic caller. >> caller: hi. i just wanted to touch on the subject of punishment versus rehabilitation. i think that -- i used to be a corrections officer in kansas, and i think we use prisons to punish people and people want prisons to be used to punish people. somehow there's not justice if a person is not punished.

but we let people out, they can't get a job, and they revert back to their old ways because they can't make they're way in the world and that's why the recidivism is so high. and it's almost like we put a brand on them to say you're a failure and now you're more of a failure because you're labeled as a criminal. >> host: you talk about the cost of re-entry back into the prison system. your report also touches on how you can change sentencing as well as releasing policies in order to curb the cost. what are some of the ways that states are looking at doing that and what did you find from your institute? >> guest: well, we found a lot of states are reexamining many of their sentencing laws. not just mandatory sentencing where you must go to prison, but also the length of stay. whether you're in prison for two years or two years and two months or two years and three months, all the research shows

that extra marginal amount you're in is really nothing gained. it doesn't increase public safety. just increases cost, and states are starting to look, especially at low-level offenders. minimizing the amount of time they spend in prison. either through alternatives alto incarceration programs or by having them spend lest time in prison but better time in prison. when i say better time in prison, i mean prison has to be more than just punishment. it is, of course, punishment. any prison is a punishment. for people who work in prison orin' prison or know what prison is like. if you're in prison, you're being punished. but it is an opportunity to provide some service, some enemy health, physical health, certainly rehabilitation programs, as politically as unpopular as that may sound, because at the end of the day you don't want these folks to come back because if they did, it probably means they did something bad and you're going to spend more money on them. so i think states are getting

that, both on the re-entry and the entry point of view to spend more money wisely, and that may mean lowering the amount of time people spend, diverting people but concentrating on the issues of why people there are in the first place, and we see state after state, especially on the low-level drug offenders, rethinking their sentencing policies and diverting money they saved back into programs that we know will work better. >> host: here's a tweet here from a viewer. it's interesting, they say, with unemployment very high, underemployment very, very high, crime statistics going down. >> guest: correct. crime has been going down. and it's been going down for a number of years now. and it's one of the reasons why states should really try to look at spending their money more wisely because we not only know why crime is down to a large degree, or some of the thing

that have driven down crime. one of the things we know in terms of crime reduction, is that marginally increasing the size of these state prison systems, because they're so big already -- that marginally increasing them gets you next to nothing in terms of increased public safety. we do know that other things work much better, both things inside criminal justice and outside criminal justice. and if that's true, why spend money on something that is not as effective when you can spend money on something that is more effective. just for a minute, if i can talk about new york. new york is an interesting case study. new york actually -- despite the fact it's a high per-prisoner cost, new york has the fastest shrinking system in the united states. it's gone down by 18%, and as a result the state has saved hundreds of millions of dollars. but not only that, new york state leads the country in crime decline over the last ten or 12 years. so it's clear from the new york

example that you can drive down the size of your prison systems and drive down crimes significantly at the same time as well. >> host: taxpayer costs of prisoners in the state of colorado, around 600,000 and that comes out to an average annual cost per inmate of 30,000. denver, kyl joining us, an independent there. go ahead. >> caller: yes. thank you for taking my call. seriously. i'm calling because i think that in this system -- i mean in this country, we have a very perverted since of liberty versus justice. i believe that -- perfect example is the war on drugs. people that are drug addicts, hurt themselves by being a drug addict, and i don't think it's right to put somebody into a cage for hurting themselves. i'm not advocating the

legalization of theft or neglect or anything that comes from drug abuse, but for alcohol and cigarettes to be legal, or nicotine, and then marijuana is not legal, i just don't think it's fair to draw the line between what should be allowed and what shouldn't be allowed. >> host: okay, james. we'll go to james in georgia. >> my comment is the guy said they should let people out of prison early with medical problems. and if you let a person out of prison bus of a medical problem, the first thing is they've got to go on social security or medicare, and the second comment i got is, i am a success story. i'm an ex-prisoner that changed his life through faith-based programs. and that's what works in most people -- georgia, the state of

georgia, has faith-based programs because they know that turning your life back over to the care of god is the only way most people can change. >> host: were the faith-based programs during your time in prison? >> caller: yes. >> host: and how much -- resources were put towards that? how much time did you as a prisoner spend in these faith-based programs? >> caller: i'm still involved. i go to na meetings, aa meetings. i go to church. i talk about it. >> host: but in prison, i mean, how much of your day was set aside for this faith-based program? >> probably an hour or -- the basic training was maybe an hour a day. and then you have to practice it. you have to learn to practice the principles. >> host: what do you make of that? any study looking at faith-based programs and their impact?

