quickly reached. >> would you say the sec in the past has put effort and energy into performing legitimate and serious economic analysis? >> i think i would agree with your sub text and they sometimes it's been pro forma. i think however the burden cannot be overstated. if you look just at the crowdfunding provision in the jobs fact, i can't keep different sets of rules congress has directed the fcc to promulgate just under section 4a. they have a burden i made a very short time limit. it's hard to do everything overnight. >> mr. cartwright, can you comment on that? i have to think cost-benefit analysis should be performed with it deal for everybody.

the lab requires that. the sec is required to efficiency formation and it's been required to do that for some time. too often in the past it was an afterthought. they get a team writing it. and at the end of the process. something would say my goodness, you know, there is that cost-benefit analysis and efficiency formation that was kind of a compliance exercise. it's a lawyer dominated agency required here those people were often not consulted at all or if

they were, i frankly think it's wonderful here in america but if you believe that an agency has exceeded its authority or acted arbitrarily or capriciously you do have the chance and question the agency's exercise of jurisdiction. that historically didn't happen in the sec very often, but other agencies have had the experience. the epa is litigated by one side or another and if you have to respond is to go requirements. i applaud the march statement. i think it's a very good statement and i think that it's a huge step forward. the real question is whether this is going to be implemented in a way that gets the economists and people asking these questions in upfront at the very beginning so the design of the rule is shaped in part by

these considerations that the lab requires rather than creating the rules and try to justify it, basically due at 350 yen to try to justify what we've done. >> on a different subject matter, can you describe the changes to the 500 share act in a j.o.b.s. act in the benefits you at first the? >> sure. as a law exists today, prior to the jobs that, if a company had $10 million in assets cabooses small amount, almost always that test is satisfied. 500 record holders are required to basically become and it's an unfortunate development that today that many successful

entrepreneurs no longer want to have their companies. that was the holy grail. let's see if we can go public and do it fast. the sooner the better. now some of the most successful companies, most successful business leaders try to keep the account based private as long as possible to his disadvantage burdens are burden. there are increases in the threshold of the 2000 holders, provided that no more than 500 or credit. >> did you just say the people are keeping their companies private for a longer period of time because of the challenges

of bringing a public, correct? >> it's not the challenges. there's two things. it's not investor confidence. it has two aspects to it. the company is their 1520 years ago were the scale where public offering is feasible and the burden of being public were not so consulate. those companies would go public. today is the recipient of companies in size and scale that no longer can swallow the overhead costs of operating as a public company and maybe becoming a public company. they have to wait longer until they grow bigger in order to become public. but what is really surprising us even when they've gotten big enough to beat the requirements, the most successful entrepreneurs today to hang out in silicon valley, lots and lots of people will tell you this. they want to keep their companies private as long as they can because they believe

even once they're big enough to go public, the burdens are greater than the benefits. you can see google for example some years ago, 2004 help him longer than they could have. they picked up in sec enforcement action, hence themselves and their general counsel for going to loan. i think some of the recent ipos, just look what happened. you can see they hauled out the last possible moment. that is one of the reasons why we have faith that caught a nice magazine.there may be preeminent financial on the cover story a few weeks ago the vanishing public company showed the cover. the cover art is a scrappy tillie and, rushing over the clift. so we got a problem here.

it is completely reversed. >> thank you, mr. chairman. >> thank you very much. we'll start with a second round of questioning and doubt recognize myself for five minutes. you know, for the whole panel, from your review of the crowdfunding provisions of the jobs fact, do you all agree the sec is a great deal of discussion over the implementation of this section? >> you could just say briefly. >> i will be brief. i understand sometimes i can be not so brief. >> welcome back. >> it's that simple. i matched in my testimony one example is at their discretion

of changes. >> professor bradford. >> yes, although that discretion gives more into adding additional regulation in the direction of cutting existing requirements. >> the answer would be yes, that's lurches because because congress has delegated every provision of the jobsites, but making discretion to the sec. they were told to consider rules. >> ray. so the legislation for 400 votes in the house was a different construct. so does this discretion, professor bradford, place at risk the probability of crowdfunding to take place in the real world? even if the sec acts counter to the bipartisan support of this provision and the idea and even the president of the same party

and majority of the sec commission? >> well, as i said, the small offerings cost is an extremely important consideration. the more regulation and the sec eyes, the stronger the regulation, the greater the cost of number one, understanding the requirements are an number two, complying with regulation. at some point if the statute itself hasn't reached that point, we reached the point where the regulatory costs makes use of the exemption. >> so, what are the greatest areas for you and how the law is actually written dealing with crowdfunding? what are your top level concerns? number down and tell me the level of importance. >> are talking in the way the law is written or regulation the sec has to add to a quake's >> yes. i'm giving you over opportunity oftentimes before the spindles you don't get a chance to

answer. i'm giving you the rare opportunity to school congress. >> my greatest concern is in the disclosure requirements imposed on issuers. particularly some of the accounting disclosure audited financial statements for come needs relatively small amount of money and even for really small offerings, financial statements required about issuers, even a $10,000 offer. that, and disclosure provisions in the statute are relatively difficult to understand. for example, issuers have to describe the risks to investors associated with possible future deals of the company might do. i'm not using the exact language. that requires the sophisticated entrepreneurs to think about

future bios, mergers, ipos, whatever to predict what the effect of that could be on the crowdfunding investors and try to disclose a subject to liability provision that makes them liable for negligent in doing so in failing to disclose properly. and so that portion of the crowdfunding act is probably my primary to you. i guess my secondary concern as a general one i mentioned the opening statement and that is just the lack of clarity,

complexity, and the need for entrepreneurs and intermediaries to understand various provisions in the act. for example in iran's damage the prohibition on solicitation. solicitation is interpreted by the sec is a very broad concept and people like mr. hillel-tuch -- did i get that right? needs to know exactly what they may or may not do in terms of advertising their say. >> the concern i had with the senate provision from the get go was as simple as the origin of congress' action. i could so do the origin because i filed the first bill and the reason i filed the first though was because it tbr. many of you have heard the story, but you had an advertising guy who put up, treated the patch blue red and was putting themselves up for sale or they were going to close. it was sort of this idea on a whim so they had a federal

agents visited. you realize the breaking federal securities law because he treated he wanted to buy you a company. so the idea of a crowd via their favorite company. i don't think the individual is pledging because they thought they would make a million off of it, they wanted to support the brand they liked. so this is what the crowdfunding sites. as the execs now, as you have an aj you like it could be a little coffee shop, could be your favorite cupcake. and you invest in it because you believe in the product, not because you're going to make a million. if the same reason why the lady i know, her father was a fan of the boston celtics. he invested in the boston

celtics so he could say he owned a piece of the team. as an irish immigrant he loves that. so it's slightly different idea and motivation to does point. and so the disclosure pieces and portend whether or not the expensive that is too great to bear for small issuances. mr. hillel-tuch commie talk about the current platform you have in mind is on the charitable side. you can pre-order a product. you get a t-shirt into a number of things.

what is the smallest offering you pat on your site roughly lags >> we've had offerings about $500. over a hundred thousand. really depends on the community. >> in the range from $500, which getting financials on now with you a little -- make it a little un- worthwhile. >> verdigris is a mild way of putting on. you are asking, work samples, in an offering for a new company to put up historical on this timeline is zero. it just doesn't make sense. i mean, what happened and i read your original bill and they've seen all those changes. what happened where educational

issues. you are spot on in your statement is not everybody's looking for a million dollars return. this is not what this is about. we're democratizing access to capital in a way that didn't exist before. that is allowing to get finance. they don't have to rent a mortgage, which we saw what happened with a few years ago. this is completely different. you get support from a whole other side of your community that wants to advise and is not about that to do so. >> mr. cartwright, too bad, the cost of going public, avoids point under current regulations, under what point of money that you have to raise going public does it simply make it not possible to go public? is not economical? >> that is an investment banking

question. >> i know, but you're a good lawyer. kidding, kidding. >> these days it is probably larger. so often, companies that might meet the threshold cannot -- do not want to go public even then. >> okay, see you are talking about a much higher threshold. >> vastly higher threshold. it's a different world. so the idea of light touch regulation on the intermediary and regulate this security in a very different way, is that something that can be done, that we could do, speaking from your farmer hats as the sec? >> the original idea behind crowdfunding was to have a quite

different mode available now that the internet among other things makes communication so easy to raise quite modest sons farge bernardo purposes. and what has happened is we both are relying on that original idea. the model is a big offering. so you need lawyers and accountants and financial intermediaries and they'll need compliance infrastructures. they need financial support to

without these additional requirements, which are the model, but it doesn't work if you're raising $40,000 for a company that is going to make cases for ipods. >> well, thank you for her testimony. i no recognize the ranking member, mr. quigley. >> thank you, mr. chairman. to your point about pabst blue ribbon, and what should i were in total agreement. i had surgery three years in the longer i serve, the more support to. last night in a letter to the sec on may 24 this year, professor coffee cup and the consumer federation of america wrote the following, and i quote, we are confronted with the sec so pace on dodd-frank

with lower priority initiatives and prompt efforts to implement the jobsite creates at least the appearance of political expediency. the rulemaking for we are all under the shadow of what could happen in europe in a matter of weeks. >> thank you, mr. chairman. i don't that. >> a few final cleanup questions if the ranking member doesn't mind. professor coffee, tea or comments, i am grateful for you sameness as the sec prioritizes the rulemaking. for instance, they spend enormous resources stranger make a rule upon conflict minerals

that was in dodd-frank. that certainly isn't systemically important, certainly in light of the whole world we are going through. your point is exactly right. now, we also have the general solicitation, to change and release on general suspicion in the jobs that i may have to write very basic rules i would foresee, seen as the lifting of some team is supposed to be done by july 4th.

now, what do you foresee the consequences have been not doing this by the timeline? mr. coffee, mr. cartwright? it is your stock in trade. we will start with you mr. cartwright. >> the simplest rules are those associated with private placements. what i would tell you, which i have to tell you do have it reality in the discussion that any entrepreneur advice by any great majority of security lawyers were to consider what are the most feasible option today to raise capital for small business would basically choose between the new liberalized private placement and the new expanded sprawl issue exemption. they are much more attractive than feasible than a stone novel

and still very esoteric crowdfunding exemption. >> crowdfunding is still not allowed because we are still waiting for the sec to write ranks by the end of the year. >> even if they write ranks they have to use the time-honored established path to private placement for the general solicitation. dolby very feasible and i testify in favor of december and i still think it will work and they are easy to write. >> to take that to the next step, is it because he didn't crowdfunding for this but into law, is too cumbersome, too complicated, too complex? >> remember the ceiling is low. the amount you can tell the investors tend as then m.a., the negligent game. an issuer hears that and the alternative is a private placement to investors and the soothing got attempted fraud.

most issues that say regardless to the sec rules about the language a kick a suit and i will sell an unlimited amounts. >> you made perfect survivors point on the liability degrees in crowdfunding. >> i know and it's my colleagues, my good friends on the other side of this institution to put an imperfect language if you read it you realize they could not reconcile differences between paragraphs. the society of the sun that in a bipartisan manner because we can agree the senate -- >> a cul-de-sac, not an enemy.

