attorneys general, he has been our guest here on "the communicators" along with juliana gruenwald of national journal. >> we are in the countdown to the conventions. in seven days was gavel-to-gavel coverage of the republican convention live. you're from receipt. coming up tonight on c-span2, the national conference of state legislature list of job creation and keeping the u.s. competitive former members of congress on the role of government and private industry in creating jobs. after that, the center for american progress examine such emigration laws affect children and families. later, a discussion about the relationship between the u.s. and japan. >> on tomorrow's washington journal, a look at house and senate contests around the country. our guest is "washington post" reporter and o'keeffe. we will get the growing number of jobs that require post

secondary education with anthony, a volley of georgetown university's center on education in the workforce. then, as part of our week-long series on on-line campaign coverage town hall political editor. washington journal, with the day's headlines and your phone calls live every day on it c-span2 at 7:00 a.m. eastern. >> now, i know that there are those who criticize me foreseeing complexities, and i do, because some issues just aren't all that simple. seeing their weapons of mass destruction does not make it so. saying we can fight a war on the jeep does not make it so. proclaiming mission accomplished certainly does not make it so. [applause] >> three days after september the 11th i stood their americans died in the ruins of the twin towers.

workers in hard hats were shoving to me, whatever it takes. a fellow grab me by the arm and said, do not let me down. since that day i wake up every morning thinking about how to better protect our country. i will never relent in defending america, whatever it takes. >> airing every minute of every major party conventions as 1984, and our countdown continues with the week to go until our live gavel-to-gavel coverage of the republican and democratic national conventions live on c-span2 c-span radio, and stand on line and c-span.org of starting next monday with the gop convention with their jersey governor chris christie and the keynote address. also, 2008 presidential nominee senator john mccain and former governor of florida, jeb bush, democratic convention speakers include san antonio mayor julio castro delivering the keynote address plus first lady michelle obama and former president bill

clinton. >> next, and discussion about job creation and making the u.s. more globally competitive. this ceos of caterpillar and state farm mutual talk about the importance of education and permanent visas for skilled workers. this event was part of the legislative some of the national conference of state legislators held in chicago. it is just over an hour. >> this morning we will hear from some of america's most important corporate leaders. two of them run among the most iconic and successful corporations in america, the third is or used to be one of us. their subjects, the business of creating jobs, one of the most important topics and our country today. the political career is as distinguished as his business career. a house member, senate majority leader, and governor of michigan. one of the nation's most

industrial and important industry states. to date became president and national association of manufacturers, the largest industry trade group in america representing small and large manufacturers in every industrial sector and all 50 states. he is now president of the round table. please join me in welcoming the governor to the states. >> well, thank you very much, senator. great introduction. i loved the introduction that the focus on the legislative years because that -- i look back 20 years of service in the michigan legislature. a while ago now, in fact, i realized, but i used to do when i was a member and a minority in the house and the senate and then as a senate leader, i have not actually been in the

legislature longer than i was and. i am certainly aging, i guess, but those days in many ways were the highlight of the public service that i have been able to enjoy. one of the things i also thought about was that, the carrier i had actually would be impossible to replicate today the term limits. and so i watch this a fact of term limits across the country and certainly it has done nothing the strength and resolve for the legislative body, experience and expertise in the incredibly difficult, complex issues that you are confronted today. now, a pretty difficult issue that we will talk about, a pretty important one, our panel discussion is going to address one of those that is to my belief, number one issue facing our nation, number one issue that is in the election that will be captured ---sharing

everyone's attention. and it is going to be the number one issue, i think, for the foreseeable future for our country. it has been, perhaps, the most important obligation of the nation, how people find employment in jobs and we are here to talk today about the business of creating jobs. that has to be a priority for anybody who is elected, and i would suggest that any level, there is of pulled that captured all of this just a week ago, "usa today" gallop had a poll. this is an amazing number. you don't see these kind of numbers. 92 percent of americans regard creating good jobs as an extremely are very important party for the next president. well, say that their jobs are actually going to get treated in the private sector. we have some people here today, because of their responsibilities and their personal life stories, that they

provide, the enterprise for our leaders. they know all about this. i expect, though, that you, as legislators, men and women with a lot of experience. in this competition for jobs because there is the creation of a job. there is also the location of a job. and you battle each other for investment and jobs with it is manufacturing plants, r&d facility, there is a pretty significant competition for jobs arrest the country. and i think that probably has not changed. it intensifies. part of my message in washington is that members of congress, come from the state's demand least most of them come on the states. i'm not sure a lot of them, but as they think about this competition, they understand

this state that they came from probably would agree with other states. what has happened today in the world, today our states are competing not just with each other, but with many, many other nations. and so that competition has stepped up. and so, sort of like the olympics, if you're going to win and jobs competition you often have to have years of preparation and dedication. it does not happen by accident periodontist it like. energy, regulatory education work force, y'all are sort of required to be part of that plan and strategy. then you have to have the tenacity and the toughness to see it through. when these strategies come together it is a wonderful thing. ec countries are states becoming successful. they are more competitive, and as a result, they are having success in terms of job attraction and private-sector job creation. they become -- places that we

all want to emulate. they win these contests as the best states in which to do business are increasingly coming best places in the world to do business. now, our to eleanor base ceos, today, both are at the helm of companies with global reach. they understand what it takes to compete successfully. they have done it leading those companies. their companies have done in overtime. they are in the business and not only making a return for their investors and shareholders, but they're also in the business of strategically growing and hiring people. and they have got opinions. we have to the chairman and ceo of caterpillar. caterpillar is the epitome, really give us a u.s.-based manufacturing company with global aspirations got 50,000 employees in the united states. 127,000 worldwide.

the business roundtable, our international engagement. he has been on the front line of some of the debates that we take part in. he is also the current vice chairman and in january will become the chairman of the national association of manufacturing. so doug has become our most powerful advocate for the right investment strategies, the right business plan and the right way to create jobs and certainly jobs through trade. so, and then we have the chairman and ceo of state farm mutual and its affiliate. countries, more than 68,000 employees, 18,000 offices in the united states and canada. so another global business. in the insurance business, by the amazing service sector that supports this country, you get to know all the factors of the

economy from the smallest mom-and-pop store to the largest companies in america. and, and his for many years led. he has been the kind of leader who has been willing to give back to his country. so he is curntly the chairman of the u.s. chamber of commerce board of directors. he has been one of our leaders at the business roundtable for a number of years. he is one of the most important business education leaders that we have america. his passion is probably well known to many of you in this room. so at this point would like to bring doug port. we will get started on the topic of business and creating jobs. ♪

>> we will do this. debt will make comments. come up. we will touch answer some questions and have a little bit of a dialogue. citizens chairman to touch on the, the chairman and ceo of caterpillar. >> well, thank you, governor. on behalf of caterpillar and possibly, those of us in illinois, welcome to chicago. we are in a very large employer in illinois. in fact, almost 20,000 people in the state. very proud to be here for this interesting conference this year. it is always fun to be in the states where they are having the governor. we should have some fun on the subject of his book about this morning. i hope you all know caterpillar. i will be brief in my comments about us, but when you see construction zones and those little yellow slowdown signs, think of us because that is our

business, and we love it. i think and the only one that slows down lower than the posted speed limit in a construction zone to watch what is going on. unfortunately there has not been a lot of that in this country over the last few years, and we need more. we are proud to do that for our country and around the world. we have in office and at least in an employee in every state in this country. we do quite a bit of manufacturing in the united states as well as around the world. we make industrial turbines in california. giant 400-ton skid steelers in the state of north carolina. we just announced and then open a manufacturing and design center in south dakota. teammate escalators in texas. i could go on and on, but i think you get the point. we are a big and proud and great american manufacturer that is able to take care of lots of opportunities around the world. spending a lot of money in capital. this year, the last two years we

spent almost $10 billion around the world. over half of that right here in the united states for expansion. fact, we've went on to announced 35 new factory somewhere in the world and last two years. about half of those are right here in the united states, and we have added, says the end of the great recession, i guess, two years ago, almost got 15,000 american jobs, most of those being manufacturing jobs right here in this country. so, we are quite proud of that. we also do a lot of investing in research and development. some statistics you did not know, research and development is critical for manufacturing. it represents u.s. manufacturers performing two-thirds of all r&d in the nation, a lot of innovation. 90 percent of all patents in this country come from manufacturing. about two-thirds of all u.s. engineering jobs are created by

manufacturing. and in our case this year we will invest about $2 billion in r&d, and the vast majority of that over three-quarters of that will be right here in the united states. so, we are pretty proud of these investments. we are proud of our american heritage and where we are going, we are also very proud of our opportunities around the world. i had a great time a few months ago announcing the new factory in georgia. in about two weeks and will be going to texas to announce a new assembly plant for escalators that we built in japan for decades. we have moved that manufacturing facility to texas. he will cut the ribbon on that and a couple of weeks. so, while we are investing here we are also investing around the world, and i think it is great news for all of us that we have these opportunities. it is no secret that as we choose investments and where to go and what is involved, and i

just want to spend a couple of minutes and that because i know that is important for this audience. what do we think about when we choose a location for a manufacturing site, an office building, or to the site a facility for what in our case is likely to be decades. we look at age a lot of things. first and foremost, our customers need and want in allocation. certainly, a plan in texas is a good one. most of that market is right here in the united states. we wanted to avoid the fray in supply chain timing for our customers in this country which is important. what did they need and value? secondly, i infrastructure. now, being the chairman and ceo of the largest infrastructure, one of the largest ever for structure providers in the world, this is somewhat of a self-serving comment. we need infrastructure in this country, and that tell you, we needed not just for american jobs and hopefully the benefit of my company, but all of our

