>> so the issue about making this automatically is sometimes used interchangeably and it's an interesting concept that we have actually recently studied in depth with other organizations and so in the conclusion of this, we came out of a believing that while we should study at but it might be viable, there's too many things about it but don't make it ready yet. so some of the problems are that students can borrow more and we don't want that. some will pay longer than they would under the rendered repayment plan we don't want that either. and the third thing is about the proper institutional reforms in place. ..

so it appears that most of those are ours will be paying their loans so if that's the case why would we, because that's the current default system right now. why would we want to change it? i'm trying to figure this out. i don't have a dog in this fight one where the other. >> my goal is success not just

in the classroom but once they graduate from the classroom and by allowing the income base repayment to be the initial, the automatic prepayment plan it insures that no student would have a loan repayment that would exceed their ability to repay. therefore reducing the default rate. it simplifies the process. it makes it more user-friendly for the borrower and it insures their ability to repay. >> this is something we will have to take more to look at. i like income base repayment but should it be the default or should just be one and an arsenal of different things? the problem i have with that is sometimes people take the easiest course out which means they lower their payments even though they could pay more and they stretch it out and over period of time they wind up paying more in interest charges rather than on the principle and that's the only problem i

personally see with it.

the collection agency writes one letter and they get to keep 18 to 20% for doing almost nothing. i know that's the thing we got into earlier today but it seems to me it's an outlandish kind of thing and plus the -- that goes on with these collection agencies. my time is run out. senator alexander. >> thanks mr. chairman. i won't bring it up again. [laughter] just an observation and this is a debate we had in 2013 when by 81--18 passed a law which put a new market taste interest rate formula on the student loan program. our goal there was for taxpayers neither students to profit on

each other and so we ask congressional office budget to tell us us how can we get as close to zero as we could and those of us who voted for that felt we did and not change what was already happening according to the congressional budget office. it's true that if you take the way the law says, you count whether students are paying back over 10 years it is $185 billion based on what we are already doing. on the other hand if you do what the congressional budget office says we should do which is called fair market accounting which is the way we did tharp the trouble the relief asset program than the students would pay $85 billion more. in other words the students are profiting off of the taxpayers. that's a debate where likely to

have this year between the two different ways of accounting but our goal is not to have one profit over the other when we impose that new rate on loans that cut in half the graduate rate to 3.6%. i thank you for your testimony today and your specific suggestions. ms. johnson your comments about early notification about the money you can borrow. we have heard that before and we are taking that into account stealing with a fast than trying to simplify it. all of you suggested ways to simplify. you could count h. different options of forbearance and other things so available to a student in terms of repaying loans. i would like to specifically ask you which we asked her earlier witnesses about the application form if you could although some of you have done it in your testimony if you would like to give us very specific suggestions in a letter about how you would rewrite this five

page, these five pages which is very small type that would be very helpful to me and i suspect to others. this is not an ideologically required. this is just a simplification and craig and i think you used the word layering new over old. we don't want to layer new over old. if you were starting from scratch and saying you mentioned a single standard repayment plan the single income base repayment plan what would you include on this five-page form if you were starting from scratch? that would be very helpful to me and i suspect to others. finally, i would like to ask you or anyone else, you mentioned skin in the game. one of the problems with over our wing which is not really the subject of this hearing that several of you have commented about it on --

mrs. dill comment on the things we should be alluded to. we shouldn't be up tomorrow as if you were at full time student if you're a part-time student and that's one suggesting. second there may be some -- we could change the law and the regulations that prohibit institution from counseling or limiting the amount of money that could be borrowed for a or a good idea as the skin in the game idea that some institutions at some point if they lend more money to a student would have some responsibility for repaying that. what do you mean by skin in the game and have you got recommendations about that? >> so in terms of addressing the issue of skin in the game we believe that skin in the game when it comes to higher education and the cost of it and how to pay for it and a shared responsibility. it's one that goes to the state institution and the government

so we believe that everyone should be involved in that particular endeavor. when it comes to the issue of over borrowing specifically. >> but how would you do skin in the game as an example? what would you say to the university of tennessee? how would the university of tennessee put skin on the game game -- skin in the game on borrowers. >> one that what recommends a risksharing model. there are some risksharing models are already out there. we participated in what i just talked about. speak in you give me an example? i'm just very interested. >> we could have the institution pay into a fund a proportion that is -- they could pay at proportion equivalent to their lower default rate for example so if their default rate is 20% they could put 20% and that fund. >> 20% of the amount.