>> guest: i think faith-based programs are a hugely important part of the sort0s programming and rehabilitation programming i was talking about. and congratulations to your caller for using them to turn his life around. for some prisoners, that may be faith-baited program. for other prisoners it may be work or employment program. for others, counseling program. for others, literacy in school. the think is to have programs that people can use to latch on to that they haven't had before as a way not just to get through your prison sentence but as a way to get something useful out of that time and to not come back. that's the goal, to get you to not come back to prison. for some people it's the faith-based stuff are which is hugely important, not just in prison but a faith-based presence on the re-entry side of things, which is important. but those kinds of programs, when they're faith, based or not, we know the essential

ingredients in programs that work, that are well-targeted, well-designed that deal with thick issues people have. they can be faith-based or not but the key is to have those programs available. there's not a waste of money. it's a good, solid investment for programs that work. >> host: all right. one last phone call here for you, sir. john is a democrat in maryland go ahead, john. >> caller: yes. i looked at -- i work for the d.c. department of corrections for 28 years. >> host: john you got turn the television down. i'm sorry about that. we're just going to have to leave it there. michael jacobson, if i can ask you, as we wrap up here, people can fine the report if they go to vera.org. have you received a lot of phone

calls? have you received any feedback from states and those that run their prisons? >> guest: we're get going feedback from states. this is not a -- some states are trying to refine one or two of their numbers. i think most states get that these do reflect the real costs, and it's a useful measure and a useful way to look at their costs. we've only gotten really positive feedback, both from the field, the field of corrections, and also from the public. prison is a very expensive, very punitive sanction, and we really have to be careful with how we use it and how we spend those taxpayer dollars, and i think most states appreciate that this is a way to further that discussion and reform. >> michael jacobson, former new york city correction commissioner from 1995 to 1998,

thank you, sir, for your time this morning. >> guest: sure. thanks for having me.

>> translator: this occasion is concurrent with the first anniversary of prophet mohammed, blessings upon him and his progeny. and imam -- i have to congratulate this the great nation of iran and also the human community, and the world, all the prophets, and to the prophet of islam, that has been

the pinnacle of all process and stands in the highest point and has come to help humanity reach the point of perfection, and this universe has been created for the sake of humans. there are two major objectives for the missions of the prophets. the first objective is human perfection and a spiritual perfection. the prophets have come to guide humans and to promote humanity, bringing humans to the point of god's successor. and his second mission of the prophet is to guide the humans

for having a pure life and a happy life in this world, as these two missions will bring about prosperity in this world and the hereafter. the materialization of these two basic objectives is based con contingent upon several factors. the first factor is worshiping god, the prophet initially have invited humans, all beauties and divine and human values and also

all the blessings can be attained, and the god almighty. -- and freedom are two sides of the same kind. humans will not be able to experience freedom and when humans get rid of selfishness, tyranny, and also the domination by the powers and -- in this way humans, as they get rid of these things, they will get closer to god and as humans take a step towards -- they will get rid of domination. so as long as the person does

not realize this, he will not get freed. the prophets have come and have called on humans to worship god. only worship god. and the secret behind happiness and freedom is worshiping god. the second cycle is justice. justice is the killer for humans moving towards the pinnacle of perfection and creating a process and happy society without justice, the reality of humans will not prosper without

justice. life will not emerge and all divine prophets haven't been tasked with administering justice. the prophets have come with the book and the justice and the criterion for justice in order to prepare grounds in societies so that humans will take a demonstration of justice and cause them -- and divine prophets have been tasked with the implementation of justice. the third factor is knowledge. without knowledge, it is as if you're moving in darkness and all prophets have invited humans to acquire knowledge and have opened the -- and they have

opened the gateways to knowledge. and the fourth factor is kindness and affection. without affection, humans will not be able to attain perfection and happiness. ...

