this is one of the things that is being changed to harmonize more with the ftc rules that says for robocalls that doesn't work anymore. you have to have the prior express written consent of the called party in order for that to be acceptable. and as i mentioned, the fcc has adopted a rule to be consistent with that on february 5th, 2012. that is not yet in effect because it is subject to some review at the office of management and budget that when that approval comes through and after the passages and thereafter that will be the governing rule, and the edi exhibition that i mentioned earlier will not be available. ..

in indiana we never had the established business exception, so we had a stronger version of the do not call list. a lot of states folded into the federal do not call since they had the same established business exception so it was identical but there's number of states with stronger do not call statutes, so womaned a do not call working group, and i have

margurite sweeney from my offic who is chairman of that. so we're very active with the national association of attorneys general. when it comes to robocalls, indiana has another, let's say, unique experience. we've banned the use of auto dialers since 1988, and have recognized the growing, let's say, opportunities for scams. we've even banned the political calls. so you won't get political calls. that's engaged a number of legal challenges, as you might have guessed, but it has been successful up through the courts and the supreme court of indiana. successfully arguing that the rights of privacy in the home trump the political free speech to blast out tens of thousands of calls to hoosiers. it is subject to a federal case we won at the district court and are now in the seventh circuit

court of appeals. so i do think there's opportunities there that indiana and other states have shown to have stricter do not call and no robocalling kind of operations. some of the work we're currently doing, though, is going to, again, be subject to additional challenges and we'll look forward to many more days in court. [laughter] >> thank you. so, let's shift gears slightly and talk about targeting. how do you identify entitieses that you might choose to sue or investigation? what do you know about complaints, volumes and trending, and let's stay with the state of indiana. >> well, let's see. i think i've got a slide up here somewhere. what we've really found is since the advent of the voip and the

cloud-based robocalls, our volume of complaints has doubled just in this past year, and we've now gone over 17,000 just since september 30th of this year. so, again, since we did have a much stronger statute, our state do not call, than the federal statute. we were blessed with really a decade of i would say peace and quiet. i think hoosiers still have maybe a greater sense of expectation when it comes to privacy in the home particularly. so, in the voip and cloud-based robocalls began, and rachel was working her magic in the hoosier state. the spike in these complaints really kind of geometric growth on the complaints. and some of them come as a real shock. i want to express the, let's

say, righteous indignation i receive in letter every day, but a lot of it comes from the relative peace and quiet we have received in the past, and now they're not used to having these calls, and wonder, why can't you keep people from calling me? so i think a lot of states didn't have the same experience in indiana. they always had a little bit of the robocalling so they kind of got used to it in indiana it's come as quite a shock, and i have 17,000 complaints i can share. the fully express the righteous indignation of my state. i think on -- the breakdown of the complaints really come in a number -- it's the largest bulk is clearly the robocalls but we do have complaints about

text-messaging, which is only 17%, and then 33% which is everything from collection calls to all the rest. but truly, it's the robocalls that insight the most passionate complaints, and again, sharing the fact that, after a long decade of peace and quiet, why can't you and the federal government do something? it's a pretty loud and clear message. >> i've got a picture of some of the hand written -- my favorite. i have to share the favorite from what i assume is a grandmotherly hoosier, rites -- writes because can't we stop the calls because she can't even take a nap? >> thank you. fcc.

>> so, let me -- i'm sorry. i don't have a graphic to put up on the screen in front of you, but i do have some complaints volumes to report to you. in 2010 -- let me just say, at the outset, if you go to the fccs web site and you want to file a complaint with us about robocalls, there are a variety of forms that are available. they're very self-explanatory, that you would choose from depending upon the particular type of problem you have experienced, and it's collating and looking at this different kinds of complaints that has enabled us to pull together the type of statistics i'm about to give you. the cross-complaints involving prerecorded calls to residencal lines to business lines to cell phones, and text messages to cell phones.

in calendar year 2010 we had 50,000 complaints across those four areas. you can see the growth in the figures i'm about to give you in 2011 there were 86,000 complaints across the areas, and thus far in 2012 and obviously we still have the balance of october and all of november and december to go through -- we have received -- i guess it's threw october 11th, 98,607 complaints. 22 for this year -- this year, about 22,000 of those are complaints about prerecorded calls to residence halllines, 3,000 to business lines, 36,000 to cell phones and 37,000 to cell phones. let me just add a footnote. the statistics i have just given you, those don't necessarily

indicate that the law has been violated in every particular case because, for example, i didn't talk about any restrictions for calls to business lines, and so there may be something going on there, but there may not be. so, i say that not to call the statistics into question bus i just want to highlight those numbers don't necessarily mean there has been 98,607 violation laws we enforce we're aware of thus far this year. >> thank you. will? >> i believe we just released our data book on do not call complaints for the last fiscal year that ended end of september this year, and our complaints were up just like everyone else's, nearly double for do not call complaints. robocall complaints, even higher. even larger percentage than they were the year before, not

surprisingly. if you look back over a two-year period, the line essentially looks like this. and everyone knows if you're getting more calls, obviously we're getting more complaints, people are getting angry about it, and we use those complaints to find the bad guys, and so what we do, we're targeting and trying to figure out who we're going to go after. one of the biggest things we consider is who can we good after to stop the most number of calls? what will have the biggest impact for who we go after? for instance, a case that recently connect, we filed against a company called asia pacific, and we know that company had made over 2-1/2 billion robocalls, 2-1/2 billion. lots of other companies we filed against make lots and lots of calls. so we figure out who we're going after, we take complaints, take

information from the complaints, and try to figure out who will stop the most number of calls. we talk about complaint figures. we filed 94 enforcement actions involving do not call violations. some of those include robocalls, some of those are just specifically do not call. but 94 enforcement actions against 271 companies. and 212 individuals. those defendantness the cases that have ended, some of them are still ongoing, have bade more than $69 million in penalties and relief. if you look just at robocall cases. three years ago our laws went into effect, fcc filed 15 cases specifically dealing with robocallers, against 42 companies and 24 individuals. although many of those case are still ongoing, in fact many

several were filed just recently. already collected more than $5 million in civil penalties and equitable monetary relief, and if you keep an eye on our press releases and our web site, a lot more to come. one thing we also do, because we target the people responsible for the most bad acts, for the most calls, in many cases we think those people deserve some criminal punishment. although we don't have criminal authority, unfortunately, we refer many of those cases, the worst actors to criminal authorities for criminal prosecution. for instance, a couple of weeks ago, a defendant in our transcontinental warranty enforcement action was sentenced to 16 months in prison for making illegal robocalls to pitch fraudulent auto warranty services. other defendants were sentenced to five years in prison. and just last month we announced

as part of the enforcement action,. a civil action against those defendants. we were mailing refund checks to nearly 5,000 consumers across the country who were alleged hill defrauded by these calls. some of those checks for more than a thousand dollars. earlier this year a federal judge sentenced a defendant from our economic relief technology civil enforcement action, to more than 17 years in prison, and ordered her to pay more than $1 million in restitution for making illegal robocalls to consumers, and those calls used names like card services and account services, the types of calls you heard about today. so, because we target those really bad actors, in many cases those deserve action. >> i didn't share something i should have about what our law enforcement efforts have been. i told you about the complaints we have but i didn't share with you what we have done. so just to highlight that for

you briefly again, our rules have been in effect since 1991-'92. since that time, we've issued hens -- hundreds of citations, and i'll get back to that in a minute. we have instituted around ten different penalty actions that collectively are valued at around 3-1/2 million, i believe is the figure. and just to circle back to the citation for you, our authority is different than what you have heard the ftc describe and the indiana attorney general, what they do. we do not have the power under the communications act, to go directly into federal court and to seek an injunction. the type of enforcement process that we use is a penalty type of

process. in the cases of people who aren't carriers or broadcasters, in other words, people who don't hold licenses from the fcc, were statutorily require as a first item of business to issue a citation to that entity, and the point of that requirement is to alert the entity that may not typically be aware that it's operating in a regulated space that the fcc is involved in; that we have to tell them, you're doing something you're not allowed to do. and then if they do it again, after having been warned, then we have the power to go ahead and start a penalty proceeding, and the way that works -- noto get too bogged down in the nuts and bolts of fcc enforcement -- we issue something called a notice of apparent liability. again, this comes directly from the statute tier enforcement procedures that the fcc has

where we tell the alleged wrong-doer what law they violated, when we believe they did that, and what penalty we are proposing to impose for that violation. they have an opportunity to respond to that. we then need to consider what they have to say in response, and move forward with a forfeiture order that would either go ahead and impose the forfeiture that was proposed in the notice of apparent liability, or nal, or do some rusk if there's some merit to doing that, or i suppose you could cancel it. the ten actions i referred to are at various stages in the process. some the nal has been imposed but we have not moved forward to a forfeit tour order in some cases we have gone to the forfeiture order, and in some cases there has been a consent dedecareer with the entity.

>> so no shortage of complaints, fcc is getting a couple hundred thousand each month. the next question, to summarize -- why is rachel still calling? i think that is definitely -- pulls together the next topic of conversation. why is enforcement so challenging? let's start with ftc. will? >> sure. you've heard a lot of the reasons already when we talked about how the network has changed. i guess the easiest thing to do might be to walk it through the way a typical rachel type call might happen. so, it might start and frequently does with what we call a lead generator, sometimes a qualifier. often it's a lead generator.

it can be based anywhere in the world or anywhere in the united states, and all they need is a computer and an internet connection with an auto dialer company. and the auto dialer company has the connection through voice carriers and the pstn net work, the telephone network. so the auto dialer -- the lead generator is just trying to find people for these products or services which are frequently going to be scams, these rachel calls, so they're just going to blast out calls to whomever. we have heard some of the lead generators are calling the phone book, going sequentially down through numbers, just looking for bodies, it's like e-mail spam. the costs are much lower now. the starup costs are almost zero, as brad mentioned earlier. you can get dialing in a few hours now. you don't need a pbx.

you don't need lots of copper lines. you don't even need a phone. you just need your computer and internet connection. so, they'll send out these calls, going through an autodialer, which is going to put them into the telephone network, and they'll good out all over the country, and a very small percentage of people will end up answering and listening to the message, and the ms.age will be like the one you heard earlier, rachel call, press 1 if you're interested in lower your credit card debt, press 2 to go on the do not call list. if you press one the call gets routed somewhere completely differently. an outsource boiler room in indiana or pakistan or california or florida. might go back to the lead generator. might go to the company that is actually trying to pitch the scam to you. frequently you'll speak to a qualifier then, and they'll ask a few questions, like whether you have at least $10,000 in credit card debt and at least

two credit cards. and they might just hang up on you. they're calling with a spoof caller id number and the use a name like card services or account-and-when you talk to them you don't know anything about them. you think you know their phone number. you think you know the name. you think you know where they are because they might call from an area code that is near you. in fact they could be in panama, in indiana in california, they can be anywhere. some cases if the lead generator -- they will just hang up on you then. they have your number and your name and they know you're someone that is interested in reducing your credit card debt and they're going to sell that information to one, ten, 20, 30 different scammers that are all going to try to call you and pitch you debt relief services, or sometimes you'll immediately get transferred to somewhere else, somewhere necessary the country or the world, and then they're going to go in and try to sell you how you need to pay

$500 or a thousand dollars to reduce your interest rate to zero on your credit cards, or some sort of other outlandish scheme that isn't true. because those lead generators and these people can be based anywhere and they can spoof your caller id, that makes them much more difficult to find. they can also move extremely easily. in fact in many cases those people don't have any connection to you whatsoever because you're not going to pay those people. the people you end up paying, the few that do, are the scammers that are actually pitching you this card services stuff. and those are people that may call you on a completely separate phone call and you may not realize the two are connected. the way that we work back to troy to find the bad guys and file our enforcement actions is we do a number of different things. usually we start out with the consumer complaints we get. because even though the caller

i.d. is usually spoofed and fake and the name they have given is fact, you can still tease information out of those. you can still bring all of those complaints together and look for trends. maybe they made a mistake in one call and then you can connect those different complaints together. for instance, just a few weeks ago we filed an enforcement action in california against a company called nelson gamble that was making robocalls, making the sort of debt reduction, credit card reduction type claims we're talking about today, and i know i spoke to consumers that began with consumer complaints. that's how one of the things that led to that investigation were those complaints, even though the caller i.d. is probably spoofed and the location is probably spoofed, that's how we trace them back. did someone pay money to someone? did you pay $500 for credit card debt relief? if you did then we can trace the

money back and find who you made, -- paid, and if we bring n enforcement action and shut down the company you paid, then we can look through their documents and see who is doing the lead generation for them? who is doing the robocalling for them? who is the autodialer involved in the call? so we can go after everyone in the chain at that point. but it's lengthy and takes time to build these cases, to find the information to trace the money back, and then go in and actually get a court order to shut down the company and get their records. to fine out who actually made the initial robocall that was the lead generation that sparked the whole thing. we can also trace the calls back through the network. that can be very difficult. talking about routing calls through all sorts of different carriers, all around the country. it takes time to go back to each one and say, okay, where did this call come into the network

from? and then the next one, where did this cal from? it helps locate the bad guys but it's a timely, difficult process. we also use informant and former employees, not surprisingly many of these bad guys don't treat their employees that well. they don't pay well. they don't give vacation. and they end up with miffed employees. we hear from them all the time. in the nell son gamble case we used information we obtained from former employees who were not happy, largely because they knew the bad they were doing. and those former employees are an extremely valuable source of information. when we trace back these calls and find the bad guys ultimately that are involved in these calls. it takes time to find them, and we want to target those ones that are responsible for the

most number of calls, the most bad. and when we do, we try to shut them down and get court orders to keep them from making those calls anymore. we've got a lot of enforcement actions that i talked about already, a lot that have just been filed in the last few months, and there's a lot more in the works, and keep tuned to ftc.gov for more information as they come forward. i can assure you more is coming. >> thank you, will. general, without giving away any state secrets, how do you find the bad guys? >> well, we have been very successful over the years until the past -- the wave of voip robocalls and cloud-based. so we're finding similar frustrations with spoof numbers and even where the numbers are valid, people aren't there. so, we've gone through the same process as we used to.

but i will say it's getting harder with the new technology to be as successful as we had been. some of the same things that will talked about, we're looking at. we are trying a couple of cases where the purchasers of the leads, from the lead generators, are claiming they did not cause the calls to be made, so we're going to be changing our statutes that allow us to get past that defense, and require purchasers to verify that the leads were legally generated and not done through illegal robocalls. we're also following up on another idea where similar to will's suggestion, that the boiler rooms don't treat people very well. we're going to initiate legislation that would allow anyone out there that might be

working in a boiler room, to call and if it's really just about making money, they can probably make more money working with the indiana attorney general's office in a case than the could from being paid by the robocaller. we have been successful working with some of the state partners in being a little more creative, where even -- there's one example, down in florida, where we thought we had run into a dead end but some of the people cleaning up after the boiler room saw all of the -- say, the scripts from the boiler room, and called a few people, and the next thing we knew, we had a live case. so we are still being very aggressive. i'll admit to more frustration with the ability to mask things and look forward to a little more help on the technological side to fight the new technologies that we're battling. >> i don't think i have a lot to

add to what's already been said. obviously there are challenges in identifying who these folks are. you would hope that you could use the number that is showing up on somebody's caller i.d. to help you out, but i think we heard over and over this morning, that's often not a good source of information. you can try to work backwards from taking the terminating number and trying to trace back to get the point of origin in that manner, but as you have also heard from a number of different people today, that can be challenging, and time consuming. folks we work with, carriers we need to talk to, often are very responsive and helpful in a relatively short period of time, such as a day or two, but that

still can be a long process when you're talking about needing to get in touch with people, several different carriers who have been involved in the transmission of the call along the way, and something like talk about this morning, would be great to get better intelligence about the true call, if you will, all along the way and to have a very expedited compulsory process vehicle available to get the information very quickly. i also want to mention that -- i think it's a challenge, if you will, that we have at the fcc that is not necessarily shared by the ftc and the indiana attorney general, is you heard me talk about the fining process, which is the typical process we use. obviously there is law in many

places outlawing the type of behavior we have been talking about this morning, but the worst actors out there don't pay any attention to those laws, and they may not pay anyway attention to a piece of paper from the fcc when we find them. that says you're breaking the law, we're proposing the fine, here us how much the fine is going to be. so we need to be looking at the other enforcement tools that are available to us in the statute and although they do not permit us to go directly into federal court, and seek an injunction, we do have our sort of own administrative injunctive authority that would have to be enforced in courts and there is a provision in the communications act where the department of justice can get involved at our request to seek injunctions to stop violations

of the law that we enforce...

can so i guess the point i'm trying to make we're using authority we have as aggressives as we have it terms of finding people but i think we need to be retooling, and other tools we have in the communications act to address the problem as well. >> thank you. >> along those lines under the telemarketing sales rule, we can go into federal court and get orders to shut down businesses. as i mentioned sometimes that takes a while. so we're looking at ways to get into court faster as we get into judge almost immediately and say we need to get an order to get these calls stopped and have the calls stopped going through the network. along those lines i can announce today we have set up a honey pot with a significant number of phone

numbers, all from numbers all over the country that come into our honey pot and the calls get answered and we record messages and take the information on the calls that are coming into our honey pot so that we can find out much faster who is actually making these calls and actually have the recordings in-house so we have the evidence right there that will hopefully hope us find these guys faster and file cases faster. >> thank you. going to turn to some of the questions. there is no shortage of them, there is no way in the remaining 15, 20 minutes we have i will get through them all. we'll do the best we can. i will liberally construe some and consolidate. let me start with the first one. is it better to the consumer stay on the line, collect as much information as possible rather than hang up? general? >> no. you know, for years we've told people that. i think there may still be

some benefit with a live caller. the robocalls were desperately trying to get the new word out that the longer you stay on the worse it is for you. so i do think that sips the spike in our complaints, our robocall base we need to get that word across very quickly, it is more a question of play the game of how quickly you can hang up. >> i think that's right. if they give you information, it is going to be fake information. the names they give you will be fake. you will not get anything out of it. usually that is not stuff we'll be able to use. also though if you press one or two, whether it's one to talk to someone and two to be put on do-not-call list, because the calls are frequently coming from lead generators, they're happy to have you press either number because they will not put you on the do-not-call list. they have already broken the law by calling you with a sales-based robocall. they certainly don't have

their own internal do-not-call list they will now honor. what they will do put you on more lead lists for people at home, working phone numbers, answer to the phone, listen to the message and press the number. perversely you will end up getting more calls that way. that may be different if it is your school district calling you and legitimate, your doctor or something like that. but for a sales based robocall, we tell consumers it's a mistake to press one or two. you should just hang up on them. >> i can tell you from, i will admit to personal experience that it is not particularly helpful. a number of years ago before i got involved in any of the robocalls law enforcement we're talking about today i had received a number of phone calls. duty at thisfully pressed one, please don't call me anymore. that did absolutely nothing of course. then i decided to press 2 to

talk to somebody about the product they were offering. that didn't help. that made more calls come to me. in fact when you start trying to get some information that might be useful to law enforcement the phone gets clicked down. people are not interested in talking to you about anything like that. >> next we have a series of questions on fcc, ftc coordination and also state enforcement under the tsr and tcpa. how is it working? general, you want to start? >> sure. i think, you know, the states have banded together, and again the working group we've got through the national association has been very effective. i think our relationship with the federal partners has been, let's say as good, maybe better than some federal agencies. at least up until the last year-and-a-half with the more technology. we had a series of, roundtable meetings around the state of indiana that, to try to get some of our

own issues in front of us so we could see what the states could be doing a little more, let's say, creative use of our own state statutes and new authority. plus, what things could be done at the federal level. so, will was kind enough to come out for at least one of those and i think in distinguishing, you know there is a lot of things where these phones, if you're going to blast out 10,000 calls a minute they have to be dropped onto the system somewhere. we look at it like, i'm not a big fan of regulation just for the point of regulation but if you're going to put 10,000 calls onto the system it's probably worse than radio. so can we regulate it, license it, put it into some way that the fcc might really focus on, blasting out calls that will ring your phone at home? i can always turn the tv or radio off so i don't with to watch a dress malfunction or

something but i can't turn the phone off unless i'm going to cut off my communication with my friend and family. so we are looking for more help and quite frankly, in most of the conversations around the roundtables, they were looking to the federal government for more help. even if it comes at the point of more regulation, at least protect my, hoosier friend who just want to take a nap. >> will? >> yeah. i mean the cooperation certainly is helpful, at least in my own personal experience in the investigations and litigation that we're involved in the general mentioned the nag, national association of attorney general working group that indiana takes a big part of and the ftc participants in. i know that working group has been helpful and shared information. there's lots of states that have been helpful and they're actually actively working with us on active

investigations, especially when they have boots on the ground near where our targets are can be extremely helpful. same with respect to the fcc. obviously you saw henning here this morning. the sec is here right now. i speak frequently with them. we share complaint information and make sure that we're coordinating and you know, not typically going after the same targets. so it's helpful. the more states and more help we get from other federal agencies certainly the better but it has been very helpful personally. >> as will said the ftc and the fcc respective staffs who work in this area have regular and periodic can't and share information. if people are concerned about duplication of efforts i'm not sure if that was part of the question but you've heard that we have different kind of enforcement authority.

i think that would be something taken into account and who might be the right entity to be pursuing a particular matter. you've also heard that the rules, while there is a lot of overlap there, not necessarily coextensive. and, without sharing confidential information that i of course koopt talk about specifically i can assure you that there are state folks who are in touch with us about different problems that they are experiencing and we are working with them where we can and it's appropriate to try to do what we can to deal with the problem. >> thank you. will this one is clearly for you. under the tsr does robocall include auto dialed and prerecorded calls? >> yeah. i mean under the tsr, a robocall is a call that will be playing you a prerecorded

message. so that's what it is. it's by definition it will be auto dial. there won't be someone sitting in a phone pressing in the number to play the prerecorded message to you. so absolutely, it is auto dial calls, what makes it a prerecorded call under our rule the prerecorded message. the message is are recorded and on the computer, and plays to you on the phone, not a live person there talking to you. >> thank you. we've had a lot of discussion about political calls and we did touch on it earlier so there are a number of questions here so it is worth repeating some of the territory. what are the two federal agencies doing to enforce robocall to cell phone banned by political organizations? i think you're probably the first one to address the question itself. >> so obviously if you're getting those types of calls that aren't legal, file a complaint with us. we, as i mentioned we would have complaints about that,

and we have active matters that we are looking into. something you might be aware of, to further get out the word, and to remind people who want to comply with the law and who intend to comply with the law, what exactly the standards are. we from time to time issue things that we call enforcement advisories, that are really designed to highlight the agency's work in a particular area, and even more importantly, to highlight what the rules of the road are in a particular areas and to alert people that were out here and, available to receive their complaints. we just last month in september given the political season that we're in right now, did issue an advisory, on what the rules of the road are for political calls. so, we are trying to get the word out. we do have complaints. we are looking at complaints and stay tuned. >> will?