>> students who are in default or in repayment. it's really a way of trying to better protect students from institutions that have a history of causing the issue of over borrowing and not just over borrowing and over borrowing of a student not getting a high-quality degree and a student not being able to pay back. >> i time is up. if any of you would like to respond in writing abedin appreciate that mr. chairman. i think one of the things we have to examine is how to get the institution more involved either to have some say in how much money they loaned or a responsibility for paying it back. >> i grew with that. i have some thoughts on that. i recognize senator murray since senator murray didn't have a chance last time. >> thank you very much mr. chairman. this is such an important hearing that you are having and i appreciate all the thoughts

and the discussion on this. it's so telling when we have so many people in our country today who are spending all of their extra income paying back the student loan and they are not buying clothing, houses and cars and contributing to our economy. it is really prohibiting young people i'm even thinking about a future in college. i think it's extremely important and i appreciate all of you for being here. one of my priorities during the negotiations last winter on the bipartisan budget act was to maintain our investments in student aid and not ask our students to contribute even more towards deficit reduction. unfortunately as you know congressman ryan and i were able to work together to provide release to struggling borrowers and the wiele did it was by reducing the collection fees that guarantee agencies charged on defaulted loans. i'm really glad you were here in our want you to talk a little

bit more about how these guarantee agencies collect fees on student loans and you have any estimates on how many struggling students will save because of the changes that wielded put in place? the changes we put in place because of that budget agreement? >> thank you. it's an idea among many to save money and i believe the new america estimate of that particular reduction in the amount of guarantee agency collection fees as well as both the amounts that goes to the government would save $2.5 billion and specifically on that point of reducing the 18.5% that is frankly automatically, guaranty agencies automatically put that onto the lawn balance so it's capitalized. a borrower coming out of rehabilitation actually has a

very much higher balance which makes it harder for them to repay the loan and as was mentioned earlier it's not tired at all to what sort of amount of time or work the collection agency has put into that account so i actually very briefly have a client right now for example. i can't get the collection agencies to call me back to two early rehabilitation. i've been working on it for the last couple of weeks and offices than above. i'm going to do the most of the work and i think we'll get that rehabilitation done because the borrower really wants to work read she has had a stroke and is doing her best but that collection agency will automatically put 18.5% on two of 40,000 other ballots. describes a we'll understand how these guarantee agencies collect these fees on student loans. >> most of them use third-party collection agencies just like the department of education does as well and then the fees are actually charged to the borrower as payments are made so it's on

the commission system essentially whether a borrower makes a voluntary payment or as in this case post-rehabilitation >> how much is guaranteed? >> again it's the third-party debt collector and it's not tied to how much work is actually done pro bono. >> thank you very much. mr. chairman the other issue that i'm extremely interested in is this issue of financial literacy and something i have talked and worked a lot about involving legislation to help ramp up some financial and economic education efforts for students beginning a lot younger than when they get to college but i think the more you know the more you can make reasonable decisions and we just do a very bad job in this country of doing financial literacy. several of the panelists have talked about strengthening loan counseling and i want some of you to comment on how much long counseling is done right now. is it done by colleges or do the

servicing agents do it? how do most students get the information about the interest-rate that they are paying or how long they are going to have to pay it off for what all this means to them? anybody? >> so what are institution, this happens for a variety of mechanisms and primarily we started this because our average was $30,000 for bout that last five years and is a large public institution i'm continuing questioning why is a public institution debts as high as it is. there are variety of reasons but we implemented some counseling. the first primary mechanism for counseling is the entrance loan counseling that borrowers can do prior to completing the promissory note. they are required to do it. they are required to do it so if they haven't done entrance counseling. >> is this the university requirement?

>> no, this is the this is the federal requirements so they can do the master promissory note and then do entrance counseling all is one process on student loans.gov. we put a hold on the disbursement of funds until that entrance counseling has occurred the challenge with the entrance counseling is that like many other things that are internet -based its text heavy and you can just scroll throughe you very long to do the send it through the process. >> without really reading it. >> without reading it. anecdotally we hear there are parents doing this on behalf of their children that make us shudder because the borrower is not getting that information. we are utilizing a financial awareness utilizing tools to her. we are mandating that they come and visit with us in person before they borrow from her private loan program and use that tool to assist them to make

sure that they understand things like interest-rate. we have been very successful in reducing or even diverting some of their private loan borrowing that has occurred. one of the pieces we are most pleased with is five years ago 71% of her students who graduated with dead were undergraduate students graduating with debt. we have dropped back to 61% so over a five-year period of time 10% fewer students are leaving are institution with debt. those that are borrowing are still borrowing the same amount of debt but there are fewer of them that are borrowing so we are making some progress we think. we also -- exit counseling is mandatory for borrower so prior to their departure from her institution they must go through the exit counseling but you don't have a lot of teeth in that because if a student does not do their exit counseling you don't withhold their diploma or put a hold on