>> translator: with the divine nature of humanity humanity, when you speak to any person in anywhere in the world with the family or values, all of these values emanate from religion and religious thought and to the establishment of the values of the world, of the profits to have come in order to delineate the values of the religion god has sent only one religion.

and all profits in proportion with him and capacities, and they have all introduced a single religion and at the ultimate point* average and two be deleted by a god's messenger a profit muhammed. agreed to islamic revolution of iran the cave victorious and took shape with such ideas in objectives as the revolution of firebrand with the same nature of the of

profit of islam with justice common knowledge knowledge, affection, prospe rity for all. the islamic revolution has never sought to create an empire to dominate others. the revolution is not aimed to over others but justice come a affection, knowledge, happin ess. it belongs to all humans in the nation. this is the spirit of the revolution. the idea the eighth tee it has taken shape in june when ideals of this revolution to

maintain the spirit in objectives and ideals to preserve this revolution requires a virtue upon virtue and also continued resistance. the islamic revolution led by the divine profits in comment prepares the ground for the last movement for the revolution to fill the world with justice. and in the revolution must think about this mission and also make planning for the materialization and it take

action in line with the sublime goals. i announce that this is a summary of the message of the iranian nation by a the leader and the islamic revolution and of it imam and the iranian nation will not be diverted even 1 inch from this path. >> of the nation will not be diverted 1 inch from this path. in the past 33 years we had considerable achievements, achievements from humanity and history see unique independence also seek integrity of the

universal approach and dignity of self-reliance and courage are just some of the achievements of the iranian nation, the progress of the iranian nation and they have been miraculously hong hong -- have been miraculously and leading others to praise the air raid the nation. in the past 33 years, during a difficult time despite the pressures exerted by the end of me, we have managed to obtain considerable achievement particularly in recent years we have experienced greater pressures by the enemy and have witnessed they have created have staged hostilities the achievements

of the i read the nations have considerably agreed and i want to mention some of these achievements. in the scientific field, we are witnessing prosperity and considerable scientific progress. speaking of the number of universities and students and scientific achievements, i will mention prior to the revolution coming we had maximum 300 schools every year during the development plan of five years. this reached 12,000. and during the five years the number of scientific articles registered in the international circles

exceeded the figure of 34,800 articles. today we have a lot to say with nanotechnology. six years ago we stood in 307th position today we're in the 12th position. and in the region we was six place and by the grace of god and the effort of the scientists come a we are in first place. [cheers and applause] starting in this 30th position on the 14th.

many pontificate of the medicine manufactured in iran and abortion exported overseas and is clear for years our scientific position and sectors will reach the fifth or sixth position in the world. [cheers and applause] for the past few years, the medical faculties have been established to dispatch agents -- patients a great number come to iran and travel to iran for treatments from the arab

states iran it is proceeding making progress with help of the iranian scientist of we have manufactured satellites and satellite carriers. also the launching pad has been manufactured in the equipment and also two or three years ago the first satellite was launched then a research satellite and the research team. a eight has been manufactured by the university and the students for the first transparent images in the world and we have that at our disposal

right now. [cheers and applause] with the grace of god in the near future, the range -- i ran satellite of the iranian nation will be placed in orbit at 6,000 kilometers. and thin nuclear domain terminal whole world that hegemony tries to put pressure on us in order to prevent the iranian nation from acquiring knowledge. today you see the iranian nation has become nuclear and can supply many demands

and the demands are met by the iranian scientist god willing in the next few days. whole world will witness the inauguration of several achievements in the nuclear domain. [cheers and applause] many other major accomplishments have been made including implementation of article 74 of the constitution that has been a major development in the iranian economy also handing over shares to 40 million iranians and also