>> telemarketing sales rule, the ftc's rule the crucial question basically boils down whether the call is part of a campaign to try to sell you something. so if it's a call from the romney campaign or the obama campaign that wouldn't fit within our definition because they're not trying to sell you something. now if you, maybe they're trying to get you to vote for them but you're not going to presumably pay them money for a service. survey calls, those type of calls also fall within that same issue. they're not trying to sell you something. now there are people that have gone out and tried to make sort of mask their sales calls as political survey or something like that. and those calls are covered and we're absolutely aware of those. >> you know, i'll just throw in kind of unsolicited. our prohibition for political calls has been very successful over the 10 years that i've been

involved in our office and even though we've had a number of legal challenges and still go through it. it's a pretty strong legal argument, particularly as it comes to blasting out tens of thousands of these calls to people who don't want them in their home. so the fact that you've got federal statutes on the cell phone, i still think that we're going to be a winner on this idea thaw can not call people at home to try to get a political free speech. although that's what the 7th circuit is still looking at. our argument is very strong that it's, we're regulating the time and place. and it's not going to be done over the phone in indiana unless the 7th circuit disagrees. >> thank you. a couple of questions on the sail issue. what's the magic number of complaints to trigger law enforcement? >> i don't think so there is

a magic number. i think it's context wall, in a lot of ways -- contextal. >> i say the same thing, most of our cases start out looking at complaints, we look at complaints every day, all the time. they're encredit ble useful. we put everything in context. we look what kind of evidence do we have? do we have informants? can we figure out where these people are? are they in the united states? what are they doing? what kind of calls are they making? what's the volume? are they stealing money from people? all those things go into figure how we who we go after with our law enforcement resources and stop the most number of calls. >> at least in indiana by the time you hit the fifth company planlt it has already been triggered up the line. one complaint leads you to really strong evidence.

it doesn't take much at the state level. >> general, staying with you there is a question about criminal prosecution at the state level? any success? >> i don't know about criminal prosecution because our office has civil. so we would have to turn that over to the local prosecutors or the u.s. attorney. we have been very good about, let's say, being draconian on fines. we've had a number of very large fines and i think a call it the legitimate telemarketing industry has a gold star next to indiana simply just it is not worth of cost of doing business. so whether you're on the do not call or not, at least up until the voip, we've been very successful just using the civil penalties but if i catch rachel i will certainly look for criminal statute. >> next question without touching too much nerves. do the federal rules supersede the state once on

auto dialing? >> no. >> all right. shall we move on? you want to address it? >> i will say i think there are some open questions that have been filed at the sec on that topic and i don't believe the agency has addressed those questions and i don't think i should say more about that. >> we would be glad to have the hearing if you want to have one so. >> one more question. can somebody explain exactly what an auto dialer is? eric? >> i will tell you what the statute says it is. it its equipment that has the capacity to store or produce telephone numbers to be called using a random or sequential number generator. that is the statutory definition and also the definition in our rules of what an auto dialer is. hopefully that's helpful. >> well, i'm, we're going to actually end just five minutes early and, there are a lot more questions here but, these are requests for legal opinions and staff

opinion letters and i know there are a bunch of lawyers sitting out there. you all know there is a better vehicle than this for that. and i encourage you to take us up on it but in any event i appreciate your attention and please let's give a round of applause for our panelists. [applause] [inaudible] have a notice somebody left a red verizon l gphone. it is at the registration desk. thank you all. >> campaign 2012 coverage continues on the c-span networks. right now vice president joe biden is rallying supporters in the battleground state of florida. he is at the sun city community center and it's live right now on c-span. also this afternoon, new jersey governor chris christie will be in virginia campaigning for mitt romney. you can see his comments live from richmond starting at 4:45 eastern on c-span. and looking quickly at the president's, presidential candidate's schedules, the

president held a campaign event in virginia a short time ago. he was at george mason university. we did air it live online. if you missed any of it you can catch it at c-span.org. the president heading to camp david for the weekend as he preps for the third and final presidential debate on monday night. mitt romney today is in florida with a rally in daytona beach this afternoon where he will be joined by his running mate paul ryan. former governor romney will stay in florida through monday. >> i have to be honest with you, i love these debates. you know, these things are great. [cheers and applause] i think it is interesting that the president still doesn't have an agenda for a second term! don't you think that it is time for him to finally put together a vision of what he would do in the next four years if he were elected? i mean he's got to come up with that over this weekend because there is only one debate left on monday. >> let's recap what we learned last night. his tax plan doesn't add up.

his jobs plan doesn't create jobs. his deficit reduction plan adds to the deficit. so iowa, everybody here has heard of the new deal? you've heard of the fair deal? you've heard of the square deal? mitt romney's trying to sell you a sketchy deal. [applause] we are not buying it!. >> watch and engage monday as president obama and mitt romney meet in their final debate moderated by cbs's bob schieffer from lynn university in boca raton, florida. our debate preview starts at 7:00 p.m. eastern followed by the debate at 9:00 and your reaction at 10:30. live on c-span, c-span radio and online at c-span.org. and ahead of the final debate on monday tomorrow night we'll take a look at past presidential debates focused on foreign policy and national security. starting at 7:00 p.m. eastern with the 2004 debate

between george w. bush and senator john kerry. at 8:35, it is the 1984 debate between ronald reagan and walter mondale. at 10:05 george herbert walker bush faces off against michael dukakis. that is from 1988. watch all three past foreign policy debates from our archives starting tomorrow night starting at 7:00 eastern on c-span. up next the race for maryland's 6th congressional district debate between roscoe bartlet and challenger, democrat john delaney and libertarian candidate nick miller. it is the second of six debates. it was held at the theater in hagerstown community college. hour long debate was hosted by the league of women voters, whhh-tv and hagerstown community college. >> welcome to the newly renovated kepler center at hagerstown community college. on behalf of the league of

women voters we're looking forward to a spirited discussion over the next hour hopefully not quite as spirited as last night's presidential debate. the league's mission is to educate the public about the candidates before the elections. so let's introduce the candidates now. congressman roscoe bartlett, john delaney and nicholas mueller welcome all [applause] over the next hour we'll be presenting questions first that were provided by league of women voters but we also have an audience here at the kepler center and and audience on facebook, twitter and e-mail that have been submitting questions as well. we will get to those questions after a short break. let's get right to it tonight. the candidates all drew numbers before the debate or before the forum began. going first tonight is john delaney and question number

one for you, what specific plans would you propose to decrease health care costs? delaney: so, in terms of decreasing health care costs it is a very significant issue this country faces. what we have to do is bend the health care cost curve so we can be more competitive with other countries and provide high level of care we spend in our country. we spend twice as much on health care as other developed nations and it is not clear we're getting twice the better outcomes. what i would do, first thing i do, allow the federal government to negotiate on behalf of itself to get better deals including deals from pharmaceutical companies. i would more rapidly introduce technology to change the very complicated and byzantine system that is our health care system which would eliminate waste, inefficiency and fraud in the system. and i would more aggressive embrace preventative medicine and introduce it more into health care so that we can control costs and manage disease stages

more efficiently early on. >> congressman bartlett. bartlett: two fairly simple things we can do to reduce the cost of health care, health care costs are increasing two and three times the rate of inflation. clearly that is not sustainable. we've got to bend that curve. many people think that the administrative costs of health kay may be 25% of the total cost of health care. a fairly simple way to get rid of most of those costs go to medical savings accounts where the first $8,000, is your money you spend it as you see fit. by the way the other $4,000 buys a catastrophic policy with $8,000 deductible and doesn't drop you after half million dollars with your present policy, you read the fine print in it. if it is your money first time ever you ask you your doctor, doc, how much does it cost? if he orders a cat scan i wonder if we could have a x-ray might do just as good.

have a chance to talk about tort reform. what we could do that. nonlt 25%. have a fairly simple solution to that one. thank you. >> nicholas mueller. mueller: i think the health care market is just market like anything else. the more choice consumers have the better and one of the biggest issues with health care right now it is done in a way that just doesn't make any sense. that is by giving your employers a tax break to offer you health insurance, rather than a higher salary. i think we need to get rid of that tax break, and let individuals pick their own health insurance that makes sense for them rather than one uniform plan. you know, people can make their own choices. when i lived in singapore for a year, i got to choose. did i want to spend $300 a month for a some hens sieve policy or want to spend 300 a year for just a catastrophic policy? as a young guy i chose the

300 dal for the year policy. so i think we can use reforms like that. to lower costs. >> moderator: question number two we bring up the "d" word, the deficit. certainly a major topic of conversation throughout the campaign. we will begin with question number two. what specific plans would you propose to reduce the deficit. you begin, congressman roscoe bartlett. bartlett: deficit and debt is number two concern in most polls. one of our polls it was the number one concern. every seven hours is another billion dollar increase in the deficit and therefore the debt. this is clearly not sustainable. we've got to do something about that. the ryan budget, a very tough budget, i was one of seven signed on to it in the last congress and this congress 13 signed on before it became the republican budget. it doesn't balance for 28 years. clearly we've got to reduce the deficit. our children will not live the kind of a life we live

in america. will not have the opportunities we had in america. clearly to do that you have to either have more income. i think we're taxed enough. government freedom day is late in july. you work clear up until late in july to support government at all three levels. i think that is probably enough. the only other thing do reduce costs. we clearly have to reduce our spending. everything needs to be on the table including defense by the way. thank you. >> moderator: mr. mueller? mueller: i'm very much along the same lines as congressman bartlett but i have not seen evidence from the republican party they are willing to do anything serious to cut the deficit. this is going to involve getting rid of entire departments that are not needed. this is going to involve getting rid of things like the department of education, which has really just driven up the cost of education while providing no real change in test scores. so i think the moves have to be drastic. defense certainly has to be cut heavily.

and then we really need to address medicare which is the primary driver of the deficit. >> moderator: mr. delaney. delaney: so we as a country have a very clear blueprint how to deal with the deficit and called the bowles-simpson deficit commission recommendation which i have been supportive of from the day i entered the race. it is a balanced and measured approach to deal with the deficit, that touches the three big levers that are required to deal with our deficit in a prudent, balanced and measured way. it touches revenue side. it deals with entitlement reform and deals with spending including defense spending. this to me is a prudent, measured approach that won't shock the economy but will get us on the path to dealing with our deficit in a prudent manner. it will also create fiscal stability and certainty for the private sector. which i believe will cause the private sector to invest more aggressively and create jobs in our economy. so we'll get a two-fer. we'll get look term measured

deficit relief and certainty in our economy so the private sector invests and we create jobs. >> moderator: moving on to question number three, what specific plans would you propose to strengthen the infrastructure across the u.s.? and we begin with mr. mueller. mueller: the federal government does not need to be involved in building roads and bridges. people can do this on their own. i guaranty you that roads existed before governments did. you know, leave the money in the private sector where it belongs. people will figure out how to build the roads. a business is not going to set up in a location where there isn't a road going to it. people are not going to have property where there are not roads going to it. so it is in everyone's interest to maintain the infrastructure that they rely on. and a big centralized bureaucracy is not the way to do it. >> moderator: mr. delaney. delaney: so i believe

building our roads and our infrastructure which also includes by the way energy infrastructure and communications infrastructure is inherently governmental function. if the government doesn't lead in this area we will not have the critical infrastructure we need to impositive people's lives and allow our country to compete. i also believe infrastructure investments has historically been a bipartisan issue. president eisenhower built more roads in this country than anyone and president lincoln built the railroads. with bipartisan support and cut through the gridlock in congress to invest in our infrastructure it will create jobs in the short term and jobs in the long term for a more competitive america. i do believe however we should do it in public/private partnership. things lube the infrastructure bank which has been proposed i think is a very constructive proposal. there is more cash in our corporations than there has ever been. there is more cash in our banks. if the government were to put a structure in place for government fund and private fund could work together we could rebuild the infrastructure, get that money to work, create jobs

in the short term and jobs in the long term. >> moderator: congressman bartlett. bartlett: when one mentions infrastructure you generally think of roads and bridges and includes one thing like energy. i think energy will be the overarching issue the next couple of decades. we face meaningful challenges with our roads and bridges. as mr. delaney mentioned they were built 50 years ago under eisenhower administration. they're all aging about the same time. unfortunately the taxes they tax per gallon, not a percent tax. so as the price of gasoline goes up we have cars use less gas and drive less often and revenues go down exactly at time we need more revenues. this is a huge challenge. we have to find some way to get around that. public/private partnerships is food i think. it works other places and ought to work here but the really big overarching issue will be energy. i hope we have a question later to talk about energy. it is really important, thank you. . .

but lead us to the next big economy in this country, which is the advanced energy economy. we need to reform our immigration policies for several reasons but including around competitiveness. the best and the brightest around the world want to come to this country and we need to create a path to help them stay here, and infrastructure investments are so critically important. so we have a competitiveness issue. moderator: congressman bartlett. >> there's a line that gets a laugh from the audience if you say, i'm from the government and i'm here to help you. for me, what people want most from the government is the government to get out of the way. there are two meaningful things the government can do. we really need to reduce taxes. we have the highest corporate tax rate in the world and you'll wonder why every 15 hours there's another bill -- billion

dollar increase in the tread deficit. maybe if we had companies coming here. another reason companies don't come here us because of our regulations. we have way more regulations than we need. we have regulation that encourage companies to incorporate overseas rather than here. where the companies go, the jobs go. we can bring them here. moderator: mr. mueller. >> in a lot of ways i agree with congressman bartlett. we do need to cut corporate taxes and reduce regulations that are piling up in a way that there are more regulations than anyone knows how to enforce. but i think primarily the way to improve the economy is to cut government spending, and the reason for that is government doesn't have any of its money of its own. there's only three ways the government can get money. it can tax you, which means it's taking the money out of the hands of up a trip knews who

create jobs. it can also borrow money and every dollar the government borrows it's one less dollar an up a up a trend knew can borrow, and the last way is printing it. everytime the government prints money it's inflating the dollar and it's losing value some punishing savers and that is the worst way that you can go about improving the question. moderator: report, we mav on to the next question. starts with you, congressman bartlett. what do you want to see the next congress do with social security? >> win social security started the average american died at 65 years of age you got your retirement at 65. obviously it was going to work. 40 people working for every one that was retired. now there are three people working for everyone that is drawing social security.

for the last two years we have had a def it? social security. obviously it's going to go bankrupt if we don't do something. there's only two things you can do. either you can increase the revenues of social security or decrease the expenditures. social security tax -- shouldn't be a tax. it's not a tax. that's the largest item on many workersry pay stubs and we're going to have trouble increase that. so then you need to cut spending. you can cut spending a couple of ways. a lot of people getting money from social security that were never envisioned when it was put in place, and change the retirement age. half would love you and half would curse you. we need to dialogue with northwestern people. it's their money and their program and they need to tell us what to do. moderator: mr. mueller. >> what i think needs to happen is of course we need to meet

obligations for people who have been paying into the system their entire lives entire livese relying on it. for someone my age, i want out. i don't want to pay into the social security system. i want to manage my own money and a lot of young americans feel the same way. we need to give future generations the ability to get out of the government system and invest for themselves. now, if you insist we should tax people and force them to save, fine, give them private accounts there are other countries that do this. it's a much better way of doing it. it's been successful in other places, and i think that is the way to save it before the ponzi scheme bursts. moderator: strong lange there. mr. delaney. >> i think there's a fairly straightforward approach to dealing with social security, and i'll flip back to bowls bowl

simpson. we can race the cap and extend the retirement age and that will strength social security for years and we don't have to make major changes. i believe government has a role. it should be a prudent role and an efficient role, and i have some perspective on the job creation question because i have been an entrepreneur. i started two businesses, both of which became new york stock exchange companies i was the youngest ceo of a new york stock exchange company in 1996. i know how to create jobs and there is a role for government. the social security program is a good example of where government has made a positive difference in people's lives, which doesn't mean it shouldn't be adjusted based on the reality of what we're facing. moderator: let's continue the discussion on jobs, and i believe it's mr. mueller that

starts this time. how does the government create jobs or how would you create more jobs if you could? >> i don't think the government creates jobs. i think it's pretty clear from my answers so far, the government destroys jobs. it taxes money out of the economy. the government's role is to get out of the way and let business people figure out what consumers want. there's no reason to believe that just because we elected someone into office they all of a sudden are so smart enough that they know how to manage a $15 trillion economy and create the right jobs. it's ridiculous. i think the government needs to get out of the way completely in this regard, and i guess the best way to describe it is i believe in a separation of state and economics. >> mr. delaney, do you want to expand? >> i have a different view. my view is informed really by over 20 years in the private sector. as a capitalist. someone who has created over

2,000 jobs and started two large-scale companies from scratch, and dealt with all the experiences associated with doing that. worrying about payroll, getting financing, all the stuff you need to do to create jobs, and i'm unique on the stage in that regard. i do believe there's an inherit role for government to level the playing field and create the incentives. government should be efficient, shouldn't be wasteful, and government absolutely does not create jobs, but government puts the infrastructure in place, levels the playing field, regulates and creates the right incentives so the private sector can be unleashed to create the jobs. the united states has been the greatest economic engine in the history of the world. and government has played a role in that. moderator: canningman bartlett. >> fundamentally there are two kinds of jobs. jobs that create wealth and jobs that consume wealth there are

only three keepses of jobs that create wealth. those in mining, manufacturing, and farming, create wallet. -- create wealth. most of the jobs in our country consume health which is why we have a trade deficit. any job that the government creates just by definition is going to be a job that consumes wealth. so we really need to be encouraging jobs to create wealth. this trade deficit is unsustainable. we cannot continue. we cannot continue every 15 hours to have another billion dollar increase in the trade deficit. we really have to focus on jobs that create wealth, and government doesn't do that. they can encourage that by getting out of the way and letting industry do it. moderator: all right. mr. mueller, do you want to expand on that? >> did we cover you? okay. >> i went first. moderator: let's move 0 -- on.