their transcript for getting a job so we tell them it's a requirement that they may not do it. >> i think this is a really important area and again mr. chairman thank you to you and senator alexander. >> i think if there's one thing that definitely cuts across party lines here and that we all agree on there has to be better loan counseling. senator alexander has talked about even going into high school and getting at that level which i agree with. i think the central thesis of that we need to have better counseling and there may be some differences on the edges but that's a common theme that runs through all of this. senator wyden. >> thank you mr. chairman. ms. loonin you recently wrote a report on sallie mae that is doing both servicing under the tracks to bomb program and still has outstanding old federal

guaranteed loans. sallie mae touts its status as the loan service or with the lowest default rate so i recently sent a letter to sallie mae asking for more information about its default prevention strategies because i think it's important to understand the default aversion programs the our worst use whether it's a deferment, forbearance, income-based repayment for something else and i asked for data on all of the federal loans including federally guaranteed in the direct loan program. sallie mae recently responded to my late letter but it did not respond to the extensive data requests. instead sally mason three pieces of data related only to to the direct loan program. it's direct default rate in its income-based repayment rate. ms. loonin i wanted to ask are these data sufficient to build an accurate picture of sallie mae's default retention

strategies? >> thank you and it's great that you are holding sallie mae more accountable and i'm really sorry they have here today. it's excellent that they revealed some information because we do want to have more data but that's very incomplete. first of all by not including the fell information it does not give a complete picture and surely sallie mae has control over its fair -- fell with no worries not to release that information. that would be extremely useful information and you would get more historical data because the program has gone on for longer. also within default prevention is helpful to see what there is to take six are but prevention is about more than this cliff of who falls into default. we have to parse that out and see by the times in delinquency is for example, look at similar programs like the camp program

or the mortgage programs how many people inquired and what was the acceptance rate in what was the end retention rate. that would give you a much deeper picture. >> thank you very much. i am very disappointed that sallie mae did not come today and that they can support me take a closer look at how all of our services are performing. but we need accurate data to be able to do that. thank you. i want to ask a second question about the student loan program. our student loan program runs from 2007 to 2012 are now on target to make $66 billion in profits for the united states government. just that small cohort and let's keep in mind these are the best data we have available. these are government data. these are not data anybody else made up. the gal the cbo and the fed are all looking in the same direction on what's happening to students that are loading up on student loan debt. right now s. estimate we have is

the interest rate we are going to charge next year to her students is nearly double the rate that undergraduates would have to pay in order to have the program break even and as much as triple for graduate students and for plus loans. i think it's obscene for the federal government to be making profits like this. measured in billions of dollars off the backs of our students. the question i want to ask is with 1.2 billion -- $1.2 trillion in outstanding student loan debts and a third of our worse, more than 90 days to link went on their student loan debt, this is crushing our young people and i just want you to talk about what the implications of this are for young people who are trying to start their lives. dr. cooper could you talk about that please? >> absolutely. i think we definitely in to keep these things in mind because it

was we extend the repayment options to 20 or 25 years that we have to recognize that delays the student's ability to make life choices like buying a home and saving for retirement and things we have all heard about i'm sure in various articles and reports. we need to be mindful we want our students to be active and effective parts of our economy. >> thank you very much. i see that my time is up. what it he already if we had a couple of more responses on tha. i won't ask another question. >> thank you and i want to say what i see with my clients many of whom as i mentioned did not succeed the first time around the debt is really crushing their opportuny to try again. they really are trying again and if we looked at the cost that when the long-term it would cost us less to have them actually succeed. >> i would answer from the perspective of having a number of new young staff in my office as well as the students that we serve and yes they are delaying

those life choices. they are utilizing the income-based repayment plans just to assist them but homeownership, all of the things that we contribute all of the successful economy and we want to have happened to drive our economy towards more health are being deferred or delayed because of the debt. >> i would just say that it is a burden and i concur with what the other individuals have said and i appreciatehat this committee is doing to help our students be successful not only in school but the repayment process. >> i appreciate all of you coming today and i appreciate the work you are doing day in and day out and thank you mr. chairman and ranking member alexander for having this hearing today. there is no problem that is more urgent in our economy and our country. we don't build the future if we crush our young people of that and don't let them have a fighting chance to get a start. thank you.