>> is a better point. absolutely. to your point, that provision, the liability provision is higher than what you haven't private placement? >> yes. >> it affects the choice of rule makes. >> this is fantastic. we have a bipartisan -- a whole variety of views on this panel, that the risk of necessary. >> paper with my colleague.

there is a rule, known as rule 508 in regulation d. it is known to most lawyers as the immaterial exemption and if the interviewer screw up, the mistake is an offense come immaterial and unintentional comedy offering to those people will still be good. i think that rule could be generalized for both 3-d and crowdfunding as well and right now it's totally ambiguous with the standards will be. >> okay, wow, thank you. that's amazing. mr. cartwright. the ban on general solicitation. the sec is supposed to write race by july 4. if they fail to do that, what are the consequences? to the marketplace. >> i will just at what was just that. with respect to general solicitation, as has been said, those are relatively easy to write, so we shouldn't have to

wait too long for them i don't think. and if they are not written, than the existing regime will continue, which is an impediment, and makes it harder to raise funds, return that investors. lots of offerings are completed nonetheless, presumably at the margins. assigned on capital formation at this time in our economic history is more. so i think the sec thought to be urged to promulgate those. >> mr. hillel-tuch, you mentioned you become for equity. so this job stacked up inside. you desired and in your firm, desire to do that, to become a

portal. so as the line is currently written, how can you compete against broker-dealers, given the disadvantage is the law imposes on portals? is not a distinct challenge? >> the way the jobs that is written right now, we are still at a plays for the sec is given, the education awareness in the proper judging could file out in the nike database platform. that said, there is a risk that if they make it to take, the additional requirements will not

do it. the reason is we don't think you will see the issuer or investor properly. when it comes to making this actually happened and what's the motivation to do so, we believe you need to be able to offer perks that equity and make sense for different individuals. one of the things we haven't really addressed here and i was hoping to bring up is the conflicts or any job creation about were trying to accomplish is allowing small businesses that are one of the largest job creators to access capital in a way that's easier than what a broker dealer can do. they make in a basically transparent and providing clear communication, which is our

intent, is very empowering to individuals right now i'm very costly access forms of capital rocher dealers are not the world's cheapest people out there. to get their they can charge fees, back in these and for small business, the ones who create the large job growth numbers out there, they're looking for 30, $50,000, maybe

that mistakes and that do not have any suggestion that they were intentional and were not widespread shouldn't cross the offer. >> must that be done legislatively or can the commission act to -- >> five a week is not based on regulation. the can do what they've done in one context of the others. >> hopefully the fcc is either watching this and if so, hello. >> i will get an angry e-mail if they are. >> if not we hope they will read the transcript and if not, we have chairman shapiro in on thursday morning, and i will read her the transcript. should be for a very entertaining and rather lengthy hearing. but, mr. cartwright, same

question. how would you improve this funding section of the jobs act so that this offering can actually occur in an affordable fashion? >> i think the simplest way to say that in general terms is to move it back in the direction of the bill that came out of the house. what we have done is overlaid with the model for big offerings with lots of intermediaries and gatekeepers who are very expensive on an original idea of was not designed for small offerings by entrepreneurs for small-scale businesses with a very different model. and they really are incompatible. so there's probably lots of places where you could move things back in the direction of the original idea that would be helpful, and you probably need to do a number of those before you get to the point where there has been enough change to make

this approach. i think that as it is currently written it may well have been strangled in its script just because there has been so much added to it that it will be for the lower end of the range the 200,000-dollar range cost will be prohibited, and i suggested in my written testimony that when the sec does do rule making it ought to carefully evaluate what those costs will be. and if in the sec's judge michel after the rigorous cost analysis it turns out that all of that leering is going to consume the proceeds and more, then the sec ought to see that in their release so congress can be aware and take whatever action the congress feels is appropriate under that circumstance. >> same question. >> i saw the original bill and

personally naturally i favor that a lot. of course i a understand that in order to get a pass it did so in bipartisan support. it's a tough one for us because we come from experience having done this for several years already and we all understand how people behave and what cost structures are going back to the exit polls we mentioned before that $500 came at a cost after only $20. that's not expensive. it just simply isn't. we do a lot now already on the back end of the you don't even get with current exemption work. i'm able to check an individual with old check that is a done otherwise i am able to attract funds and how the move and how they are handled and how they are spent. what is the performance. the oversight i am able to perform with a web based platform that is so much more significant than the paper based trail that we are still using.

it's mind-boggling to me we are not adopting the modern perspective and naturally if the fcc is listening, i would love to explain to them how proud something works. we've tried in the past, and we've had some opportunities, but one of the issues right now is a big difference in education when people don't grasp something they tend to move back to the old root of understanding with and leave the investment banking for the war over this thing is not going to work. we are in a different era right now and we need to be will to strive for it and tried innovations. when other countries are implementing the equitable crowd we are the only one not doing so and so you know, that for me is personally very troubling considering we have a huge opportunity here and entrepreneurship really was born in this country. >> professor b8, same question, final word. spinets hard to answer that question quickly because i read a 60 page article basically

talking about the act and what i would change. spec we have a right here. >> i assume you did. >> for those of you who are watching for those professor bradford has in essence written the bible on crowd funding, and something that my staff has read and i have read as well. but, for the record if you could -- >> absolutely. if i could play lit down to two things, number one, something you haven't talked about a lot today the first thing i would do is clear up the ambiguity in the drafting in the bill. there are a lot of problems come a lot of things that are unclear and what the meaning of the language is there are some inconsistencies the need to be cleaned up, even if we don't change any of the regulations. second, to echo what many people have said today, i would

generally reduce the regulatory burden, particularly for the -- if i had a love that i would say particularly for the smaller offerings. the burden exemption is simply too expensive. as a mix of the ambiguity you were mentioning one of which as i recall is a distinction between how much you make and how much your work your network versus your income, and the drafting doesn't distinguish between either nor does it get any indication which one should be with the one you look to if somebody's net worth is under the amount that they may or their net worth is over the amount that they need to estimate the of three categories of individual investment limits, and the middle category where somebody's annual income net worth is over 100,000 the other of the two figures is below

100,000 both limits apply to that middle class pachauri and you can't have let funding to one investor and then there's also for the higher in the investors it is unclear whether it is the greater of 10% of annual income or the net worth or the lesser of the two members. >> interesting. you know, the ambiguity needs to be resolved. obviously there is some consensus in terms of what is material, and as opposed to incidental herders or omissions in this offering, and i think we have had a very informative panel today. do you have any final -- thank you. i want to thank the panel for the opportunity to ask questions. i know that you have been very generous with your time and very instructive in terms of your words and explanations. thank you. we hope that this furthers the

cause of helping small businesses especially get the capitol they need to grow or to survive, and we certainly appreciate your willingness to engage in this exchange. thank you for your time and the hearing is now adjourned. >> [inaudible conversations]

on tuesday attorney-general eric holder spoke to the boys and

girls cluby-general eric holder spoke to the boys and girls club of america about the justice department youth mentoring program. in 2011 the justice department awarded a total of $20 million to nine organizations to support mentoring programs and services for youth with apparent military. the president and ceo of the boys and girls club introduces the attorney general. we have some work to do. you've had a chance the plunge so you have to be through with your morning tiredness and it is time for a great afternoon. so, let's try one more time a giant agreed afternoon to get everybody stimulate it. one, two, three. good afternoon. i definitely wanted the after lunch spot going forward. this is the right one. welcome.

welcome to all of you on behalf of boys and girls club of america. i'm jim clark the president and ceo, and it's great to see you all here today. i had a chance to spend some time with many of you this morning and you had a great morning as well in the sessions you were able to attend, and i know you have a great time yesterday because i was hearing about it at 1:30 come 2:00 in the hotel. so it must have been a great day. it's a privilege to be here and to be partnered with close-up in this great, great program. after our speakers this afternoon, i will have a chance to talk a little bit more about the partnership and how important is to us. i want to get to the program and introduce to you a very special person to all of us at the boys and girls club of america and one of you, one of our many members of boys and girls club we servo lost 4 million kids across the country and around the globe, and of course on a

400 military bases as well. each year we have a use of the year competition across the nation and around the globe to represent all of you and all kids boys and girls club of america and it is my pleasure to introduce him to do to say a few words and also to introduce our speaker. our national youth of the year this year is nicholas foley and he comes from the boys and girls club in pittsburgh pennsylvania. he will tell you his story a little bit later this afternoon let me introduce and bring a picnic right now to bring in the guest this afternoon. [applause] >> thank you everyone.

one eric holder, jr. was born as an 82nd attorney general of the united states on february 3rd, 2009 by vice president joe biden. president barack obama on december 1st, 2008. 1997 mr. volcker was named by president clinton to be the deputy attorney general the first african-american to be a point of the post. prior to that he served as the u.s. attorney of mexico 1988 mr. was nominated by president reagan to become an associate judge of the superior court of the district of columbia. mr. holder a native of new york city attended public school graduating from high school where he earned the regents scholarship he attended columbia college where he majored in american history graduating 1973 from columbia law school in 1976

the legal defense fund at the department of justice criminal defense. on graduating he moved to washington and joined the department of justice as part of the attorney general's honors program the and he was assigned the new reformed public integrity section in 1976 and was passed to investigate and prosecute official corruption of the local, state and federal level. he was a litigation partner in washington. mr. holder lives in washington with his wife, a physician and their three children. so please, give a warm welcome to our speaker this afternoon attorney general mr. eric holder. [applause] good afternoon. i heard a much better good

afternoon when i was backstage. what's up? there you go. all right. something like that. i want to thank you for that introduction and also congratulate you on being named use of the year. it's a special privilege to share a stage with such an extraordinary young man this afternoon and in honor to welcome you and so many other aspiring leaders and advocates and guests here to the nation's capital. just as you all understand everybody here is out of school, right? five got bad news. this is something that you are going to be tested on, the speech i'm about to get. so, i would expect you all to be paying attention and i hope you do well on the test. this will affect your greeting your first semester of next year, okay? [laughter] you think i'm kidding. this is serious. okay. i am kidding. i know that you have had a remarkable and a very so far and

i would like to thank the boys and girls club of america particularly james clark and chairman robert along with tim davis, the president and ceo of the foundation and board chair for organizing what is a really unique program to educate young people about the importance of the civic participation in helping inspire generations of children to pursue their dreams and to reach their full potential. through initiatives like keystone and project learned and as a result of this organization partnership with americorps and the u.s. military, the boys and girls clubs nationwide have worked for more than a century and a half to build positive values to encourage passion for lifelong learning and to set high expectations for the future leaders to be for you know it will take the reins of government and the private sector. did that phone.