i see teachers in the crowd. let's talk about education. how can the government in collaboration with other levels of government provide an equitable, quality, public education for all children? we begin with mr. delaney. >> the public education system is central to who we are as a country and central to the future, and 98% of the students in the country are in the education system, and local governments and states are the most important flair the -- important players in the educational system. i believe there's a role for the federal government to make sure standards are being raised across the country. that's in the national interest. just because we have particularly good schools in maryland on a relative basis, that doesn't mean the quality of education, which may not be as good in other parts of the country, is not relevant to us as marylanders. we're in one united states and it's one economy. as i said earlier, there's never been a stronger correlation in our country's history when having a good education or

specific skills in getting a job. 40 years ago you gout out of high school, the job you could get with a college degree and without is not that much different. today it's dramatically different. so we should keep elevating the bar for everyone so our kids can compete in the future. moderator: congressman bartlett. bartlett: i'm the first person in my immediate family that ever graduated from college. i got a doctorate and did so much for me in my life that i want to encourage others to do that. so during my 20 years in the congress i have given more than a quarter million dollars of my money to create scholarships for students in the sixth district in the nine school wes have here. from 13 up in higher education our schools are the envy of the world. everybody wants to come here. in k through 12, we bring up the rear. a recent poll of 17 different

countries, cypress and sri -- bn big difference is competition. there's no competition in k through 12. what we need is competition in k through 12 and it will be better, be more efficient. moderator: mr. mueller. mueller: i noticed mr. delaney pointed out that 98 mrs. of students attend public schools. that's what happens when you have a coercive monopoly that taxes from people and says if you want to go somewhere else, you have to pay more. i think vouchers would be a great start. i don't think it's the full answer. the point is people need to be able to choose where they want to send their kids to go to school. they are in the best position to know what schools are doing well and what schools are failing, and what is the right place for

their student? i don't think that 535 of us up in congress have any idea what the right standard should be across the entire country, where everyone should be going to school. let people decide for themselves, bring choice into the mix, and you'll see a lot better results. as i pointed out before, federal spending on this has gone up 200% since 1970. most of that after the creating of the department of education in the '80s, and i don't think anyone here believes no one was educated prior to 1980. moderator: we're almost to the first break when the audience -- if you have questions you would like to be collected, make sure you hold them up so volunteers can collect them for the second half hour. before we go do that. let's talk about medicare. it's so easy to do in two minutes.

remind me who goes first this time. congressman bartlett. bartlett: clearly we have to do something with medicare. it's cost our increasing very up more than the rate of inflation. if we don't do something it won't be there for those who need it most. i believe for medicare, like everything else, that competition will make it better. ryan's suggestion for medicare is not -- he does not want to replace medicare with avoucher system. he simply wants to offer you avoucher if you think you can do better in the private sector. stay on medicare if you want to. but i think that if you can get that voucher and go out there, almost everybody will be getting the voucher because i think in a competitive market place you're going to get a higher quality, lower cost health care if you do it that way. clearly we have to reduce costs and this, i think, will do that.

moderator: mr. mueller. mueller: it's amazing how little the'mans and -- republicans and democrats disagree. medicare is the problem itself. it's just not reformable in a way that's 20 years down the line we're going to be asking the same question. we need to, like with social security, meet current obligations, take care of people who have been paying it for their entire lives and have been dependent on it. but for someone like me, find ways to illinois courage me to put money in a health savings account. it's a great idea. giving control to a single entity to manage for the entire country is not going to produce good results. it's not going to lower cost. we a need to have competition, individual choice. moderator: mr. delaney. delaney: i'm not in favor of

avoucher system improve think it's a risk transfer from the government to the recipients of the program. i do believe that escalating costs in medicare is a very, very significant problem and has to be dealt with. one thing i would do is put the government in a position to negotiate. right now the government is limited in its ability to negotiate with drug companies improve don't know any enterprise in the world that doesn't use its buying power to get the best deal possible. the second thing we need to do is put in place mechanisms for controlling how medicare costs escalate in the program. i am in favor of that. i'm not in favor of avoucher system but i am in favor of putting putting in budgetary strength on how it can grow so we're forced to push efficiency into the healthcare system. that's what we ultimately need to do. we spend twice as much an health care as other developed countries. that makes us uncompetitive. it's an enormous problem for the country in terms of our ability to compete and enormous problem

for the government in its ability to afford these programs in light of the demographic shifts in the country. moderator: we have come to halfway point of our candidates forum. we'll be back in a few minutes with audience questions. [applause] moderator: welcome back to the candidates forum with the sixth congressional district and the three candidates on the stage. we'll continue now with audience questions. we were overwhelmed with questions and we're glad for that. certainly helps to fill the time. it helps us to learn more about the candidates, and our first question is, no matter who is elected, they'll be serving an exceptionally diverse district. rural, urban and suburban. how will you do this? mr. mueller? mueller: i'm not one to group people by really any kind of way

it's typically divided up as people who live in rural areas or by race or by gender. i look at everyone as an individual with their own dreams and hopes and desires and so i want to give the power to you to decide best what you do withor money. to give back to you the power to decide how you live your life. i don't want government getting involved with the decisions that should be left to individuals, and i don't think it really matters what part of the country you're from. i think that's universal truth, people want to make decisions for themselves because they know what's best. moderator: mr. delaney. delaney: so i think there's two parts to the answer. the first is, i think across this district, just like any district, very local specific needs that people have, and i think my job is to be as engaged and active as possible and bring together whatever resources are

available. community resources, state resources, federal resources if necessary, to help people overcome challenges or pursue opportunities and that's about doing the work, being out there listening to people and having a partnership with the community, and i'm committed to that. the second aspect is to work on the issues we all have in common. we are all worried about the employment trends in the country, worried about education, all these things in doing my job as a member of congress, similar to the positions i discussed earlier to make davis against these big challenges. those things bind us together. they're consistent across the district. i have made a hundred stops and it's all the same message so work hard on the issue's we have in common. moderator: cockman bartlett. bartlett: i built my first house in montgomery when i was getting

my doctorate. fortunately i'm 6 years old -- 86 years old. i was a farmer, milked cows. i live on a farm today. i have a doctor's degree. i taught for 20 years. so i can identify with those who have an education. we have a lot of those in our district in montgomery county. was a home builder, was ask still am the solar home builder in frederick county. the thing that has helped me most in my career in congress is that my first degree was in theology. and there i learned to love the sinner and hate the sin. that's helped me an awful lot in reaching across the aisle and dealing with a wide spectrum of people. i think that my background fits know serve the new constituents as well as i've served the older constituents for 20 years now. moderator: we move on to immigration, which i'm sure

there's no shortage of opinions on. do you believe we need comprehensive immigration reform, and if so, what's your plan? and that begins with mr. delaney. delaney: i think we need comprehensive immigration reform. first, we have to deal with the 11 million undocumented residents in this country. we need to create a path to citizenship for these people. it needs to be fair. to the extent they have committed a crime, they shouldn't be eligible. they -- we should create a structure for them to learn english. we have an obligation to do that. the second thing we need to do is secure our borders so we don't have the same problem we have now, and invest in resources to make sure the immigration laws we have in this country are in fact enforced and monitored so that our borders are secure. the third thing is we need to think about the immigration question it's relates to our economic competitiveness.

people who come to this country and get advanced degrees and want to set up businesses and entrepreneur or engineerings, we need to get them a faster track to citizenship. we need comprehensive immigration reform across those three dimensions. moderator: congressman bartlett. bartlett: of course we need immigration reform. we have between 11 and 12 million immigrants here but we can't get enough people immigrating here because there are jobs that can't be filled. so people have to go overseas. we need to have a system that permits those people to come here and encourages them to stay here and work in our businesses. if you have a path to citizenship through illegal immigrants, that's kind of amnesty and you're kind of rewarding bad behavior, and when you reward bad behavior you get

more of it. yet they're here. if you don't educate them ex-every family, whether they're legal or illegal, white or black, whatever they are, if the head of household has less an high school education it costs us a million dollars every generation to support them. we really do have to have a discussion across america to decide what we need to do for comprehensive immigration reform. mod'd mr. mueller. mueller: only probably the most different on this issue. i view this very strongly as a moral issue, and to tell people they can't come here because it's bad behavior to want to come here and make a better life for themselves -- i don't view it that way. people want to come here and they want to work and they want to provide for their families. i'm not in favor of the government telling people who can and who cannot come into this country. i think that is not even possible for the government to

know who is going to be not working or who is going to be a terrorist or any of these things you think the government can do. they've shown they're not capable of doing that. as for securing our borders and putting the military down on the border, i thought we just talked about reducing the deficit, and cutting spending, and these things cost a ton of money and they're achieving a goal of keeping people out who just want to live better lives. moderator: we talked about education before, but the audience would like you to expand on that. specifically, what should the federal government's role be in k through 12 plus higher education? and i imagine pel grants come into play here. congressman bartlett? bartlett: in k through 12 i'm not sure they should have any role. there's no evidence they have ever done anything to improve

education. the provide 6% of the cost of education. they would like that 100% of the control. there are a lot of federal mandates that cost the local school board way more than the 6%. they would be better to tell the federal government to keep your money and keep your man mandates. i think education is under the local level. the local school boards would do a better job of that. clearly, clearly we need competition. competition makes everything better. it makes it more efficient. higher education, the envy of the world, and the major reason is competition. there's a jillion schools out there and lots of competition. we need competition in k through 12 and we'll lead the world there, too. moderator: mr. mueller. mueller: i'd like you to imagine you were running a big university and you were told no matter what you charge, we have a bunch of taxpayers who are going to back up the loans to people, and we're going to let

them go wild, charge 60,000, fine, we got it covered. we're going to give them those loans. what incentive is there for the universities to lower their costs? no. i think the evidence is clear. the universities are raising their rates much higher than the rate of inflation, and they're spending it on really awesome gyms, and really nice campuses. i just got out of school, so i'm well aware of this. the gyms -- i could have trained to be an olympic athlete in some of these facilities. i think what you need to do is have the government out of the business of giving out unlimited quantities of loans to students. let the market decide what the right price should -- for education should be. let student goods to -- go to private banks and take out loans to go to school. moderator: mr. delaney. delaney: i am on a board of

education and that's not what they do. they worry about their kids. they provide an enormous amount of financial aid to students so that the best kids can have the opportunity to achieve in this country. i do think that the federal government has a role in k through 12 education. i agree that the most important action is local. with good teachers in the classroom. and i agree we should have competition, and ah i agree we should be embracing technology. enormous possibilities in technology to change the paradigm. but there is a role for the federal government to make sure the standards are being raised across the country. that's our economic self-interest and the right thing to do for our citizens. so i support things such as pel grants, and the head start program, and i support student loans. i think federally funded student loans are important. i believe things like "no child

left behind" and other things the department of education has done is important. it shouldn't be wastel but there's a role for the government to raise the educational standards across the country. moderator: just to follow up on that. i imagine we have a bit of a college audience here. they want to know what you think a fair rate to be for federal student loans. if you want to take a few minutes or just answer that, that's fine. mr. del lanely? delaney: the rate for student loans varies with interest rates in the country. it is a loan and it should move up and down based on interest rate policy. i think the rates where they are now, 3-4% for student loans, are reasonable. based on where interest rates are. moderator: congressman bartlett? bartlett: i taught medical school for four years, and when the kids came in, they all wanted to serve, which is why they came. by the team they finish erred their fourth year they war $250,000 in debt and they wanted to make money. i can understand that.

what i would like to do is do away with student loans and to give them scholarships. i would like to give you, your neighbors, a tax credit for giving scholarships. i don't want kids to exit school with a big debt. i want them to exit school still with that desire to serve, which is why they went there there would be no shortage of money, i will guarantee you. if you had an option of either dumping your money in a big black hole in washington or giving it for a scholarship for the kid down the street whose parents can't afford to send them to school. i'd like not a tax deduction but a tax credit for scholarships and student s wouldn't need loans. moderator: mr. mule center any mueller: it's the wrong question to ask one person what the right interest rate is. interest rate takes into account a lot of things. the expected inflation, the risk of this individual, and these are decisions that are best left

to more local units. individual banks dealing with individual students. i'm not smart enough to tell you how they would do it but that's the point. nobody is smart enough to tell you how they would do it. let them figure out for themselves and get the government out of the way of trying to figure out what the correct price of money is. that's what the interest rate is. and i do agree somewhat with mr. delaney's statement about having kind of tide -- tied to -- if the interest rate was real but the federal reserve is manipulating the interest rate, i don't think that's a particularly good idea. moderator: all righty. let's go to congressman bartlett with another question. how will you bring dollars to the sixth strict while looking after the interests of all the citizens of the united states? bartlett: fortunately i'm on

armed services committee. i brought nearly $600,000 and plus up to the district. one of the officials that ft. de -- it was a billion and a half. and just military construction. this brings jobs to the district. i don't know how many jobs that's created. this process, i can mention three different companies i created with these plusups. one of them had 17 employees. now they have 700. they make the radio you see hanging on the bells of every army and marine person in the film. a little company in carroll county was doing work for the post office. i thought the military ought to be into robotics, so i started funding them. they're now the largest military robotics manufacturer in the world and they're owned by general dynamics. so a lot of ways i have brought jobs to the district and i will continue to do that. moderator: mr. mueller.

mueller: i do find it a little strange for a republican to be bragging about how much money it got for its districts. as far as i knew, republicans were all about cutting spending and not increasing it, and everytime you bring in, give-mes for the district, that's more spending. that's the kind of stuff we need to get rid of. no district needs specialized spending from the federal government. i know this is a harsh thing to say and many of you probably would not be very happy if the federal government took away the money that it pours in, but it's the fact of life. all right? the government has no need to be trying to figure out how much money each district should be getting to create jobs. entrepreneurs can figure that out for themselves. mod'd mr. delaney. del tell the sixth district has

a vibrant economy and needs a more vibrant economy in the future, particularly against the backdrop of reduced federal spending elm everyone's budget would like to see federal spenting as a percentage of our economy go down. that will disproportionately hurt maryland. murder is one of the most depend tent states on federal fundings. ranks third behind the district of columbia and alaska. yet we only rank 30th in job creation. we have been comfortable with the federal spending creating jobs. so we need to focus not on how much federal now get into the district, which as i would represent my district and if the money is appropriate i'll fight hard for it. we need to focus on how to create private sector job creation in this district, which is something i think i'm uniquely positioned to do that. if we don't, the pull back of federal spending will

disproportionatly hurt maryland and the sixth district ask that's what want to work against. moderator: all right. starting with mr. mueller, what do you want the voters to know about your position on abortion? mueller: i am pro choice. i -- this is a very complicated issue. probably the most complicated issue that there is out there, because it involves two people, and it involves two people in a way where it's not clear where one person's rights end and the other person's begins. if you start taking a look at it as a practical matter, if you want to make abortion illegal, you're going to drive it underground and make it unsafe for people. people are still going to seek this out. much like they seek out 0 prostitution, drugs, all these thing wes made illegal, we've turned them into a crime economy, and it's not what we want to do with abortion. so, yes, we should be looking for ways to encourage people to practice safer sex and all these

things. all part of education, but to make abortion illegal, even if you're pro life, is going to make it riskier and more dangerous and drive it underground and it's not something you should be looking to do. moderator: mr. delaney. delaney: i support a woman's right to make her own reproductive choices, which means i'm prochoice. i -- i'm a practicing catholic and we follow the teachings of the church as it relates to our personal view. but i don't think my personal view should be put on the broader citizens. so i support a woman's right to make her own reproductive healthcare choices, including her choice about this decision. mod mott congressman bartlett. bartlett: because my first degree was in theology and because i have a doctorate in human physiology, for 20 years my position has been i'm prolife

with the expect for the life of the mother and insist. let me use the rest of my time to respond to something mr. mueller said about spending government momentum. there's nobody in congress that votes more than i do to limit government spending. unless it was part of a bigger bill i have never voted to raise a debt limit ceiling but once they decide to spend that money, i want to get all of it for maryland if i can. is that fair? we'll have time for applause at the end. moderator: we have another question from the audience from someone who recently said -- they had a recent serious health problem due to lack of government regulation to a pharmaceutical company. how do we ensure safety within our drugs, roads, buildings, food, without government regulation? mr. delaney, we begin with you. delaney: we can ensure safety of our pharmaceuticals, of our food, without government regulation. this is clearly an area i think it inherently governmental, is

in the public good, in the public interests, for the common good of the citizenship for us to have regulations around pharmaceutical companies, drug discovery process, the drug approval process to make sure the drugs introduced to the market are safe. and the same applies with food. however, we need to be practical and reasonable about these things. we don't want regulatory overreach. we want the right amount of regulation. that's hard to do. you'll always find examples where it wasn't quite done as well as it should have been and that's terribly unfortunate for the people who are injured like that, and there's recourse available for them to pursue and make sure things were done appropriately and that needs to be investigated relentlessly. this is an example of an inherently governmental role. moderator: congressman bartlett. bartlett: when a bad drug gets out on the market there's nobody more hurt by that than the pharmaceutical industry. they would do a better job of

self-regulation than we're doing it if we let them do it. i think a primary role of the federal government ought to be education. i really believe in truth in advertising. i want to see on the label of food, whether it's genetically modified or not. they won't tell you that. i'm not sure it makes any difference but i have a lot of constituents who think it makes a difference. so i'd like to see that. i'd like to see the government back off and let industried do more self-regulation, they know what's go for them better than the government. and let's conduct that little experiment to see how it works. moderator: mr. mueller. mueller: i think the fda has not a perfect track record on this. this kind of happens from time to time, whether it's contamination in our food supply, or bad drug gets through the market. so i think there may be possible ways for the free market to deal with this. you can have groups -- we have consumer reports, people can go

to consumer reports and see what are the best electronics. ideas like that, that could be brought into the market to help better regulate pharmaceutical companies. but to make a point about the fda, milton freeman once pointed this out, someone came around and said, look, we have this drug, it took us ten years to get through the fda but it's going save 100,000 lives a year. what about the million people that died because the fda takes so long to get drugs through to market. what about those people that died because of the fda? moderator: we're getting close to the end. i want to make sure we have amp time for your closing statements. so let's begin them now. and let's given congressman bartlett. bartlett: i came to this job 20 years ago. i didn't have quite as many kid -- i had ten kids then, and

i now have 18 grandkids. i am a child of the depression. i was bornin' 1926. i remember when franklin del know roosevelt defeated herbert hoover. i lived in a desperately poor depression family, and i wasn't sure my kids and grandkids would have the same opportunity i had to work and achieve in this great country. so i ran for office so i could help to change this country so the opportunities i had would be there for them. it's in my great honor now for the last 20 years to serve the constituents of the sixth district. i hope that service has justified another two years. thank you. [applause] moderator: mr. mueller. mueller: all of my political positions are rooted in the very simple philosophy and that is something that we have all known

since we were in kindergarten, s not okay to commit an act of aggression against another person. when you were a kid, some kid had all the baseball cards and all the toys. your friend timmy didn't have all that. was it okay for you to steal from billy to give to timmy? what if you got all your friends together and said, let's vote and if we come to a majority decision, we can go steal from billy to give to timmy. i still think you're parents would have disapproved of that. it's very simple idea. except when you get to be adults, now you can use guns and jails to enforce your ideas on other people. and that's a whole lot worse. so i think we just need to go back to the concept that we let people alone so long as they're not hurting anybody else. thank you. mod'd mr. delaney. delaney: thank you. and thank you for this evening.

so, i was at an event recently and a young girl, high school girl, spoke about how she and her mom immigrated to this country, and they came hear because her mother wanted to be an american because she viewed america as the land of opportunity, and every single day they would talk about how this is the land of opportunity in my judgment, unless we do things to reverse the course of the country around our competitiveness and ability to create high-quality jobs with a decent standard of living, i think everything is at stake. the question is, will this still be a country of opportunity where people like myself are or my parents who didn't go to college, my father was a union construction worker. i received a helping hand to go to college and give me an education. is that the kind of country we're going to be or a country of birthright. you have to be born into the right family with the advantage to achieve. that's not what my four young

daughter want. we want a country of opportunity, and to be a country of opportunity we have to come together and work on solving issues this country is dealing with and work for the common good and you need an independent mind set which i bring. my opponent is a member of the tea party, an organization that came to washington to do nothing, to defeat everything that tries to get done. i want to go to washington and get things done. thank you. [applause] [cheers and applause] moderator: congressman bartlet, we have time left. congressman bartlett, we have time left if you would like to respond. bartlett: i joined the tea party because i thought that what they wanted to do was what america needed and that is to focus on the constitution. we have wandered a great deal from the constitution, and that's our primary focus. who is the tea party?