>> senator warren. none of you and your testimonies touched on something that i also look at and that is the lack of any limits on graduate student loans. prior to 2005, the kids going to graduate school could borrow stafford loans of up to a certain amount. in 2005 a new program started so long plus program so today a student going into graduate school can borrow up to the next month or stafford loan and then they can go to this new program created in 2005 that has no limits. i'm just amazed at this and i'm wondering, i've seen a lot of these loans with grad students

that has really accelerated since 2005, huge. i am going to get more data on that. it has happened there. i have two questions. one, should we be looking at again establishing limits on red plus loans and secondly how much does the fact that these graduate loans are going up to 100 or $200,000 raise the average national loan indebtedness that we see of all students? i have said before i think the average is $29,000. how much of that is boosted up because of the grad plus loans that are out there are? can we put limits on it? ms. johnson? >> first of all the statistic about the average indebtedness when schools are required to report their indebtedness on common dataset etc. the question

has always asked what is the average indebtedness of your undergraduate students? i have never been asked to report on the indebtedness of my graduate students. >> do you have that data? >> no. we have been trying to do a study on our campus because we did get a grant to study this. it's difficult because you have to sort it out. many students come to you later after having done their entered graduate study and have already consolidated some of their loans which are then in a big balance and trying to figure out what is graduate of what is undergraduate is a difficult prospect but now we have never been asked to do that. >> are you telling me we don't really know? the indebtedness of these grad plus loans? is that affect? >> senator harkin what i can say to that is i don't know the indebtedness but i do know

graduate student borrowing has increased between 2008 in 2012 which does suggest we may want to take a closer look at grad plus loan policy. >> but the grad plus loans comes through the department of education direct loan per gram, right? >> that is correct. >> we really don't have a handle on how much is going out there and how much students are borrowing? i find that very disturbing. maybe some of it is an total about 200,000-dollar debts and things like that kids go to graduate school and they have huge debts and they may not get jobs after that it go into teaching. and they can pay that back. am i missing something here? >> it would also be worthwhile looking at how much of that is grad school debt versus how much is undergraduate debt and sometimes ended totals we are not able to disaggregate but

belongs at the undergraduate level courses what's at the graduate level but as i said before it has been for the grad plus loan program that we have seen increases in the number of borrowers in that program. >> just a moment. i want to hear from the department of education and i want to asem and find out from this committee will kind of data they have on these grad plus loans. how much is outstanding. how many are being defaulted on and suffered from the regular stafford loans. this is amazing. love last thing i would say is i have a bill s. 546 called the smarter borrowing act to strengthen loan counseling create more requirements and schools. i'm going to ask each of you, have a lot of co-sponsors. i ask you to take a look at it and tell me what needs to be done to it. what else do we need to do to change it and modify it? one more question i have.

ms. dill you said something that again startles me. current federal regulation schools are prohibited from requiring additional loan counseling for students who appear to be over borrowing or who by statistical indicators appear most at risk of defaulting. is this so? >> yes, sir. thank you mr. harkin. absolutely. the federal regulations require entrance counseling is a prerequisite to disbursement, the initial disbursement but after that institutions are not allowed to require additional counseling for disbursement. we can offer it but we are not allowed to require it and without the ability to require it there is no teeth in it. ..

>> $57,000 in 2012. but he said the average indebtedness, you don't have a grudge with programs?

you do but most undergraduates. >> darr reported data is the undergraduates of $29,000 sinecures is 30,000 for undergraduates? >> yes. is that the maximum a student can borrow? what i am trying to get to are they simply because the interest rate is 3.8 percent are they bar wing all that they are allowed? why are your numbers about the same? the mcfadyen is a and interesting question the aggregate limit is $31,000. for the independent student is 57,000. >> so they could borrow more. is it your judgment that if he were allowed to students

were required with each disbursement to have fretted to counseling that would be good for the student or just another federal regulation to caused college administrators to do unnecessary work? >> i think that it would be allowed but not required because you do have the statistical indicators of those that are the most capable a and will prepay you don't want to create the necessary administrative burden but i am advocating for the ability. >> we have done prior to disbursement we require the student to say yes i wanted to or no i don't with the link to repay but if you take this here is how much it will cost. >> you have slid around its. [laughter] >> but you do it do that with private loans. >> you would like to have it

as a tool. >> five would not make it mandatory but i would permit >> that changes department regulation. correct? >> yes. >> the only other thing up with like to end up paralyzed started out i cannot remember anyone to say it was easy to pay for college. but i think it is important

to make the boat has been called as a back we had good testimony. please tell me what we need to do to modify changes. i appreciate that and to our witnesses with the expertise and i request the record remains open until april april 10th to submit'' it answers to the record. >> thank you for wearing red and gold of the cyclones and i will take a vintage of the fact mr. murphy is not here to say tomorrow night go cyclones. [laughter] >> just a minute. [laughter] >> 7:15 p.m. tennessee will play michigan. >> we will all be to you.