competitors around the world, every country is investing more in infrastructure as a percentage gdp and we are. and our children and grandchildren will have to compete with that more and more, and it worries me as we invest less and less infrastructure. it is important, texas among georgia, or wherever it may become important facilities. can we get supplies in and out? how reliable is the power grid, amazingly enough is becoming more of an issue in this country and is really an issue outside this country. but by far and away, the biggest piece of our site selection process is our work force is. is there a local work force that we can use that is killed in what we need? either universities and community colleges that will work with us to help train our people? manufacturing jobs in this country, far different than a manufacturing job, is 40 years ago. high-tech, highly trained, for

the most part of the tests are performed. everything is computerized. we need people that can run those. in fact some of the statistics for you, in this country, we reject six of ten, six out of every ten applicants that apply for our production jobs in this country. basic education or drug-testing. imagine the cost and waste to society for some the average is 25 years old and 60 percent of them don't qualify for a basic manufacturing jobs? what a waste our society. the really big in terms of educating our were forced to compete. now, i am sure there will be more to talk about on that later. high-school dropout rate is 30% which implies our educational system is not working. i don't have to tell all of you that. i suspect you know more than i

do, but we are the customers of that education system that uc failing in this country, and other competitors around the world are exceeding in their education system, cycle used to have a competitive event its. it is a big problem. supply is another interesting one. a local group of suppliers or can we develop suppliers in manufacturing locations that can support our facility? and that goes into our -- in terms of where we decide to set its facility, the united states. and finally, kind of a big one, and it is sort of taken for granted, but today it is really applying. the general business climate. is this state fiscally stable? the pension and medical costs under control or will we look at a spiraling amount of tax increases down the road or benefit cuts for people that retire from plants eventually. well, we don't need advanced

today, we sure need a plan for every state to become fiscally solvents in an amount of time as soon as we can get there, and that really weighs on us when we cite factories in this country. that has a lot to do with where we site because our employees have to be happy. they have to be ready and available to come to work every day. if they're worried about their pensions and other medical care down the road, it is an issue, so that is a big one that all of you have a greater say in. to all of you coming to play when we talk about this country and elsewhere, but remember, 95 percent of our customers in this country don't live here. we are only 5 percent of the world's population. my generation, my parents' generation, many others live in a world where the united states was the king. our economy was the biggest. still yesterday. most of the purchasing power resided in this country. that has changed dramatically.

today 95 percent of that is outside this country. we have got to learn to deal with that and compete on an international stage more than we have ever done. some of the things i talk about our indication of that. so when you're looking at where we want to invest in manufacturing, all these things come into play. and then finally, as the statement here at the end of these comments, we need an economy that is growing. we really have to all work together today to make sure that happens. some comments on that. but growth cures a lot of hills. we have not seen growth in this country and disposable income in a decade. we need to turn that around. lots of other things that are being worked on but need more emphasis. so, with that, i conclude. i look forward to your comments. thank you very much. good morning. [applause] >> thanks you.

i've. >> i remember growing a busy restaurant travelling across the country. i realize this is three interstate highway system. as a little kid i would be sound asleep in the backseat of a car. if you wanted to get my two sisters, my parents would yell waterfall. it would perk up, looked up. well, the way you got me out, it was construction, caterpillar equipment. so, yes. i have always been a little envious. because at the end of the day, and my business the have to have policy which is increasingly becoming digital and available online. you can at least walk over to the factory of the show room. you have something rather big and huge that you can touch and work with.

take a few minutes here and share a little bit of background the governor touched on it. state farm. state farm was started here and in illinois from central and lori, bloomington illinois, 19 years ago this past june. a semi retired farmer by the name of george. he had a crazy idea in 1922. being a farmer and looking at roads at that time, still gravel and impassable. but insurance was still sold and an annual basis. farmers, cannot drive have the time, the roads are impassable. so the car is sitting in the barn. maybe farmers should pay less for insurance. crazy little idea that kind of hatched the entrepreneurial energy in the 1922. a little company called state farm mutual. smallest company in the industry

at that time. that's crazy idea moved to today we ensure over 40 million, nearly 20 million rental or home across the u.s. and into canada. it is -- we have led the industry in terms of customer base and we employ over 65,000 employees across the country. we operate about 18,000 agents. we are very engaged locally, and many of your communities across the state you represent. and this gives us the most unique and powerful footprints across the country, local communities, and in space. we are very involved in looking at communities, looking at states. we invest each year to

charitable donations from other programs, in essence, driving a focus of how to build a safer, starter, and better educated to many. in addition to the dollars that we provide, we are investing time and resources abroad. we have worked with a number of you in the state legislature looking at how we enhance building materials, building codes, building safer, stronger structures in your community. and number of groups helping safety. coming out of the interstate highway system, as state highway, how do we build them safer, make them -- we tend to forget back in the sixties are so, highways were somewhat of a death trap. simple things in a way that there were designed did not do

much to improve safety aspects. things have come out. efforts of the industry, things looking at making cars safer, passive restraint, seat belt usage, airbag, cars basically minimizing the amount of injury to the occupant. there is an unfortunate accident. communities are, indeed, an important part of our organization. if we reach out and look at young drivers coming in to be it the work force to my getting their driver's license, we are very much involved in helping the parents. youthful drivers coming in. helping make a connection of parents that they can use to help the young driver become a safe driver. next month state farm will host a new program. it is something that will be

held across the country. it will be focused on allowing communities to support teens everywhere as they learn to drive and get ready for the road ahead. now, we were to prepare students for their time behind the wheel. we also want to support them in their formal education. now, we are looking at from the public policy standpoint, we can all debates regulation. i have to tell you today, and major underlying contributor to our country's economic growth is, unfortunately, our students lack of proper skill sets required by american business. workers in the marketplace creating a huge competitive gap,

one that, frankly, needs to be filled in order for us to create jobs and compete in the global economy. today businesses are searching for skilled employees ready to take on the challenges of working in the 21st century global economy. skills that i things such as a verbal and written communication, critical thinking skills. really, how do we build that intellectual curiosity that is going to be so critical for their generation to continue in succeed. some amount of change. what we have seen during our lifetime. i was sharing earlier. colleagues of mine who several of years ago, the three sons, the oldest was 16 and 17, the

youngest was 13. the kendis look at his older brother and said, what was it like? growing up before broadband? [laughter] my generation, whether the party line. we have to watch party lines, a much different connotation today. but as we think today, within the u.s. there is an estimate of 2 million until jobs available for skilled workers. ..

>> the economics confirms over employment are making it increasing and difficult for people to achieve their life dreams. the challenges and issues we face today as individuals, as states, as companies, as a country must take on the importance of this education issue. no longer are we to be passed on to next generations or the proverbial kick the can down the road. coming in this morning, i was thinking that kick the can done the road analogy is like looking at the right hand rearm -- rearview mirror of the car and changing the octobers closer

than they appear. consequences of not addressing this is much greater than they appear perhaps today. to address these items, it's incumbent upon us to work together, have the best solutions, we do not need to reinvent the wheel, but we have to be about addressing this issue. i applaud what you all do day in and day out in the public policy arena and in dealing with constituents back home and the politics of your local states. business has a key role and can play a key role with you in conveying the context and the importance of what it is that we'll be talking about this morning in creating an environment with job creation and long term success be it for companies, be it for states, and it's important for our nation.

again, i appreciate what you all do day in and day out, and i look forward to sharing the perspective with you. [applause] well, doug, thank you very much for excellent presentation, and that gives you a perspective from the manufacturing company and a service sector company. there's issues that are common. different -- very different businesses, but let me start with this because these are state legislatures and people influencing stot government, and try to break down -- we've got a half hour to have this conversation, but it does strike me that today, and, doug, you mentioned 5% of the people who live here, 95% of the customers are outside. some more domestically focused, but there's a competitiveness among states, and then there's a competitiveness among nations, and state legislatures influence

national policies to an extent, but they are key in terms of a state's competitiveness. is there a way to look at this, when you're making a decision, and you think about competitiveness among the 50 u.s. states, how do we look at that, and what ought to be -- we heard education and, you know, lateral base in your case, and infrastructure needs in both cases. do you look -- and the state's own fiscal ability. how do we evaluate among states, states get rated, and then what is it that we as a nation need to be pays attention to if we're going to win against a location. europe's got their problems today, but other parts of asia, not just china, but malaysia or i indonesia, vietnam, or south

america and brazil. two parts to this. let's start with the state, but i also want to -- can't leave out the national government because the taxes and the regulatory burdens from washington are dwarfed what any of the states are imposed, and so kind of give me the outlook. >> i'll be happy to start on that. really, i think it comes down to two things -- two basic things right now. one is education. all three of us talked about it. everyone's aware how critical it is. we are falling further behind. there's a loot of great initiatives out there for us as a society. we need to reprioritize its importance. secondly, national government debt, state debt, county debt, municipal debt, you can't pick up 5 newspaper today and not read about doubt. we've dug the hole so deep it's going to take a generation to dig out of, but in some states,

they started it, some cities started, the national government has not started it. in fact, getting further behind in the debt. i heard a good one the other day, john. the difference between europe and the united states? about six years. that was a frightening thought. >> very scary thought. >> revenue has to be raised. expenses have to be prepped. every legislature in washington knows this, and it's not a surprise to anyone, but nobody wants to talk about it. we are failed by the lack of discussion around that, deep discussion, and then when it comes to states, in my mind, i think we have to move business, and whether it's illinois or georgia, texas, whoever it is. workman comp's laws, states roll out the red carpet to welcome jobs, and others, you don't hear it so much. it's an attitude.