a thousand, a million different people would describe what the tea party was. the one fundamental thing they want to do is return to constitutional government. we have wandered from constitutional government. we need to return to that, which is why i joined the tea party. thank you. [applause] moderator: mr. mueller. you want to get in? muehller i don't have other dog in this fight. i'm not a member of the tea party. i am sure i can find agreement with a lot of things they believe in. i stand for individualism. that's my platform. moderator: let me ask you this. a young man like you had the choice of being a republican or democrat, would probably be tempting, yet you're running as a libertarian. why? mueller: the republicans and democrats have been in power for decades, and goes back and forth, and seems to be getting

worse. libertarianism is rooted in a very basic philosophy that i think we all know from a very early age, and i think once you start exploring that philosophy, it leads you down a road to a set of principles and that's how i found myself in he libertarian party. i just don't fit in with the standard molds of right or left. moderator: all right. i believe we have a minute left and in that time, i would like to give all of the candidates a hearty round of applause. [applause] moderator: i would also like to thank all of the volunteers with the league of women voters and anyone who helped out to do this forum. it certainly was a spirited discussion. i learned a lot about the candidates and i hope you did as

well. so, from the kepler center at hagerstown community college, it's been my pleasure to moderate this forum. thank you so much for joining us. >> we do have more campaign 2012 coverage, and debate coverage on the way today. tonight it's the texas senate debate with republican ted cruz and democrat paul sadler. mr. crews is a former solicitor general for the state and paul sadler is a former member of the texas house. they're vying for the seat of kay bailey hutchison. that starts at 8:00 from the studios okert in houston. and this afternoon chris

christie. on monday, the topic is foreign policy, and our live coverage will start at eastern -- 7:00 eastern, with the debate beginning at 9:00. >> it starts as an economic argument. men are just having a harder time adapting to the economy and women are adapting more easily. i can't tell you why. but just to stay to this period in history. it's education and credentials. the economy is fast changing. women seem to be getting those skills and credentials at a much faster rate than men are. and they seem to be more nimble. and that kind of filters down into our society. so in the book i talk about how that changes marriage and our notions of fatherhood and what men can and can't do in families and how young people have sex

and make decisions. so you start to see it having an influence in our culture. >> author hannah rossin discusses the end of men sunday night on book tv. >> i think mr. nixon is an effective leader of this party. i hope he would grant me the same. the question before us is, which point of view and which party do we want to lead the united states? moderator: mr. mixon, would you like to comment. >> i have no comment. >> in the constitution we would talk, elect officials based upon reasoned arguments. you cannot argue against an image, and its just that, and you have to counter it with an image, but in a world with a whole lot of problems in the world and a whole lot of problems in the country, reasoned argument has to

dominate, but doesn't when it's on television. >> the history of presidential debates since 1960. sunday night at 8:30 eastern and pacific. on c-span 3's american history tv. >> on tuesday, north carolina's lieutenant governor walter dalton debated former charlotte mayor in the state's race for governor. this debate took place at unc studios. >> good evening and thank you for joining us for the second north carolina association of broadcasters educational foundation gubernatorial candidates debate. we have with us pat mcrory, the republican candidate for governor. he served three terms on the charlotte city council and as mayor of charlotte for seven terms, starting in 1995.

walter dalton is a former six term north carolina state senator and is currently north carolina's lieutenant governor. we begin with opening statements starting with mr. mcrory. >> thank you very much for having us here at the unc studios. since we are here, i think it's -- we should definitely mention the passing of an icon, dr. william friday. bill was man of tremendous character, tremendous vision, and what was most unique about bill friday was his ability to anticipate problems before they occurred: these d this is a person that we cannot replace in north carolina, but what he did for north carolina will be with us for many generations. i think what we need to do as future leaders of north carolina is use those traits that dr. friday left to us return good government to north carolina and that's my goal. god bless you dr. friday and your family.

>> dr. family was a great north carolinaan. i want to thank each and every one of you for watching tonight because in two days you'll begin to determine north carolina's future at early voting starts. do you want big corps corporatio pay no tax and transfer that burden to the working class and senior citizens? do you support cuts to education? do you support transferring money from become -- public schools to private schools? do you want a rubber stamp for partisan political agendas? if so, i'm not that candidate. i want to move forward, build jobs now and the future, i want to work with you, want to lead you, and working together we will build that better future. tough for watching. >> also tonight we have three veteran news anchors asking the candidates questions. paul camus is with wbtv in charlotte. john evans works with wect in

wilmington, and larry is with wbtv. the topics and questions were selected after surveying members of the radio and television digital news association of the carolinas. each candidate will have equal time to answer the questions. then the candidate commenting first may provide an additional response up to 40 seconds in length. if any candidate exceeds the allotted time i will interrupt and advance our discussion. also, the journalists are allowed to ask followup questions to the candidates. our first question is from paul cameron. >> ant, thank you very much. the poll this morning has mr. mcrory up by 14 points. you bypassed the naacp convention. i'm wondering if perhaps that polling had anything to play with that. when you weren't there mr. dalton, you interviewed an empty chair. would have liked to see that. you made a few charges you said

mr. mcrory would be for repeal of the -- support voter sun suppression. >> they're also saying this may smack a little of inflaming racial passions to get votes. do you agree with that? >> not at all. if you look at what has happened, what they said is that he has been insensitive to the african-american experience. i'm going to represent all the people of north carolina. i find it telling he was in the triangle on that day. he went to the fair but did not come to this debate of a significant number of people. i went to the debate. i went to the fair. i want to represent 100% of the people. what they said is that they found his policies also offensive. what you will see is that his tax plan has an $11 billion hole

in it. that means that 80% of north carolinaans are going to pay more taxes. the middle class, senior citizens, working families. they found that offensive. they found that him having scott walker in, who has divided wisconsin, saying that he was going to divide and conquer teachers and state employees. they found that offensive. those are not racially motivated ads. those are leaders in the african-american community that said we have concerns about this. we do not think he understands that experience. moderator: mr. mcrory. >> the ad said much more than what mr. dalton actually is saying. but i'm not going to dwell on that ad. i was very pleased to spend that day with our commissioner of agriculture because agriculture is such an important part of our economy, and i think in a very important part to help north carolina get out of this very deep recession, and that day i spent some time in a nursing

home with senior citizens which they expressed deep concern about some of the medical issues that are coming from the federal government and in north carolina. i do want to say, the empty chair i thought did very well in the debate, especially with regards to the racial justice act which about 98% of our district attorneys, both'mans and democrats, said it was one of the worst pieces of legislation we have seen in the criminal justice system? north carolina. this is preventing people who actually killing police officerses from getting the penalties that jurors said they deserve. in addition to that, he continued to debate about the defending not having voter i.d., and we definitely need to have voter i.d. >> but are you for suppressing votes? >> absolutely not. i'm for protecting the ballot becomes, and as we stated in the last debate, if an i.d. was good fluff for the democratic convention, it's good enough for the ballot box, and i don't

think the democratic convention suppressed anyone from getting into that facility. moderator: mr. dalton, your response. >> i think you're talking about somebody trying to inflame passion and talking about police officers. we were talking about people should not be put to death nearly because of the color of their skin. i'm for the death penalty but it's wrong. i tell you what was really offensive about the racial justice act. the bill was filed intentionally so on the anniversary of martin luther king's assassination. moderator: your time is up. the next question is from john evans. >> gentlemen, you will be putting forthbudgets. i want to ask what part of state government do you believe needs tightening up as far as the budget is concerned and which departments may need expanded budgets to help the citizens of north carolina? mr. mccreery, we start with you. >> the first thing i'm noticing in getting ready for possible transition, if we win the

election -- we're not taking that for granted because i don't trust the polls. we're going to work until the polls close on november 6th. i'm looking at a governor -- there are 300 committees in state government. before we make appointments to over 300 committees in state government, we ought to first ask, why do we have 300 committees in state government and how much does it cost to support those 300 committees and how long have those committees been around and what they've hey accomplished? can they be consolidated or be eliminated? so some of the first acts will be instead of appointing all the positions the governor is allowed to appoint, we might not appoint a lot of them. we might just keep them vacant to save the taxpayers money in this very difficult time. moderator: mr. dalton. >> my goodness. talking about the transition team. he is already measuring the curtains in the mansion. he could have taken that time and perhaps gone to the debate and filled that empty chair. is a said before, with the motor pool, i think we can effectuate

some savings there. there are tremendous savings to be had with information technology. with the use of the cloud and working on some privatization of that, and in combination with what we do in state government, i think we can save hundreds of millions of dollars and find more oeffeciencies in the department of revenue and tax collections. there's a billion dollars on the books of bad debt. we collect 500 million a year but we put 500 million on the book. with technology i supported when i was in the north carolina senate that has now come to fruition, we are now seeing we can be more effective in both the collection and keeping that money off the books. so, that's a couple of three ways we can save money in state government...

you look at this values plan you will see that detail how we pay for every bit of it. one thing i would do, there was $140 million spent in this last session by my opponent and his friends in the legislature to help people making over $100,000 a year in fact hundreds of thousands -- >> moderator: your time is up.

thank you now we are going to focus on a question about taxes. >> mr. dalton you said repeatedly to the campaign that mr. mcrory has plans to raise the state sales tax above the present 7.4%. he says that is just not so. who is telling the truth, and we will begin with you. dalton: see the analysis the has an $11 billion hole in his plan. he said that he moves to eliminate the corporate income tax and remove personal income tax. if he does everything that he's talked about, that takes $11 million. he says he would make it up in consumption taxes those that generally serve to be sales tax and taxes and services the budget and tax centers say if you do that on the sales tax it is 192% increase that would give the highest sales tax in the nation. today we of the second lowest in the southeast. if you look at their analysis,

80% of the families in north carolina would have their taxes raised substantially so. he is taking that burden off of the corporations and putting it on the working families, middle class families, senior citizens on fixed income. that is not right, i do not support that and i do not think that is a good plan for north carolina. >> moderator: mr. mcrory? mcrory: he keeps repeating what he said in some strong negative ads against me and the media outlets said that they are inaccurate just like the comments that he just made. the only person that has asked for a sales tax increase is perdue and walter and it's in the last budget and even during the primary in which mr. dalton: dalton was running he was like telling people about not approving a 15 percent sales tax which has a bigger impact on the middle class than anything else. a 15% sales tax increase both he and governor perdue for

promoting and demagoguing anyone that was against. >> moderator: mr. dalton, your response? dalton: the 15% has been proven false and even the 15% is less than 1 penny. but then let him tell tonight in front of the cameras when he is going to find that $11 billion. to get the end of corporate tax down to zero and reduce that personal income tax. budgeting tax and the analysis 80% of the people of north carolina would see the tax increase substantially so. >> are you making a leap in saying that he's going to raise the sales tax? and are you saying for the fact that you will not? >> moderator: let's start with mr. dalton. dalton: let him deal. if he is medias. if he is not, where is he going to get the money to do it? mccrory: i listed on the record i'm not raising 4.7% sales tax increase. i've said it time and time again. and i'm not sure where he's getting his information, much of that information has been

debunked. what we need to start doing is growing the economy and chilling defeat could jobs. that is good bring more revenue into the state. the fifth highest in the nation. >> let's go down >> a share a border with the state of south carolina. if you live in charlotte you drive just a couple miles of the border and get gas for 40 cents cheaper per gallon. the time of high gas prices that means a lot to a lot of people. what should the next governor of the state do about the high disparity in gas tax? should we lower the tax, lives in the revenue, getting more people to buy gas, or should we like it is? the border of south carolina. you have to drive about a yard or to to get some of the gas stations there at the boulevard to get cheaper gas and cheaper liquor and cheaper sells tax and

the cheaper income tax and cheaper property-tax the list goes on and on, cheaper corporate tax. our taxes are higher than south carolina and it's making us less competitive. cities on the border from danville to wilmington -- not danville, but cities right near the danville virginia border like roxburgh are impacted like this, and what we need to do the first tax i think we need to reduce is the income tax which is having i think the biggest impact on the job recruitment and job retention. after that, the corporate tax and then if there is still revenue that we can balance, it would be the gas tax. but what we need to do is get into the energy exploration and participate in the nation's independence of energy and north carolina should be not sitting on the sidelines to do just that. the western part of the state really feels the impact of the high gas prices because of the reliance on the new orleans pipeline. >> moderator: mr. dalton? dalton: he took to the corporate

income tax and personal income tax but where is he going to find the $11 billion it takes to do that? he said would be revenue neutral. where is he going to find those? he's never identified that. as far as the gas tax and would cap. in the north carolina and south carolina we of effective management. we don't have 100 d.o.t. is a north carolina. we thought 82,000 miles of state funding what state, the fund 18,000 miles. they have a lot of the local taxes and a lot of the inefficiencies with smaller d.o.t.. but as to the energy proposal that he has, by his own statement that is six to ten years up by the state in the last debate it is 387 billion jobs. there is a question whether the economic studies would support that energy exploration. what do you do now to create the

jobs? go to the web site and you will find the solution. i have a plan to put people back to work now and to create jobs for the future. >> moderator: mr. mccrory? mccrory: we both agree that the gas tax should be capped and it's good we have agreement. there is nothing wrong with the agreement. and i do agree with him on that one issue. >> moderator: our next question is from john. >> mr. mccrory you touched on this and i would like to dig deeper in this if i can. the official web site in the state of north carolina does more than 200 boards come a committees, agencies and departments. so many people have never heard of. other people have no idea what the people in that department do. so, i asked -- and mr. dalton, i would like to start with you. do any of those entities need to be eliminated and you think the government by that commission is too big, too small or just

right? dalton: i think a lot of it could be eliminated and i would do that initially i would have liked the cabinet secretaries model in that arena but say that we need to look at every efficiency that we can have. you go out and you identify those areas that we can find efficiencies and then come back and let's put it in writing and let the contract and let's have a schedule of doing that so we can be accountable to the people of north carolina. but i fully agree, there are too many boards and commissions coming and we can be far more efficient with that and save money. but to be truthful, you will not pick up all that much money. we need to do that. but we need to use the tax dollars wisely each and every day. >> moderator: mr. mccrory? mccrory: well, i'm glad he agrees with that. the question is why hasn't he done anything about it? he was the head of the senate budget committee. he's been lieutenant governor for almost four years. he had an opportunity to show leadership to do something about something that's very, very obvious that you don't need all those committees. and real leadership would have

already dealt with that. that's why it's going to need to take an outsider to go in and break up this system, system that we can no longer afford. >> moderator: mr. dalton, your response? dalton: leadership you have to effect your plan. he's mentioned the tax reductions and he's never come forward with how he's going to do it. that is substantial. that's $11 billion. the boards and commissions are not that much money, but they do need to be looked through. we need to eliminate a lot of them. i would do that. i've never had the steering wheel. if you give me the steering wheel, we will make things happen. >> moderator: the next question? >> gentlemen, historically, much like sausage makers, politicians have been preferred not to show how their work gets done sometimes. some past governors have tried to keep journalists or citizens from pulling the curtain back. in what ways and your administration be transparent, and where, if anywhere, should the line be drawn? mr. mccrory?

mccrory: i think the best way to judge transparencies how you lead in the past come as open as i was mayor for 14 years in custody and i had a very transparent government. a government whose ethics was never challenged. a government was known as the queen government. a government was known where every piece of my e-mail was shown to the media and available to the media. i think you saw some of my e-mails, and there was never any controversy to be hiding things from the public. the only dilemma that i had, one time i was concerned about some private letters written by members of the public about personal concerns for their family being let known to the media come and the people were not giving warning that it could be read by the media. there was the only concern that i expressed, not come in and leading to the public letters written to public officials could remain public and i felt the public should have that right to know.

>> moderator: mr. dalton? dalton: i support open government. i have one bills from the press association and i would do that as governor. if you look at my plan it addresses that. but he talks about being open. why is he letting people see his tax return? governor mitt romney has done it, paul ryan has done it, biden has done it, obama has done it, i've done it. i don't know what makes him so special. we don't know what he's doing for that long. when you talk about transparency, he's not a lawyer. it's a big law -- big law firm. they say in the paper he is a rainmaker. well, how is he making the rain? or the lining the big corporate clients that come in and meet the mayor? we have to make in the next governor of north carolina. tell him when you want to do. that's not right. if that is going on that is catered strictly to the special-interest. i'm going to represent people of north carolina. the working families, the senior

citizens, the middle class. that's what i will be about. he needs to be forthcoming with those tax returns and be more forthcoming in what he is to me for that law firm. >> moderator: our next question is from paul cameron. >> you know, i don't have a whole history here but it seems to me that it's been a long time since we've had both candidates from the no western part of north carolina. for years and years in the west we have heard how labor in equal when they built up the money for the roads in such a point still incomplete about charlotte. as the next governor, do you consider this an acronym? is their something that you can do to equate the playing field for the western part of the state or should you? mr. dalton, you start, please. dalton: as i said before, the grass is always greener. the east gets more, the west pretending the east gets more. they think charlotte gets more. charlotte thinks that raleigh gets more, and urban areas still think the rural areas get more and the rural areas think about

your been. we are all in this together. but i did say on my logistics task force report that on the d.o.t., we need to let more regionally, there are 14 divisions. if you ask why do we have 14 regions, that's where they were in 1928 and 1930. that is a bad model to have. so i said let's have two from each region. let's look regionally and let's be fair to everybody. every person in north carolina should have that opportunity to be the best that they can be to the educational opportunities. every community needs that opportunity. to fri the kutz ride and to do their very best. so it is always a balance. you know, you have to have objective standards. you have to take the politics out of it coming in have experts in there. there have been sometimes to really prioritize and who we need to focus the money to get the best. >> moderator: mr. mccrory? mccrory: he had that from the highway provisions.

he's been a part of the system. a part of the top leadership in the state government has had no success in implementing his recommendations. and we and local level have been complaining about that for years. the issue is this, for example, the cities and towns, rural and urban areas have had major highways going to get from iowa- 95 to i-26. any state that is a major interstate going through is punished because it takes away the funds to fix that road as opposed to all other roads. this is the so-called equity formula that's been around since 1988. it is a for that is broken and i-95, the towns on i-95 and the town of durham and rally and burlington are being punished by the i call it an equity formula that many mayors that spent time in orange town have been complaining about for years.

>> moderator: mr. dalton? dalton: i've never had the wheel he talks about on that plan. the final report just came out this summer. i know north carolina and i know what the logistics need. the piedmont trial is one of the regions in the world. north carolina has a great feature if we prioritize correctly. >> moderator: now we are going to focus on education. from john evans. >> gentlemen, many young ladies and gentlemen may be voting for governor for the very first time who are in higher education in north carolina i would like to hear from you and i would think they would as well. name one education initiative that you would work on as governor, and what it would take to make progress on that specific initiative in the first four years. we will start with mr. mccrory. mccrory: something i've been promoting and i felt as we ever since i went to roosevelt high school when carolina and graduated 1974, and that is i think we should have to pathways

to success, that out of our high schools. especially when you have a dropout rate of one out of every five students and to have employers that are just begging for vocational and technical workers and we have the fifth highest unemployment rate in the nation. what i think we ought to do is we ought to have two types of degrees coming out of high school, very similar to universities having a bs and a b.a. degree, one focused on vocational courses and then another concentrating on college curriculum courses. to me this would help reduce the dropout rate and help our market and help kids become productive because my goal was to get our kids job and get employers to hire a them. we've been doing education the same way for so many years and i think this is one of many solutions we need to implement. >> moderator: mr. dalton? dalton: to do what he's talking about taking it back to a 15-year-old defining their career before themselves. fun of purdue has the same ideas and it's far too early.

career tech is very important but the early college high schools, that's something that i had something to do it. i didn't bill in 2003 than we raised the foundation for this. many people work on it. they are 70 something in north carolina today. we have one-third of the early call which i schools. seven of the top ten high schools last year for graduation rate work early colleges. "the new york times" said as a model for the nation and you need a leader that brings people together. i ask for something to be created called the jobs commission joining our businesses and schools and of the house and senate members, republicans and democrats, business and education leaders. we are allowing those efforts with the regional need of north carolina that we hear from employers students don't have the skills we need for the 21st century economy. the schools are aligning with those schools now and engaging business say and what do you need and we will have it. i think that needs to be amplified in north carolina.