[laughter] [inaudible conversations]

>> the driver instantly wanted to know where the film was because i knocked it out of her hand.

♪ she was alive for about 45 minutes before they cut her out. ♪ >> hello i am a 16 year-old and i ready to start driving i am eager but ascared. many drivers are focusing their attention on the cellphone rather than the road. statistics showed distracted driving is dangerous and they have no place behind the wheel and something needs to be done about this.

>> a panel of academics and journalist look at the role of u.s. tax policy and debate ways to improve the current system. the urban institute hosted this. it is about an hour and hamp. -- half -- >> welcome to the urban-brookings tax policy. we are going to be talking about tax reform which is the holy grail of tax policy. it is sought after.

there are rumored sighting all of the time. there have been recent tigsights like tom camp and ron whiten promises after extending the 5,000 stupid tax extenders for the last time there will be tax reform and it will never happen again. president obama called a tax reform commission, president bush called it. their independent tax reform commissions. we have lots of commissions which must mean tax reform is coming soon. by the way, tomorrow is april fools day. the -- i don't want to steal the thunder of this group. these people know how we will get the tax reform and they will tell us how to get there.

the moderator is howard glekman who is the senior fellow and the editor and chief of the tax blog. one other piece of information, i googled holy grail before today's talk. it has been found. it is in the leon, spain area so tax reform is coming. this is an unusual event. we normally have economist up here. today we have political scientist talking about the tax reform. it is challenge issue. it is one of those issues that

politicians love at 30-thousand feet. as long as they can talk about cutting rates and closing loop holes tax reform has a number of friends, but once they get down to the dirty work of identifying what the loop holes are the lawmakers fall silent with david camp being a rare exception. the challenge is how can we get public support for reform? is it possible? it is necessarily? we will hear about the '86 acts. we have three leading political scientist here.

ka karlyn boman, bill galsto and also leonard burman. we are going to go in alphabetical order. karlyn, want to get it started? >> i would like to say about the polls i watch at ai on many subjects. i think they are a useful tool to understand things but ankh i don't think they should be used to make decisions. public rarely gives specific legislatorive -- legislative

advice. there are other problems with sweeping choices from the data. the response rates of surveys are around 10% but more troubleling is pollsters are not upgrading the valuable trends they had. they have become the hand maidens of the media going in with it is hot and dropping it. half a dozen major pollsters were asking questions about the irs targeting the specific groups but since it faded from the news there has been one question from the irs. now let's turn to 1986 views about tax reform. gene sterling reminds us when ronald rake reagan asked for a

study on tax reform congress bursted into laughter. gene went over a number of reasons why he thought tax reform was successful. and he talked about seizing the opportunity. individual tax shelters were running a muck and the income tax system was become more complex. but there were other factors that are not present today but were in 1986 that may have been helpful in moving the reforms forward. i don't expect public opinion to be involved, but the climate was different in 1986. gallop reported the public mood was the brightest on record. compare that to the sour rate in 2008. in the spring it was 60%

approval rating and congress's approval rating was 42%. it dipped below 10% in several polls last year. 40% said they trusted the government to do what was right just about most of the time. in january 2014, 15% gave that response. there is little evidence americans were following the tax reform debate in 1986. 26% said they had no opinion of the proposals and 38% were in favor and 36% were opposed. tax reform wasn't a major thing in 1986 but is today. four pollsters asked about the

priorities and economies and jobs topped the list but closing loop holes or taxes didn't rank in the top five in any of the polls. one of the reason for the disinterest is when people hear reform they think their income will go up. even thoughs in the lowest tax groups thought their federal income tax would go up under reform. so in many ways, the public opinion climate is different from 1986, but the public's priority on reform and the belie belief that no matter what happens they will go up is similar. in 1986, most people said their federal income taxes were too

high. but we have seen something interesting since 1986. in june of 1985, 60% said their income taxes were too high. today there is a closer division of opinion between the too high and about right responses. in a number of polls the about right exceeds the normal change and that is a big change since the 1980s. here is another trend. this one puzzles me. since 1992, gallop asks people about upper income and separately middle or lower income people pay too much or right around the right amount. upper people paying too little