5 million better under study and planning and also the accomplishment was the implementation of the targeted subsidy and that has directed the iranian nation toward progress and justice. them the present a couple of figures in this regard. >> with perpetual consumption, more than $15 billion and the iranian nation will benefit in order to contribute to the country's prosperity. also in reducing the

economic social differences have been reduced. we have an economic index sets in this society if it moves towards zero that means society comes closer to the economic balance and moving toward justice. if it moves to woo the number one, that is this means very wide economic gap of the social class is in implementation of the plan this moves to the point* 307 this is a major accomplishment during one year. >> we had to import pez

zero but today i am announcing probably bad today we are a major exporter of petrov around the role. to indicate the economic activity also production the country is remain to progress there has been a miracle occurred around the revolution. half a billion dollars every year and in the calendar $7.5 billion and i announce probably today that this year our exports during the 10 months have exceeded the

figure $35 billion to the end of the year. god willing it will exceed $43 billion. [cheers and applause] imports have come under 10 troll during the 10 months. the country's imports have experienced a 5% reduction and today, lahood the most actives successful stock to shane's it indicates prosperity is the stock exchange of the islamic republic of buy rand. [cheers and applause] minimizing the size of the government will government has experienced 10 percent

mineralization. in the past the size of the government was expanding so for the ministry is have reduced and we have tried and even though there could be cases of extravagant to announce the government republic of iran, the most clean government throughout the world. [cheers and applause] in the housing sector, but there has been a major improvement. when you look to housing

construction and, many economic managers and politicians in the world are surprised initially. they do not believe this but when they come and visit to come and they gradually come to realize these achievements. ahead of the estates, it. >> it is a major achievement and coming to that project first, they visited the housing construction project and a colleague took them to a major project. they will construct 8,000

but the 140,000 housing units being built by contractors. in recent years, 1,400,000 to this awoke major new riches survey projects help to fund projects, the water project today we're born of the major exporters in the region. [cheers and applause]

also industrial investment made by the iranian calendar , up only 688 billion has remained. but those industrial investments have been made in the sector and great achievements have been made also seeking and government can shooting two for the unity and also the government decision is directed to people with the

administration of justice. the capability of the approach and big government needs to focus on this throughout the country to the other accomplishment is the offend over the last 50 years every year the revenue that has been spent invented to borrow money to make up for the government's cost that has been the establishment with the help of the parliament the national development fund 20% of the old revenue is

deposited in the find second year of 3% increase. i want to tell you for the first time in the country's history, last year with the government, it has deposited more than 30 million to create employment opportunities, new jobs and the development of the country. and without using this money in the political arena arena -- iran but the nation has been influential with

justice and power and for global peace and security. and also made dizzying to change the discourse of hegemony in the world. and materialism and selfishness and to justify the arrogance the iranian nation has managed to change said discourse to justice if you go to any part of the road today and speak with the people of different parts of the world they demand justice, freedom, and other accomplishments that was breaking in crushing often do i go the elegant powers, those who were

slaves and colonists to dominate the world within the regime. but the holocaust, the iranian nation with your age, broke and crashed the way the freedom of the western nations. [cheers and applause] [chanting] to the people of iran, these are just policy achievements made by the great nation of iran. so there should be things

and you should foster unity and to make ever. >> the one to direct my a rare marks to the ongoing section in the world through triad of two route announce and it speaking at of freedom and justice and progress, also national sovereignty in to spare natgas there is such a divine right but it also cut to prosper and of course,

his said the last month to be accompanied with hard work and to you should have read them and democracy in. it cannot be attained are inspired by nato. [cheers and applause] the invention by the arrogant powers and also of their spending $1 they expect hundreds of dollars.

friars to ndp event the eyes of the animosity end hatred that will lead down to hatred to endanger the future the regional governance must be aware the nba create to save the regime with having discord among the nation and also among different religious

schools but to create one in the city. they want to eliminate some others and later days they want to will eliminate as well. why should it be this way? they have enough to take care of that the election. you cannot put that into the lexicon and it would the single election has been held, they come together with the help of the u.s. u.s., they prescribe to freedom and the solution in this is very bitter also the

most ridiculous joke anybody has heard in history. i tell them the only way is to return to the nation that respects the rights of nations of the rise these governments that are supporting the u.s. in european countries in say being the regime, they are putting pressure on those nations they should know tomorrow will be their turn. if the americans pay attention to them, the resistance, the harm to the governments would be thrown away. all of the attention in the u.s. in the west have shown