"the new york times" says so and we will do it benign governor. >> your response? mccrory: i was in the county recently with 17% unemployment and the employers were telling me that openings yet they can't find the skilled workers. that's because we've been doing education the same way the past 50 years. there are some microareas of success but we need to make a statewide. if we do not connect our education people with our commerce, we are going to have high unemployment rate. we have to break up the system and fix it and we can't do it sitting on the sightlines. >> moderator: now we are going to take a short break right public service announcement now we are back for more questions for the candidates. gentlemen and went to visit what has become a very volatile issue or possibly in on the issue in the campaign. you touched on at a moment ago and that is mr. mccrory

employment with the large law firm. he wants to know how much money you made and who your clients were. you steadfastly refused and hasn't hurt you in the polls. to each of you, with mr. dalton is this something the voters really care about? dalton: who are you going to represent? are you going to represent special-interest with a working families out there in north carolina? there is a reason. it's not the first time he's but special-interest that is what is going on. the north carolina supreme court in just as late said when he was the member he collaborated with his employer duke energy to have the city of charlotte condemning part of the family farm to enhance his profit line and then he found a sworn affidavit and didn't tell the truth. he was looking after the special-interest. he wasn't looking after the people and he certainly wasn't

looking after the form and i think that says it all. i am going to work for and fight for the working people, the senior citizens, the middle class. he has shown not only with his employment now but from that case he is going to take the side of special-interest. >> moderator: mr. mccrory? >> this is the first time i've heard of the spirit of this attack on the private sector. i was not proud to be employed by a great law firm that he recently wrote to get donations from the first political campaign, a law firm that the engineers and environmentalists and journalists working for them. i have 34 years of business experience of duke energy company which i'm very proud of and i was employed with them the whole time i was mayor and never was the request of ethical and discretion. and when a recovery proud. i am also proud to be working with my brother, seals marketing

consultant. two weeks ago we were in philadelphia working with a software company on sales strategy. this is the experience that we desperately need in the executive office. we've always had people coming from government working in the governor's office the last ten to 15 years. that hasn't worked well. we need someone that understands business and jobs and also has leadership experience in the public sector. as an animator i helped create an entire effort was partially because of my understanding of the private sector. and i am very proud of that experience. >> moderator: mr. dalton, door response? dalton: and indiscretion i think that is a pretty significant ethical and discretion of the meeting the city to condemn that city to serve because it wasn't an area that they served. if the city and that they served the city. he filed an affidavit saying if they were appalled by what not have voted on it. the case clearly says that not only does the e-mail and

correspondent showed that he knew about it, but the collaborative was to condemn. >> now we are going to turn -- it's amazing he's attacking not just me but employers that are headquartered in north carolina, employers that employee thousands of people and he's on the implying i did something unethical he is implying dollar will firm, lending to treat, the north carolina companies on what those companies to expand that the jobs to provide don't want to attack them. this is how we are treating the sector come as adversaries as opposed to partners. this is not the north carolina that i remember. >> or next question is going to focus on one of the powers of the governor. we are going to go to paul cameron. >> a record number of times with

the republican-led house. voters these days all the polls say they want to see politicians to get along. what makes you think you can get along with a legislature that might be led by the opposition? in montreal your answers. spec i have worked with people of the opposing party for 14 years. as you know during 12 of the 14 years there was a democratic majority, and i think during those 14 years of my leadership we saw a dynamic change in the dearth of jobs and growth of infrastructure and the lowering of the property tax and of crime it was a bipartisan effort i was proud to be part of but i have a great relationship with governor hunt during my first two years in office where we felt implied a major transportation initiative which was a role model only for north carolina but the rest of the nation because of the cooperative relationship i had with governor

hunt and i am very proud of that. >> moderator: mr. dalton? dalton: i think he wants somebody that can bring people together. i've shown that and i talked of the jobs commission a while ago. we passed nine pieces of legislation when the body was democratic and two years when it was republican. we did it because we had great things for north carolina. we were leaving it because during good things -- i think if you identify the problems and identify the goal you can get an agreement. then you start looking at ways to solve the problems and achieve the goal and start reading the fabric where things will come together but i would say this we don't need a rubber stamp or some of the policies that we have seen coming through the general cut to education the was so deep, 17% to the university's. the only child by about 20% which the court said was unconstitutional. we don't need public money going to fund private schools. we are going to see that i am afraid if the mayor should get

in there. we need someone that is not an ideologue, someone that is pragmatic and looks at it independently and has great respect of you believe on both sides of the iowa and in both houses as a general assembly. >> moderator: mr. mccrory come your response? .. lt. governor dalton was in the first two years and governor perdue eight major cuts in education and support those cuts. i also want to talk about the metropolitan coalition of mayors that i helped form along with the mayor of chapel hill at the time and that group is still in existence today, a bipartisan mayors across the state. east piedmont and west that are working together not in competition with each other but speaking as one voice and i am very proud to be one of the founders of that group. >> follow-up? >> moderator: i'm free to pass on a follow-up, john evans? >> the racial justice act which i believe you mentioned a little bit earlier did cause a lot of discussion with the general

assembly and district attorneys outside of the general assembly. do you believe it has played a factor in the cases and what would you do if elected governor to ensure innocent people are not executed in north carolina? mr. dalton i would like your response first, please. dalton: i do believe race has played a factor and there are some cases out there in the individual situations that have shown that. and what i have said again is that i support the death penalty. but when we have the death penalty, you need to be sure that it's only for the most heinous crimes committed need to make sure that it's not because of someone's skin color. the most offensive was on martin luther king's assassination. if you look at the capitol cases you are probably talking ten to 15 each and every year. it's not that much of a burden on the district attorney. the backlog right now is an issue and i think we need to

deal with that. but going forward is another pretrial motion the court will look at its saying we aren't be very careful of this person is put to death of that it will not because the code be because the color of their skin but the nature that the act if a police van got killed, that they took that person to death, i understand it and i will support it, they ought not to put the black one to death and the white one gets prison meant. that's not right and that is what the racial justice act is about. >> moderator: mr. mccrory? mccrory: the need to fix the lab which is absolutely a disaster during the last four to six years and in fact in our city we had to create our own lab because it is a link the time it took the state to process dna and fingerprints and there was at the cost of the local taxpayers. the second thing is listen, almost every district attorney, republican, democrat said this was a lousy bill. and it is a lousy bill. basically it is an antideath

penalty bill. and if you talk to the victim's, families, police officers in my own city, shelton and clark it's just tore up the families in the community, and both of the people who were accused of murdering those four police officers, one person burning to officers and two separate occasions, both of those people accused of murder used the racial justice act and by the way it's not just african-americans there using the racial justice act to delete the death penalty, it's everyone. white, black, anything. and that shows the joke that it's become and it's just a delay tactic that is costing the taxpayers a lot of money. >> moderator: your response? dalton: talk about insensitivity to call that a joke which shows what the african-american community is upset about that. they are being tried for the

life and it goes back to the time to kill. you've seen that movie and you give the situation then you say a mentioned that child was light. we need equal justice in north carolina and i would be about equal justice and equal treatment for all of the people of north carolina. >> now we will turn to the issue of transportation. >> like many people in this reminder people call north carolina the good road state we need money to make about $4.5 billion worth of upgrades to iowa-95 to the virginia line. some support meeting 95 a toll road to pay for it, but there is also stiff opposition among the quarter. if not the tolls, how can repairs be made? and that would go to mr. mccrory mccrory: it's free for to try to retrofit polling on the road and put it in a road that's been there for years is a mistake and

there's already examples this year of new roads being considered which even the residents don't want and that money can be sure we transferred to the i-95 corridor. with the east and the west. and i hope to implement a

25-year infrastructure plan like i did as mayor, for the entire state of north carolina. >> moderator: mr. dalton. dalton: i think tolls should be a last resort, and if you implement them you have to have an alternative route that is not tolled. you have to give consideration of the working people. it's less offensive if it's a new road and your constructing a new road. i think you have to prioritize, talking about the dot funding. the first thing you do is prioritize, and if you look at my logistics task force, we talk about the seven regions in north carolina, and having inland ports, intermodal facilities and having routes to the port of choice. we have to prioritize. the second thing is north carolina has generally been a donor state with hit federal tax money. we send more money to washington than we get back and that's not a good formula. we need to work with our congressional delegation to make sure we get as much back as we possibly can.

we also need to look at public/private partnerships on some of the improvements we need. we need more brain storage, we need more refrigeration at our ports. we can do public/private partnerships empathy inland ports i'm talking about suit themselves well for public/private partnerships, and we have engaged in purchasing of roads, doing innovative financing. >> moderator: mccrory. mccrory: we need what eisenhower did, connecting regions of the country, and i think we need an energy plan for our state to ensure that we have low electric rates and sufficient oil and gas for the consumer in our state at a low price, and i think we also need to ensure we have a 25-year water plan to ensure if we do not have sufficient water in our

state, then we're in trouble -- mod'd mr. mccrory your time is up. our next question is from paul cameron and you'll each have one minute to answer the question. >> we got you to agree on two items tonight. the gas tax and the toll roads. that's amazing. mr. mccrory you have reluctant to release your personal taxes. how about something personal tonight for the viewers? howdah's faith play into you're everyday life and what kind of decisions would you make based on your faith as governor? mr. dalton, you're first. dalton: faith plays a tremendous role in my life. i grew up in the methodist church. i'm a methodist lay speaker. lost my dad early in life. that's not easy. i think faith gets you through that. any hardship you have, i think faith gets you through that. you know, god listens to all

prayers, and i'm happy for that. i'm glad he is not divisive at all, and when things get tough, that's the best place to go, and i get strength from my faith and my family and it will by with me every step of the way. mccrory: i agree that faith should bring an important role. it brings sir -- sirenity. and politicians start thinking the world revolve around them, and i know because of my faith that the world does not resolve around us as individuals. and that's what we have have to remember and i think the faith is very important, how we treat others. >> moderator: our next question is with john evans and you'll each have one minute to answer. >> thousands of families along north carolina's coast rely on

beaches and waterways to make a living. federal dollars, though to help rebuild some of those beaches -- those federal dollars are going away. so, what do you think is the state's responsibility or should the state's responsibility be for providing funding for those beaches and how do you then come up with the funding to help in this tourism industry in north carolina? mr. mccrory, you're first. mccrory: i think travel and tourism is an area where we can implement more of a strategic plan to promote some of the great travel and tour opportunities we have on the coast and in the mountains and one of the issues we have is beach renourishment and one of my ideas -- i mentioned this at the coastal communities, with strong support to my surprise, and that is with get into the natural gas explore asia, either offshore or inland, we can use a portion of the revenue to have

beach renourishment and we also have to do a better job of promoting travel and tourism. cities at the coast and great mountain cityies and piedmont towns have much more opportunity for travel and tourism dollars. there are thousands of jobs depend on travel and tourism, and i don't think we have done enough job of integrating the travel and tour opportunities we have. i want people to come here to visit, not virginia and south carolina and tennessee. we should be doing so much better. >> moderator: you're time is up. dalton: i think that has to be port of a much langer -- larger comprehensive plan. our needs are great. the top three economies, agribusiness, military, and tour jim, agribusiness the top one.

the other two add ed together don't equal agribusiness,ing a by business and the military are compatible. tourism is not. myrtle beach lost its air field because of the growth in myrtle beach. so, it's a greater issue than just beach renourishment. we have to look at a comprehensive approach to all three of those major industries in north carolina because that's going to fuel our economy in the future also. >> gentlemen, i would like to get you a little more specific to the beach renourishment and rebuilding the beaches, whether it's a hurricane that comes along the outer banks. i'd like to talk specifically do you think the state should pick up some of the funding for specifically beach renourishment and where the money could come from? mccrory: first of all we ought to -- especially our beach erosion is actually occurring due to dredging, and there's got to be a better relationship with

the federal government with regard to some of the dredging issues occurring in all areas of the state. right now there are some major, major issues, for example, off of bald hed island regarding the dredging -- >> moderator: mr. mccrory, your team is up. dalton: john, the answer is, yes, we need to do it. i also know there are many, many needs for the states. so there's always a balancing process and that's the reason i say it needs to be part of a comprehensive study. but to keep our tourism industry strong to keep our beaches viable, i think we have to always have that in me mix. >> moderator: our next question, you have one minute each to answer. >> i'd like to talk about the tone and texture of the campaign ads, in private interviews with me, both of you have said that you're not running negative ads. yet we see negative ads on

television, and you both say, you have no control of third-party ads. has this thing gotten out of your control? >> moderator: mr. dalton. dalton: i do not like the third-party ads at all. the case that was decided by the supreme court has allowed unlimited money to come in to campaigns now that is not controlled by the candidate, and i do not like that at all. ads we run, we have the facts there. if any of them are perceived as negative, then it may be because the record that we have and have shown is negative. if you look at some of the things, when the mayor was in charlotte, he has ads that would make you think he hung the moon. we want to get some perspective of that. so we show some of the things that perhaps indicate he didn't hang the moon. like being the highest taxed city for nine years in a row. people need to know that. if he considers that a negative, that's what the record shows.

>> moderator: mr. mr. mccrory. mccrory: a negative attack on negative ads. i was in a comfort inn hotel and i saw my picture on a washing machine, and i watched the ad. heck, i almost decided not to vote for me. it was so ridiculous. i have not run on the money i control, the pat mccrory campaign, you will not see one negative ad on the radio -- hear it on the radio or on tv, even mentioning my opponent, much let cutting my opponent down. we decent need -- don't need to do that in north carolina to win elections and i'm very proud every one of my ads are positive and talk about what i want to do. >> moderator: your response. dalton: he has gone around the state talking bat culture of corruption, and certainly by immix -- implication trying to find the -- i am not part of the

culture of corruption and i will hold myth cricks up to anyone. so i think that's disingenuous for him to say that. the think the there'd-party independent ads, is not healthy for the nation and the congress should address it. >> moderator: mr. dalton, your time us up. we have our last question with paul cameron. you each have 45 seconds. >> mitt romney wanted to cut funding to pbs. what has to be cut to balance the state budget? would public broadcasting be on your list? i think mr. dalton starts? >> moderator: mccrory: rory. mccrory: i don't know. i have to see items such as pbs. i have to look at the bigger items right now, and the beinger items, my most concern is the increase in spending in every one of our departments. right now i'm concerned about students who keep having their

tuitions increased and part of that is because the universities have not controlled the cost of increasing costs that at our universities. they have been going up 7-9% when ennation is less than 3%. we have to control the increase the cost of government spending because it's going to bankrupt our state. we owe $2.8 billion for unemployment insurance. we're in a bind. >> moderator: mr. mccrory your time is up. mr. dalton. dalton: i would certainly keep public tv viable. i can't tell you specifically what you cut or don't cut until you see the whole picture. i think unctv does a great service both in education and public information. tom howell and his staff do a wonderful job. i come in most years, and i don't remember all the call letters but i know the last ones are 9090. send in your money to unc tv. so i'll make that play right now and make it in the memory of

bill friday, who has one of the greatest shows on public tv that we could ever have, and we're all going to miss him. >> moderator: thank you very much. it is now time for closing statements. beginning with mr. dalton. dalton: again, thank you for watching. i want to thank the broadcasters for hosting this debate. as you have seen, we have very different visions for north carolina. mayor mccrory supports big corporations and special interests. he would take money from the public schools and fund private schools. he would raise taxes on the middle class, and all of that, i think, jeopardizes our future. as governor i will fight for you. i will be accountable to you and i will stand stand -- stand up for the middle class and senior citizens and working families. i will protect education and respect our teachers and treat them as professionals. i will listen to you and work with you, and together we'll grow those great jobs from great schools. i ask you to give me the opportunity to lead.

i am walter dalton, i'm running for governor. i'm asking for your vote, and i hope you vote early. >> moderator: mr. mccrory. mccrory: now more than ever we need positive leadership, leadership which establishes a vision for the future, a strategy to get there and put together a team to make sure we implement it in an ethical and proper way. we live in the greatest state in the united states of america. and one of the reasons i'm running positive tv ads and positive radio ads, because i want to send two messages. the first is this. i'm convinced if you run a positive campaign, you can then be a more effective governor and bringing democrats, republicans, and independents together because i didn't tear down my opponent during the whole campaign. i ran a constructive, visionary campaign. the second reason i want to do this is, first of all, show the rest of the nation you can run positive campaigns and you can win. and also, i want to show the next generation that public service, getting involved in your city council, county, my

school board, and, yes, even governor, is a worthy effort that is needed and we need to encourage people to do it instead of tearing people down and discouraging the next generation to make our state even better. thank you, and god bless each one of you. >> moderator: gentlemen, thank you very much. that concludes the debate. we do want to thank mr. dalton and mr. mccrory and our news anchors for their participation. this public service program is brought to you by the north carolina association of broadcasters educational foundation. thank you for watching. >> we have more debate coverage coming up today. tonight it's the texas senate debate with ted cruz and paul sadler. mr. cruz, a former solicitor general, paul sadler, former member of the house. the winner takes over kay bailey

hutchison's seat. it begins at 8 eastern in houston. this afternoon, new jersey governor chris christie will be in virginia campaigning for mitt romney. you can see his comments live from the ball office products company in richmond, virginia, starting at 4:45 eastern. it will be on c-span. earlier today, vice president joe biden met supporters at a community center in sun city florida and covered a range of issues during the stop, including foreign policy. here's a look. >> this is --en foreign policy, on afghanistan. you may recall my debate. i made it absolutely clear the president and i will leave afghanistan the end of 2014, period. [applause] >> because our jobs will be done. we have trained 315,000 afghan soldiers already. it's their time to step up, take on responsibility for their own country, and for us to come

home. as we did in iraq. [applause] >> governor romney and congressman ryan made clear they're willing to stay. they say that maybe we can leave in 2014. and this is their phrase, it all depends. well, i hope that didn't surprise you because with romney, everything depends. depends on the moment. depends on who you're talking to. depends on -- i don't think that's unfair. depends on, in the case of governor romney, you know, what day of the week it is. [laughter] >> i've never seen a man move on so many fundamental issues over a period of four to six years in my life. >> see the entire appearance with joe biden in florida tonight at 9:00 eastern here on c-span2. >> now i have to be honest with you. i love these debates. these things are great.

and -- [applause] >> i think it's interesting that the president still doesn't have an agenda for his second term. don't you think that it's time for him to finally put together a vision of what he would do if he were elected? he has to come up with that over the weekend because there's only one debate left on monday. >> so let's recap what we learned last night. his tack plan doesn't add up. his jobs plan doesn't create jobs. his deficit reduction plan adds to the deficit. so iowa, you know, everybody here has heard of the new deal? you've heard of the fair deal? the square deal? mitt romney is trying to sell you a sketchy deal. [applause] >> we are not buying it. >> watch and engage monday as president obama and mitt romney meet in their final debate. moderated by cbs's bob schieffer

from lynn university in florida. the debate starts at 9:00 and you're reaction at 10:30, all live on c-span, c-span2, and online at c-span.org. >> a business capacity. i love keeping up with the hearings, trying to figure out what is going on to capitol hill, guy to c-span. >> it's what i needed in my business class. i was able to watch it live and i felt current and up to date. >> most recently i covered all the technology so cybersecurity was the last one i watched and it really -- i needed to know what was going on. i didn't want to wait for the coverage so i turned to c-span. >> she watches c-span on directv. c-span, created by america's cable companiesin' 1979, brought to you as a public service by your television provider.