now, over the years you have a small group of concerned but hopeful activists into a national organization that is nearly 4,000 clubs that serve more than 4 million kids across the country. along the we come to have engaged thousands of mentors and community leaders and fostering the creativity inclusiveness and the drive to succeed among the countless children at risk and who are in need and today and this work is having a tremendous impact. as the members of military connected family each of these young men and women have been asked to make great sacrifices. in many cases you have to contend with long deployments, frequent moves to cities throughout the country and even around the world and all of the other stresses and difficulties that come with having the parent or relative uniform they respond

to the challenges of maturity, courage and with tremendous strength. we are in the respect of the mentors, the admiration of your peers and the sincere thanks of a grateful nation. and in the community of friends and allies with you today, you found a strong and vibrant network of supporters all of whom are ready and eager to serve with you no matter what. as nick said upon receiving the award and i quote, the boys and girls club is responsible for some of the greatest lessons and inspiration's of my life. thanks to your extempore work and the generous contributions of the thousands of adults that committed to donating their time and giving of their talent, this organization has become a powerful force for change and progress comes as we gather in washington this afternoon at a time when so many of america's

youth faith significant obstacles of barriers to success, i believe the need for positive and effective mentors like so many of the people in this room to hardly be more clear. and the opportunity to make a difference in the lives of our kids could not be greater. each year more than a million students drop out of high schools across the country. far too many start down the wrong path, starting to violence, criminal behavior or substance abuse and just over 2 million are arrested. more than 15 million are left unsupervised. the areas of three and 7 p.m. when juvenile crime is at its peak. a third of all children have and half of all low-income youth fail to graduate from high school on time and one in four violent crime victim's known to law enforcement our children. now of course many of you are here today because you understand these problems. you have heard the alarming

statistics. you are familiar with the heartbreaking stories. and many of you have witnessed this reality in your neighborhoods and in your own schools. most importantly, you understand that each of us has a responsibility to confront these challenges which in many places have reached the crisis proportions. now, you are leading the way in responding not with what's there and which result. serving as the advocate for the role models and mentors for beyond this room have dealt to teach valuable lessons to insist young people developing the skills they need for future success and to instill a sense of self-worth and self-respect. lead by example reinforcing our children as they set and achieve goals boosting the confidence of ridding the behavior and encouraging academic excellence, and they have had a lasting impact there will continue to guide the actions and informed

choices and shape the path children take for years to come. if all of this works the boys and girls clubs have sent a very powerful message that in this country we will never waver in our determination to ensure that our kids have the tools and the resources that they need to shape a positive future. we will empower them in every way we can. we will challenge them to make good decisions and work to inspire each of them in turn to live out these values and take up these essential efforts in the lives they will lead and in the careers that they will build. the importance of this work is difficult to overstate. studies have consistently shown that through stable and personal engagement, mentored children are more likely to grow and mature into confident and responsible young adults. in fact the survey found that 90% of boys and girls club alumni grow to read it from high school would have been half of

those that said the club's save their lives and as i assure all of us can say from personal experience, perhaps the strongest argument from entering its greatest is that the benefits run both ways. during my tenure as the united states attorney for the district of columbia, my staff and i adopted an elementary school and a low-income part of the city. i was thrilled to have the chance to work with these students on a regular basis getting to know them and become invested in their futures. my colleagues and i found a really remarkable and rewarding sense of purpose and the relationships that we develop and i'm proud to say that i know well and have seen firsthand that mentoring changes but not just for our young people. that is one of the many reasons i have been honored to dream president obama, the first lady and others throughout the administration strongly supporting the programs. i'm proud of the stride we have taken in bringing a group

stakeholders including federal officials, state and local partners, community organizations and leaders like boys and girls club members bringing them together to discuss how the mentors can improve educational opportunities and out comes to address juvenile delinquency and i believe there's good reason to be optimistic about the continued progress that we will achieve through the work of this organization and others through the initiatives like the first corporate mentoring to lunch and in the important work to come and will remain the justice department priority. now over the last three years, my colleagues and i have advanced to increase federal assistance for mentoring initiatives and exploring evidence based strategies for reducing children's exposure to violence in the communities. the department's office of juvenile justice delinquency prevention has awarded more than $480 million to support

mentoring programs that reduce delinquency of a detour the participation and lower school dropout rates. in 2010, we lost the landmark defending childhood initiatives to complement this work to help leverage pressers resources to better understand and ultimately to eradicate. we are now partnering with a wide range of allies across the federal government and far beyond to the national for among the youth violence prevention from six to ten cities across the country. in march we introduced a new 20 million-dollar grant a solicitation research proposal that can give us a better sense of which programs are most effective. last october we also announced a series of grants totaling more than 15 million for a national organization including the boy and girls clubs of america that offer a mentoring programs specifically for young people like many of you that have a parent in the armed forces. these funds support programs like the ones that brought you

to washington this week and underscore the justice department and this administration's dedication to standing shoulder to shoulder with service members and their families especially in times of need. so as we look to the future, i am confident this will continue to help the military service members develop resiliency to become teen leaders and connect with other military families to get it will help us to make good on our commitment to stand with those that have served and are still serving the nation in uniform and will offer a chance to strengthen the families to have sacrifice, sacrifice so much to keep this country safe. at the same time, there can be little doubt that the hardest work is far from over. each of the remarkable, accomplished and engaged people in this room here today there are far too many others in the big cities and small towns across the country who are in desperate need of help.

reaching every last one of them will demand that we sum in our best efforts, that we marshal every resource and what often is made without delay to engage even more partners and supporters in the service of the cause. i recognize this will not be and has never been easy but as i look out over the crowd of kids and passionate advocates alike, all of whom understand exactly what we are up against and improving their dedication to seizing the opportunities before us, i can't help but feel confident about our capacity to build on the momentum that you all have helped to create. and i'm eager to see where each of you will help lead us from here. as you continue this work, know that you will always have a strong supporter and a good friend and attorney general as well as this president as well as the first lady. on behalf of them and the rest of our colleagues i want you to know the we are proud of you, we

are fortunate to count each one of you as a partner and we want you all to keep up the great work and i want to thank you all you wish you all the best of luck [applause] >> we have a few questions our team helped for you. first you talked a lot about entering in your remarks today. the have any key points of the device and how to choose a good mentor and who were your mentors? >> i'm not sure that there is a formula for finding a good mentor. there's almost a chemical thing that happens. you want to look for somebody that is doing the kind of thing

that you think you are interested in doing. somebody is doing well which you are interested, and somebody and you think will have an interest in you. you don't necessarily want to force somebody to become a mentor. you want to find somebody that you think has a natural interest in you. the people that are mentors and, certainly my father was one, the person that was his lawyer mr. archer was the mentor of mine and he raised the possibility that i might become a lawyer. i was the first person in my family to go to college. mr. archer, my father's lawyer helped me understand that there were possibilities out there for me and helped me along the way. they are always interested adults that you can tap into the the need not be old people like me. they don't have to be that old. for people like yourselves, the

county college kids, people that just courage we did from college have a good hit on your shoulders and sense of what they are doing with their lives. but there are people out there that are willing to engage with you and willing to help you become all the you can be. >> our next question is overall this will work we have been doing a lot of things involving civic engagement. what do you believe the true and get rid of civic importance is and all the kids our age? >> i don't ever think it is too early for you all to be actively involved in basically the running of the country to be involved in even if you are too young to vote to be actively involved in political campaigns with er on the national level, the state level, the local level to be involved in your community trying to identify issues that are not going quite well in your

neighborhoods and in your cities. they come up in ways to fund programs that are addressing these issues and then to come apart of those programs. if you train yourself early on to become the lead could do those things and think that a routine part of your life will be something there will live with you forever. it will be part of what it is you do. you will have a great family life, school and academic experience and you also have this notion of service and the reality is you all are a select group of young people, you have a future of this country so if you dedicate yourself to bittering this country, you will make america the 21st century as good as it was in the 20s but it's important to you. this doesn't happen by chance. america will lead becomes great because the people who lead it and so we are going to look to you all as we sit in this country to ensure that america and the 21st century repeats the things we did in the 20 at.

>> this goes back to you probably studied him but i lived through his administration. john kennedy was president of the united states elected 1960 in 61 we celebrated just last year the 50th anniversary of the swearing in of robert kennedy, his brother as the attorney general of the united states the most famous predecessor, but robert kennedy and john kennedy in particular stressed the need for involvement in government. it could be a force for good. president kennedy began the peace corps, and he talked about the government as a force to do good things in our nation. i had a chance to witness that. i grew up in a time when the civil rights movement was in full flower and to see the role that the federal government

played in integration for instance of the university of alabama were young woman walks through the schoolhouse doors of the opposition of the state governor george wallace that young woman turned out to be a future sister-in-law i watched them on television in new york where i grew up to see federal marshals to see the deputy assistant general help her achieve that goal and the notion that savitt engagement in particular the government service could be something that would be both interesting and worthwhile. you all are at this point blessed with a great deal of idealism, and i hope he will not lose that idealism as you get older and think about ways in which you can make this nation better whether it is a engagement, government service or in the private sector. there is a whole bunch of ways which you can make this nation better and you can surf. that is an expectation i think that you all should have for

yourself. how is it that you are going to make this country better? as i said, you are the best and brightest of your generation and we will look to you for the leadership that is going to be needed in this century. [applause] >> thank you very much, mr. attorney general, and now on behalf of the close up foundation and boys and girls club of america we would like to present you with this picture as a token of our gratitude. thank you. [applause] for withholding documents related to operation fast and furious. we will have live coverage on c-span.