i can tell you as i go around the country and recite different plants, you can tell the states interested because they are first in line with the hand up to tell you how business is. that's critical if we're going to create jobs in the country, and that backs up on tax rates, costs, workers' comp, you name it. that's critical on a local level, state, and national level. then we can talk about competing with china and competing with europe and elsewhere. >> ed? >> john, three things. i would echo what doug has just touched on. i think as you look at the global economy today, many of us, why would you be interested in that? today, in -- if you had not traveled or had the opportunity to be in asia, india, south america, europe, struggling, but if you don't have a point of reference and context, you are

going to be significantly surprised about the reality. another point, we look at budgets. outcome a little bit different. we are a major institutional investor. through the years, we invested in that role and state municipal debt, and i got to tell you from our perspective of working through and doing our own homework in evaluating states and where we put money, deficits, strong financial cliffs, or bad cliffs, however you want to characterize it, grow with us. as we look at this, it's been part of one how we support local communities and state, and we're feeling an avenue that is shut off because of the financial problems. i think that, you know, any

first finance portion, the miracle of compound interest, how, you know, in over a lifetime of 40 years, it can be four to five times what you started with. on the liability side, looking at pensions and other obligations, it's the same dynamics, but the problem is we don't have the support for the liability. i'm concerned very much with where that will lead because as doug said the difference between the europe and u.s. is six years. that is not something you can just pull back from overnight. >> opportunities for state lawmakers, and it seems to me that the rules that govern how you manage your aggregates and pensions for health care are very different. the standard or i think for

legislatures, one of the thing that is there, probably, and part of that strengthening may well be additional mandated transparency with real rates of return, not fictional rates of return. there's a clear understanding of how much that future obligation looks like because today california's in the news again with several other cities in conversations about their fiscal health, and you got one of the reports on one city talking about how reduction per retiree benefits are immediately, and these are unkept promises. i think there is a need for the states maybe to step up and mandate this so everybody knows what's going on. >> well, that would be eye-opening. those who worked in that know the reality of working, and

you'll find out, john, and i'm the first to say, and i think there's no disagreement, it's easier to say it. time is not on our side. trying to keep the consequences of this more -- [inaudible] this is where in coming back and dealing with what we have to deal as businesses and economic reality in the world of which we live. you look right now, and you can argue on fiscal policies within the u.s., interest rates, it's very challenging for industries like state farm, particularly in the life insurance, where you are dealing with guarantees and the interest, and we have a 3% or 4% guarantee on a product, you don't make up the difference between a 2.5% 10-year bond and a guarantee bid vieter, and -- by the provider, and this could

derive from unemployment, conflict, chasing deals, and i think this is something that, you know, the business community, coming together with a, i think, it's an important one to avoid in saying we have got to address the debt issue be it with pensions, aggregations, health, but the fact is that have the discussion in dealing with it, and we cannot afford what was talked about, and let me get this point. we have to have plans for the conversations. that's going to be very difficult, but it is something that the sooner we have that, then hopefully, the sooner we're on a more sustainable path than before. >> i'll make an observation which is that the transparency standards are not tough enough.

we need to get all of the evidence to the people quickly. see what they want to deal with. the public policy consequences of that, however, are going to be painful because, in fact, the public companies are absolutely transparent, but unfortunately, that's forced us to end the client benefit plan, and that's a painful thing for us to do at caterpillar and private industry, but today, they are virtually non-existent. the only supply and benefit plans we see today are government. it's no coincidence the liability has not been fully recognized by states for that matter. let's get it on the table and deal with it that the coming bomb on that is really going to be painful because as i said, we have to raise taxes to pay for it, and the citizens have had enough of that in my opinion, or benefits for current retirees to

be cut. that time is not on our side. it's a 3wu8 -- dull et. >> transparency strikes me being in education as well, 3 million jobs that are around in the country available for people with skill, and so the ability to scale up, and in this case, we're not always talking about college degrees, maybe a 2-year degree, but specialized skills that have to be acquired, but clearly, talking about a child in 3rd grade, 68% not proficient in reading. i mean, we can't accept that. we got to fix that.

we got to have a science education, and we also got to have a skills focus, and it strikes me that states that want to compete in this area could do a more transparent job of explaning the results and showing what works because it's just that we don't have the same set of incentives that require it to be duplicated everywhere once discovered, and i'm just -- you've done so much work in this area. what are your thoughts, and what states -- this is where legislate and governance can make a difference. >> you know, john, we've spent more years than we want to acknowledge on this issue. the agitation is so critical.

as we said before, it's years, and if we are not getting kids out in the right environment and learning, when do you ever make that up? i think the effort, and i complement the states involved around the adoption debate, adoption of the common core in terms of these are skill sets regardless of where you live in the country or where you live in the world, are critical, foundational steps, blocks, that you got to have if you're going to be able to survive in a world of lifetime learning. >> you mentioned the time and core, and that's a debate in some states, and you've done 5 lot of work. common core means what? >> common core are fundmental things. math, science, you know, principles that -- these are things that one plus one equals

two, environments are where you live. read, write, and math. we can't afford to do that anymore, but that common core, what are the fundamental skills, communication being able to read, write, comprehend, math, science, be what you might call the liberalized, you know, issues, curriculum. states so communities can address that in the way they feel appropriate, but when it comes to the core fundamental skills that are the building blocks for lifelong learning, i -- i know there have been debates around that, but i got to tell you from an assessment whether or not your kids in your state, your community, or what, if they don't have the fundamental skills, they will be

among the six out of ten that are not going to get a job, entry job at caterpillar or at state farm. this is something, you know, we talk about common assessments and the common core, here's a common assessment for years called a preemployment battery which is what got me involved with this when we heard from parents that a son, daughter, niece, or nephew was not employed because they couldn't get through the basic math, reading, and writing comprehensive skills. it's tough for the audience as we go back and look at the common core and particularly at assessments. we kidded ourselves. we any we are doing well until we read the score. when we realize we do 75%, when, in fact, we may be at 50%.

that is a difficult, difficult discussion to have when we're back home saying, hey, we thought we were doing outstanding, and now we're down here. this is something where i think the business community can provide very important support to you when you're back home taking some of those difficult positions to point out if you want the kids in your states to have an opportunity to have a good growth opportunity at a caterpillar or state farm or any other business, these are the skills they're going to need. >> the one thing that appears very clear that in today's economy, if a young person drops out of school, and we still have dropout rates from the urban schools that are pretty high, we've got dropout rates in the country that are too high. of course, there's just simply no -- there really is no -- today's economy doesn't provide a future. if they dropout, they still have to re-enter at some point.

>> yeah. >> i come at the other end of this, sort of the area where they enter the work force, and i think our, you know, as we've gone from the urban civilization, we've lost so many mechanical hands on skills where a lot of people used to go into manufacturing jobs and had it because they worked on the farm or something with their hands, some mechanical aptitude, carpentry, whatever it is, and that coincided with a big push towards four year university education, and i, for one, struggle a little bit with a $50,000 education for a philosophy degree. they are wonderful people, but we can't employee philosophers in manufacturing in the united states. we need a one or two year technical add-on to a high school, and maybe that's where some of the kids pick up where we have a lot of work with community colleges around the country to ensure some of them can go to work on a diesel

engine, and there's a great career there today that we're really missing. >> on that, be it a, you know, a 2-year program, a 1-year program, or just a continuing certificate or something because, you know, as we kidded earlier ring going, you know, what was life before broadband? you think how the skill sets and the requirements, you know, man, i'm great in basic computer language or programming language. well, that's great if you work in a museum, but just how does the skill set i have today is going to be inadequate in three to five years. what are we putting in place to junior colleges or what to where it is more of a -- just a second nature. you know what? i got to go back in the evening or weekends and upgrade my skill sets. >> doug, when you went to north carolina, one of the things i remember being announced was the

cooperation you have with the community colleges and the high schools because it seemed to me, and there's innovate *eu6 things happening in part -- innovative things happening in parts of the country where they part with the high schools earlier. i'm not sure i can did out and get that philosophy degree or history degree, but i want to be prepared, starting as early as their junior year now working with the community college. >> yeah, we've had wonderful luck with that in many areas, actually. in peer -- peoria, illinois, they have a community college working with us, us with them, and the local high school, and they take a person that shows some degree, the four out of ten we could hire, he or she wants to do something with their hands, sees there's a tremendous career in working on caterpillar equipment so we guarantee that person a jb if they complete the -- if they can complete the program in one of the dealerships around the country. we just can't get them through

quickly enough in the colleges around the country, but it's an effort, and it starts with a state that recognizes they got to have kind of everybody lined # up too put out those kinds of people that we can use in manufacturing. we really want manufacturing jobs, and there's not one politician i met that says we don't want one. we turn around, and almost every policy, john, in this country hinders or gets in the way of manufacturing jobs. >> yeah, yeah. >> there's a lot of that involved, and education -- education is what made the united states great. that put the man on the moon. the single school room schoolhouse put the man on the moon, and today, we spend more money than ever, and we can't get it done. >> look at it from spending more money, and we get a poorer result. the thing that, back on the comment of looking of getting outside the u.s. and see what's going on elsewhere, is when you realize some of our toughest global competitors, growing

nations take it to china and elsewhere, they copy what we did in terms of education in recognizing that young people coming in have to have critical sets of skills. it doesn't mean they are flawless in how they are going about it, but they are, you know, you hear, what, 3 # 00,000 engineer -- 300,000 engineers graduate in china versus 50,000 here in the u.s.. there's a pushback, well, a number of are not as competent as ours. 50%, that's still 150 ,000 engineers to our 50,000. do that over a number of years, and you find they have the competitive advantage. >> yeah. >> ed got us going here a little bit. that touches on a favorite subject of mine -- immigration. we have a shortage of technical engineers in this country. we welcome engineers from around the world, young students to