>> and now a debate between vermont's democratic governor, peter shumlin, and his opponent, state senator randy brock. it took place on the campus of vermont community college. it's about 50 minutes. >> good evening. >> tonight we'll be posing questions to the candidates for vermont governor. peter shumlin, randy brock. >> weed also like to thank the community college of vermont for hosting the debate. it will cover a wide array of subjects. >> keith is in the audience here. keith? >> just a fantastic live audience here, made up of faculty, staff, and students. i'll be asking education questions, and i'm connecting with people on cam tuesday,

suzie is with the people at home. >> i'm covering all things social media so we want to connect with you at home. if you're on twitter use the hag tag ccv, and we'll be on facebook. we might ask oneoff your questions live on air. >> moderator: now late take a look at the rules for tonight's debate. >> moderator: when we pose a question to a single candidate, he will get 90 seconds to answer. his opponent will then get 30 seconds to rebut. when a question is posed to both candidates, each candidate gets 90 seconds and know rebuttal. each candidate will have a chance to ask way of his opponent and one minute to make a closing statement. >> most questions from from the viewers. the first one was inspired by a situation here at the community college of vermont and it is for both of you, and after the coin

toss, senator brock, you chose to go second. the situation here to set up for this debate meant the college had to bring in a special cell transmitter. the cell service here at the college is spotty. it's a problem across the state. how do you expect to have a robust economy, be able to grow jobs, if you can't even use a cell phone on a state college campus in the capitol city? what steps will you take to change that? shumlin: you just gave my campaign speech, and the reason why i rap for governor. i believe that vermont cannot compete for jobs and economic opportunities unless we're connected. and we're behind bosnia, across, vietnam, and cambodia, and most of the other 49 states in connectivity. that means high-speed internet access. i put together an extraordinary private-public partnership to deliver and we will deliver that we will have high-speed internet

access to every last mile of vermont by 2013. i keep saying thank god there's 12 months in 2013 but we're going to make it. cell service is the most difficult thing to deliver in vermont because we are hills and valleys and cell waves do not like the hills and valleys. our challenge is we're making great progress but we will not have universal cell service by the end of 2013 but it will be much better because we're driving fiber because it's the best internet service, and we're using a wireless canopy to get us the rest of the way, as we build out the wireless canopy, that's cell compatible so we'll have much better cell service in vermont. won't be universal. but one thing i said when i you elected me, i will get tough things done. we're delivering on a promise some governors have not been able to deliver, high-speed internet access and if we don't do it, we will not compete for

job and economic opportunities. >> moderator: senator brock. brock: that was an he can lend. he is the first governor who has been able to move us forward but the one piece he forgot to tell you about, he was able to do it because of $200 million worth of federal funds that came out of the federal stimulus program. without that no governor could have moved this forward in a logical fashion. this is as much an issue of timing and because the economy went as bad as it did, as fast as it did, we got money we otherwise would not have gotten and were able to use that money in order to be able to fund things like the cellular expansion and internet and fiber. all of that was paid for and driven trifederal funding. now, while the 2013 deadline? if we don't spend the money to do this by 2013 we'll lose the money. it's the right thing to do. i've looked at countries all over the world as part of what

did in business. the countries that do well are the countries that are able to get a telecommunications infrastructure up, running, and operating, and often it's the last country to do that, that is most modern in terms of its technology. so we're poised well for the future and if we get this done well, get it done right, get it done on time, thank god for the federal money because that's enabling us to do it. >> moderator: thank you. >> now we have a question about negative ads and this question is directed at you, senator brock. comes from patty an our facebook page. she wants to know why all the negative ad with the half truths? is it a republican thing? she went ton to say you're using scare tactics, talking about tax hikes and have no alternative plans. how do you respond to her in 90 seconds? brock: it's not a scare tactic to tell the truth. the key is you have to tell the

bad as well also the good. the bad doesn't mean that this is a bad place. on the contrary it means we have great opportunity for which i'm very optimistic, but governors have to be candid. they have to be able to be honest with vermonters. we have to understand what's wrong in order to be able to fix it, to move forward. now, she may say that there are some things that are inaccurate. i stand by everything in our ads and we can demonstrate that everything we said is absolutely true. let's take the tax hike. highest tax hike in vermont history from implementing a single pair system. a single payer system will replace $5 billion in health care expense we have right now, assuming we don't lower our healthcare expense, we have never raised taxes in vermont by $5 million. whether that substitute for premiums or not, and how doout get to that? you get to it through aright me

tech. simple as that. >> governor shumlin, rebuttal. shumlin: i don't believe in negative ads and ads that don't tell at the truth. everybody knows in vermont while we spend $5 million on health care, only two billion is in premiums in vermont. so his inaccuracy in hi ad is we're going to raise taxes. 3 million comes from the federal government. we spend 2 billion every year on premiums. what he doesn't tell you in the ads is two things. if healthcare pending continues to rise as it has for the next three years, as it did over the last ten years, we'll bankrupt this state. second, we aren't raising taxes. we're -- >> moderator: mr. shumlin -- >> to a finances system. >> this is for you, governor shumlin. it came in an e-mail. we got a few questions about this. people are still fired up about the green mountain power merger

and the controversy over the $21 million that was not refunded directly to customers who bailed out cbps but instead the money is being invested in an energy efficiency fund. and david e-mails to say as a life-long democrat i'd like to know why i should vote for someone who has so little consideration for vermont voters that he would disregard a binding agreement and basically steal $21 million. do you work for the citizens or are you just a corporate shell? shumlin: when you elected me governor, i made a promise, that we would grow jobs and economic opportunities opportunities and that's what i would focus on every day and that's what i've done. why is the green mountain cbps not about $21 million? because it's going to save rate payers $140 million in the first ten years, and $500 million in the next 20 years. that is a huge savings for vermont. why is it important? because business person after business person tells me, if we

can have stable rates. we're actually cheaper than most in new england. we can grow economic opportunities. ...

their governor to keep the promises. in this case, we failed to do so. not only do we not keep out the promise, we then are going to take the money and put it in energy efficiency improvement in the built the second time for money they've already paid. that's wrong. >> thank you. with energy issues we received a lot of questions about wind, including this one from mohammed on facebook. he writes i'm not against wind power although i believe their needs to be a balance going forward. how do both of the candidates sea wind power in the future of vermont. senator brock: beat brock you are up. brock: they are not renewable and when we blastoff top of the lines of the prestige mountains we damaged ecosystems and water flow and the esthetics and the future of vermont and in the air a terrible way. i believe that we need a moratorium on wind power and this industrial and power in vermont.

there are too many unanswered questions that relate to the ecological damage, relate to the damage to potential wild life and to the ridge lines and water flow and damage to the esthetics and the duty of the state. i believe we need to study this much more carefully. i think we also have a situation in which thousands don't believe the government is listening to them. they don't believe in the public service board process is working to them. we need to review what we are saying. i do believe that there is a future for the renewables in vermont but right now that future is to words small-scale wind and towards smaller. it's biomasses was the small-scale hydro and other kind of technologies that are proven and cost-effective. i am concerned what we are doing is we are whinging developers to a particularly large scale when the developers through huge government subsidies and tax benefits and other kinds of great advantages and we are charging the rate payers, poor

and working high energy cost for years into the future. i think this is reversed and we need to stop it. >> senator brock, same question to you governor shumlin to read what is the future of schwinden vermont? shumlin: if your hair is on fire you don't call a moratorium to figure out how to put out the fire. i've been governor for 22 months to revive now managed for climate change induced storms. the biggest ever a year ago in march. the flood of april and may and the floods of i mean. the changes are here hitting vermont and we can't move fast enough to get off our addiction to coal and move to renewables. my view is this. we should do all of the renewals, not one of them, but all of them. harness the sun, wind, the forests, our streams and fields to get off of oil. why? we are spending four to five in the future to oil and gas, sending money to countries that mostly don't like us. secondly, we are leaving it up

to our kids that is and be unsustainable. so, we have a very inclusive process. i board has a very clear direction for me. if the local community on the big leagues and local control of that is asked to host a when the project has a public vote as we do in town meetings in the greatest democracy in america and votes on the project it shouldn't be built. if they vote yes, we have indicated that it should be built. we have only to constructive wind projects in vermont right now. one-third of an up and hopefully a fourth. it's not an epidemic. it is an important resource. i just can't feel strongly enough about this. we have a very short period of time to change the way we are doing energy and we are going to have a very tough future for our kids. >> governor come shumlin, thank you. shumlin deacons >> moderator: keith has been talking to questions of the audience.

>> monitoring what you're saying online don't go away. we are back in a moment. >> welcome back to candian 2012 the meeting to be a good debating vermonts future. >> we are going to go over to keith mccgilvery now in the audience. >> thanks, we are going to switch to education. governor, we will start with you. vermont nationally is near the bottom when it comes to funding state colleges and universities. here it means students can often pay four to six times with their community college counterparts are paying elsewhere across the country. places like state college have seen their student body nearly double in the last decade yet state funding continues to drop. how can you tackle these concerns? it's a huge challenge and i am honored to be here at ccv with any educational institution vermont incredibly important to the future and jobs future.

here's the challenge. in vermont as you know we fund the students through other ways of getting money to afford school. i've brought together the chancellor as well as the president and we are working as hard as we know how to reduce costs for vermont kids. we are we doing? we put together a commission who used to head in vermont to made a number of recommendations for uvm. we are working together with ccv to make sure that we are unfolding vibrant canvases about to build a new headquarters and we have a new headquarters right now that just opened here in montreal your. we opened a beautiful campus and root lending and by ensuring that we are getting the vermont funds to pay for those buildings so the students don't have to carry the cost of those investments so here is the challenge. nationally the college costs are rising higher than to be sustained. we are working hard with the chancellor and the presidents of

the universities and state colleges and technical college to ensure that we find ways to make schools more affordable for more kids. it's the biggest challenge that we face in higher education and vermont and if you elect me i will continue to work with our educational leadership to reduce the rising cost of tuition. >> thank you. cementer brock? brock: i got to vermont years ago when i went to middlebury college and people always ask me why did you pick middlebury? the answer is because they offered me the most money. that is a challenge many years ago and today. our task in vermont as be able to give our kids tall levels agreed education at a price the taxpayers can afford. if we look at k-12 education and what we are near the top of the nation and not be spent for people and when we look at higher education we are always rated 48, 49 of 50 in what we spend on higher education. given a finite amount of money

we've got to balance the to watch more in favor right now of what we are spending on higher education because we can't continue with a situation in which kids graduate from college here in vermont with thousands and in some cases six-figure debt. we've got to figure that and manage it and make education more efficient. we have to do the same thing the businesses to throughout america and that is what the way that we deliver services and the way that we do reformation technology, the way that we manage our facilities and build our facilities. we need to take an intelligent look at how we are doing things and then step back and say are we getting the most value out of every dollar we spend? and ensure that what we do we deliver, we deliver well and efficiently and deliver in a cost-effective manner. that's the first challenge of government. the second of course is obviously to distribute the money more equitably so that we can get the key 316 educational system rather than let kate ralf.

>> we are in the transition from k-12 education and senator brock was reviewed. standardized test scores show 33% of the 11th graders in vermont are proficient or higher in science education. we've proposed adding a month to the school year. is that an initiative that he would support and if so, how would you raise the bar? brock: the notion of putting additional time to the school day or the school year is something that may make sense. if we look at the nation's we compete that is frequently something that is done. we operate our educational system on an agrarian calendar assuming that kids of course have to get out of school in time to work in the fields or do other form work. that time is now past. the key of course in all of it is if we expand the school year we have to figure not an intelligent way to be up to pay for it. that will be a major challenge in the reduced resources. i think it's important now that we move the car in which we have

an education superintendent rather than commissioner of education we have someone that reports to the governors of for the first time we can begin to have true accountability in the education system that is something missing in the past and from that accountability i think we need to challenge ourselves much more to deliver that quality education at a cost the taxpayers can afford and be able to have true accountability that goes up through and down our educational system to set high standards and make sure we achieve them. >> is a 200 a school year the answer? >> i said when i ran for governor we're going to make vermont the education state because that is how we're going to grow jobs and get a great future. this is what we've done that. first act in office, get rid of the caps on early childhood education to every student in vermont has access to publicly funded early childhood education. second, that the governor -- and this is past governors, republican and democrat alike

did the devotee to appoint a secretary of education and have some control over the educational policy in vermont. i got that done. very important. where do we do it? there's a couple things. first continue to grow early child education. second take our already very good schools and make them even better by promoting public school choice so each school can innovate in debating this best and final the moved from the crazy system where we have the requirement for algebra in ninth grade and geometry and tenth grade. implement requirements for every student in vermont to the culture war in ninth grade and geometry in tenth grade because we know the future for our kids requires them to be doing well in math, science, technology and engineering. that's where the jobs are going to become and it's pretty amazing that in this state only 47% of the schools require your algebra in ninth grade and geometry in tenth grade is only 37%. finally, this.

if you really let me governor i will focus the laser on this tranche that all the money we spend on education in vermont we haven't moved the needle one of leota in terms of breaking the gap between the income and educational achievement. we've got to do better. >> my final question we will start with you, governor shumlin i want to speak darkly to the students in the room tonight. many of them are receiving fantastic education's here in vermont and we have thousands of college students here in vermont but unfortunately many of themselves find themselves having to go elsewhere to find that first job. i know you speak a lot about jobs but speak specifically to jobs for young people entering the work force. shumlin: i've been on the job for almost two years and i promise i will make sure this is a better place for you to stay and get a good job for you, my daughters and all that went to work here. here's the good news. vermont right now has the fifth lowest unemployment rate in america. we have more grain, clean, high-tech jobs than any other

state in the nation. it was revealed just two weeks ago that fraud is the only state in the nation that saw the income growth over the past two years. that means income growth, people's income went up and that wasn't true in the other 49 states but here is the best news when i first became governor and i would speak to employers and do that almost every day. how can i help you grow jobs and then they would say to me, governor, we are thinking about doing a layoff. you know what they see now? we've got jobs we just can't find enough students in vermont who are trained to do the jobs that we have sat together with vermont state college and state college systems, with our technical centers and dtc, you together will have a bright future in the state because we are making the tough choices to grow jobs. we are emerging faster than other states. stick with this team and we will grow jobs for you.

stan expatriate. cementer brock? >> since he's been in office vermont has lost 3,400 jobs from its work force and the work force is getting smaller. what's happening is people leaving. every audience i speak to in vermont i ask this simple question are you unemployed? do you know someone who is unemployed, to have a family member and whitcomb to have a grand child or grandchild that left vermont because they never entered the workforce after graduating college because they couldn't find a job? every single audience throughout vermont, regardless of the economic condition of the audience whether it was a high income group or low-income group, 60 to 70% of the people raise their hands. we have a fragile economy that although it may be doing well on paper, it is away from failure for so many vermont. our problem is that we don't have enough jobs and that's why the work force is falling and people are leaving and white kids can't find jobs when they

graduate from high school or college. what do we need to do to fix that? one of the things we need to do is change the attitude that we have been vermont overall. we need to make sure the world knows vermont is open for business and vermont welcomes jobs and opportunity and is a place that can be flexible in terms of the kind of jobs and the number of jobs and placement of those jobs now that we want to reduce any of our environmental restrictions. we don't. our clean air and water, the pristine environment we have, these are the things that make vermont the great place it is, but we need to be able to do things like r. dee but for recommitting and oversight faster and cleaner more efficient manner than we do now. >> thank you. >> thanks to the >> moderator: now it over to souci falcon the debate reaction online. >> and loving the response we're getting. some people say they love seeking the live audience and some say they already think they know who is the winner and others are frustrated with the issue and want to hear more on that. but we are going to go to right

now the big divisive issue in the debate and in the campaign and that is health care. we've got a question this to you, governor shumlin. how do you plan to pay for the expansion of government with your single payer health care system and how are you going to offer the same coverage that we enjoy today? governor? shumlin: thank you, suzy. i want to respond to something that's an accurate and then going to correct it. we created thousands of new jobs since i've been governor and there is no reporting that number. second and health care we are not creating a big government bureaucracy. here is our challenge and opportunity and i don't know why more governors are not looking at this. the biggest obstacle to the job growth for businesses like mine and others across the state, small businesses and large, is the rising cost of health care. here is the challenge to the if we continue to spend over we have the past ten years in the same rate of growth the next three we will be spending $2,500 a person by 2015 that we are not

spending today. today we spend $5 billion on health care. it will be ten by 2020 so we are implementing by 2017 that first single-payer health care system in the nation where health care is a right and not a privilege, we will follow the individual isn't required by the employer and we use our health care dollars to make people healthy again, not for insurance profits and waste and efficiency in a crazy system where we reimburse providers for the number of services they do instead of outcomes. it's very ambitious and it's very smart. we will not implement it on less it costs less than we otherwise would have paid for health care. so that is the plan to david ascent guinn effect until 2017 and we have between now and then to find how to pay for it but the hard part is the good work that my green mountain health care more disturbing to design but sensible delivery system.

>> moderator: senator brock? shumlin: i congratulate you for getting an a in statistics because if you assume the rate of growth by 2020 is going to double, they're in my and last year the rate of growth for health insurance in the united states was 4%. it wasn't 9 percent which would be in your scenario. now consider the fact that the rate of growth of the general fund under governor shumlin this year is up 5.5% in the year before it was 6.6%, secure is a government that is growing at a rate faster than the cost of health insurance assuming they are bring to control health insurance costs. >> moderator: we will allow you to consider on health care because i for to criticize the governor for not having a specific payment plan yet we have here today to hear your plan and how much it will cost and how much you are going to pay for it if you could elaborate on that. speed i haven't spent $300,000 during the preordained study. i had spent what we've spent thus far on this path to a single payer health care by

building a health care exchange. i've not put 100 people to work and spend your devising a health care plan that creates the situation much constituents ask me every day how much is it going to cost, who's going to pay for it, what's quinby covered? can i keep my own doctor? things nobody would be able to answer today. i have a plan that is a framework that moves us forward and focuses on the discreet cost that is driving our health care expense higher today and put in place ideas and plans to deal with those individual costs to lower them in a way that we can measure and we can test and we can pilot and if we don't like it we can reverse. that is something the governor hasn't done. we do not have a plan today. if you ask the plan is today, no one can tell you because it hasn't been defined. >> governor, do you have your response? brock: i will be very specific. first let me say, you know, sometimes a year this description and i see my god who would vote for that? its past of the vermont legislature with bipartisan

support. if we were passing a system you describe where your doctors are going to be told by the government what to do if we take of your choice and then its current cost more money why would we be doing it? the point is very simply this system that we are building will cost less than in place. we only had a 4% growth in the past year, that's true. i assume that is an endorsement of the plan we put in place and we're finally getting the costs under control which other states are not the point is we can't sustain the rate of growth. we have a better way to do it and we are going to join the rest of the countries compete with and to do it right. >> moderator: we are going to circle back to what keith was talking about. people are talking that education and their concerns. this question comes from me now from danville. he wants to know how both candidates are going to level the playing field for teacher salaries. we are going to start with you, governor shumlin. what we mean by the levels of playing field? >> that's all i've got from wayne. he wants to know how you were

going to improve teacher salaries and vermont. shumlin: they are associated by each local school board. i am a big believer in local control, and i think we have the most progressive and fought for a system for public education in the country by ensuring every student and every community has the same access to the same resources. we have the fairest system of funding public education in the country. we also ensure that on your house and 2 acres if you make of to $97,000 a year you pay your school tax based on income. randy wants to take sensitivity away. i don't. i think it really works treated basically turns the property-tax which is aggressive for education into an income tax but your local school board to answer your question decides how much to pay teachers and with the salaries should be and that your local school board and town meeting those decisions are made and i think that system works. >> what will you do to improve

teacher salary? brock: i'd like to correct what governor shumlin said. i've never advocated the elimination of income sensitivity. i advocated for overall tax reform in which we look at every aspect of the tax system particularly the larger broadbased taxes and make sure they are working together effectively in terms of teacher salary i believe local control does apply. the locality to decide what they pay their teachers but at the same time, i think their needs to be greater flexibility particularly for the localities to operate and what i call virtual mergers which is something that we passed in an education bill several years ago and that would allow local communities to ban together with other communities to share services and the services could have contractual arrangements with unions as well as contractual arrangements with other vendors to share the services in such a way the services could be provided over a wide area. what this could do is allow teachers to be able to teach and multiple locations and this is particularly true for smaller schools that can't get services

such as language teachers and can't afford them on their own by using virtual mergers and trying to control arrangements that would lower some pay scales that is something i think we can do and something we can export to bring forward. >> moderator: we will continue to monitor the conversation online. >> thank you to read quickly before we take a break a quick question that we both will have a chance to answer. he will have 30 seconds to answer. mr. brock, you are going first. you both served in the senate at the same time please please me one thing that you admire about your opponents approach to his job. brock: there is one billington didn't of that governor shumlin and by both a co-sponsor and we were fully in agreement and there was a bill that goes to the issue of income sensitivity that we dealt with. what we said is an billionaires' amendment if you have a million dollars of net worth exclusive

of your personal residence you shouldn't be getting in and comes into the payment that is something we agree on and i think that governor shumlin went along with as well. shumlin: i have a lot of respect for randy brock. he's done a lot of great service and need great friend of mine. when he voted to shut down yankee in 2012 he gave a speech saying louisianan couldn't be trusted, they were not a partner that was worthy of the great honesty and virtue of vermont and they should pack up and go home. i appreciated his vote to shut down the vermont yankee in 2012. >> moderator: next we will talk to the candidates about mental health services in vermont. >> moderator: the candidates will get to ask each other a question. >> moderator: we are to be talking to the candidates about mental health. >> the flooding of the hospitals during the hurricane obviously

highlighted this problem here in vermont. karen kelly wrote to us asking how they plan to handle the very real deterioration of mental health services and vermont? we all know about the new hospital plans. but what happens in the meantime? governor shumlin, we begin with you to read 90 seconds. shumlin: i will be candid with you. it scared me to death and it has and continues until we build our new mental health system. we have our most vulnerable patient in situations where they are not in the best facilities for their care and as a governor i have to tell you the biggest nightmare is to get a phone call in the middle of the night that you have to evacuate a patient because of the floods we are not under the best circumstances and we pleaded guilty. what are we doing to fix it? we are designing the best community-based mental health delivery system in the country bar none. so, we've taken the challenge and we have turned it into an opportunity to build the best mental health system in the country. what does that mean? we are going to finally put the money into the governors that

paid lip service for years to refine going to get it done in to the community-based care. mental health patients are no different than health or kidney patients. they want to get their care close to home so we are going to have a delivery system in the community to work with our patients when they need services at home. if they become acute enough to need hospitalization we are going to have three locations instead of one. six at rot went for central vermont and 28 beds right here in berlin in the state of the art new facility. now i wouldn't have sent my pet to the old hospital. it didn't dignify the kind of service that we should be offering and i made the decision we will never go back. we are going to rebuild as fast as we possibly can. >> thank you. senator brock same question, 90 seconds to answer. brock: we do have to rebuild as soon as possible.