>> this is the conversation we need to have in this country that nobody is going to have. what role should the government like housing finance. >> if you want to subsidize housing in this country and we want to talk about it in the

populous areas it's something we should subsidize and put it on the balance sheet and make it clear and evident and make everybody aware of how much it is costing. but when you deliver it through these third-party enterprises, fannie mae and freddie mac the deliver the subsidy through a public company with private shareholders who can extract a lot of that subsidy for themselves, that is not a very good way of subsidizing homeownership. i think we have seen in the end of that movie in 2008. [cheering] to a prayer republican presidential candidate mitt romney talked about the supreme court ruling on arizona immigration law and the pending decision thursday on the health care law. he made these comments at a rally of the carter machinery mali and salem virginia as a part of the visit to the

battleground state. the southwestern virginia company manufactures equipment for the coal industry. this is 20 minutes. >> i want to see them out there working. [cheering] this is a busy week by the way for the supreme court. i think all their work highlights of the leadership failure of the current president. you see, when he was running for office he said he would make his first priority in the first year agenda to reform our immigration system and make it work for the american people and for those that want to come here legally. he did not do that. why is it? he had a democratic house, democrats all the support he needed. he did nothing. why did he fail to do that? so the supreme court had to step in to find a way to solve the problems he didn't address, try to address it in their own way

and now the supreme court looked at it and what we are left with is a bit of a model but what we know is the president failed to lead. he failed to do what he said he would do. [applause] some against the focusing on immigration and the big issue which was the economy getting the economy growing, he instead focused on putting in place his health care reform called obamacare. now, as you know, the supreme court as planned to be dealing with whether or not obama is constitutional. if it's not, if obamacare is not constitutional the first three and a half years of the term will have been wasted on something that hasn't helped the american people. [applause] if it is deemed to stand, then i will tell you one thing we are going to have to have a president and i'm not one that is when to get rid of obamacare

guice bobbit i tell you what. [applause] [cheering] what we're witnessing is a failure of the policy who did not deal with immigration with regards to obamacare he put that as a higher priority than the economy and as a result we have had 40 straight months of unemployment above 8%, the economy isn't working, immigration isn't working, this president hasn't been working in the right way for the american people it's time for that to change. [applause] he is in a tight spot because he said when he was running for office and he turned this economy around, you may recall he said on the today show if he couldn't turn around the economy within three years he would be a one-term president. so he gave a speech the every day trying to convince people that he had turned a company

around. he said the private sector is doing just fine. and your voice is like the voice of 23 million people are of the country that said we are not so happy. this private sector isn't doing so fine and when they were promised if they let the government borrow $787 billion of common plan that would stay below 8% the stream that no on the planet has ever been below 8% since. they saw an economto grow at less than 2% in the first quarter of the year people recognize the economy isn't doing just fine to the president had to change his to to the cartoon. we are working long we just take a long time to be effective. so give me four more years. we are not going to let him turn in one term proposition and treen 80 year proposition. [applause] -- eight year proposition. do you think obamacare is working just fine to get

americans back to work? do you think shutting down the keystone pipeline from canada is hoping the american people? do you think raising taxes on small businesses like this are going to the american people back to work? what do you think that the avalanche of new regulations, is that helping americans get good jobs? look this president is out of ideas and he's out of excuses and we are going to vote him out of office. [applause] >> one thing he said in a speech of his, he said every american deserves a fair shot, and i agree with him. every american should know if they work hard and get an education and have the right kind of value they have a fair shot for a bright future and able to provide for their family official that realizes their dreams. but then i stopped and i looked at this president's record.

but me ask you some questions about these. do you think when we passed clemens of dollars of our debt out of the next generation this president is giving the next generation a fair shot? do you think that when 50% of the kids that graduate from college this year can't find jobs, jobs commensurate with the skills it's giving our college kids a fair shot? do you think that when the president puts the interest of the teachers' unions ahead of the interest of the teachers and kids that gives them a fair shot? >> did you think that when he takes the the co-pays tax dollars from you and then uses it to give guarantees and investments and to some of the businesses of his contributors does that give the american people a fair shot? how about when he closes down coal mines and says no to developing our oil resources and gas resources, does that give the people that work in those industries and other industries that are energy independent does that give them a fair shot?

let me tell you that there's ever been president of the united states that hasn't given a fair shot to the middle-income families of america it is president obama and that is why he is going to be replaced in november. let me tell you if we get a new direction in the country you were going to see an economic research and that is going to surprise a lot of folks. i am convinced america's economy is going to come roaring back. let me tell you how we are going to do it. number one, we are going to get in touch of energy resources from the coal and oil and gas, renewable. she said she's in favor of all of the above. and i wondered what he meant because he has made it harder to mine coal use coal, harder to get reliable supply of natural gas and harder to get in drilling for oil, as we wondered

how he could say he was for all of the above and then it hit me he is for all the sources of energy that comes above the ground, and not that come below the ground to come from what is below and above the ground and did energy independence. let me tell you what else i'm going to do. i'm going to get advantage of trade with other nations. you see, a highly productive nation like we are benefits if we can open up markets where we can sell our goods, particularly next door to us like and latin america. other nations figure this out by the way. china and the european nations over the last three and a half years have negotiated 44 different agreements with nations around the world to open up markets for their goods and put their people to work guess how this president has

negotiated? zero, no new markets for american goods. i would go to work to open markets and make sure we trade with them on a fair basis and by the way, when they cheat as china cheated stealing intellectual property our noval and brand names i will crack down on them. the president said he would come he didn't. i will get good jobs by trading around the world fairly. [applause] you know, one thing that frightens people better thinking of investing here with capital and building new businesses that start up of all kinds as they wander whether the dollar is going to be worth anything on the road because of all these deficits running a trillion dollar deficit every year this president broke the record as a matter of fact he's put together almost this much public debt as all of the prior presidents combined. if i'm president of the united states i will recognize that is

both wrong economically it is also the moral those burdens on to our kids to the balanced budget. [applause] >> i'm going to get rid of that big cloud of uncertainty that is hanging over all sorts of businesses that want to add in planet. i'm going to get rid of the cloud of obamacare and return us to personal responsibility and states' rights as it relates to health care. [applause] to get this economy going is one more thing i might mention and that is the economy runs on freedom, not on government. we have to get the government a little smaller and a great deal in greater than you should know across the country we are still a freedom loving pioneering innovative can do people. you may not see it every day because you don't get to see all the places i have gotten to see in the campaign but i go to

various parts of the country and i am just inspired by what i see. i was with a woman that was in las vegas she has a business, she rents furniture to the casinos and to the convention that comes to las vegas. i went into her where house that looks like it is black naugahyde sofa as and coffee tables and so forth and when the president said not to bother coming to las vegas to go to a company meeting, her business collapsed and she thought she would lose all of her employees and her business but then she had a can do idea. she id i'm going to have these people learn how to make furniture. now she makes furniture and selzer of the country and in place people. that is the kind of attitude that exists in this country. i met another guy who said he wasn't a great student. my guess is that he's real smart but didn't like to study. i don't know the answer to that. but he talked to his dad and said i don't want to go to

college and he said you know you need to go to college. he said i want to borrow money from you. i can't remember the number, ten or $20,000, a lot of money. i want to borrow that from you and i'm going to start a restaurant. his dad said okay. if you can pay it back at the end of the year with interest, then you can stay in your little restaurant business but if not i am sending the course of your life in a different direction. so he took that money and started a little restaurant and found out with ten or $20,000 you couldn't build much of a restaurant so the only thing he could make is that kind of price with hot dogs and hamburgers. the ventilation system was too expensive for the money that he borrowed. so he would make sandwiches instead. now jimmy johnson has a lot of restaurants. hundreds of thousands of restaurants come in place a lot of people. that's the kind of can-do attitude that exists in this country. met a guy named harold hammer is

a truck driver for ten years save his money driving trucks to get an education, get a college degree in geology. he happens to books that maps and other states and concludes that there must be some energy in the mountains of north dakota so he goes up there and starts drilling for oil. the first one, nothing. second well, nothing. 16 gets nothing. i'm told that it costs about $5 million. i can't imagine where he got the investor to give him that kind of money. on the 17th they got the return because he hit the black hole known as oil and it's estimated there are about 20 billion barrels of oil. herald is doing just fine by the way. [applause] american entrepreneur ship, innovation, freedom, freedom and free enterprise drives our economy and they are going to bring it back. [applause]

this is how the founders saw it, you know, this is how they envision america. they didn't want to have a country that was dominated by, driven by your guided by the government. instead they wanted to have a country the was driven by people pursuing their dreams. so they said in the declaration of independence that it was the creator that endowed us with our rights, not the government to the [applause] [cheering] and you know those rights. they said we would have the right of life and liberty and the pursuit of happiness. by virtue of that phrase they were referring to the reality that here in america people would be able to pursue happiness as the choose. the government wouldn't tell them what they had to do. we were not as an agency to people you can achieve your dreams because of the place you're born with the language of your origin. instead we said this is the land of opportunity.

this is where you can pursue those dreams. that is what has made america what is. it isn't a government, it is free people pursuing their dreams. we want dreamer's here in america. [applause] the president says he wants to fundamentally transform america. i don't want to transform america. i want to restore the principles that made us the hope and then i will do it. [applause] and the consequence of doing this right compared to what is going down the path we are on couldn't be more stark. the president put us on a path in europe. europe doesn't work in europe. it will never work here. the right course for america is to restore the principles that made us a power house pierre du economic freedom, small government, taking advantage of our natural resources like coal

and oil yolly in the gas, having trade with other nations, tracking those that cheat on having a level playing field between labor and management, building infrastructure that makes us more competitive. there are things i will do if i'm president will get this economy growing again and as a result of doing that we will put people back to work and convince the american family their kids will have a bright future. that is what this election is about getting america to work again for the benefit of the american people in the world. [applause] and there's one more speech or factor or consequence of making the right decision, and that's the consequence for freedom and self here and around the world. i happen to believe that american strength is essential to preserve liberty here and elsewhere. i was in great britain some time ago and i got the chance to speak to anywhere and the prime

minister david cameron and other leaders of the government and one of them said something to me which will not leave my memory. he said mitt romney if you are lucky enough to be what did president of the united states and you travel around other countries you will have rehearsed the mistakes the believe america is making. but please, don't ever forget this. what we fear the most is a week america. american strength is essentials for liberty in here and around the world. [applause] the world has seen that strength time and time again. in memorial was a celebrity with our veterans the honor associated with those that serve the country and those that serve in the past. three of the veterans were from

the second world war i was a lookout on the uss tennessee in the day of pearl harbor he said as he looked up and saw the aircraft coming in his eyes locked on the eyes of the pilot that would attack our ships. he was injured in that conflict that day but he wanted to serve for 43 years in the u.s. navy and they recognize this sacrifice for america. [applause] but you know, these veterans are not as many as they used to be and those that are with us can't hold the torture freedom as high as they used to. it's not americas torch but it's america's duty and honor. the freedom and hope and opportunity. it's our time. we have to seize that. i love the country and what it's going to do for the world. we have to be strong and have strong families and strong values, a strong economy and a

strong military, america's strength to the world. i'm going to bring it back with your help we are going to win in virginia in november. thank you for your help. we are going to get the job done and keep america of the above the earth. thank you so much. thank you. [applause] ♪

i could have told you at the beginning of this year there would be the republican primary and the republicans with a look feeble that would be a nominee and that the republicans would then rally of of that money and their nature of the race would review the self which is that it was going to be close and i would have told you the media would eat that the psa romney is searching for this is a raise. and i will tell you what the next phase is going to be. it's when to be the media is

going to become an alert to the fact the governor has been completely evasive about his positions that have been all over the lot on many of them and has tried to play a game of hide and seek with the american people coming and i think that the news media will be challenged to challenge him to be more forthcoming and then of the story is going to be that for a while. this is the nature of the business. today microsoft founder bill gates was the keynote speaker of the association of publicly and land grant universities. the years of breeding the upcoming 150th anniversary of the act, which created the land grant universities system. mr. gates talks about the state of america's higher education system. he co-chairs the bill and melinda gates foundation for private charity with a