that they just think about their own interest. they are not loyal friends and they will sacrifice you see you have to turn to your nation and returned your values in return to the pure religion of the profit of islam of muhammed. [chanting] all nations and politicians must be aware that are major developments so the honesty of groups of personalities must be survey of what is the criterion? and the honesty of political figures what is the criterion for that? next to the phase-in the

guide, the criteria and will be open opposition to the domineering policies of the u.s. in the west and the region and the occupation of the palestinian land and the fake a zionist -- zionists regime due to good dishonest regime in the united states. i like to announce to be of a supporter of nations and a supporter of freedom and a supporter of democracy but if they gave been to the domination of the u.s., it did not oppose such a

domination as a secret contact all must know is a big liar. [cheers and applause] all of the problems in are due to the u.s. nomination they will receive the support to of the west's and the regime. >> today we have our allies between iran and the iranian nation adopting that threatening tone and insulting tone. i want to to revise them to give them advice to

understand better understand geography that the cultures and capacity and by eighth. >> they should know it is glorious with a historical nation but the whole world has realized this. that the westerners, americans oppose our progress also using the nuclear issue as a pretext. they do not want to negotiate. very well. within the framework of justice and respect. you were using different excuse is that you gathers should gather for a

revolution. budget to to use that to insulting tone come with the iranian nation will never surrender. [cheers and applause] [chanting] >> translator: the only option left is to comply with justice respecting the rights of the iranian nation also coming to the negotiation table may gain a difference for cooperation. any other option will lead to your failure, to the westerners failure and defeat. i advise them to stop

interfering in the region. there liked they are dilapidated and no use for you so where you just supporting the occupying regime that is not even accepted by the people? let sellout palestine to be liberated with the palestinian nation to do what is right and this is to your benefit. probably by following this message you may survive over the next two or three years to have achievement, but i

am telling you honestly that there is a great awakening and there is a storm coming. the storm is on its way and if you don't join the asian comment it will eradicates. [chanting] >> translator: this is to your benefit to join the nation's the concluding thoughts of the history has been tyranny and oppression and also capitalism and

marxism today is engaged in the oppressive measures at other junctures, two-tier any and the plan during the nation's to make different theories and i want to tell you with a grace of god, such an era has come to an end. it also the crushing blows of capitalism you can hear the crushing of the bones of capitalism in the world.

[chanting] also of the new order order, welfare, a security, a justice, dignity , based on such an order to have a global management in this requires a new sovereignty. and a new government. humans attorney did universe of management and universal coverage. a government that belongs to all nations regardless of language or color in race to protect all people. humans are in need of

government based on justice common knowledge and affection. and at the same time so, who should create such an order? the government? the ones who have nothing to do with justice and kindness? to they bring those values? can the u.s. set up the state to our operating behind the scene, can they bring justice to the world? the answer is clear.

justice requires just rulers. on behalf of the free them seeking nations of the world , the alternative to unjust order of this world, nothing but a perfect society. [cheers and applause] [chanting] to we ruled by the imam of the time, he will come. accompanied by jesus and all

the justice seekers coming he will come he is the perfect human being and the manifestation of jesus. the and probable human being that so many show kindness to humanity. he will come with the historical radios. of this is a common point* and the solution to all problems and hardships. also bringing humanity to perfection. this reality plays a pivotal role for the unity and for all justice seekers.

>> but use affection and the realization of the eight deals and allow me to commemorate the late to imam and the murders and i wish to thank all the people for the massive turnout across the country and also in tehran. powerful players. i pray to god, help us in

order to bring the iranian nation in and eliminate the impediments faced by the iranian nation and all of the oppressed nation and also grant us your blessings end grant your herb blessings to the nation of iran.

>> spirit of disagreement in are given to good don't let the influenced by that. you have given here pins this halt a moving and dramatic proof of how america, who differs, i can move forward for the nation's well-being shoulder to shoulder.