we have to solve our mental health problem in as expeditious a way as we can because what we are doing now among other things have been a patient in hospitals that are not capable of effectively dealing with them and having them and we finally got them out of emergency rooms largely that at the same time the emergency rooms are still being used because we don't have the backup facilities that we need. all of these are clearly unacceptable and where we are taking some mental patients and putting them are attempting to put them into the nursing homes that is clearly a situation that is unattainable. the problem with what we are doing right now in terms of planning for the future is we didn't plan the contingency plan in the event they didn't come through if the money dows we needed we needed a clear contingency plan from the government as to how we are to pay for the things we are going to do it's not that we shouldn't do them. it's making sure that we have the backup plan to make sure we

have the funding in place to do them. that's what i've been critical of and what we failed to do. ultimately we will have a new mental hospital and will be state of the art. one can argue the model that we chose not be in the best model. in particular the old hospital, the people that have dealt with these folks have said that by distributing it in the way they do we are going to lose a lot of the expertise to deal at these remote facilities and that could be a problem going forward. >> senator brock thank you. >> moderator: but if you have an opportunity to answer this. the other struggle for vermont brickmaking at an affordable place to live. mr. brock you will the first with 90 seconds. hancock e-mail thus asking what are you going to do to reduce the cost of living for vermont especially the property-tax burden? i would appreciate a straightforward answer from each candidate with no spin. [laughter]

the very best way to reduce the tax burden with it the property tax or any other kind of tax is to create a more vibrant economy with more jobs and opportunities particularly private sector jobs that generate more tax revenue. the second we estimate the cost of living lower and reduce the thousand cost of government. government is one of the reasons we have to have the taxes so high to pay for it. if we can make the government more effective, smaller, more transparent come easier to operate come closer to people with less bureaucracy and we can create a government that costs less and now is an ideal time to do it. we have 29% of the state work force that is going to retire within the next five years. what better time is there to reorganize the government to make it more effective and make it closer to people by removing the layers of bureaucracy and red tape? we have shown that every major company in america has moved towards efficiency and innovation in the way that it operates. only government is lagging behind. and that is something that we need to increase and take and

move forward. we also need to remove the tax system. we need to take a look at our broad based tax system sales tax, income tax and property tax and go back and what are the working together the way they ought to make it easier for people to understand, and that is the first step towards making them lower. >> moderator: governor? shumlin: to raise jobs and incomes to refine the first governor in a long time that has actually resulted in higher incomes for vermont. it's a start. but here's the answer to your question. governors come as much as we might wish cannot control school spending. that's the truth. we have a choice to make in vermont. we either believe in local control that you can show up at a town meeting, for your school budget up or down and choose how much your print spend or give it to the state. i am a big believer in local control. i want you to make that decision of what is best for your community. so, these are the things what we

can do to help reduce the property taxes even though we can't control the decisions you make about spending because you do that locally. first i made sure that we fully funded the state's contribution to the education fund. that makes a difference. second, i dedicate a larger portion of the sales tax to the education not just this fund this year but ongoing for future years. so ensuring that the state of vermont doesn't short the education fund is critical to making sure that we have least keep up with our obligation, but we cannot control school spending. you do that when you show up at town meetings and that is why it is so important to show up psp seven now is the time you get to ask each other a question. >> each candidate will have 30 seconds, 90 seconds to answer. we start with you mr. shumlin. your question for randy brock. shumlin: randy, recently you introduced a jobs plan and one of the foundations of the plan was a business in the box and

your business in the box plan suggests you are going to have the state government offer franchises to vermont who use their jobs and for roughly $6,500 they can buy into a franchise. i have dealt with a lot of unemployed in vermont since i've been governor, and i haven't met for the many of them that has the $6,500 to buy into a business in the box office by the state government. can you tell me where you think unemployed people would get this money? brock: there is nothing in my plan that mentions $6,500. i don't know where you get that. shumlin: that was in the press. brock: there is nothing in a plan like that and when i had a press conference and i discussed it on the indicated that this would not be something the state government would indeed have to invest. this is entirely private sector venture in terms of the funding that is necessary to do this and there was no mention of any payment. now, if you take a look at president obama's plan, america's job plan, one of the key elements of the plan was to allot -- provide provisions to

allow unemployed people to be able to become an entrepreneur is to start businesses themselves. there is such a thing as going out and looking for a job and there are also people of our unemployed for competent, capable, effective people but can the entrepreneur is. the key to this perham kump this business in the box concept is to say something like this. look, we will create a set of business ideas that a well qualified entrepreneur could enter into and package that in a way that includes a business plan idea come a business location, it arranges financing with banks or other entities within vermont who might be willing to fund it for the appropriate people and provides expertise in terms of retirees or their people that have been in that kind of business before that can provide the expertise, the mentoring and training of the entrepreneur and links it to some of our educational institutions and other support institutions that exist right now for small business there's never any intention or mention

whatsoever of them having to pay for it. >> moderator: all right. senator, your question for governor shumlin. shumlin: between may 2010 and july, 2012, the total number of people in state government, the employees have a full-time part-time elective appointed were classified employees have gone up by over 400 people. my question, governor is what have you done and what do you plan to do to stop the continued growth in the size of the vermont state government. shumlin: one of the things i'm the most proud of is i balance the two consecutive budgets $176 million in my first term from a 56 million last term without raising broad based tax is on the hard-working vermont. having said that, there are two things that are driving in a very small way a higher number of employees to read the first is the affordable care act that gave $104 million to implement

exchanges that vermont is currently implementing. that $104 million of federal money is new employees to help build the exchange that's going to reduce health care cost and bring in $400 million of federal funds to help vermont who were struggling to pay for health insurance right now pay for it. the second is we found after the toughest session of all of the layoffs that we did in the last six years we couldn't deliver some of the services that were needed in order to get it done and offered required us to rebuild roads and bridges faster and in a way that no other governor had to face. we delivered and we did on 30 cents on the dollar but it required people power and we had to hire folks to dig out from the mess. >> moderator: thank you. >> moderator: now for a little fun and we will start with you, governor. which hollywood actor would play you in a movie and why?

brock: everyone tells me i look like him so i would have to say dustin hoffman. shumlin: clint eastwood, no debate about it. wow. [laughter] i have been called a lot of things in my life but never a chair. [laughter] >> let's check in with susie one more time to see what folks have to say. the favorite part has been the back-and-forth. let's see what each other have to say and here is the question directly to each other which we have time to answer. i am thinking this might lead to future story if we keep collecting we've had a great response. we have more than 400 collecting on the website and posting their

questions, posting some comments we are happy to have all of those responses and we could answer all the questions but continue to monitor them. >> we're at the end of the debate about ready for closing statements. is their anything else that you would want to ask each other? this is on the fly. there is another question that has been burning that either of you -- the 400 people that are really turning and looking to see you going at it and ask another question. >> i would like to do follow-up if i could. i understood was to cost 6500 bucks. the unemployed person gets a loan or line of credit i don't know many unemployed folks that have the resources to get a loan or line of credit. how is that going to happen? >> that is one of the functions

of government. this is coming from the private sector and i think one of the jobs of government is to work with our banks and financial institutions and investors and venture capital investors to attract money sitting on the shelf and vermont. people are not investing. why aren't the investing in vermont? because of the uncertain environment that we have created about things like health care. i think the job of the governors and to be to talk about the financial community in a way that they can understand and that's what i've done professionally for many years. i know that capital is there and the people are willing to invest in vermont and willing to invest in vermont i want to get that money off the table to be able to do that. we have about 90 seconds to ask the governor a question. >> you said you're here is on fire. you set your hair is on fire because the call on the oil that we are burning to take power. but as i understand we are not getting a power from coal and oil from the renewables and

natural gas. you said that we are going to run out of energy because our high use of fossil fuels but at the same time, we know that we have the fossil fuels are going to go away because we are bodying it in the worst country in the world but have is that the case when we have the cleanest energy portfolio the country just about come and second, we are not using any of the things that are being bought from the foreign countries and we are using natural gas, and we find that we have a 200 years' supply of natural gas. so i'm wondering why you're here is on fire. >> very closely because we have to get to closings to be a shumlin: the climate change and induced storms or a sign of what is ahead of us. listened coming here is the fact. the governor has to look forward. the governor has a vision. my job in the next two years is to ensure that we start to build out our plugged in, electric car transportation infrastructure so that we move from an older than fleet, our automobiles which are killing us at $4 a gallon, and

obviously political what future, to more electric plug ins, working with the premier of quebec and others to make sure that we are not telling others to make sure that vermont is the plug in states that we can the of the cutting edge of moving to move renewables. what does it mean? it means jobs and economic opportunities for vermont and a better future. so the answer is that we need clean, green, locally generated power to not only power our lights, but to power our transportation infrastructure. >> thank you. >> thank you, governor. let's go to closing statements. governor, you are first. brock: thanks for sponsoring this debate. i ask for your vote on november 6th for the simple reason that we are making great progress. you elected me governor and i promise that we get tough things done together. we have to be delivered on building out the internet system that is going to actually build this into the communications age. it's creating jobs by having the best education system in the country. ensuring that we have affordable health care system, the first smart one in the country in the

building of renewables and removing in record time and extraordinary cooperation. we have created jobs meeting brought the fifth lowest unemployment rate in the country to see income growth making great progress i promise if you elect me for another two years we will continue to get results from jobs and incomes for hard working vermonters. i of that he will re-elect me. >> thank you come governor. senator brock, closing statement. brock: i want to thank you for inviting us here today. this is been spirited debate and hopefully interesting to those of you in the audience and the viewers out in the field. between the two men with very different purchase to government and governing.

someone focused on building a larger more powerful government and centralized government that is much more involved in running and managing your daily lives controlling them and then on the other hand, you have someone that is much more focused on placing a steady hand on the rubber of government making sure the government does what it is supposed to do and that it creates an economic environment in which jobs can grow and prosper in the people can grow. i am running to become governor of fraud. i'm not running towards a national stage and i don't want to be the head of my party's governors a season. i am focused on doing what needs to be done to make vermont the next best place to be, the place where our children can have a future to grow and prosper in a way i was fortunate to have done in vermont so far. >> moderator: thank, governor brock at thank you governor shumlin for joining in the debate tonight. >> moderator: thanks to the folks at home today don't forget to vote and to in for the fall election results on election night. we will see you then.

[applause] >> it was made during that they

do not share that view. they do not believe a woman has the right to control her own body. romney and ryan made it very clear they were opposed to the views on the republic. it's clear they don't believe in protecting a woman's equal access to health care on women's health. they are prepared to turn the decisions back to the insurance companies where if you check with your daughter's out there to get charged 50% more on average for the same health care. 50% more where pregnancy is literally a preexisting condition. [laughter] and serious. under the obama legislation, that cannot go on. they are not about to do that [applause] and after listening to

particularly congressman speech because it was very stark the view that he expressed on behalf of he and governor romney had many have captured a romney supreme court four years from now? ladies and gentlemen, on tuesday the governor was asked the direct question about equal pay for women. if this were not so serious -- do think i'm making this up? he said i have binders full of qualifying women. how did he have to ask for binders to find qualified women? it is -- it gives a sort of window into how he thinks about these things.

>> it's an economic argument men are having a harder time adapting to the economy and women are adopting more easily. i can't tell you why there's been differences. just to say to this program of history, it has education credentials of the economy's fast-changing and who knows what it's going to throw at us.

women seem to be getting the skills and credentials at a much faster rate than men and they seem to be more nimble and that kind of filters into our society. in the book i talk about how that changes marriage and the notion for fatherhood and what men can and can't do in families and how young people have sex and make decisions and you really start to see it having an influence in our culture.

former federal reserve chairman paul volcker appeared before a british banking committee in london where he was asked to discuss the differences between the u.s. and the u.k. banking standards. the parliamentary commission meeting was made up of members from the house of commons and the house of lords. it's about one hour and 15 minutes. >> thank you very much for coming this afternoon. when i saw it crossed my mind for a moment that you might be taking interest from that at the bank of england.

>> less than 85. you are one of the clearesteed thinkers in the field and probably several generations ans one of the practitioners that wf will take evidence from home,ct perhaps the most experienced practitioner and we are very grateful to you for coming. can i began by asking you aboutt one aspect of the very of intesting piecece of evidence that you provided to us? this is a three page sheet by which we shall be surely publishing. section d item three reads out the different subsidiaries of single commercial banking organizations can maintain tot l

independence either in practice or public perception is is ticult to sustain and the gentleman code for the work.co >> it's better for us to say if you put in a different organizations to different folk decisively, you don't put two folks in the same organization and say they don't talk to each other. we've never had anything so quite so comprehensive but have had different subsidiaries of the banking organization with prohibitions with the bank.

we tend to break down. because of pressures from the institutions itself. as we moved away from concentration on traditional mer kmshl banks which is other functions and subsidiaries, the federal reserve rules out in theory is we now permit another subsidiary unless they provide support for the bank in time of need. let me just repeat what is used to hear from a prominent banker.

he just loved is affirm point, which is to name parts of the institution, it will be protected to the extent possible, each part will be protected. they are going to protect. as i understand it before our security, that would not happen. i think you know. >> you said it would be permeable over time. does that mean it's worth a try? >> that's up to you. i'm not saying that. i don't mean to sug that but when i read the victories and i'm not a great expert ob the. the treasury paper and all say

we're going to have a fence. that's where the problem begins. i understand that need. that gives a question without any at all if you do this and have this exception i say e, yes, let's have this bigger. you get the same customer in two parts. it depends on how you do it. potentially you have you have the customers in two parts of the organization. to think that either parts will take account in dealing with that customer seems to be strange. >> i thoi we can determine the

strong sprens in separation? >> in reading the proposals you make is my reaction is i understand why you want the separation. but for some reason, it's not realistic. >> that opens up the question, what should be separated? and you're on record as saying pulling out as much as the report is proposing would be to amount to another. you describe that as radical and yould explain win -- would you

explain why is this. >> these institutions have customized relationships that have been proud of. i think that implies a responsibility. you do worry about the customer. . you schon be, anyway. the proprietary trading activity doesn't develop that relationship. someone wins. somebody loses the relationship. i think in part that's where the facts got in trouble.

that activity became checkered. very high levels of compensation which affected the rest of the organization. so take that counter parting stuff out of the organization. lots of other people in the market can do that the other part is what we think is connected. shouldn't be engaged in proprietary connectivity. that takes care of if payment system. it's more and more important in

a globalized woorld. it has to be done quickly, safely, that's what the big banks do. nobody else in the united states or in the uk is equally committed to making it medium sized. eat before the crisis or during the crisis. the importance to protect people with their money and give them a safe place to put it. those are all public functions. they're all protected every place. when push comes to shove, they get double.

you shouldn't do that when people are just engaged in trading for their own account. without any public responsibilities as i see it. that's the heart of the matter. >> i'm very pleased you would come in at this time. i think we suffer from a major confusion that you can help us sort out. in the u.s. they're returning following the advice. and we have in the independent banking commission a halfway house. and it should go the whole way.

this is a completely wrong characterization that i think of what you're saying, you're saying they can't a wide rapg of functions that can be alongside the payment system. then there are another type of transactions that shouldn't be there at all. they should go off right to a separate institution. and in terms of scope you allow a larger scope to remain in. in terms of separation, when it happens, it happens in a much more radical way than being proposed here. woef we have to muddle twine between the two.

in the noncommercial banking part of the organization you can list all the functions. but the heart of the functions there are trading this a broader sense. whether it's customer trading or pure speculation. this is between the customer relationship and impersonal relationship. that let it and left special trading outside the organization. >> i will sim simplify that. you people understood better what these alternatives are.

if you have in the model a company whose directors are -- and none are directors of the group, but group on the or hand is responsible for everything going wrong. if something goes seriously wrong in the end, this separation won't prove effective. you have in this second company that has the more sophisticated products? it has a separate board it won't

be confined there. and the grub directors cannot ignore what they are doing. >> i am certainly saying sna. my imagination could be crypt or something. you seem to visualize an organization, a holding company. he can do this. i don't know what it means to have an independent board subsidiary to another board.

they decide how to allocate capital. a certain amount has to go to the bank. following the law. just as narrowly as we can. there's nothing in it. negative says you have to put more capital in there if you are worried about it. but this is all kind of awkward. you're going to think about how to use the strengths to support the other part. it's human nature. i'm not saying it's impossible. you can try it. it's sort of going on.

>> okay. in your next commission you said the internal of the dominant international banks has changed dramatically. they will have essentially techal misjudgments by well meaning people. how much is a failure within the banking world. how would you characterize the changing in culture? how would you karkize the changes, and is it possible in your opinion to get the tooth paste back in the tube? >> i've been accused of that.

and one of the thingsry ebb t big new york bank at that point, bun of the biggest banks in the united states. things vice president changed. not in major terms of the bank. should be working for the bank as a whole. for the customer they shouldn't be seeking big rewards in themselves. contrast that to what goes on themselves. tremendous part of the conversation not just in

bonuses. compared to what they would have been 20 or 25 years ago. no what kind of climate does that create? they get to elaborate a little bit. people who criticize this rule, they are sure to speculative access. infact, a lot of things are at the heart of the banking crisis. why did that go wild? i would argue that the kpep sags practices crept in into trading

parts of the bank. so the lending offices said, how can hay make a lot of money and get a big bonus? over simplifying a little bit. it's true. the chairman of the citi bank. the biggest bank. a couple of trillion dollar banks. he said to me, we put these two different kinds of organizations together and it different work. and it's a cultural problem. you didn't just regular rate the losses. it created a tension in the bank is that very healthy. very open about it. i think he's right. >> are you saying that the

approach that breaks apart those cultures perhaps for bankers might put the toothpaste back in the tube? >> i think it's entirely practical. you can take out the pro pry tear trading. # the possiblies, hedge funds and equity funds. it was basically pro pry tear trading, too. and we have not mentioned two with words, conflict of interest either. but those ak at this timetivities inperfectly involve major con flicks of interest. wrour not going to avoid all of the conflicts of interest. you have customers who compete

where each other and different activities have different conflicts of interest. you have rules to moderate them. when you're conducting an organization, you're not paying any attention to the customer. whatever you're doing, these are conflicts. how can you run the business completely insulated from the trading books you're writing? my biggest concern is the whole thing. >> you balanced most of the question.

there seems to be a major bank failure every ten years or so. >> yes. sometimes the same bank. >> sometimes the same bank. that was the failure and so on and so forth. that was on the scale of 2008. but major issues. whattics it so difficult for regulators to foresee what is going to come? >> things are going well. the economy is slooifing. the banks are making money. and you suspect some weaknesses developing. you go to the bank an say i

don't think you'll have enough capital. i think you lay off the activity. he says, i know more about banking than you do. we haven't had a serious loss for four years. you think you're going to tell us what to do. i'm going to the congress nan. i will tell the regulator to get off my bank. this has bothered at that point, nobody. they have a lot of lempbl when things go bad. it's engraved in my mind, personally. shortly after i became chairman of the federal reserve board. i within the to chicago.

with the reserve bank there and other people. i i would ask the chairman, at that point you could not branch them in chicago. in the state of illinois. but these were big banks. the biggest in the united states. build upon basically borrowed money for the basic deposit couldn't be that big. so i thought, well, i'm going to talk to him. nobody is talking to them. i think you people have undercapitalized. so i said, who are you? there was no law. there was no regulation that governed how much capital we had. one of the banks went bust.