33 billion-dollar endowment. >> we for talking about who should be the keynote speaker of the 150th anniversary celebration act. we immediately agreed on a first choice, bill gates. someone who would not only help us recognize that celebrate the last 150 years, but challenge us and work with us in the decades ahead. together with his wife he coachers the bill and melinda gates foundation which works to expand opportunities for people around the world. there foundation as a leader in efforts to improve global health alleviate poverty and expand opportunities for women coming and with particular significance today, increased access to and success in education. when there are efforts that would expand the global are unprecedented and truly exciting. the work of the gates foundation is built on a simple premise:

all clients have equal value. that powerful statement resonates with all of us. and it is rooted in the same philosophy as the act we are celebrating today. .. committed to improving the human condition. we could not have been more committed and passionate ally in these first use.

i know all of us respect and admire greatly with bill gates has devoted his wealth and his wife to them we are delighted to welcome him to this celebration. join me in welcoming bill gates. [applause] >> well, thank you, president mel can. i'm grateful for your to express my gratitude, i brought this bag with me. now, this bag is actually hoping that 10 million people out of poverty. farmers in central and west africa group black eyed ease. they are hardy, protein rich, but unfortunately, tiny pests called weasels destroy half the

crop after it is harvested during the time it is stored. or they did intel researchers at purdue university developed this relator polyethylene and mailing bag that costs less than $2 keeps up the weasels and increases family incomes by over 25%. [applause] and said that bag is a good example, one of the many partnerships or foundation has the aclu members across the country. american public colleges and universe to be used finest research in the world. you create knowledge, not just for its own sake, but to improve people's lives. on behalf of our foundation, i want to thank you for that. today i want to focus on the one thing you do that is even more

important. and that is research. providing great education to almost 5 million students. the morrill act with the liberal and education of the industrial classes. there were two breakthrough ideas contained in that single sentence. first, the higher education should be both liberal and practical, that it should address this 80s theme and sack him, that all people should have the opportunity to it tenet. these two ideas amounted to a brand-new vision for higher education based on the conviction that a bigger, more diverse group of educated people would be an asset to our democracy and a boon to our economy. this fission powered america's economic dynamism for more than

a century. your graduates hope to build a prosperous country. recently though, education advocates have been looking at the international competitors. and while we see they are is that other countries have seen what the u.s. did well. we have built a system of great colleges and in many respects, they are copying what we did. another area site completion rates, some countries are doing even better than we done. and so what that says to me is we need to double down. we need to take this phenomenal asset that is benefited the world and make it even better. there should be no doubt about our starting point. we are still by far, when it comes to research teaching and learning at top universities come at the very in the world.

however, two major trends in higher education are guiding us down a path that made us away from the historical commitment to equity and opportunity. first, there is the financial constraint. in the past generation, state funding for full-time students is followed by 25 cents. i don't need to tell you that this is something you face every day. the fiscal crisis has accelerated this trend. and just the past five years, for example, my home state of washing 10 has cut funding for higher education by 17%. as the result of this investment in the steadily rising cost of running your institution, the financial burden of college has been shifting to students. they now pay an average of

$45,000 a pocket for four years of public schools. no federal money has helped bridge the gap for a while. the federal spending on higher education has gone up quite a bit. one of the fastest-growing items in the budget. the stimulus package to the state jail for a couple of years, the noblest dollars dollars have largely come to an end. the pal program alone more than doubled in the past decade. but unfortunately, it is unlikely to continue that path. it is not on a sustainable trend. in fact, we look at 22014. an $8 billion funding gap just so the pope program alone. so that is one tram that is troubling. a second trend that is troubling is the sort of trap of moving towards tidier and hires djs or

exclusivity period when u.s. news rankings come out, the judge you essential and house select to view art. more by the input coming into the hands duchenne. they look at credentialed faculty, the money spent on various things and sort of subject to the impressions of academic reputations. and so comment these measures are standing in the way of having real measures of the fact demands that we really need to root out what best practices are and continue to benefit from the best work at all if you do. i understand these perverse incentives are hard to get around, but in a sense it is a type of zero-sum competition and dignity. one symptom of this we see is acceptance rates at many flagship of these now hover at

around 50%. and that doesn't count a large number of students who don't even bother applying because they know that the bar for admission has continued to go up into. and so in short, fewer people of those who want to attend universities are getting in and those who do get in are paying more. and so, this is a big challenge. they cannot continue if we had a goal of fulfilling that mission of providing product tatian. we have to look at how we can reverse both spirals. we have to let in as many people as can be successfully educated and have to get the education at the lowest possible cost. private universities can both combat if they decide to do so, but at public institutions, your prestige conserve a commitment

to equity, opportunity and excellence. and so, it is not a point of high status to keep students out, but rather high status leading them in an even taking student who haven't had the greatest high school education, who don't give them a high-quality education. and so today is a great day to pause and look to this group to leadership. you can steer your universities out of these trends by making innovation is a priority to sector you the. 150 years ago, if your predecessors started a new conversation about the purpose of higher education. you can start the conversation now about the changes required to keep us serving that purpose. for example, we can move beyond the question, how can we get a

lot more public funds clegg unfortunately, in the reasonably near term there will be much additional money. the rising share of both state and federal budget committee to halt care broadly defining the leaves very little room for flexibility. and not monitor quite brutal. whether there is more money for less money in the long term, we should also focus on the challenge of figuring out how to use it as a particularly the money devoted to financially. how do we take it and get better results for students? iquique there are two principles worth keeping in mind. the first two said he should be structured providing incentives for both institutions and students, incentives to raise completion rates, incentives to raise income and employment of

the graduate. if we look just a completion rate, the six-year graduation rate for apl institutions is just over 6% and the four-year rate is a little bit less than 40%. now, behind those statistics are about as student who aren't succeeding, who wind up with a lot of dead. tracking those students, understand what is going on should be more important. perhaps he should somehow be tied to institutional practices that creates a strong incentive to adopt the practices that have been seen at the best institutions to boost graduation rates. what is students felt the financial incentive to reach important milestones on the path to graduation. we really can't be agnostic about whether he subsidize failure of success. the goal is success, a degree in the shortest reasonable time for

every student who put an unnecessary word without just cleaning the most perverse units and sacrificing quality. policy makers are starting to look at what some of these incentives for completion the locally. i hope you'll join them come to you and your students will have to live with policy changes that are coming and those changes would be more fact that if you contribute your expertise early in the process. a second principle i think it's valuable for financial aid is to make need-based aid a priority again. in the past 30 years, the percentage of aid money going to students of that demonstrated financial need has tripled. this is somewhat a consequence of the upward status by her upcoming giving the top student fellowship is a great way of persuading them not to pick

another duchenne, but also means the money is spent on students who may actually may need the help. colleges add the most value in students come in -- who are less prepared leaflet the same knowledge of skills that other graduates possess. reserving your aid money for students who need it also serves your economic mission. educating a student who may not otherwise go to college generates much higher return on public investment than to frame the cost of an education is today and that might have paid for themselves. we also have to engage in a new conversation about the role of technology. after all, technology has come a long way. it's far easier now to store online.

it's essentially free to do it. there's tools that let us build wonderful interactive courses. students are marks that enough is being part of their educational experience. in fact in some cases their demand are getting the hound of the supply things. so how do we used to knowledge she cannot write a good ways to augment the education we are providing. technology needs her to help us both in terms of efficiency and quality. technology should be re-examined to look the whole college chicks. you know, how to attract others to denser coming to lectures and immediately engage them and understand what is going on with them. actually whether for-profit sector does things that of your interest. we have seen technology come into several different areas for the universities that are piloting these things.

personalized education system and spend more time on the concepts they are struggling with. hybrid model construction improves collaboration between students and teachers and simulation gaming can engage students in creative and applied ways. but these innovations are largely still the pilot stage that will take leadership to move them. what you seek to scale, technology can change the financial calculator and give more student an opportunity to turn a degree. there's some interesting models to build on. off in key state university in tennessee recently created advisor system called the recount is to give students a suggestive list of courses by looking at transcripts and data from hundreds of thousands of previous students. it is almost at the way netflix

suggest movies, but if it is suggesting classes this due to too enjoy it, it's what they will be allowed to handle and help them get their degree requirements. across the united states, the average student graduates with 20% more credit than necessary. in some cases this is fine. it is simply them seeking to broaden educational experience. but in many cases it is because courses are not available or they didn't have the face about what would be best. provocations like the combo skin address these issues and what is straightforward to me to shushan. the earlier results are promising. students to have the letter grade better than classes suggested by decree, baseband and classes they picked the old-fashioned way. similar systems that other

universities have improved retention rate by more than 5%. educational technology will probably have its greatest impact in terms of learning itself. the great example of this is arizona state university recently designed its introductory math scores taken by pete doesn't freshman, many of whom came in with very poor preparation not ready to do college-level work when they enroll. instead of lectures he developed hybrid classes. students are given a piece of adopted computer software the looks of where they are, understand with a learned well and what they have been and focuses the student on the knowledge they don't have. it gives reports to the professors said they could work with students in small groups. they can organize groups that need help on a concept and

organize groups for pure learning that turns out to be very powerful. and the results msr very impressed with. they take a first math scores that is often the very worst six. it has terrible completion rate and raise this completion rate by 17th and while cutting costs by a third and a large numbers didn't able to finish weeks before the end of the term. so get their math knowledge up to par and still have time to devote to other classes. certainly in areas take remedial math, i believe the future of education looks more like the course delivered they are than it does like the traditional course delivery. the whole area called luke's, math and how my courses is receiving attention now. you may say what is really new here?