come to our best universities, and we won't give them a visa to stay here after they get the best education in the world. we send them back. they had the experience at caterpillar, send them back, five years later, they are across the table negotiating with us with our fiercest competitor, and we trained them. we stumble over this, and we have way shortage of this in the country. >> and immigration, there's another one as you look at the demographic of john looking at failing high schools, and you look at young people who are not graduating from high school or graduate from high school with limited skills. the school failed them. you look at the impact on youngsters of color, look at demographics, and you look at the fact that we need all young people performing at high levels

because of the aging population of this nation. we're not getting it done. you look at this. it is a demographic, a slow happening, but they do, and we -- this is part of -- come back while no child left behind brings different con connotatioo different people, the policy of looking that we have got to bring all young people along in terms of developing fundamental skills because as a society we need them because if they fail at that, then the social cost become horrendous, and the competitive costs or experience we lose is another factor that holds us back. >> i wanted to start sort of with education and work force, and i'm glad we had the conversation come to this because that's clearly and state and local responsibility to whatever extent washington plays a role, it is, despite what they might think, secondary to what

the men and women in this room deal with on a topic that is something that state legislation also deals with, the whole question of incentives, and i kind of wanted to go there because is it possible to -- and this has been a debate. what state level incentives, tax incentives or other -- you mentioned a one stop shopping for permit and the business climate attitude, but are there not probably enough incentives to make up for -- and can't pay enough to produce, but at the margin, and let's take this to the national level because i thin's hard to send the best state here out against what other nations are doing where there's a national strategy to support a competitor to

caterpillar or a competitor to a farm pharmaceutical company. the labs are not far from here, and they are going up against national power houses and other nations. >> yeah, i learned a lot on this in the last couple of years, and on so many new green field assembly plants in the united states. i've learned a lot about incentives over the last couple years. the bottom line on this is that most states because we use consultants that work with you and economic officials, and we all do that, most states' dollar up sentives are not that dissimilar. it's interesting. somebody does here more or there, but taking the total cost and benefit over ten years, it's not the determining cost. i found that quite interesting because before i got into this, i thought, well, some states will be really aggressive with the money, and some are not, but when it comes down to it, add it

up, it's not -- it's not the determining factor. it's sort of the price of admission. if you're not there doing something with your competitive states, you're out. for the most part, most states have a level playing field. then you get into other things. the way we look at it is really around business friendliness. does the state come forward on workers' comp? an example here in illinois and indiana, two states. an engine plant in illinois and a plant in indiana, basically the same work, same sized plant, same number of employees. our workers' comp costs in illinois are five times greater than that plant in indiana. that's a fact. five times. >> wow. >> same injury, acl injury is five times more expensive in illinois. how can that be when you want to

put a thousand people plant, how does that happen? in illinois, it doesn't matter the cause of the injury. playing softball on the weekend. if you come in, we pay. causation it's called. that's one area. business friendliness around local taxes, education, we talked about that. a quick story. when i joined caterpillar in 1975, i was a junior financial analyst. we did tax analysis. tax analysis we did were 35% cost in the united states, 3% statutory generally, 38% all in. japan, at that time, 1975, 80%. germany 70s. france, 60s. u.k., 70s. you didn't hear anything about china, india, brazil, or anybody else. today, we do analysis, u.s. 38%,

headed to 44%. higher in states when that's added on, and all of our competitors are below our tax rate. some substantially. canada, it was always greater than the united states, but now they are much lower than we are. when i talk to politicians, oh, we have to have manufacturing jobs. i follow that up why are we the highest taxed country for manufactures in the world? oh, we can't touch that. you big rich guys make the money. we can't do that. well, it's a competitiveness issue. there's nobody out there today whether it's the labs, caterpillar, that doesn't have an international competitor. state farm, we all do. it's a different world today. >> a went watch which -- and we watch it while we're in north america, but from an investing standpoint, we're global. this is back on that theme of we

are more than any other time in our lives live in a truly, global economy, and i know that it is a very difficult subject for most all of you, not all of you, but when you're back home visiting with constituents around why are these things important? it's because of that global economy that, you know, we have got to continue to judge. >> what's the best place for state legislators to gain awareness? i mean, you got members here that are at risk because they traveled to chicago to come to the national meeting, you know, and there's critics back home saying we shouldn't do that. everybody in business, obviously, gets out, and you have to see what's going on. you mentioned that earlier. probably not feasible. everybody here go overseas and see what's going on, but it strikes me there's global businesses in there space, and there's got to be a way to get that knowledge up from a competitiveness stand point so

any advice? what do they need to do? >> when we can talk to all of you, and at the federal level, the senators and congressmen one-on-one and explain our story at caterpillar, how important exports are, the fact that 95% of the population is outside, and take you through that on a local basis. you don't have to come to peoria. we have plants everywhere. suppliers are in all of your districts. go out, talk to the job creators, and listen to what, you know, and learn from that. we find that we can really help educate. we may not change an opinion, but at least we've had a dialogue and fry to do that often, sometimes with luck and sometimes not so much that. >> doug, one thing, this is not just caterpillar. you have a substantial supply chain, that small-medium sized -- >> yeah, in our case today, around 150,000 full-time heads at caterpillar in the world. we think about a factor of seven of that in the supply chain.

call it a million people. we got another 250,000 with our distribution. call it a million and a quarter. they are everywhere. half are in the united states. there's three quarters of a million people more or less all in your district somewhere dependent on a caterpillar job dependent on global trade, and there's a dialogue that can be held there. >> the -- i would echo what doug is saying, and, you know, it is -- this is one of the important things of partnering a business and legislative, helping us make sure we're attunedded to the dynamics of what you have to deal with back home, but also our sharing with you the perspective facts, dynamics that, perhaps can help you in creating a better umsing and context back home, or there are times that, you know, i look

at the years i've been involved, and there's times every one of you in an elected position, there's times you walk up to that podium, and it can be pretty darn loney, taking a tough position on something, and if you have a business leaders in the community, in the state that can step up along with you and say, you know what? this is tough medicine, but it is critical for us to do, for us as a community, as a state, as a nation. i just encourage through a variety of, be it state round tables, chambers, and that to make sure that you are reaching out and we'll push from a business standpoint from the business community, reaching out to make sure that we have impactful partnerships to address these issues that we're talking about. >> doug, done in a minute, but just one quick question that i think people would benefit from

hearing me because mckensey did work for the president and jobs council and competitiveness, and what struck me in the briefing of the round table is the fact they found the relationship between business and government, as they looked at all over the world, to be the most hostile here. >> yeah. >> that's why i'm delighted there's key business leaders here and have the opportunity to have this conversation, but it does seem to me that that has to change. >> for some reason, and i don't know how it happen, and we talked about this, ed and i, and a lot of business people, the country that was built on private entrepreneurs and business now for the most part hates that society, and resents it or -- i'm not quite sure what, and we have an obligation because some of bad apples in the business contributed to a bad reputation for business, and we all got to watch that and clean up that, but having said

that, i don't know how that's turned, really, in my lifetime where you or a businessman, hardware store owner, car dealer, state farm agent, the pillar of the community, and today, that's changed so much, and we really got to watch that. we have competitors out there all the time. to the point on the contentious relationship between business and government, i don't really see it elsewhere where i go. >> yeah. >> we are welcomed in many other places, and today, we're welcomed here 234 many places, but it's a different attitude. business has an obligation. it's not everybody else's fault, but business. we have an obligation to step up, to be ethical, do the right thing, but somehow that, i think, dialogue has to change, and maybe we have to lead it and we should. >> well, i think it's a good point to end on there. many of the states here where actually the relationship is business friendly and professional. >> very good. >> i think that's what needs to happen and is the case in other countries.

i've heard this repeatedly, it's a bigger challenge in washington today, but everything's a big challenge in washington seems like, even little things are big challenges, but i think that the energy in the inventiveness and innovativeness coming from the states has the potential to be transformative, and so i -- my -- closing with just that i think we've been given good guidance today, good conversation from both ed and doug, and i very much appreciate your participation here, and i just want to say to everyone that we're anxious to work with you, but you keep up the good work because it is something that serves the good example, allows us to try to challenge then people at the national level to copy that for our nation. we're still a country that can send a, you know, a rocket all the way to mars now and land something on the planet's surface. we can do that, we can do amazing things, but we ought to be able to figure out how to get the people to work and get the country about the business of

solving our problems, and business is ready to play a cooperative role. we heard that today. thank you very much. >> thank you. >> thank you. >> thank you, all. [applause]