>> good morning the subcommittee on maritime security will come to order.

the subcommittee meets to hear testimony from jeremy nadler and department of, and security office policy and acting commissioner in the customs and border protection and assistant commandant for our safety with u.s. coast guard also the director of maritime security from gao. today our importuned to topic is a global supply chain and a recognizer sell for the opening statement. this is a part of a two-part series to examine eight -- examine dahan -- examine the maritime measures last year refocused on the northern border and in between the ports of entry but it is important to remember we have three reporters the maritime border is just as important and a conduit for

much of the trade and commerce is the lifeblood of the nation and after september 11th we recognize the importance of securing the nation's porous and a cargo that tranches from overseas to our shops here on a daily basis. i had the opportunityatio recently to visit the nation's largest ports to see firsthand c what the united states coastguard y orde due to secure the nation bit is clear more work needs to be done. whether coming into our ports of involved are incredibly complex. security solutions we propose should cognizant of the reality. in today's hear, we'll examine how we balance maritime security

and the needs to facilitate trade and not place a burden to the flow of goods that are vital to our life. delays in shipping can cost millions to our economy and facilitating commerce is not easy, but risk based systems and trusted bissed programs help companies who play by the rules and make extra efforts allowing the border protections to focus on less secure shipments. we have to ensure we push the borders outside by conducting as much as cbp's cargo section and screening work before potentially dangerous cargo arrives on the shores. we have to do a better job of rev of leveraging work of our trusted allies to help screen and if necessary scan high risk cargo. it's no secret the nation faces a difficult financial situation. we have limited taxpayer dollars requiring that the government make smart decisions to use those resources in the most effective and efficient possible manner. we should be under no illusion that we can eliminate every

single risk certainly that there wases pose to the nation, and that all we need to do is just to spend more to make the risk completely disappear. a clear eyed assessment of risk should inform how we allocate scarce homeland security dollars as well. i think this is an especially important to remember when considering the 9/11 agent mandating 100% scanning of cargo prior to it arriving in america. certainly, that is a very, very worthwhile goal and should be the goal; however, we have to look at the -- how we implement this law, whether it's possible, the potential costs and benefits as well, and we currently scan 4% to 5% of all containerized cargo entering in the country based on the data screening system and the current threat environment. it certainly is far from clear that the investment required to scan the rest of the 95% of the

cargo is possible and again we'll talk about based on risk, is it grounded in a proper understanding of a threat posed by containerized cargo. the secretary, herself, department of homeland security, mentioned on numerous occasions including in front of this committee and a number of times that she wants to work with the congress to modify this requirement. i would say certainly i stand, and i know this committee stands ready to work with her, and we are waiting for her legislative proposal that will help move the country into a more risk-based system as the secretary has been saying now for over two years. as part of the discussion today, i'm eager to hear the witnesses' thoughts on the custom trade partnership against terrorism, the pack program, the private sector has a role to play in helping secure their supply chains, and it's important to spend customs and border protection officers' times on shippers of concern rather than on trusted and vetted companies willing to make security

enhancements, and that, you know, i think is a wonderful example, that program of of how government and the private sector can partner together to help increase security and ensure the smooth flow of goods, and we want to explore ways to improve and explore the program to additional companies willing to improve the security of the supply chain and finally, i'd like to note the safe port acts of 2006 calls for a strategy to be released, and it was due in october of 2009, but it was not released until just a few weeks ago. i think it's interesting to note that many times this subcommittee has been having hearings on particular issues, and then the agency, the department responds, which i think is a very good thing. in fact, we had a hearing in july on maritime cooperation, and then the department released their maritime coordination plans right at that time. then we held a hearing on visa security in september, and the department released an

announcement on visa security on the day of our subcommittee hearing. i don't know if it's intended or what, but it's great. the congress is doing its job as oversight, and the agencies respond, and i think that tells us to subcommittee is focused on the right issues, matters of security for our nation as well. however, i will mention as well that even though we just received this a couple of weeks ago, the document that was produced by the white house was only six pages long, and the first page was the management executive's summary, so i'm looking forward to hearing the department here's plans an implementation details with a complete strategy to better secure the supply chain. with that, i recognize now the ranking member of the subcommittee, gentleman from texas for his opening remarks. >> thank you so much, madam chair, for holding this meeting and also i'd like to recognize our ranking member of the full

committee, and, again, thank you for holding this meeting. madam chair, before i move forward with the statement, i'd ask for unanimous consent to allow the gentle lady ms. richardson and ms. con to sit in. >> without objection. >> thank you so much. as you know, this subcommittee has previously examined cargo security and facilitation issues at our land borders. some of the busiest land port entries are located in my district making facilitation legitimate commerce a key issue for me and my constituents. they are great importance to the lady from michigan given her location on the northern border, and i appreciate all the work she's done there facilitating the balance between security and, of course, commerce moving as quickly as possible. today, we're examining another important part, which is the maritime cargo security that has certain parallels.