is still the majority, 61% but it is done from 77% in 1982 and has been moving down. we don't have the 2014 response on the question yet. and the part saying lower in come pay too little is small but 2% in 1992 to 20% today. there is only one pollster that has a solid trend on this kind of question, sadly. policy makers need to be aware of what public opinion is but i don't think it should determine the tax policy. the kind of work chris is doing will show this isn't useful to people thinking about tax reform. >> chris is one of the few political scientist in the

country would see digging in detail into people's attitude on tax preference and spending. so give us a rundown. >> when i read media counts of tax policy, i read words like n untouchable, wildly poplar and one quote that tax breaks are something that citizens came from the bill of rights or moses. and given my own research, i find these protrails of tax breaks to be confoundling. in the research i conducted, along with others, we found the popularity of tax breaks is wide, but not very deep. and a lot of the public opinion on tax breaks is conditional. conditional on information citizens have, conditional on

their partsinship and income level. so the public isn't uniform in their proposals to tax breaks. and any pathway to tax reform that i read crus the elimination and reduction ouch of cap expenditures. there has been recent evidence from speeches from obama or paul ryan or even boehner talking about tax information to citizens that might downgrade support. president obama has given a number of economic speeches and talked about tax breaks in his state of the union addresses.

there are portions where he says i support the goal of home ownership people need to understand the tax breaks gives tens of thousands of abouts to the wealthy households and nothing to the families that need it. so there are attempts to inform the public about the distribution of the tax cuts in a way for support. chris ellis and i conducted a survey experiment that tried to see if people were given the information about the tax cut break breaks did it soften their support some and we wanted to see if they were a right given by moses like they believed.

we took a sample, assigned them to four different groups and presented information on social programs. we used identical language in the fist group but one was a tax break and the other was a direct government program. we found tax breaks were poplar across groups in that experiment but they were more poplar with conserveatives and republicans in the survey as you might expect. but in the next set of groups, we gave people additional information about the distr distributive affects and we had the retirement and home mortgage programs. we found by giving them a little information that wasn't heavy p

heavy-handed where we said people are larger homes get benefits and with the retirement people who pay more get more. even including language at subtle as that we found it done do downgrad downgraded the support. there was a catch. with and when you look at the people responding by their partisanship people who were independents and democrats downgraded but the conservatives and republicans didn't. so this additional information on the distrufbdistributive mat

independents and democrats, but not for the people when are self-identified as conservatives and republicans. so there is, we think, support for tax breaks but that support is soft but again conditional. some of these effects varied by income cohert. giving information to voters could have an affect, but the effect isn't going to be uniform. and giving people information will matter for some citizens and not for others. >> bill is going to talk about tax reform. the '86 tack reform as well. but from a different

perspective. >> thanks for inviting be to be on the panel. when the introduction was happening and they were talking about the move on tax reminders. i was reminded of the make me chase, o'lord, but not yet. everybody knows the obstobsticao tax reform. the opacity of the system, the complexty of the relationship between policy input and output leads to the fears that were being discussed namely i don't know how this works but the odds are i am going to lose if the

system changes. i don't like the way it is no, but i will be worst off. history records that these obsticals that are powerful, particularly with the constitutional system, stim from time to time, most recently in 1986, tax reform has come pass. my view is that history never repeats itself but it does rhyme occasionally. so it is useful to take the successful '86 reform as an analytical baseline. i want to ask what were the enabling conditions that made that reform possible? not inevitable but possible. you were briefed in detail about the state of public opinion.

and i would just venture a summary judgment, which i think it is consistent with facts on the table, compared to now, public opinion offered a more per missive environment for tax reform today. it wasn't at the top, but the sentiments about government and taxes in general generated a per missive environment. i remember when the house ways and means committee chair sent out a famous request write rosty if you want tax reform. he got an avalanche of responses and i doubt a similar response would move the public today. enable conditions two: there was a rough and bipartisan c

concensus at the elite level. there were people that remember the camp caston proposal and along with the perhaps better known bradley gep heart proposal. the congressional budget office did a side-by-side of the proposals and they looked similar. you could look at the side-by-side and see how a deal could emerge. democrats and republicans agreed on the parameter of revenue neutrality and that was very important. i can tell you having spent time on the hill recently no such agreement exists today. another key factor, the alignment of key institutional actors in the congress and in

the administration; the house ways and means chair, on the senate finance bob didn't start out as a proopponent of tax reform but got there. there house and senate leadership were on board to the extent they were not telling key committee chairs to keep their mouth shut. and there was an interest under the treasurey with two terms of don regan and jim baker. and thrusere was a public cry f reform. bill bradley would attend the opening of an enevelope for