>> next, former members of the house and senate talk about the economy and the role of government, the private sector, and academia in creating jobs. they also look at the impact of past economic policies and what the presidential candidates propose to improve the economy. this forum was co-hosted by the national archive, and the association of former members of congress, and it's 90 minutes. >> this is about jobs and the economy as a con tippuation of our partnership with former members of congress, a non-profit organization that promotes public service and civility and political discourse. this is the third year of our collaboration based on our shared interests in promoting understanding about congress and the history of representative government in america. jobs in the economy, posters and political science remind us are

central issues in every campaign season. our history confirms this in the records of the national archives here providing evidence of the many ways presidents and congress grappled to meet the economic challenge of their times. researchers come to the national archives interested in learning about the origins and implementation of the laws to research the records of the senate committee on labor and public welfare, the senate committee on public works, the house committee on education and labor, the house committee on public works, and others. the records of the house and ways and means committee are an unrivaled source for illuminating how the nation has addressed matters of taxation and finance, and the records of the senate banking and currency committee, the forerunners financial services committee are in understanding our policies in response to crisis. we could do a tour of the

histories, and recall the popular slogans and symbols from the past that resinate with tonight's themes of jobs in the economy. presidents have promised voters a square deal, a new deal, a fair deal, a new frontier, a great society, and a new morning in america, and who can forget the promises of a full dipper pail with a chicken in every pot? [laughter] in short, talking about jobs and the economy has been the duty of every president and each congress for over a century. tonight's distinguished panel of former members of congress, historians, and economists revisit our history and comment on the past approaches to promote job creation in the healthy economy. it's now my pleasure to introduce the president of the former member of congress association, ambassador connie morela: she's a great fan of the

archive, and we're a fan of hers. she has a distinguished career with 16 years of service in the house, six year ambassadorship in the economic cooperation and development. throughout her career, she's been a champion of economic growth and at all levels from capital in developing countries to promoting biotechnology and advanced scientific research as global engines of global economic change. please welcome ambassador connie morela. [applause] >> thank you, thank you. that was an introduction i didn't expect because i'm not even on the panel. i'm connie, i approve this message, and i want to thank the archivists for inviting us to the beautiful home. we appreciate being here. the introduction was so lavish that it reminded me of may west when she said too much of a good

thing can be downright enjoyable. thank you. i enjoyed every word of it. thank you. [laughter] i also wanted to welcome those who are here, thank you, members of the community who care about hearing about jobs in the future, and thank you former members of congress who have been with us all day long from 7:30 this morning on through this evening. thank you, visiting parliamentarians with us all day in making great contributions to our various venues during the day. here at the national archives, we do have a wonderful partnership which some people call a strategic partnership, but it is, i guess, but it's a wonderful partnership we've had with three or four events here in the theater every year and invite you back to all of the ones they have. right now, i have such an ease

sigh let assignment -- easy assignment to introduce the moderator. a man named han is nichols, the white house correspondent for bloomberg television focusing on foreign affair, and the international community. he's right here in washington, d.c.. he's interviewed many political figures and government officials as well as past and present heads of state. in 2008, he coveredded the presidential campaign. ..

>> i would like to invite doctor david sicilia. now, i will turn the program over to our very distinguished moderator. [applause] >> thank you very much. i appreciate it. thank you for joining us and also to the audience watching on c-span. we have a promising and exciting

panel that actually has the added virtue of being true. we have a variety of lawmakers and doctors. so i will get out of the way. we can get into a conversation that their expertise. congressman bob clement, he is from tennessee. formally university president. it will be interesting to get your take, congressman, on what the president says is the role of colleges and community college education. doctor nela richardson, a former economist at the cftc. i have watched her grow other economists and it makes me very scared because i'm not an economist, and i need to keep it in a language that we can all understand. congressman mark kennedy from minnesota, we won't ask you about governor pawlenty's overall thoughts, but the exciting clear before government and in business school,, also,

he did some nma. we might be able to get him to talk about the opposition of häagen-dazs. and doctor david sicilia. a historian at the university of maryland. we really want his overall pick up where we are historically in terms of the jobless rate from economic growth, just where we are at. finally, senator larry pressler from south dakota. chairman of the commerce committee as well as served on finance, especially as we talk about that prospect for individual tax return and corporate tax reform. i know you probably know what a lot of loopholes are. to start off, we will talk with doctor david sicilia. thank you very much.

>> delighted to be here, thank you very much for having me end this great opportunity to learn about this organization and all the great things you have been doing. i want to just provide a little information. over the course of the 20 century, u.s. unemployment rates have ranged between 3% and the highest 10% with the exception of the great depression when it hit 25%. during the early reagan administration when the fair chairman paul volker was trying to wring inflation out of the economy, which led to the 10% unemployment, and then of course come in the last two years. unemployment throughout history was recognized as a very serious, debilitating aspect of american life. but it really wasn't until the 1930s and 40s that the federal government explicitly started to

claim serious responsibility for addressing the problem. first through deal programs and things like the employment act of 1986. it commended the federal government to ensuring maximum employment. the broad index that we use is misleading in several ways, as many of you know, because it doesn't account for things like discouraged jobseekers, underemployment, ms. employment. but there are other things that we need to use to interrogate a little bit. there is a national index, which in the current economy, there are parts of this country that have depression levels that face unemployment and other areas that are actually prosperous. you might think of it differently, called unemployment

frequency. which measures the percentage of americans who are out of unemployed for any part of the given year. if we look at that, over history, we see that it is an astonishing 21 to 22% in the postwar. we can also think about joblessness has affected different fortunes of our population. in fact, before the new deal, unemployment was kind of more egalitarian. since the new deal, teenage workers, african americans, and women, disproportionally. this could be a little too radical for a panel about what this federal government do to ease unemployment, but the fact is that the unemployment rate has changed remarkably little

over the course of the 20th century, with the exception of the great depression. the new deal programs actually did not bring about any kind of revolution in addressing the unemployment problem. even though we do have more forms of insurance and other safeguards. the transit unemployment, particular administration affiliation, democrat and republican. the record is mixed. and this is because i want to suggest that by and large, unemployment is caused by things that don't have much at all to do with the federal government. macroeconomic trends. international forces like energy prices or exchange rates or international trade. those are the things that really drive the unemployment rate. obviously, the performance of private business sector is very

important. but even there, it does not correlate neatly with the unemployment rate. because corporations can perform very well, and yet that does not automatically translate into jobs. we have this phenomenon that is becoming more and more prevalent. so-called jobless growth. when we think about the federal government's efforts to ease unemployment, it is useful to try to separate out the long-term versus the short term. obviously, there are things the federal government can do in the short-term to sort of be the economy. actually, when you look at efforts by the federal government specifically targeted toward easing unemployment, as opposed to more general measures to try to make a robust growing economy, there hasn't been that many end virtually everyone, by the time it was enacted, the

recession it was enacted to address was already over. it came too late. many of them were bipartisanship . except for the cases of the major depression or the major recession today, this actually gives us more time to act. so actually there is more opportunity there for the federal government to take steps, which brings me to the longer term. again, larger macroeconomic forces and private sector competitiveness in hiring practices, for its part, federal government has had the greatest positive impact, not when we simply spend money for any purpose, john boehner says he could build ditches and build the whole and i don't think that's the way to go. but even if the government had to borrow money to do it, they

have invested in wealth producing capacity for the country. for example, in transportation, communication and i.t. infrastructure or in education or in the energy sector. not that the government cannot or should not accept these as unemployment, but to target wisely and carefully and keep the longer term in mind. and i think voters need to do that as well. thank you. remark one thing jumped out at me. jobless growth. that talks about what doctor richardson might be talking about. >> it is likely to be with you here tonight. and i would like to just pick up on doctor sicilia's comments and the current economic situation. there are 12.7 million americans who are currently unemployed. and that does not count of

5.4 million individuals who give up looking for work. the economy was rebounding and producing jobs. for the first three months of the year, job creation averaged 226 jobs per month. that is a far contrast to the jobs reduction we are seeing in the second quarter, which is about 75,000 jobs per month. now, to give you some perspective on those numbers. just to keep the 8% unemployment rate that we have currently, 8.2%, the economy needs to post 90 to 100,000 jobs per month. at our current rate of job creation, we are not even holding steady on what is a high employment rate for the healthy economy. given those facts, what are the key out the -- key obstacles?

about 40% of those people seeking a job have been unemployed for six months. not only that, young people, ages 20 to 24 are disproportionately affected by the unemployment rate. this is not just the capacity of of individuality for these people. but long-term, research has shown that for 10 to 15 years after they become employed, they still make 20% less than people who were employed during this time period. that is a lot of ground to make up. for young people, for their part, they may delay important life decisions. like living in their parents house, order, you know, finding a partner in getting married and starting a family. these have real implications for people. a second obstacle is the mismatch that we see in today's unemployment numbers. the bureau of labor statistics recently, just today, put out a

number of 3.6 million vacancies happen in may. for the first time since the early '80s, there is a mismatch between the jobs that are being advertised, which are in the sciences and math and technology. and the jobs that graduates are preparing themselves for. there is also the job polarization. highly skilled jobs are being created, like quantitative systems, and jobs to take care of our aging population are being created. but those jobs in the middle, the jobs responsible for the upward mobility of the middle class are disappearing. a third key factor in the job market today is the shift in responses to downturns in the session. back in the 1970s, firms were more willing to sacrifice productivity and profit keep workers. now it seems like every downturn is a downside, and firms are

more willing to lay off workers permanently in order to keep profitability and productivity in place. finally, the fourth key issue going forward is that americans are just much less willing to move to where they are. in the 1960s, the average american move at least one time in your -- one in five americans. now, only one in 10 americans were many are. why is that? first of all, the housing market is broken right now. and it is very difficult to sell your house and moved where the job is. secondly, we have seen a rise in dual career families. it may be possible to find one job in the new location, but finding two may be more difficult. finally, as the population ages, there are so many more social and family commitments to make that make people unwilling to move from their present location. the final thing that is holding

back job creation, i think, in the united states, is uncertainty. there are a lot of macroeconomic issues that are still undecided right now. the fiscal clip is one. the wonderworker till spending and perhaps increase taxes going forward. there is the burden of deficit that is also impeding firms for making decisions about hiring workers when they don't know what the tax rate is going to be next year. these five things will have to be addressed for job creation to go forward. i would think about running for congress. but since i don't, i will go to my esteemed copanelists were used to addressing these things. thank you. >> i will start with a the senator. i know we couldn't possibly start with it represented a first.