we've had video courses online make a coors. we've had interactive courses like carnegie mellon open learning institute. so you know, is there some great truth? the answer to technology send is that really is a dramatic rate through. but what is being done but i think it's very exciting if they are taking really great video lectures with the interactivity built into those lectures. so a 10 minute intervals are tested on the concepts and you sent those. so you know, the beauty of great video lectures together with the inactivity. the third thing they do is get a lot of people, often as many as 100,000 taking a course at the same time. so they have lots of pure education going on where people are answering questions, looking at each other's hallmark, given

the bias in the teaching staff is merely reviewing the activity to make sure it's high-quality and students have been misled. the fourth piece is probably more challenging. that is, how does this act of two degrees or accreditation employers will value? they give out certificate, but not fully endorse degrees. that is an area where there were definitely be some evolution. but this is a very important movement. you all need to try it out i'm a think about how your institution should get involved. there are two liters. of course over 40 courses from the university of michigan. penn, princeton, stanford. the courses themselves are free to everyone. you only pay to get the actual certificate. theoretically, these courses can serve millions of people.

and so it has a real opportunity to step back and think about what are the best lectures and how do we need to stop women have with face-to-face study groups and hands-on laboratories? what are the skills that you really want to poland for a hybrid type model? i know some critics worry about the loss of personal interaction that is certainly central to a high-quality education. this technology when it slocumb p. can be used to strengthen those interactions. the arizona state math shows technology can free up time and allow the professionals to really be working with the students who need the help in a more direct way. and so these really do represent something important that we all have to contribute to and think about what the role should be.

so it feels in some ways and it infancy. we need to look at students, particularly those not well motivated. we can say definitely the original group assignment for learning course is not your average student. those are highly motivated people. so that is very think the hybrid brand really has to come in. technology can't do everything, but for schools that want to be at the cutting edge, experiment is very important. when we look at the numbers didn't be an educated, your institutions have grown at 2% a year. so disinterest in to ask, would advance to and use of technology allow you to grow even more and use of technology allow you to grow even more events? for 150 years, higher education has been an incredible source of strength for our country.

there is no group of institution that shows that is the one represented here. our nation has done better than a month again kiss to college than any other. institutions have shown that could be an opportunity don't need to compromise excellent. if the nation in charge of the different course 150 years ago in education continue to be reserved to the select view, there's no doubt we would be less competitive today. instead, we decided to build something new and better and we created the universities that are the envy of the world. that is why young people keep applying an ever greater numbers and that is why they are willing to take on tens of thousands of dollars of debt to get a degree. but because they know the education you provide is the key to the future they want to badly, they know you can make their dreams come true. but we face a huge challenge, just like in 18 dixie two.

how do we cope with these budget constraints without sacrificing the quality on which society relies? can we be innovative and affect good with the most challenge students as we are with the most prepared ones? and can we apply resources in new ways so we can serve everyone who wants access? asking and answering these hard questions is the key to building on the legacy you inherited and that you now hold. i believe is key to the future of our country. i've great optimism you once again come in your ability to innovate, do you see clearly where higher education needs to go and meet a solitaire. thank you. [applause]

>> okay. well, i told you he would challenge us. now i get a chance to challenge him a bit, so they will open up for questions. i know there's some people in the audience that are chomping at the bit and i'm having trouble seeing everyone. somebody -- i don't know what the microphones are. i'm assuming you get to someone with a question. all right. i'm going to ask the first question while you're figuring out the logistics. so, one of the issues that some of our institutions have, bill, is young people are coming out of high school unprepared for college work. they have to take remediation, developmental education, foundation supports, work in that area, something you're interested in. i wonder if you could share what

she found to be the most promising. >> definitely the boundary between high school and higher education is really not well handled today. if you are a student in high school, you ought to be able to go online and have some preassessment of your math capability. you should never have to go in and take the qualifying exam, generally a place to come for exam and get surprised by the result you get. it is really disheartening for the student because they get a number. they don't get you to work on fractions, scientific notation. they just get this number and go into remedial course with a set there and they are not sure every day, as is the part i understand ours is the party completely messed up? 70% of the kids go to the remedial math class never get a degree. it is just bad in every way. the idea is to have the set of

knowledge makes that could have been math. they all too proud, have that be well understood in the so-called common core effort adopted by 46 date in the so-called common core effort adopted by 46 date, you can have different textbooks, different way of teaching, but the core concepts are the same. the online material that actually has adopted a common court very quickly over the period of the next few years, the different ways they are getting their training into that and that will be coupled with these free online mix and you can try your knowledge out to be pointed to various materials, either by your offer with the teacher or some type of coach that will help you get there. so we hope to take the huge disconnect that puts huge costs from higher education systems, and make it kind of clean up

these problems and have it be a lot more open about what is going on and a lot more efficient, a number of positive for that student. so that is the boundary and reading and writing and not that it's been very, very problematic, particularly coming out of inner-city high school. >> question? okay. whoever gets the mic first gets to go. >> mr. gates, thank you for being here. and the chancellor at north carolina state university. throughout your career and particularly in recent years he visited many college campuses and i know you get a charge out of interacting the students. tell us what you think the challenges and opportunities are for students these days. >> well, it is interesting to talk to kids about how do they pickiness to teach and in how

clear where they about their goals as they were going into the institution. there is a big difference between kids who have a career goal and ones who don't. you know, it's fascinating to talk about how much she worked during school, how do you think about this at your building up over time? and no, what do you think about the quality or teachers? do teachers? u.k. feed back to the different experiences are having? one thing i've always been interested in at the kids who don't complete. the fact that even in these very top institutions, later 40% have completed, you know, and a surprisingly higher than if you'd asked me before i saw the statistics what that number would be. so sitting down attacking event, where did you feel like you got lost? what kind of intervention would've made a difference to be

able to stand? was a financial? read discouraged about your ability? why did that go off track? clearly there is a lot of amazing professors to reach out and get engaged the students. it's always wonderful to hear about that. it makes you think of that develop this, is that measure? is that rewarded? how is that it's spread out to other universities? you know, it's always impressive to me the energy this event put into get an education. as leaps of of faith you will find this for years and that will do something great for you. you look at the application rate that are even stronger today. the economy, if anything, and that more people wanted to have the credential. it's phenomenal. on the side of the employer, you know, for microsoft we went to the elite institution and took

the degree we could hire the best events and we were quite picky about where we went to higher and exact google courses we thought they should have taken. and so, were in the universities. we work tittering ourselves the ones who would take some lack of education. we were going to pick the people who are well-prepared food is definitely on the petition's hands to give somebody the skills. >> in upcoming imagine something important and barack are are interested in increasing graduation rates in this country and that is the goal of reinstitution in this room shares. one of the things apl u.s. work in an outcome which is very important to policy makers is a different way of looking at graduation rates. right now we don't look at students who transfer, which is a significant number in higher education. a number of elements where we

can where we can add to that data available, which will help us understand better the path for students in america. >> another question. yes, please. >> good morning, mr. gates. i am president of montana state university. thanks for your message this morning. you shared with us some exciting ideas. you have any additional exciting ways in which to knowledge he can be enhanced to higher education? also, what is your advice to institutions who want to lead in this area, especially in the current session environment. >> well, there is no doubt that technology enablement should be able to help with budget constraints. you know for example, if you take the lectures of your big courses and shoes to put them entirely online, and that is not to have a physical get-together, then in many cases that takes

what the key enrollment limited for those courses and gets rid of it. it is the size of the lecture hall and many come in many cases. and if you actually have feedback systems we take the study groups that are adjuncts are people in the and helps you understand who's doing a good job in those things can you have a review system that rewards those roles, then that is the real thing that drives the quality or the people in this study section. and so there's kind of an irony right now that the large lecture, which technology can provide something that is better because you're using the world-class flexure. it is interactive and away you you're not having to go 30, 60 minutes with us in a non-practicing the knowledge

regaining. you know, there is clear, proven evidence that stopping them doing the action improves the retention and understanding of the material. and no, i think that a sitting mayor. and why isn't it being grabbed onto? well, i think it the financial sequester hasn't been strong enough force him to take that leap. it may be that the teachers don't want to do it, but that is sitting out there is a very, very clear name. hardly adapt to it this stage but however. so that is partly why we are at the beginning because it is only has to get the adoption used in hybrid mode. but we are going to get his sins system of accreditation that has the same press quiche is college degrees will arise, which is independent of how you learn the

knowledge. people who are certified that have the equivalent of a four year degree. employers will trust that just as much and i will have a lot of people experimenting how they can prepare people for that, but they won't be bundled together in the degree we are right now. there will be the system that grows up outside the traditional education, particularly to the degree the online things aren't adopted within the mainstream education. >> okay, who has the microphone? zero. >> university of tennessee, knoxville chancellor. your foundation does many great things. looking at your foundation at the postsecondary level, looks like you focus on community colleges for funding. i was wondering if you would explain why you're doing that. >> yeah, that is absolutely correct. other than scholarship programs,

the great millennium scholarship program that ends up sending kids to four-year colleges like this one, a lot of the rest of what we have done has been hocus on community colleges. most of what we are doing there in terms of how we track student and intervene intervenor students have problems, redesigning the remedial math and reading and writing portions had applicability to all colleges. but when they look at where a woman can students end up going in this country, it is overwhelmingly to community colleges. fortunately, many of those students if they do well after two years, they show up in your institutions. there's selection because those events actually tend to have a better completion rate if they've gone through an amount. they can have a somewhat better completion rate than those who,

in the first year. so it is a very good cohort, a code word we should control. in dollars spent there getting a four year degree for lower cost than people who take another pass through the system. so we saw there was less philanthropic money involved in community colleges. less attention, more use of adjunct professors. more of a need for student tracking. more of the need for actual measurement of who the good professors were to create the professional system around that. also inability when you have adjuncts. i know there's lots of challenges but that, but it is a system that if you have a quality measure you can immediately decide who to give bonuses to, who to bring back in her not to bring back. so you know, the payback on quality and are standing is

very, very high. whereas if you put that in two another system, say what are you going to do with the data that comes out of this. so we wish we could work on both can we hope it has broad application, but it's probably three more focused on community college. as they get involved in issues that bush's policy be and how should that encourage excellence in completion rate, now in those areas are all the different loan type policies obviously touches the whole system. you know, we are quite worried that if the amount of federal money for education trains, a lot of people talk about that happening. will that be done? can we minimize the amount that have been into the degree of confidence can we we make sure it is done in the most effect to the way it?