tori tax reform. and last but not least, presidential support. reagan was unequivocal about doing tax reform and he told and directed his secretary of treasure to deliver a concrete proposal. i was the issue director so i had to smile when reagan directed his treasurer to deliver the proposal after the election. but not only the '84 state of the union address, the first

policy address reagan made after being elected again was a proposal. they were creating a space for the serious conversation about tax reform. if i had more time i would go through the list and show how none of these enabling conditions is present today. you know, perhaps in the q and a we can go into greater detail. but john boehner's response to dave camp's tax proposal -- blah, blah, blah -- spoke where his head was on tax reform and we could talk about the other

insti instituti institutional israel values. will this change? or be another wind mill? as all of us know, ron whiten can be a public advocate that is persistance and has a record on tax reform. with the midterms behind him, speaker boehner may decide it is time to legislate and the president maybe reluctant to leave office with no significant economic policy accomplishment in his second term so one would imagine thinks look better in 2015 than now.

>> i want to ask karlyn to follow-up on the people's attitude toward tax preferance. >> the question on pew for tax reform there was no differences in the questions and that surprised me. i think that makes reform difficult. we see the deep partisan differences in many areas. >> bill, it is interesting. it is said that paul politicians love to give out goodies. for republicans it is the tax code and for democrats it is spending. in that environment, how does one convince republicans to give up their favored mechanisms for

giving stuff away? >> well, let's go back to the very beginning. the classic cunonedrum here is diffuse benefits and the possibility of concentrated losses and the reverse. it is easy to confer benefits that are concentrated benefits that will be defended by the recipients. what we had in '86, everything i say i say is provisional with sterling in the room, but pol politically spending there was a broad and passionate group within the republican party that

believed the key to economic growth was significantly lower tax rates. that belief, that was the supply side movement in its youth. wordsworth wrote about the french revolution and it was very heaven to be alive during those days. and there were people that thought they found the missing key to economic growth and non-inflation growth after a s dismyl decade. it was just barely enough to overwhelm the perennial temptation you talk about. there is strong institutional

support for the idea of lower rates again. that was a major objective of camp's exercise and there is one publication, the one i write for, that thumps the tub tirelessly for lower rates. ...

>> if you are able to rank these tax increases with the other programs, not just popular in perception, then it seems that people are willing to let go and favor tax breaks with the marginal income tax to be raised. in another comparison is one thing that would make it more difficult this time is that there is a change in the composition of overall tax expenditures after 1986, which a lot of the business sector expenditures were/. which allow them for individuals and the proportion of overall

taxes that go to individuals or these social programs rose and has continued to be close to 80%. so, you know, if you consider this in the pressure of the groups, i'm not sure that i would use that phrase the low hanging fruit. but it would be more difficult are trying to cut individual expenditures and going up to the business ones. >> that brings up a very interesting point and it is often forgotten that the reform was revenue neutral in its totality. but if you look at the two stovepipes of this is that corporate taxes actually went up as a result of reform and that was then used to subsidize more changes on individual side that could otherwise be achieved under revenue neutrality.

and i suspect some of them who smell a rat may be onto something and so stay tuned. >> it's an interesting issue as we are pointed to point out. so much happens on the individual by that that makes it even more important. >> the brings up the deep split between the small business people represented by the national federation of independent business and the corporate business community. their interests are not in alignment on this issue and many other issues as well. it is increasingly notional to talk to this point. >> let me ask you about this.

i would like you to dig a little deeper into it. so is it even necessary to have broad-based public support for tax reform, or is it kind of a public this assurance of disinterest? >> well, we need some victory in a slightly different way. if you look at all of the government activity, there isn't one area where people are really positive about government right now. and they really do believe the country is safer since 9/11. and that is something positive that i see. but the approval of congress in the last couple of months since the agreement in late 2013, it was actually picking up ever so slightly because the mood has been quiet. and so is there is a fix that and something is seen as getting

done, that could provide so much for them in congress and i might be a good thing. the public is never going to be engaged in tax reform. it just isn't going to happen or the pros and cons or all of these other issues. we think about these issues and i think it is possible that even let a significant lack of public interest it is something to move forward because it's the right thing to do and to be a success. >> let me ask you about that. what politicians be better off trying to sell this as the value issue or the economic issue in a you know, i think so. there was a recent study talking about a disconnect but after the bush tax cuts, two thirds of americans say that they supported them even though when you asked him on the same survey they fed it got inequality was a