you were in the senate for 18 years. one of the biggest sessions we had, the president was in iowa, back-and-forth, a thousand miles apart, but what to do about the tax cuts and want to provide consumers some sort of certainty that their taxes will not allow. you have been in town for a long time. is there the bipartisanship to actually get a deal to cut something to prevent massive tax increases? >> first of all, i consider myself a member of the house. [talking over each other] >> neither one. in any event, in tax policy and honest labor issue, our national media in our presidential candidates are not really dealing with the truth. for example, even if we have a sequester, we are still going to

have substantial tax increases to get through the spending we ever be done. and we will not admit that. the presidential candidates are talking about 5% here, 10%, some days the president of the united states, if we have a cataclysmic financial event, the president of the united states may say we have to pay more. the wealthy people have to pay much more. the gas tax, as in the simpson-bowles report has to be tripled to suffice what we are paying on infrastructure. everybody knows that revenue has to be substantially increase increased in the united states. as a republican, i think both parties should amend that to the people it is going to have to be done. and we are tossing around these job report percentages. lou dobbs, whose facts are good,

and the he had a program on jobs and he showed all the jobs were available. and i can say to you that in the state right now, that anybody could get a job in the oil industry for about a hundred and $50,000 a year. that is man or woman. we have to get past the thing that nobody wants to move anyplace. on the lou dobbs piece, there was a lady in the unemployment line. these are not minimum-wage jobs. these are 18 or $20 per hour. there were six of them within two city blocks where she was and she said that i am a language translator and i don't want to work in a drugstore. so this is very frustrating. we have to become much more honest with ourselves. our politics have to be much more honest.

his presidential campaign, neither candidate is talking about the real issues. >> you sound like you think the united states is about to become greedy? >> well, we could very easily. i would predict that unless we do something about the statistical matter, the day will come the next five years. and we will have a cataclysmic event in the president of the united states will come on and see if we didn't have to do all of these things right now, it will be a very painful thing. high inflation, for one day will decrease faster than it does now. we are headed for some very hard times and very substantial tax increases and a lot of us are going to have to take jobs that may not be where we want to live or that may not -- we may be language translators, but we have to work in a department store. >> congressman, do you agree with that five year time horizon?

>> i think the difference between europe and america when it comes to the issue is that europe acknowledges that issue and are working on it. i agree with senator larry pressler. my most recent post in huffington post is that we were talking about things that are not the real issues. there is a fiscal clip. the fiscal cliff with the decision on which tax breaks and what we will do with the increase of the debt limit, and what we are ultimately going to do to solve the deficit, it has not been decided. integrates uncertainty, businesses stay on the sidelines. this economy would not recover until business has the confidence and can only come from addressing the fiscal clip. neither campaign is really talking about it. until they start talking about

it, we would have to open up the discussion. there is a breakout opportunity for either campaign that comes out and says, my first priority is to solve this. i'm going to work with whoever is in congress and whatever one of her party. i'm not going to let anybody leave town, not going i'm not going to do a fundraiser for anybody until it happens and intuitive signed into law. if any member of any one of the candidates came forward and said that they would be the immediate front-runner in anybody who tried to follow -- i hope somebody takes that across the country right now. >> do you agree with that old prescription? both of these lawmakers seem to be blaming the candidates. how much does it fall on the house of representatives and the senate? >> first of all, i thought it would be disagreeing with larry and mark. but i agree with them. i think they put it very well.

what we need more than anything today is political courage. and that has to happen. i know the students, all this talk about today, about compromise. there is nothing wrong with compromise. that might be a dollar for additional revenue. it might be $5 of cost cutting per dollar of additional revenue. it might be $10. $10 of cost cutting for a dollar of additional revenue. but the fact is that we need both. if we are really interested, if we are really committed to end these budget deficits and balance the budget, once again, i am proud to be able to say, and i know some of the other former members that are here with me tonight, they will probably be able to say that i served over time where we didn't have a balanced budget and it was a good feeling.

>> i am too young to remember. [laughter] >> when you talk about these looming facts historically, have there ever been periods of time like this -- we all know that the bush tax cuts expire -- has there ever been a time where there has been a greater consequences for inaction? >> well, yes, we tend to think that our current times are the most challenging and they don't look that way in the longer view. you know, a lot of things happen . obviously, given the onset of the great depression in action. it seems to be the worst thing to do, and yet the president did it because we have had those cycles and recessions for virtually every 20 years for 150

years. so this is anther 1921. virtually everybody thought that. by the time president roosevelt took office, it was pretty clear that this is something different. so this happens all the time. and we somehow -- no, i will stop there. historically, we have accepted the narrative that a tax decrease increases employment. that is not historically true. as you said in your historical comment, or levels of unemployment stay pretty much the same. in fact, during some of the biggest tax increases, we have had an increase in employment.

i think our national media needs to dig into the facts mourn with all due to the facts of the present company. and i just happen to see lou dobbs, i know he is on a fox channel and that makes him was given to some. but he did a fantastic piece on what the job market really is. people are not taking the jobs that are available. >> are we stuck at 80% unemployment? >> it may be. there is recent projections that even under optimistic scenarios, if the country grew jobs by 205,000 per month, we are still looking at eight years before we return to the unemployment rate that we had before the recession. >> and that is a too 3% duty? >> the senator's point, that

people need to take the jobs are out there. that people need to be trained to work those jobs. right now we are seeing the scale mismatch. such is the jobs that were advertised, there used to be where firms were willing to train employees. now, firms want somebody who is ready on day one. and they are willing to wait six months or year. they find a person who walks into the door with a complete [inaudible] >> providing that training for middle skilled jobs. it then became a four year university. what role do traditional community colleges have been filling the gap that other companies to? >> we ought to have congressman mark winchester. what a great leader he was in north carolina in this country when it comes to unity colleges.

i was college president out of nashville tennessee. and move the college to a four-year accredited institution. i have always said that that is the toughest job i have ever had. when i came out here, people mention that you are a congressman now. but yes, the last 4.5 years they have called me mr. president. i might say about community colleges they serve such a great purpose. what a great need and what a great bargain that they are. and i think all of us know that young people need more than a high school diploma to survive and compete and get a job. that is why community colleges are so important. these tuitions are going out the roof. a lot of people are an

unbelievable debt. and i can see why so many people are questioning, should i go to college at all? i can't afford it, i don't want to put that burden on myself. i don't want to put that burden on my family. we do have a disconnect today about skilled jobs. jobs that are not being filled. >> welders, manufacturers. >> absolutely. and we have to fill that need, and that is just not happening today. a lot of people just need more advice and counseling. not only young people, but a lot of adults. that's what we had at cumberland university. i started and funded it. working adult degree program. the end it worked. >> would you like to jump in? >> two quick things. there is new workout of harvard.

claudia goldin, the investment in education -- the quality is better than anything else that you can come up with. the other thing that i want to mention in which doctor richardson brought up, and congressman kennedy, this issue of uncertainty. other work shows that if you want to predict how well the economy performs, having a high tax rates were low tax rate is not a very good predictor. with the best predictor is this how often the tax code has changed. so when the postwar. none, you had an extraordinarily good economic performance, the tax code did not change for 25 years. that is part of the problem. it underscores the issue of the gridlock and congress.

the biggest risk is if we are not able to get more bipartisanship and have this kind of brinksmanship around around our treasury notes and if we will default. [inaudible] we can't play brinksmanship with things like that. >> there seems to be a lot of blame in washington. you have significant private-sector experience. sometimes the president vetoes the business community. some might use a different verb. he talks about the need for businesses to get off that $2 trillion and start spending. how much of this is on the business community on corporations sitting on cash?

>> i think that corporations are sitting on cash because they are waiting for certainty. when you extend tax cuts by year, when we heard that it is less correlated with the level of tax cuts long-term, politicians are waiting for the next election, the business communities will wait until the next election. it is kind of hypocritical for politicians waiting for the next election, or focus on the next election comes when businesses for doing the same thing. i would also like to take a historic perspective since we are here at the national archives. and think about where we are in our economic development and what kind of economy we have and what needs to move forward. because i teach a lot of courses in world economic forum, rankings of competitiveness. three different stages of economic development has a look

at countries around the world. resource driven countries, like we used to be in the 1800s. back then, infrastructure and other things were important. much more important than they are today. then we moved to an efficiency driven economy. how efficient can he you be. and then they moved to innovation economy, where we are today. twelve pillars of competitiveness, the one that they rank than the one that makes the most difference in an innovative economy, it is a sophisticated production system. read that as a global supply chain for he that is in sourcing and outsourcing. i saw it today, the very first bill and the congress, we saw this earlier here at the archives, with the baltimore citizens petitioning to protect. he was on the political table from the beginning of congress.

they were on than when they are on now. you are bashing was critical for our economy to move forward to the central and licensed for a global supply chain. and you ask well, it's pretty easy. the second thing is innovation, which requires two things. getting a reward. why am i going to taste this risk? here and there, when in reality, it is risk-taking that drives an innovative economy. we need risk-taking and free and open trade. it is one of the proven tools that has been left in the toolbox. sites approaching the fiscal clip, we need to be part of the global economy and lead the global economy, as opposed to cowering and being fearful, the

person that will leave this economy back to the job growth. >> we talk about the toolbox, the president has free-trade deals, they are moving ahead on the partnership they have invited mexico, we are talking about the pacific -- are you accusing the president of not doing enough on free-trade? >> i would say america is not doing enough for free trade. let me applaud the president when it was given to the congress with a 90 day requirement in an up or down vote to finally get three builds on what some of our most vital allies. it took us five years to get a trade deal with south korea that we have needed all these years. it is not a great croissants. transpacific partnership is not talked about enough. if you talk about the most -- top-five most of the things that your kids and grandkids

employment, it is whether or not the trade deal in asia is going to be in asia trade agreement or a specific trade agreement. we are not talking about enough. is it an asian trade agreement, the printing itself from america, we are going to have far less prosperous economic futures. i applaud the president again for putting forward a specific partnership. i applaud them for putting candidates in mexico in the mix. that needs to be part of the narrative. move beyond this in sourcing and outsourcing discussion and talk about our futures dependent on this trade agreement. >> i'm glad i am glad you took it to a global term. imagine all of you guys have a variety of views on what countries competitors potential collaborators, what other countries are doing well, and what they are doing poorly. when you look at the global footprint of countries that are competing, who should we be