relying upon regulatory discretion, which you have to do a lot, but it's a structural problem what i'm saying is absolutely agreed. you're looking for structural changes. we're putting the board somewhere a little differently. they're worried about the same thing i am. this is removed from the basic function. we're on common ground. it's just a sengs of how we do it. >> thauchk. there's been a loss of discipline and the natural and ethical has been ignored.

that takes us into the field of culture and ethics. is it a place for culture and ethics in banking. what is it? some would say you can put your finger in it, and there's nothing of substance there. these go hand in hand. >> in the case of the banking, it's a simple proposition. you have customers that we don't have over a period of time. you have the kmirs that say with you and are profitable. you're not going to say you're going to sell whatever you get rid of because it's possible at the moment. and that's the distinction i see between the, you know, the counter party where none of those responsibilities in the

relationship. all of these claim relationships in their own party. the relationship is everything. they put that in a piece of mail they sent to me. but that's not true for the trading operation. the relationship isn't everything. it's how much profit we can make on the trade today. they haven't lost all sense. but efrl they lost a lot of it. i discovered it wasn't very effective. but the sec had a rule book, that said an investment bank that they were supervising did certain things for which they had a relationship.

and they had other things for which they had no responsibility. i don't think it's much realized in their own approach. that has been certain around in the back of there anyway. actually in the written regulations for a long time. i'm not saying anything new. it's different. the impersonal trading oermss are different from a continually banking relationship. >> do you think that makes it? always behind? the expects at the time in a down and out kingdom. is this the best stuff onto the

biggest banks and the less qualified onto the smaller? what we asked them, if they look to the business model, they say it was none of the by talk. >> i think it's chronic in the ability that we're talking about. the conflict that you're talking about. that's why it is part of the human nature. there's difficult problems. but that's why, i think, it is correct that you want some structural change that's change that's kwleer enough that it's not easy to get around. the regulator can say i'm sorry, i don't know more about banking than i do. i have to enforce the law.

there it is. when it comes to important points, that's what you want. you don't have much leverage if you don't have some statutory plain english rules. plain ek lish is a bit of on axsy mora oxymoron. there are endless criticisms. why can't you do something schi

simple? this is tough stuff. even though there are instances where the kpleer principle doesn't make sense. if you keep making exceptions to it the time, it won't be sufficiently disciplined. the problem begins when things are going well. anybody can put a lasso around the banks whn they're on the brink of bankruptcy. when they're doing well you have to get them under control. how are the people in the united states realize what is going on with the subprime mortgage thing.

weem in the credit standing. >> in the field that has seen a volume accrual with bankers taking bonuses get there today. that problem still seems to exist today and is unique to the banking system. what chance do we have of that being abolished? discipline has arised. that happened to the chairman of

the standards committee foundation. they began realize iing. when you get down to the detail how much the regulators are similar to the problems of the accountants. and drawing some of these difficult distinctions. the accountants are in a better position. but somehow they lay down the rules and everything follows. but there's a lot of controversy in the accounting rules. sometimes you wonder.

i talked about the bank credit. the united states on a clear capital standards. they just didn't have it. citi bank had a ratio of 2% and the big chicago banks were around there. this sounds crazy. but i assure you it's not crazy. i've been reporting accurately. i was visited by the biggest banker in new york. he said, i want to tell you my bank doesn't need customers. what do you mean? # we make a profit every year.

now, he was not entirely. he really felt that. he was the same banners who believed they don't go bankrupt. but things were going well. so all this stuff. all this stuff, in an effort to get capital standards up. the desirable efforts still

exist. don't count on that entirely. because that's subject to all kinds of uncertainty. the there are so-called risk based standards. they had the assumption that they didn't have a risk. the mortgages had almost no risk. what two things went bad during the eye sis? mortgages and sovereign debt. they had no risk waiting. has that changed entirely? i don't think so. they have hundreds of different waiting for different assets. you got so many that you don't know what any of them mean.

everybody said you can't possibly think you're on the same risk waiting for some small little manufacturing company like general motors, can you? he says general matters was aa. didn't need much so forth. to years later general motors goes bankrupt in a way you could not have foreseen. so there you have very able working people working very hard that don't trust the judgment and able to administer the standards over times.

>> everything you said so far makes a great deal of sense. but i would like to go back to the question of the rule and all of that. you make the point that this reinvents the location. and you pointed out the differences. the fact is. -- who directed and responsible for the game shup of shareholders. would you say there is another

reason of the note you gave to us, which is extremely helpful where you refer to the cultural problem and the change in the culture of that. if we are addressing a culture problem ape we are charge to do that and maybe that's the reason we didn't address it. thn it's difficult to understand how they can be completely separate and indeed two totally incompatible cultures within the same organization.

>> with difficulty, certainly. i done want to be in charge of saying that. they're aimed at the same thing that american law is aimed at. creating some separation. and the court is trading locations. so the question the united states g forward from the unjust trading. people say, well, that doesn't lapse with us. you can make the distinction that has strong arguments made against it. they're saying you can't do pro pry tear trading exit in the nonbank part.

yob how all of these come out. the law hasn't been written. in the work conditions, can they do it? the payment system has to be available to everybody. does that come into the whole sale par or the retail par? st this is a different payment system. i don't think so. >> we will follow that with two questions that arise direct from that. accepting your side that the realization, you have to have complete institution separation. is if question of where do you draw the line. and you say it's a function on

one side. there's proprietary trading on the other side. of course, there's a whole range. largely trading nature. not strictly proprietary trading. >> absolutely. >> they would say on behalf of the customs. they would still have the same trading you're right. as i say you have trading that isn't nominally proprietary to get you in trouble. and they both -- we know a trader is a trader. he wants to make money on his customer trading. there is a distingion that can be identified and to say you look at every transaction and say that's proprietary or a customer trade or market making trade. you can tell over time and what

irritates me a bit, every management, if they have any sense at all, these big banks maintain very close control over their trading operation. they get -- report daily. they know what positions are daily. they give them orders as to what their value at risk would be and if they take too much risk they can't do it theoretically. and they've got other controls. they can look at the aging of the inventory and why is your trading volume so high and your inventory so low or vice versa. and the key to me in enforcing what is united states law, is very simple in concept. you got to have the chief executive officer and the bank of directors understanding what the law is and there is a difference between proprietary trading and market making, and if you ask a banker whether he knows the difference had they always say yes because they can't say anything else.

i mean, they wouldn't be a proper banker if they can't tell the difference between a proprietary trading and market making so they have to say yes, and make a role to control their traders. is that going to be perfect, no, but the supervisor can look at that role and see whether he thinks it's reasonable and then what you will do which they will do in the united states have so-called metrics and they'll have, i don't know, maybe too many, but they still have seven or eight metrics they look at, volatility would be very important. the ordinary trading operation, customer trading operation will not have a lot of volatility. the aging of the inventory, the size of the inventory, the hedging of the inventory. half dozen things you can look at that are going to give you pretty clear evidence as to whether, you know, as a regular matter proprietary trading is

going on in the guys of market making. doesn't mean you catch every transaction. you don't have to catch every transaction. and i think that can be effective. and you know, i've had a lot of traders tell me it's going to be effective. so, i don't -- on that particular point, it's clearer. they say we're going to take all trading and put it away. now what do you do about -- you say all trading. that means you can't do any underwriting in the bank itself. put that in the other thing. in the logic, the american position is underwriting is clearly a customer related activity. you are financing the customer, you want to keep the customer, you offer him a choice and make a bank loan, sell the security, mr. customer, we would like to make a loan, maybe you want to do it, a security, and we'll

advise you on that. it's all part of the same customer to me. that involves some trading inherently but you can -- with that trading related to underwriting operation or not. >> one thing you said when you were asked a question, was that when you done the separation of the volcker rule and this proprietary and separate company, you said, if they fail let them fail. >> if they -- >> let them fail. >> yes. >> if they gamble and get it wrong basically get it wrong. would you not agree that is actually rather important issue in its own right, that we have been putting too much of the disciplinary burden on the regulatory system and on the supervisors and the more that you can let market disciplines,

then that reduces the complexity and difficulty for the regulators and supervisors. >> this is probably the most important single issue we should have. or dodd/frank. dodd/frank is law at this point. they have a preocedure spelled out how to deal with a failing financial institution without quote bailing it out. the government will in effect take it over, they will have enough resources to run it for a while if they deem that it should be run for countntinuity

the market. that institution will be lick which gaited, liquidated is a strong word, it could be selling off parts of it or the whole institution to somebody else. by its nature that resolution process will mean the stockholders is gone and the management is gone and depends upon what happens, but creditors may be harmed too. now that's not what happened during this crisis and talking about the united states in particular, true in the uk too, there were a few cases in which stockholders may have lost. there were many cases in which the stockholders lost money. there weren't many cases where the stockholders were wiped out. >> right. >> and there weren't many cases where their management was removed and there were no cases where the creditors lost. but that may be an exaggeration, maybe in one or two cases where the creditors lost. basically the whole effort in the middle of the panic, so to speak, was to save the institutions. and now you've got a way to

avoid that and it won't work for an international -- complicated international institution if the united states doesn't loan. what do you do with the other operations? and by far the most important of the countries is the uk. because these big banks are big in new york and they're big in london and small every place else. little casual in saying that. it's more true with the american banks than the british banks. but an interesting statistic which is given to me in looking at the so-called resolution process, they looked at the big american banks and how important were their overseas operations outside the united states and how do you measure that. they looked at assets. 85% of the assets of these big american banks outside the united states itself were in london. only 15% in the whole rest of

the world. and there were about 5% or so in tokyo. no other country had really more than one. neither the country had more than 1% nor its banking system nor did the american bank have more than 1% of any single country and japan, they're not doing all these things anyway. they're kind of, you know, in the curve in all this speculative activity so that's not such a big problem. but the uk, you're probably aware, the uk and u.s. regulators are working closely together in my understanding on what they view they are concerned. full of this too, so you've got the continent of europe and britain and the united states work on the same problem which is inherently an international

problem. >> mr. volcker if i can parafriz what you're describing with the volcker rule. it strikes me what you're saying, there is one side of a bank which is virtuous by the fact that it equally balances the shareholders and the staff and the customer and there is another side of the bank which is nonvirtuous where it only balances the interest of the shareholders and the staff and the customers completely excl e excluded and that's the core behind the volcker rule. >> i reject the word virtuous and nonvirtuous. that's rather prejudiced. >> no. >> the one that has i think historically important public function, it's hard to see an economy working without commercial banks doing their essenti essential funkion. it's not hard for me to see the economy working without the amount of speculative and proprietary activity. i'm not saying that's wrong. i just say let people do it who

are not protected by the government. and who can be permitted to fail because they don't have a central piece. but they can do all they want. we got mixed up. that's what the investment banks were doing. they were immensely profitable but they got in trouble. now they suddenly make themselves and the banks. why did you make themselves into banks. because they want the government support. at that point the government wanted to support them. the only way they could support them was by making them a bank. now they don't want to give up their banking license because it's dollar and cents. they can't finance themselves. they're not confident they can finance themselves economically unless they're a bank. >> i'm very interested by your whole idea of the cross-contamination of the institution, the banking institution from the proprietary traders who have no interest in

the outcomes of the customers of the bank compared to the other people, the rest of the bank who should have a vested interest or do have a vested interest in the outcome of the customers. i look back to the deregulation in the city of london in 1986. at the time the london stock exchange had two very, very clear funkions. one was if you prepared -- if you took positions on your balance sheet, you were never allowed to talk to cause mer or an outside investor and if you were a broker who only talked to a customer never allowed to take a position on your balance sheet. and that to me really putting the customer at the core of the stock exchange by having that rule. do you think we lost something quite special when we deregulated? >> [ inaudible ] you had all the mixed functions in the bank, by a whole technological revolution that created, made it much

easier for different types of institutions to deal with each other and made it easy for the traditional institutions to engage in these exotic activities. and you had at the same time, i think this is quite fundamental, a philosophical approach that said markets can take care of themselves. and we have a whole blossoming of thee yor rising about the efficiency of markets, the force of market participants, rationale expectations, and this -- and things were going well for a while so the whole implication was leave it alone. the market can take care of itself and they'll have excesses from time to time, but, you know, they'll control it themselves because it's in their interests to control it

themselves. now that viewpoint isn't very popular anymore given what happened. at least it went overboard. and, you know, that viewpoint was not consistent quite specifically with the mass of both the subprime mortgage market. obviously went well beyond any kind of self-mediating function until it went over the cliff. and then it all collapsed. you had a whole philosophical development that affected regulators that affected banks that affected politicians. it was a different climate. do we go back to where we were 30 years ago by snapping our fingers or passing a law, no? but i think we can do things around the edge. around the edge when you deal

with volcker, it's more than around the edge but it's not the whole thing. let me say here, i get a little irritated when people say what are you worried about p proprietary trading. that didn't cause all the bankrupt bankruptcies. it certainly contributed to some of them as i say, but that's not the point. it's the cultural damage that it does. and without -- where is the corresponding of the offsetting public benefit. there is a public benefit in having reasonably active markets. good. a lot of people are willing to do that. that's what the investment banks are doing all the time. a lot of hedge funds are doing. they're not publicly supported. hedge funds are largely financed by partners. limited partners. they don't have much to say but it's their money at stake. they're not by and large -- financed too these days, but the

heart of their financing is not whether they have the capital ratio or 3% or 10%. you know it would be 50%. 75%. 40%. so that's different. let them rise or fall on their own. >> earlier about pushing the toothpaste back into the tube in terms of standards, do you think part of the answer could be to introduce more professional standards? >> do what? >> introduce professional standards within the banking industry? >> yeah. not just in the banking industry. you know, better extend it to the legal. profession too. i don't want to hurt any feelings here. we have a real problem. look at -- it's getting more attention. what about auditors? >> there aren't any.

>> anybody here -- >> not like the united states they'd all be lawyers. >> i don't want some profession to go away with a feeling i didn't offend them. >> i think there has been a change in professional behavior. law firms are an example. partly a compensation question too. >> okay. >> andy? >> this commission is tasked looking critically at -- sorry to come back to that but you've been very diplomatic and the ring fence so far and we've listened very carefully to your criticisms. can we fix or more importantly can we make it more effective than it will be at the present? >> i think you imposed right now it would be effective to a

considerable extent. now, whether, you know, i might argue the causes and you didn't have to go that far and it makes big business lending more difficult and maybe questions of payment system that you didn't need to go that far. but yes, can you make it effective? compared to where we are now. >> you mentioned -- and comments to the daily telegraph it wouldn't work in fall weather. that's important that discussion. >> these problems, you cannot read the treasury paper, you cannot read [ inaudible ], you can't read the original paper without knowing that there are leakages, if you can call them that holes in the fence because

there are advantages in having them. that doesn't mean it's not going to be effective the day after you impose this. depends on how many of those you put in there. saying over time, those are likely to get bigger rather than smaller. that's what happened to glass diehl. we're somewhat influenced. glass degreele was a simple law. it said the bank can't trade, se except in government securities and other things. you cannot hold a trading security in your account. you can act as a trader for a customer but can't deal with them. but then you got a subsidiary. can the subsidiary do it. somehow it's put in there well if it's not principally engaged maybe you can do some underwriting. what's principally engaged me?

for 30 years, people assumed that meant no, you can't do it. then the banks began getting more -- what do you mean the law says principally engaged. we made up this subsidiary to sell apples. and it's principally engaged in the apple market but we wanted to do some underwriting. that's what the law says. so we said, great wisdom, it's only 5% of the activity, you can do it. that's not principally engaged. but another federal reserve later, that got to be 25% or 30%. or whatever. and through the years, a whole lot of additional securities were added to what was possible for a bank and for the

subsidiary to do because you could find language in the law that said the regulators had some discretion. and by the time some justice in those that said by the time glass degreele was abop lished it had already been abolished in practice. >> the original vicars proposal slightly mandated was investment banking would be here, retail banking would be there. i think what you're saying to us, over time and with financial innovations that will change? >> [ inaudible ]. there are a number of things they say yes, maybe the commercial bank can do the retail bank can do for a customer of the wholesale bank. can a big company put deposits in retail bank? if not, why not?

so they said well maybe he can. i don't know where they're at on this. can the retail bank lend. i'm taking simple stuff. lend to the big customer and under what terms and conditions or is that wholesale. what's the borderline or wholesale. endless numbers of these questions that arise. you can read. i read it on the plane coming over here. >> can i -- move you on and ask you about this whole issue about how independent the retail part of the bank should be? you mentioned about the board -- of the overall boards to allocate capital. that's one of the big concerns here, a way of -- >> i think what vicar says, you can do this, yeah, the overall board in the end can allocate the capital except he's going to have a provision of law that says a subsidiary holding

company will be responsible for the adequate capital of the retail bank. you know, that's an unusual -- i think you can agree that's an unusual provision. i don't know how long it's workable. because they are both part of the same company. the ultimate stock holder has an interest in both sides. it may not be impossible to insulate one part. at the end of the day, the stockholder. his immediate stockholder is obviously the holding company. but the ultimate stock holder is the stock holder in the holding company. if he changes the law he knows what he's buying. he hasn't got -- whatever law says he hasn't got influence on the retail bank.

but it's -- that's something that you have to work out over time. >> for what it's worth, some of our larger significantly important banks seem to be warming to the proposal they would like some changes at the boundary. is it possible, i mean, your experience of the volcker rule in the united states where there have been changes to the boundaries, is it possible to be absolutely definitive and what implications does that have for regulation? >> couple problems. you see, proprietary trading, the law says it's quite reasonably, it's not a proprietary position if it's well hedged. i forget the exact language used. who? the banks came in and said we hedged the whole position. make a caricature of it. we have some stocks, standard &

poor's 500. that's not a hedged pro pry -- that's not a hedged trading position. that's a hedge fund. that's what they do. the law says -- but you have to be practical about it, they hold a particular security, long position. short position against the security that's a hedge and that's okay. they then say well i know, but we have this particular security and it's not traded very frequently and we can't take a short position against that particular security, but suppose you take a short position against a similar security or something close to it. so i'm sure in the end of the day that's what they're struggling over in writing the regulation. if it's close enough they'll say okay. as they said. but how do you define that. there are problems in the volcker rule no question about it, that involve similar

problems. but, you know, the whole [ inaudible ] didn't exist. it's a wonderful instrument for hedging. somehow the banks 200 years got along without it but they -- it's a great hedging instrument and it can be an efficient had hedging instrument. ta doesn't plain how at the beginning of the crisis estimated $60 trillion in value of credit default swaps against a universe of risk that may have been $6 billion to $10 billion. how can you have -- if you hedged every one of them, they're hedged six times over, which is an oxymoron, it's no longer a hedge, somebody --

somebody's hedging hedges. and that's what the traders do and it's all right but don't do it in the banking system is my argument. >> let me ask you one final question. looks likely that the united states going ahead with the volcker rule, europe is considering the proposals, we're considering vicars will not cause any problem across banking systems of internationally? >> you're getting beyond my confidence because i'm not involved in writing regulation or directly involved in writing the law. disclaimer. fal always fun. but the law gets a little tricky, probably put in there because the american bank said okay, foreign banks can't do a proprietary trading in the united states, but they can do whatever they want to do outside

the united states with so long as they're not doing proprietary trading with americans basically is what it says. that creates you know practical problem of super policing. difficult problem of who's american and not american and all this. and apparently -- i'm just saying what foreign banks told me, a lot of trading activity around the world, be however it originates, pure foreign trading activity, involving foreigners, at the end of the day is cleared through new york because that's where the clearing facility is particularly for dollar transactions. you interpret the law to say, clearing transactions through the routine new york facility, makes it american and you can't do.

you can't have any trade. i'm exaggerating but that's an overreach. the law says something about an american connection, you can't do proprietary. you can do ordinary market making. so i'm sure the regulators are trying to fix that up. and we hope they will because they have a reasonable solution. can they work together? i think they can work together. the idea that everybody was on the same. but come back to the beginning, philosophically, they have common ground. they're both worried about excessive trading, proprietary trading. they're both worried about the curl turl implications of that. so there is some common ground. a lot of common ground. >> maybe we'll end up with the

volcker rule is what you're saying, a little bit passse here. >> i think we're going to call it the love rule. >> thank you m chairman. i just wanted to hark back, mr. volcker, to some of the comments you made about your long-distance visit to continental illinois via chicago, to be fair i should say i joined continental illinois as a new banker on the day that penn square bank in the shopping center in oklahoma went bust to continental illinois with it. i do understand the issue of under capitalization and difficulty in assessing risk. but if we could go back and just get -- dig a little more into your thoughts around bassle 3 you've talked then and been quoting as discussing the practical