>> okay. microphone? yeah, great. >> mr. page, president of university of idaho. one of the concerns i have and i know a number of my college has is the number of young people tracking into the stem discipline goes beyond preparation and getting them excited about lance, technology, engineering and math. we are losing ground globally in this context. i would like you to comment on how we can work more effectively at the middle-school level and high school as universities to use emulate a more effect of pipeline for the students at her university. >> yeah, it is a fairly stunning fact that all the rich countries, europe, japan, the u.s., less unless the bair graduate are going into science and engineering. and if you look at the salaries and the job, they're very, very

strong. so so you have very unusual things a computer science department, the top computer science departments in the united states, many are over 50% foreign-born. the you see berkeley computer science department, which is super top-notch, 77% foreign-born. and then you get this irony, which is if you go to hire those people they can't get hiv cars. they got a world best education. where they were, companies like microsoft create five jobs and engineers to people doing taxing, but we do it wherever we can get engineers. so to the degree they have to go back to india or china, that forces the other skill sets to be developed enough countries. so definitely there is, as you said, and attrition in terms of interest did not lie in that

starts in high school. the first year of college drops off a lot. even as people compensate to microsoft as an engineer, more of the wind and then moving to marketing and general management type roles in the mails do. we just have this incredible attrition. both in terms of the absolute numbers and in terms of women and minority. so by the time you take an engineer, you're taking 10 years. that is a very male nonminority nonminority -- it's a variation and caucasian percentage that is doing that. how we can make math and science less daunting, how we can make the image of those careers a little bit different. i think there's good work going on with that.

you know, some of the way science and high school. i've been a new online behind called a case jury that teaches the science in somewhat different ways. i know some universities has combined a number of science course is, but you know, we really need to seek out as part this is on my because those jobs, more than other jobs, those two time to drive your economic future. so it is ironic we are not driving those things. the fastest growing major in the u.s.'s physical education. you know, historically the u.s. put people into the new field. it is big and important. now, either in terms of how much we educate our people are having people in the cutting-edge field. either indicators are a bit scary in terms of relative asian

countries. >> thank you if this is not -- alaska last question because i'm in charge of keeping control of the schedule. i want to take a bit of a shift in the conversation. obviously educational attainment is a high priority. when great universities are deeply involved in addressing the gates foundation and we think of the twyford sentry land-grant model is organizing around someways addressing food security and opportunities for economic opportunities for public health. so, could you tell us -- just spend a few minutes talking about some of the most exciting opportunities that you see for america's universities to being caged in the kind of work that drives you around the globe? >> yeah, universities are doing a far better job making students aware conditions around the world. when i almost graduated from

harvard -- [laughter] i had no living conditions around the world. today, these have lots of courses and they tend to get students out there. i think that awareness alone is an extremely valuable thing. i know when the foundation goes out to look for, work on bidders needs, get rid of crop disease, design your backs, to build better toilet, it really reinforce those the u.s. universe he said the cutting-edge. you know, some in a bus to one of our grand, where if any thing we tried to go to institutions in the developing countries themselves. if we had two equally meritorious scientific research proposals, we would favor the

poor countries of the problem is actually enough location. and yet, for most of what we do, and incipient elite university will be a u.s.-based and to to shame. and they are doing a really good job partnering with institutions in these other countries to build a capacity, run the trials. i think there's some secondary benefits that come from that. one thing even though worth talking about this very tough challenge of these budgets, i do want to share with you my out to miss him for the state of innovation. the fact that other universities around the world will participate is a good thing. the speed of innovation, whether it's material science, understanding, digital level, energy type advances, understanding how to make new

backs, the immune system, a lot of that pushed there by trying to understand. agriculture is so exciting. thank goodness that plants have the same genetic says humans because though much money, billing and billions were spent to create secret in tools. and now the culture field essentially get that as a windfall. and so the deep understanding of plants assayed your product to the use of old mage of innovation. they are at your institution allow your foundation to be very take and the poor countries. whether it can't take 8 million a year. i couldn't see a path to get back to 4 million down to

2 million. malnutrition. but we have enough food to feed the planet? innovation absolutely, despite the headwinds of climate in certain limited resources will be out in the dead challenge. so it is almost a paradox at the importance of the work in the innovation gets stronger than ever at a time when making a broadly acceptable as a tough challenge. >> absolutely right. that is a challenge we will accept and we look forward to working with you in the gates foundation. thank you for being here to help us wreck netizen celebrate the important event in our history of higher education. thank you for challenging us to dance thanks for your partnership at the gates foundation. we appreciate it. [applause]

>> sunday, ward ran out there david the truth that our guest

>> a house oversight subcommittee today held a hearing on the jobs that come a law passed in a row that uses security relations on small businesses. requires this year it is an exchange commission to rivals that would allow companies to sell shares through crowdfunding. a method for raising capital over the internet. this hearing as an hour and a half. >> could not turn as an thank

you all for being here today. this is the subcommittee entire financial services and are hearing today is the j.o.b.s. act in action and we are seeing effective implementation that can grow american jobs. i will start today's hearing, as they always do by reading the government reform committee's mission statement. the oversight committee mission statement exist to secure to fundamental principles. first, americans have a right to know the money washington takes 10 minutes well spent. second, americans deserve an effective efficient government that works for them. our duty in the government reform committee is to protect these rights. our solemn responsibility sold government accountable is tax years because tax tears have a right to know what they get from their government. we will work tirelessly in department with watchdogs to deliver the facts to the american people and bring genuine reform to the federal

bureaucracy. this is a mission of the oversight and government reform committee. i would not recognize myself for five minutes for the purposes of an opening statement. approximately three years into economic recovery, america's labor and capital markets face unprecedented challenges. the u.s. unemployment rate is now about 8% for 40 consecutive month and nearly 24 million americans are either out of work or underemployed despite various government driven initiatives. to make matters worse, outdated and even offered times new government regulations continue to limit the ability of small businesses to access capital, which is the lifeblood of our economy. preparing a strengthening markets will not occur overnight, nor will the accomplished more government regulation. in an effort to address challenges that focuses is on a

bipartisan bill signed into law this past april meant to promote capital formation for small businesses by relaxing various securities laws titled the jumpstart our business startups act is commonly referred to as the j.o.b.s. act. when they first say the j.o.b.s. act is a significant victory for capital formation and notch premiership in the united states. i am particularly proud that efforts by this committee commend ishida by chairman darrell i sat back in march of 2011, his letter to the securities exchange commission chairwoman, mary shapiro helped develop a j.o.b.s. act and modernized or securities laws. for instance, when the nation on the band on general solicitation from a rule that has been in place since the securities act of 1933 will improve ability of small private businesses to communicate with investors and raise capital.

increasing the private shareholder cap from 500 to 2000 that a company may house before registering with the sec has been welcomed as a logical adjustment. it simply reduces the number of instances a company is forced to endure in an sec filing process merely because it did to many accredited or institutional investors. now, title iii of the jobs that they stop legislation i author creates a new federal securities exemption to permit equity-based crowdfunding. after introducing the first crowdfunding will in congress, i reached out to my colleagues on the other side of the aisle to build a bipartisan coalition we could actually enact this bill to address these concerns of interested parties. specifically i want to commend congressman carol pallone who serves on this committee as well

as oversight and government reform committee at large and also serves with me on the financial services committee. now, carolyn and i don't often see eye to eye in matters of public policy, the denizens since we collaborated and work together to take the legislation i introduce to improve it. now caroline had a number of turned about fraud and a number of investor protection ideas, worked very diligently -- very diligently to craft a very balanced bill that we were able to pass, not just out of committee, but on the house floor. and before came to vote on the house floor, president obama put forward a statement of it policy endorsing with kind of bill. well, unfortunately due to a few senators who i think misinterpreted the spirit and

promise of funding from the senate inserted in perfect -- who called them in perfect provisions that jeopardize the vitality of equity-based crowdfunding and complicated fcc rulemaking. as the sec considers comments regarding crowdfunding, the crowdfunding title of the j.o.b.s. act, it is clear the senate's 11th hour changes have unnecessarily made sections of the j.o.b.s. act ambiguous and can withstand. today's hearings serves as an opportunity for congress to hear from knowledgeable folks that either participate in the arena of crowdfunding is that now it's this. it's not equity-based, not on the investor side, but crowdfunding is that now exist, market participants an academic expert about these provisions of the jobs that and i want to get

their thoughts and that is really what this is about. our intention is for interested parties in the sec to work together to ensure that affected rules and policies are promulgated, that will allow crowdfunding to flourish. and if crowdfunding flourishes, i think first mall businesses have another opportunity to flourish. i think the witnesses for making the trip here and i want to thank the ranking member, mr. quickly for his involvement on this area public policy as well as any others. but that i recognize the ranking member for five minutes. >> thank you, mr. chairman. i want to thank the chairman for holding this hearing two weeks am in the implementation of the j.o.b.s. act. the j.o.b.s. act was passed with bipartisan support by the president on april 5 of this year. the act alters federal security law to make it easier for small

businesses is targets to raise capital. the act will create a unique status for a merchant see growth companies that will allow these companies greater flexibility and testing the ipo waters. the act will lift restrictions on the ability of the start of companies to raise capital. they survived their earliest years to make enough site contributions to sustainable job growth. under title iii of the jobs i targets will raise capital they need through crowdfunding or this is a welcome step forward and i commend the president who endorsed the idea in this 2012th it is the address and the committee sponsored the original crowdfunding legislation for working together on this issue. at the same time to break the traders action rollback were originally put in place for a reason. there are legitimate concerns exempting this type of act to the deep from the regulation would open or expand opportunities for fraud.

the clean water standards keep our water safe to drink and france are regulations protect his aunt the financial products. while congress judges correctly, there were too many hurdles to raising capital, the mission is still to protect investors and maintain fair, orderly and efficient markets. under the jobs i've should have the same procedures as in the past. there is no reason to jobs j.o.b.s. act should be prioritized in run of the dodd-frank rulemaking from which have been delayed as a result of scrutiny from congress and the course. the same standard should apply to all the fcc rulemaking is required by law. i also believe the dodd-frank j.o.b.s. act are to factor the same coin. before and during the financial crisis or financial regulations were deficient defense collapsed in the housing market bottomed out, investors lost their savings, homeowners lost their

homes and millions of americans lost their jobs. bypassing of implementing dodd-frank reassured the next generation of american is not so vulnerable to the catastrophe. at the same time i recognize some of regulations are necessary and the man had a child grows more than her tech day. that is why it was proud to support the j.o.b.s. act. going forward i am eager to work with the sec to ensure that these two acts of congress are implemented in a timely and responsible fashion. thank you, mr. chairman. and i yield back. >> i think the ranking member. members will have seven days to submit opening statements for the record. we will not recognize their panel. mr. brian cartwright is a scholar -- the scholar resident marsha school of business, university of southern california university of southern california, senior adviser at the atomic level partners and former general counsel of securities and exchange commission.

thank you for being here. mr. alon hillel-tuch -- i say that correctly, sir -- the cofounder and chief financial officer bob rockethub inc. and for those of you who are not familiar, it is a fantastic crowdfunding site doing fantastic things. ..