emulating? who is really out there innovating? >> well, it's very hard to say. so many countries have gone into this deficit spending business so much. this is not a thing of the 1950s to the present. much of the western world in countries such as india, china has not engaged in that sort of deficit spending. and i suppose we would have to emulate china. that is not a very popular thing to say. but in terms of managing the fiscal house in managing the business, i think that we might have learned something from the chinese. that may surprise some. also, let me say that i think we have to be very honest with ourselves. historically, and this isn't part of historical discussion, things like in the presidential campaign, we talk about the immigration issue on the edges. the fact is that everybody in this room knows that we will not

deport illegal aliens who are here. now or in the future. after the president is authorized to deport those democratic and republican presidents have not. and we are not deport the people you're here. they are going to say. so we should accept that and deal with it. we are going to make them citizens, and that is what is going to really happen. if we look at ourselves historically, we are not a country to deport people. therefore, if we let people into the country, they are going to stay with the immigrants are here. everybody knows that, but nobody seems to be willing to say it for a presidential campaign or anyplace else. a whole host of issues. taxes, trade, international matters, we are not having an honest discussion with ourselves. >> congressman? >> i agree with what larry just

said. i agree with what mark said. one of the toughest vote i ever cast when i was a member of congress was on nafta. and most democrats were opposed to that. i will never forget going to the oval office and pleading for my help. [laughter] [talking over each other] >> i wasn't not smart. [laughter] but i did help him. and i do feel very strongly about fair trade and free-trade and opening up our markets. because i know americans can compete. i know the american work can compete. if we don't have our hands tied behind their backs. >> you raise something, one of the criticisms that you hear of

obama and the relationship he he has a capitol hill if he does not spend that much work lawmakers on his own. the presidents who served under, how frequently did you socially interact with president clinton? >> yes, i served under four presidents. starting with president reagan and ending with george w. bush. eight of those years were under president bill clinton. it was a real pleasure. >> did he play golf? >> all, he did. as a matter of fact. that is a real story. [laughter] >> i will just tell you the last part. we were on one of the last hopes. the army and navy country club. right in the middle of the gore campaign. we had a lot of time to spend.

[laughter] >> i sent mr. president, i had a tree about 10 feet for me, you might want to move that golf club. and he said bob just hit the ball. i hit the ball, it hit the tree, he came back on the president, should the golf cart, just an inch and he could've gone down. [laughter] >> the next day, tennessee congressman kills president. [laughter] >> the shot heard around the world. >> thank goodness i'm not much of a welfare. >> those things happened. >> yes, he would even call me. i will never forget i'm even though i didn't vote with him this time around. on the floor of the house.

>> but you went within -- and i said this is one time i can help you. but, i didn't mind saying yes, but i did say no. i said no at times, too, because abbott district and the state in the country and you have different feelings and you take different positions and you have to stand by your decisions. >> i just want to come back to an interesting question about who should we emulate. should be emulate china? i don't and we should emulate anybody. because capitalism comes in many different varieties. i don't think there is one best way. some different ways work very well. there is the so-called scandinavian approach. in that performs very well, but it would not work in the united states because we wouldn't go for that kind of a large social

welfare system. the issue in china is always about the government. and the government actually introduces a lot of unpredictability. it has shifted from the 1980s to the 1990s. and actually, there is a lot of evidence that the economy performed worse in china in the 1990s because of that shift. now, we do have an innovative society. it is one of our competitive strengths. however, in some of you may know this book in circulation and says that we should, you know, cut taxes even more because it will incentivize people even more. the problem that i have with that is that i don't think people should go out to start companies and say well, if i'm only going to make $800 million instead of a billion dollars, then i'm not going to try to start this company. the middle class -- the moral

issues involved. the middle class has been the engine of economic growth in this country. in fact, we talk about america trying to make a mcdonald's on the world. the fact is that other countries have tried to get into our economy because we have had the most affable middle class in this country. from a purely economic point of view, to the extent that we continue to grow the middle class, we will possibly end up like reese for whatever model that you want to use remap i will give you two people to emulate. i agree with president obama when he said that health care is our deficit issue. nothing else even comes close. >> do you mean medicare and medicaid? >> health care is our deficit issue, medicare and medicaid -- nothing even comes close. if you look at australia moving

to the social security side, and i will come back to health care, the liberal party passed a mandate that you had to save extra of your earnings. when the conservative party, when in which everything is done under, they are considered part of the liberal party -- when they came into power, instead of repealing that, they said that we are going to let you invest in whatever you want. so you only access social security at 9% of your earnings in your lifetime aren't enough to give you enough payout to make it more than social security. so 4% of the people are actually drawn from the government. so rather than having people when they turn 65, they are are turning it on savings and they have a huge pool to invest in private industry. that is one model that we should look at. when you look at health care, i would look at business. you look at the grocery store that said says they determined that 70% of health care costs are influenced by behavior.

and that they're only three or four big things that account for a big part of that. diabetes, high blood pressure, etc. they came up with incentives that if you don't smoke, if you're not making progress on that, if you have high blood pressure, high cholesterol, they take the medications, you do the right things from a behavioral perspective and they give you a lower premium. when everybody else's health care costs are going up everybody else's were going down. they have incentives and there is no incentive in our government health care plans, and there are restrictions on what private health care plans can do if we put the same incentives and encourage it for private health care. that would go a long way towards bringing the health care health care costs under control under jefferson under control. >> is that possible?

>> i am stuck on this idea. because honestly, i am kind of listening to the comments that are being made. what is going on is that we are coming off of an addiction. there is a withdrawal happening. the withdrawal of easy credit. not only when it comes to that housing market in 2005 to the 2007 housing boom, but the world kind of fixes themselves to this. china investors -- not just china, but international investors all over the world. they gave the incentive to manufacture this so that more investors can invest in the american housing market. it gives people the ability to purchase homes they couldn't

afford. and now we are in the most painful correction ever. what is real is how much of our economy, not just our economy come for the world economy is driven by this bubble. just recently, the imf took down global growth. they change their projection of global growth. one of the mandates that the imf has told the u.s. is to fix the housing market. why? because we need consumers to start spending again and advise the global economy. revive the global economy. the fact is the rest of the world depends on the u.s. consumer to spend and to import commodities and products that these countries are selling. and so we can't oversell or under estimate the role of housing and installing u.s. economic recovery, and also stalling global recovery two so have we bottomed out on housing,

and if we are on the upswing, i figure savings is for our 5%. germany is 12%. if housing is sort of on a slight uptick, where you see the u.s. savings? >> you know, the house was the savings instrument. for millions of middle-class. if it is not in the house and interest rates are almost at 0%, where it is the middle class go to save? more than that, we haven't talked about small business yet. small businesses -- you know how small businesses are generally financed. through savings and home equity. as home equity disappear, so has there been a decline in businesses. that is an issue going forward as well.

>> one thing i heard the president say, particularly when we were coming out of the global recession, wendy's international forums come in talking to foreign leaders, don't count on the u.s. consumer to be the instrument of growth. there has been more difficult conversations with merkel and gordon brown -- i think what i am hearing all of you say is that the u.s. consumer is no longer going to be the engine of growth. senator? >> i think that is a very good assessment. it is also deficit spending by individuals with privatizing home loans and so forth. and we have gone through a period of time where it has been very difficult. everybody has forgotten about that. about 1950 onwards, we really

haven't had a shortage of things in westford we have a sense of entitlement. a sense of abundant goods. and it is, as you said, we are hopefully going to come off the addiction. but it will be very painful, i think. >> as long as we are on addiction, and this is something that we hear the president talk about. addiction to foreign oil, where are you, congressman on the overall hemispheric energy policy? where are you on crack and? where are you on energy where are you on energy is being a job growth factor.

>> we need to look at how we can use our research in the most productive way possible. >> that is a man who is going to run for congress. [laughter] >> i am a big fan of the fact that the incentives for the energy companies come up with something like that, it radically shifted the geopolitical landscape. we have a real possibility of being far more independent than the middle east on our own energy needs. now, we are finding that we have the cheapest natural gas in the winter. all the things that go down to miss. i think, you know, we are getting way too contentious on the energy and issue at hand. that not only has great economic benefits, but from a

geopolitical stature in the world, to have that economy is a huge change. one thing we have to watch out for is they need to preempt regulations that could stifle all this and act in a responsible way to say this is the way we are going to act to address consumers and resident legitimate concerns. >> senator? >> i would like to see, especially on energy, i believe that we should not a lot -- i think both pipelines, the main pipeline that we are talking about, deficit in order we have been trying to build a refinery for 16 years and south dakota. the combination of the rights of individuals in lawsuits and extreme environmental concerns.

we now stand -- we have great wealth. if we could harvest the whale that we have in the alaska area and north dakota area -- and we also have refineries to movement -- we consult with much of the world and pay off a lot of our debt. we are extremely wealthy in that area. i just think it is a shame that we don't break out of the box and really develop that oil and gas and sell it. >> congressman? >> i am former director of the tennessee valley authority. and we sell electricity over seven states. i felt very strongly that then and i still do now about diversification. >> we were building when i first came on board 17 nuclear plants. >> how many are you building right now? >> which was outrageous.