indeed, the fundamental issue is the same. how can we have legitimate cargo while keeping instruments of contraband from terrorists entering the united states. given the amount of cargo entering and crossing the country every day, it's no easy task. we were hearing testimony today regarding dhs programs and initiatives to secure maritime cargo through programs such as the container security initiative, secure freight initiative, and the ct pap. i had the opportunity to visit a csi port with mr. thompson, and i've also been to the national targeting center where the customs for protection cargo security work is done. while i appreciate the hard work of the men and women of cbp and dhs colleagues on this challenging issue, more remaining to be done. many of the cargo security programs have grown stagnant in recent years in part due to lack

of adequate funding, and many of these programs are carried out by cbp officers who are in short supply. we have greatly expanded the ranks of the border patrol, the men and women in green since september 11, 2001, but we have not kept base with cbp officers, the men and women in blue, and we have to do better to ensure we get the men and women in blue because also the ones that man our airports, our sea ports, and our land ports. without adequate personnel, our sea and land and airport security and facilitation will both suffer. finally, i'd like to bring also the issue that madam chair also brought up which is my dismay at the recently released long overdue national security and supply chain security. this was due in 2009. 2009. it just got released this last month in january, and, again, not that weight counts or number of pages counts, but six pages

is, i think, is not sufficient for such a very important issue that we have here, and i'm hoping that we'll get a little more substance from the administration on the path forward for supply chain security and facilitation. i know we can do better than this. it is my hope that the witnesses today will be able to speak to dhs mission for its role in this very important mission. i thank the witnesses for joining us here today. i look forward to your testimony. with that, madam chair, i yield back the balance of my time. >> i thank the gentleman. the chair recognizes the ranking member of the full committee, the gentleman from mississippi, mr. thompson. >> thank you very much, madam chair, i appreciate you calling this hearing, and i appreciate our witnesses for their participation also. today's hearing comes as a critical juncture in a department of homeland security's efforts to secure maritime cargo entering our nation's ports. later this year, july 12, 2012,

marks the deadline for achieving 100% scanning of maritime cargo before it arrives in the u.s.. pursuant to the implementation recommendations of the 9/11 commission act of 2007. in other words, the law requires all u.s. bound cargo be scanned either through non-intrusive scanning machines or receive a physical examination. today, it is widely acknowledged that dhs will not meet this deadline. i'm a person, and i understand fulfilling these requirements are no easy task. those of us who supported the precision hope to spur cargo security at this point even if the initial 2012 deadline was not met. instead, the end of nearly five

years since the law was enacted, dhs failed to make an honest effort to implement the mandate. we've heard a litany of reasons that 100% scanning cannot or should not be done. in testimony before this committee, secretary napolitan expressed opposition to the mandate saying 100% requirement is not achievable by 20 # 12 instead advocated for a risk-based support to maritime cargo security. of course, the sure surest way to fail is not to try at all. equally troubling is the fact that in recent years some of dhs's existing cargo security programs have become stagnant, have been scaled back. for example, the container security initiative, csi, is operational in the same 58 ports that were active before the

enactment of the 9/11 act. over the past five years, csi has not been expanded despite the fact that at least 700 ports ship goods to the united states, and a number of overseas personnel deployed to the 58 ports has plummeted. specifically, in 2009, there were 167csi officers in overseas ports. today, there's only 79. similarly, while a few years ago, the secure freight initiative included six ports, today, the program has reduced to a single low volume port. last month, the administration released a long awaited national strategy for global supply chain security. you've heard my ranking member talk about the size of the six page document. it's hard to see how