>> you have my written testimony. and will not try to rehearse that year with the brief introductory remarks. instead of 12 frame my

discussion to offer my perspective why a the j.o.b.s. act that passed with overwhelming votes in both houses of congress. that j.o.b.s. act past widespread bipartisan understanding something has gone wrong with companies with the new and up and coming companies. exchange listed companies has declined to radically. we have gone from 8,000 exchange-listed down at 5,000. that is a dramatic drop because not be enough signup to go public to replace those. ipo is down four below

previous levels. the most alarming development, back in the day the venture-capital list would take a successful new company meehan they would blossom and grow the most jobs come after a company goes public. 80% of the time. today almost 90% of successful debenture backed companies are acquired and not taken public. we know that acquisitions often subtract jobs as they seek to achieve efficiencies. imagine what the world would

be like today if microsoft was managed to make it as attractive as possible to ibm. i submit to you seattle would be a different city today and replicate that hundred seven times over in the u.s. would be a different imagine the problems we would be facing if we did not today.

time will tell and the first increment told weeks at the questions could be directed that way. good jobs act is to move us in the right direction. then to move with all deliberate speed to have the job sacked faithfully. i've looked or to your questions. >> we thank you for the

opportunity to provide testimony and barriers to capital formation. and established crowd funding website to launch over 8,000 campaigns since 2010 amenities successful campaigns from a local bakery to a startup developer to film production. it is the application of new technology and those to have the advent of social networking to benefit from the lower-cost model. title three of the j.o.b.s. act that we look forward to

this development unbelievable the j.o.b.s. act will benefit business but the impact with the secure exchange commission's and rule-making. i'll try to fit it into my time. in the j.o.b.s. act those who have crowd funding platforms including financial statements or the amount that the commission may establish. i believe this is too low and should not be acquired unless it seeks to raise 1 million. added the historical financial statements there is no little irrelevance as

compared to the financial statement but opposed significant cost. making fed change could save businesses tens of thousands of dollars. secondary commission is by minimizing of fund expenses for those who seek to crowd fund. this allows small businesses to have a small initial costs but yet to then the funds to pay the fees. of the cost is minimal though support is charged then they don't come back with a new idea. the commission considers the structure of the platform should be able to change these for the funding. disallows more companies to

use crowdfunding while they cannot attract financing. one area congress should address is raised crowdfunding of about 5 million those then need capital from the crowdfunding method currently this is this have to rely on angel investors, small business loans or credit-card debt and those may not be available to all people especially minority led businesses are those that fall outside the high-tech model as a source of funds to give businesses more options to drive down costs.

i believe the limit for crowd funding and limiting the cost of the financial's above 1 million and aligning the interests of companies successfully structure with increased economic benefit these reforms that choose to raise capital to expand the role of small business finance. that allows the investors the ability to participate in the growth and success of foia range companies. of quick response is welled crowdfunding the to fraud? and no. it helps to minimize risk and high and the transparent. it helps keep them honest and drive the standardize terms. i thank you for your time.

i look forward to questions. >> professor bradford? >> representative mchenry good afternoon. i am professor of law at university of nebraska. much of my work is under federal securities law and it is an honor to address you today. have written to articles on crowdfunding and focus my comments on that provision of the j.o.b.s. act. i believe it would spark a revolution opening up a much needed new sources of capital but whether that happens depends on the regulatory burden. that is a phony at with the offering proceeds. the new federal securities

law exemption created is the important first up but not complete until the sec has the resignation in the -- on how exercises the right to the tory authority. my statement includes recommendations concerning crowdfunding rules. i will be happy to discuss but i want to limit myself at four points. first come across as a critical consideration. because of bad the sec crowdfunding should be unobtrusive as possible. the statute already imposes regulatory requirements on crowdfunding issuers and those brokers who acted as intermediaries. adding additional layers would increase the cost of

using the exemption without much benefit and inconsistent with the thrust of the teethirty and small business capital formation. second come at any other regulation should be with the crowdfunding intermediaries rather than entrepreneurs. was intermediaries are more heavily capitalized than those engaging been crowdfunding. they can afford securities counsel to guide them through. there also vp players to spread any cost. that makes sense to focus on the intermediaries rather than the company is raising money.

third, the regulation should be clear, concise and written in english. it requires corporate disclosure to understand but yet drafting crowdfunding rules you should follow your own plane english standard for compliance. many small business issuers using crowdfunding exemption are not sophisticated. if regulations are dense they will need sophisticated counsel to guide them. that would significantly increase the cost of the offering which is important. either they tried to navigate the complex rules on their own or simply not use the exemption but the best way to deal with the

issue is that small business entrepreneurs can hire them without extensive attorneys. the sec should dog-- substantial compliance rule for injured -- intermediaries who violate the extension. it contains a lot of detail and the issuers are not sophisticated. so the inadvertent violation of high. and the consequences are drastic. violation of securities act act, liability to return money to every purchaser. other laws protect those that comply with the requirements and a reasonably believe if it turns out they are not part of it should have similar rules with crowd funding regulation.

by have other recommendations of my time is up. thank you for the opportunity. >> we now read 89 is mr. coffee. >> thank you members of the subcommittee. i have been working with ipo for over four years. to make three basic points points, i believe the greatest enemy of job creation is not overregulation but loss of investor confidence. they have lost confidence in the ipo market place with facebook and the low trading place -- price of ipos. the erosion confidence goes

back to the burst of the internet bubble when confidence has not been restored. investors are complaining about the prevalence of selective disclosure of ipos as analyst this seemed to have been occurred to preferred institutional investors. by a agree with many comments with chairman i sat with his views to of greater attention in the event two auctions and the process. i would point* to select disclosure. there are ways the jobs sacked compounds this problem.

second, virtually every page requires the sec to adopt new rules and imposes fairly tight timetables that expired july 4 if with crowdfunding. these proposed rules are subject to second-guessing. across could be overstated or benefit understated or the empirical studies are just not reliable. as a result it stance that they could be arbitrary and capricious. as a result virtually everyone today under the j.o.b.s. act has the

incentive to sue and go to court. this results and uncertainty, confusion and delay even if they make a superhuman effort litigation and is predictable because now they have a fair option. and with the most recent policy statements setting forth the current caroline tuned economic analysis and sec rule making. they do require the commission and to consider reasonable alternatives and then careful matching of cost benefits. i cannot tell you the commission will always

follow these principles but whenever heroic efforts it may make there is a real prospect d.c. circuit could disagree. if that happens i cannot say the federal koran ask greater expertise and the sec. they do not think we will come up with better rules. the sec caught between the rock and a hard place. it faces the unsympathetic bench with rulemaking. the sec asked to adopt rules with financial statements and follow-up periodic disclosure in all those

areas i think we will see a long battle because i predict those who will try to exercise the judicial option. men the courts could substitute their analysis with the freedom of contract to say it interferes with cost benefit analysis. >> thank you for your testimony. a recognize myself. the foundation 1933 and 34.

it is what we deal with today. congress was acting people standing on the street corner hawking security. what we have found is under the mentality of the sec e-bay could not exist. the sec could not be there to root out those who have a lower net worth from purchasing products. e-bay sells billions of dollars on a yearly basis between people who do not know each other. but under the sec mentality that could not take place

without massive fraud. they get it we know the large failures of them to root out fraud with what they overseas. with crowdfunding for securities. mr. alon hillel-tuch you believe pride could be rooted out through the power of the crowd why do you believe that? >> >> absolutely. not a problem. crowdfunding is very transparent. there is a lot of feedback from community participants it keeps them on s to and the bd about crowd funding

it allows for communication by potential investors to allow four goals for risk disclosure and investor education. we expect portals to issue but what we have noticed the crowd is extremely wise for potential risk and looking at 1930 don't have access to the information and that you have now to research company with the online and offline presence to research individuals from the comfort of my home that simply did not exist. it is that level that is

unheard of and just not using that for fraud prevention. >> in your writings and testimony imposing additional layers of mandatory disclosure is not the best way to root out fraud? >> because the entrepreneurs who use this are relatively inexperienced, simply cannot bear the cost of the burden. if i make the $200,000 offering it does not take much before i cannot do it paid to the intermediaries or regulatory cost i cannot use for my business. it makes more sense to do to

the eye to printers and disclosure requirements that these people will not understand without hiring council. >> does the 50 states have the ability to rudolph fraud? >> nobody is talking about taking away anti-fraud rules. the states have the right to enforce the fraud rules plus additional in the crowdfunding provision. that is the best way because it only imposes cost on those with those who are investigating fraud the other way you want to put the cost on whoever wants to raise money and some -- most of those are acting in good

faith everything we impose on them could be borne mostly by honest people. >> thank you for your testimony. >> for the sake of argument but you recognize the difference the transactions that take place on the day most people know if they buy a bike but some investments there is more sophistication involved and i supported the act but for the sake of argument talk about how to implement. some sense of protecting those and the concerns that can take place that it is

not as practiced as investing? >> >> that is a great position weekend discuss. so the standardization of the requirements and the education that is necessary. granted it is ludicrous and itself, that said, what you are able to provide this critical to make it as seen less as possible and that is the decisive factor to make this cost prohibitive when necessary. win fraud and investor education go hand in hand.

a lot of the network comes from individuals in your it neighborhood there is a tea shop trying to raise funds the community knows the shop and raises funds with members of their community who want to support the business indication mumble is different than have the interest of the short-term return. they look at long-term strategy. >> securities are more sophisticated but what e-bay has