as a matter fact, led the attack by myself. two to one to curtail part of the nuclear program because we were overprotecting and driving up the rates and we would've lost the tva it would've kept moving down that track. it was the right thing to do. but america has an abundance of energy. it is about like a growth policy in the united states. we've never been serious about the true energy policy. because energy in the past have been so cheap to buy overseas, if we move in that direction, rather than moving towards energy independence. >> well, taking a long view, thinking in terms of the age of the automobile, the combustion engine and fossil fuels -- we

are kind of at the end of it. tracking could give off an indian summer. because of the synonymy and disaster they are in japan, if they could get off of fossil fuels and nuclear power, it is an astonishing claim, almost any country can do what they can. if they do it, that would be a game changer. every other developed country like us will have to follow them because of economics. >> when the historians -- i just want to be clear on your time horizon, would be 20 years or 30 years? >> no, i think we could extend it for 20 or so years. but the fact is that we need the age of fossil fuels as being in a twilight. president obama coming in for his second term. you know, thinking on terms of legacy. the issue hasn't come up yet

today. so i don't think that we can just say that we article you talk about fossil fuels, we need an immediate solution. but the longer-term issue, and again, it will be driven by a country like japan. because if they are able to actually pull this off, that we then we are going to have to pull it off as well. >> i would respectfully point out that they're going to keep it. in fact, italy is buying all these nuclear plants that are designed by the french. >> and this runs on nuclear energy increasingly. and though japan was traumatized by that. but i would say that has not been the case with france and italy and switzerland. and england. and the united states. i think we should have nuclear energy is a component.

we don't seem to be willing to build pipelines and refineries or do the things that we need to do. and if so, we are going to have to have a nuclear component the larger. >> i think larry said it well. what they did, that the united states did not do, is standardized nuclear plants. and where we did all this end we got into retrofitting in the nuclear regulatory commission, the nuclear plants became very expensive. i support nuclear. but i also believe very strongly that we can move forward with diversification and our energy sources. and accomplish argenta. >> commerce and, thank you. really quickly come after this, if there are any sort of

audience questions, i can keep droning on or we can have a conversation to ask. if anyone has questions asked, we invite you to go to the microphone and his raise your hands. >> is i was going to say we talked about political courage. an election where the person ran against the idea that we are going to have this in japan. i'm not really sure. because when you really care about global warming and tracking and all these issues, nuclear is the cleanest form of energy. also, you don't have to worry about where you're going to store it. we have not really had a real conversation about nuclear energy and energy independence and insolvency. >> i agree, which is what i have

talked about with fossil fuels. we just now licensed a new one. there was a historical period when it was completely dead. >> if there our audience questions, i would encourage you to go to the microphone. because this is all being recorded by the archives. by c-span. if anyone has a question, please let us know. if not, i'm going to talk about what senator kennedy was talking about. social security reform. one of the first things that president bush did after he won an election, was to try to privatize part of social security. it didn't go anywhere. what makes you confident you can have some sort of social security reform in this country, given what happened in 2005? >> well, first of all, let me say that social security is a much smaller problem.

but i think you have to approach this, not putting everything on the table all at once and trying to do something in addition to social security. but if you have local capital, figure out a way to make it work -- something that doesn't cost them too much consternation -- many people say when it comes to entitlements, we need to do something from a bipartisan perspective. there are really a couple of things that change social security make it solvent for extended period of time. social security problem, if the politics out and let them come up with a solution. it's an up or down vote in conjunction with the medicare and medicaid -- it is a fraction of the problem, that health care is. i would suggest -- i will give

you an example -- of how it has been done in a way that is more official for the economy. >> we have the first question. introduce yourself for the historical record and fire way. >> i am from [inaudible name]. i was just going to ask about you guys brought up a lot of factors. skills and uncertainty, did that worry you about the future deficits. but from my understanding, a lot of those problems existed 2007, and we didn't have massively high unemployment, whereas the biggest change was a huge shock to aggregate demand. so i would be curious about why those factors do not cause unemployment in 2007. and why you think there is still the driving force of unemployment today?

>> that is a very good question. during the 2000 decade, what we have is a distortion in the economy. we had an have an oversized housing market and an oversized financial sector. see that in all areas. the best and brightest students went to wall street more often than they went to medical school. that distortion had some structural inefficiencies in terms of what was happening with the economy. once there was the recession and once it hit, all of these bubbles, starting with the.com bubble, ending with the housing bubble bursts, you saw the gaps in the economy that dealt with the unemployment rate. for years, upwards of 80% -- that has not happened in a long time. >> senator, i think you wanted to say something? >> we have all these narratives

reported in our life that are just not necessarily true. a lot of things happen economically, and it doesn't work out that way. everybody assumes that we have a tax increase on the economy will slow down. that is not historically true, although most people assume that it is. we accept the fact that there is a% unemployment, when in fact, there may be only two or 3% real unemployment. there are jobs available. we accept the fact that we are going to do something about the illegal immigrants. we are not. it is not in our dna. it is going to have to be making them citizens eventually. we seem to deal with all of these prodigies. in this presidential campaign, i am so upset. either obama or mitt romney, and say, listen, the stuff we are

talking about is just on the margin. the real issues are best. and we are not doing that. i think you for your observation. >> i would just say that yes, there is some misconceptions about higher taxes reducing the incentive for innovation. if you think of what happened in 2007, we have put so many different issues on the table, he created so much uncertainty. whether you are talking about the health care bill were the cap-and-trade or what will happen with labor laws, financial regulations, they are all just kind of creating uncertainty. part of the problem was what bush saw -- which was a fraction of what was put on the table by president obama.

take them in bite-size chunks that we can wrestle with and get them done. as opposed to putting so much uncertainty that it discourages businesses from stepping forward and solving the issue. >> go ahead, and then we will get to the gentleman to historically, the high point of the unequal distribution of wealth in the country has been 1929. but it went down and we had this great expansion of the middle class, especially of the 40s and 50s. then it started declining in the 80s. it is an order of magnitude. corporations are not passing along any of their earnings to workers. they are passing them along to shareholders and that comes back to my point about the middle class. it is just fun sometimes, but it

is not a one-size-fits-all answer to all situations. right now, we have a problem. >> next question? >> i am from the center for american progress. there has been a lot of agreement on the panel that the debt and deficit are big issues. when economists think of this in terms of debtor deficit ratio, i think doctor richardson was hinting at this, when people are unemployed, that can reduce our potential gdp. i know that larry summers had a recent paper published by the brookings institution that had been a relatively low interest rate, there are levels of history that suggest that government spending would almost pay for itself. what does coness need to do to

get growth moving again when there is such infrastructure investments they could pay off, investments in education that would be incredibly useful for our economy. >> well, i believe that's one of the economists. >> economist surrounded by congressman. [applause] >> that is a tough question. if you like the stimulus was like cotton candy. it was very sweet, and then it disappeared. and i hate to have the solution be more stimulus. because it has to be smart spending. we have a mirage of infrastructure problems. and we have a labor force, a lot of construction workers who are spending time at home because there is no new task that could be put to work right now. and we have an education sector that could use investment.

there are definitely those starving for government funds. those funds have to be directed in a smart way that recruit their investments. and i think that is why maybe congressman for american people are gun shy about more government spending. because they didn't see the results were expected were advertised. >> more fiscal stimulus if you yourself? >> in the national archives, we had a lot of [inaudible] it was world war ii that brought us out of the depression. so far, there is not much historical support that i see for stimulus really having any kind of significant impact on the economy. but we touched on something earlier that is vital. and that is we can't be the engines of the world economy. we need to get the developing countries like china and india and brazil, to start buying more

american goods. because that is the kind of stimulus that can offset us being in a fiscal constraint it. if we just stop spending, that is going to depress the economy. we need to be doing more training. getting consumers to buy more. that means they need to have better safety nets. the key thing that we need to be focused on more today than the campaign is how we sell more to china? and we sell more to brazil and india and turkey and africa? we are losing africa to the chinese. we have this myopic internal thing, when in fact, the solution isn't necessarily washington. the solution is doing everything we can to encourage businesses to go abroad and sell more. >> made a historical point.

that historians your right may want to challenge. >> the great depression, it is true that the new deal did not end. however, it is actually a rather conservative effort that fdr tried to balance the budget in 1937 and brought about another severe debt. doctor richardson reiterated what i was trying to say in my opening comments about investing in wealth produced -- wealth producing capacity of the country. two programs i have mentioned would be the federal program and the g.i. bill. i think that those had an enormous positive effect on this country. because it educated people for higher skilled jobs and a lot of construction workers back to work and created a highly system and transportation infrastructure. >> i agree with you on the transportation committee. >> yeah, you know, i would've

done the obama administration a different way. i would have done national health care on an incremental basis. i think american people would better understand it. and they would better accept it. because there is an unbelievable amount of fusion, lies, chaos, over national health care. and you could still help people and help cover people. the pre-existing conditions, taking care of young people on their policy to age 26. selling state insurance across state lines. transportation infrastructure comes first. that is what we need to do first. it would create more jobs faster. people just like during the roosevelt administration.

the wpa. the same economic activity, and i think he would've gotten a lot more bang for your buck than the way we have done it. >> and currently we are about 60 billion analyzed for surface transportation bill? >> 110 billion. the amount is that correct? >> yes, we haven't had a transportation bill since 2009. we have gone for three -- now we have just passed one. and thank god, made part of it, keeping the interest rate low for students. or it would've skyrocketed to over 6%. >> the lawmakers up here, about 55 billion? >> yes. >> more or less? >> congressman kennedy? >> again, we are talking history. we pass the highway bill, we

didn't have a highway bill around the country, now we do. there is a huge proponent of higher education, which we have today. we are not in an efficiency driven or an innovation driven economy. transportation is important, but it is far less important today than encouraging innovation and having a sophisticated supply chain that was the center. one thing on transportation i think we are missing is we are building a lot of roads in africa and southeast asia. do you know why we are not building them? because we have socialized highway construction. and that's only funded by the federal government. so our contractors only know how to respond to a government. they are the ones who are taking advantage of those markets. again, rather than having washington spend money, we are

selling to emerging markets and we will be in far better shape because we have taken a citizenship approach towards transportation. we are far worse in shape as far as access and emerging markets go. ..