problem and they wanted to take policies to address the inequality gap. so why would two thirds say this and then say that they want the government to a dress crime and inequality. so i believe this disconnect is caused because they have not linked other issues that people really care about. so one thing that we have an public opinion is that there are certain issues that are tethered to people's values and believe and there are some positions people take just because they are out to take a position by events. so it is really important to get into that depth of conviction when they are talking about public opinion and whether someone is saying that they support tax reform or whether it is tethered to this ideology. there's a fabulous book out by chris ellis about ideology in

america. and one of the paradoxes of public opinion is that they look at over 7000 questions since 1956 and it shows that a majority of americans and even the majority of self identified conservatives and republicans say that they won in the abstract lower government spending, smaller government. and they sometimes want increased spending. so one thing that i want to talk about his tax expenditures allow them to thread this public opinion. so if you're looking at the public opinion in saying that you want smaller government and less government, but we want you to spend money on health care and education, if you are able to support tax expenditures that you can finance popular goals and support with the groups and at the same time make rhetorical claims about this. but the tax breaks were able to

be linked to income inequality, which becomes a bigger issue that could sway some people. so just to point toward research and also to others, it will have an affect on independents and democrats. if you link the tax breaks to inequality, i doubt given the result that it will sway the opinion of people who identify as conservatives and republicans. >> if it is, what is the value? >> well, just for fun. i went back and i took a look at the speech that ronald reagan gave at the signing ceremony for the 1986 tax return. and his answer to that question was that it is both an economics question and he refused to give one as opposed to the other.

he said to individual citizens, this will be good for you and good for families. but he also sent to the country that the spirit that made america great is the spirit that will be revived and rushed by the new incentives in the 1986 tax reform for innovation and entrepreneurship. the kind of individual enterprise that has been a part of this country. so he was unabashed with the complexities of tax reform and fitting them into the american narrative that he was so good at telling and retelling. and so every time he retold a it was as though he was saying it for the first time. so my counsel based upon this practice is do not choose between economics and values.

read the narrative of tax reform is part of the values that you believe in most passionately and believe that the american people either do or can be brought to embrace as the core of the problem today. with those values being the same as they were in 1986, not necessarily. times have changed. so for example right now i think that it would be very effective to try to link the tax reform to accelerated job creation. that is not what ronald reagan had to worry about in 1986. it was certainly had to worry about it today. and so similarly, my impression is that even within the republican party there are now some second thoughts about this

warship of the individual health reserve. the job creators. a lot of them are beginning to ask themselves what about the people who carry out jobs faithfully but don't necessarily create them. are we abandoning a whole section of the population with this rhetoric of ownership. and i think that also linking the tax reform to the wealth and security of average families, the jobseekers and not the job makers, it would be an updated version of the values of tax reform. >> okay. so let me play at devil's advocate with everyone. we know some things about tax reform that we didn't know before. >> just. >> so there has been a good deal of research that suggests

whatever good tax reform dead, it didn't do very much for the overall economy. >> just. >> so we have with that experience, can we make the argument, and they tried, can they actually make the argument that tax reform is correct. >> the pessimism is seriously so deep. it's been there for so long, since 2008. such a very high level. so i think that they want to try things to see if they can work because the picture is so pessimistic. >> so that is another interesting issue. i asked bill, given that the pessimism that existed about the ability of government to do something right.

are people willing to give the government the benefit of the doubt to do this thing called tax reform when they don't understand what it means? two i see two potential obstacles. one is that a lot of policies that are indirectly related to economic growth are framed as good for economic growth. so there could be a mistrust and the public that this is yet another policy that is being framed for economic growth and the other three, it is good for economic growth and then there are other things as well. one thing that is unnerving about public opinion when it comes to trust in government and even questions about do you think that you're paying your fair share. correlate highly performance of the economy. so if you look at trust in government and economic performance. these correlate over 40 years. so as public opinion scholars we

must question when we ask about the government, people using the economy as a way to evaluate performance of the government. and so other people have talked about how that is a window of opportunity to carry out tax reform because the public is going to allow them to raise taxes on them. but we call into question the very ability to measure and trust in government because the correlate so well with the economy. also people's perception of when the economy goes up able think they are paying their fair share. when the economy goes down the more people are responding that their taxes are too high. so because of the correlation with the economy we again have qualms about tapping into real

belief. >> are you sure you meant. >> i'm not sure that i agree. but it certainly is true that they have a strong correlation if you look at this in 2000 and 2001. people were so positive about the environment and then it had nothing to do with the issues at hand. but i still think it's important when we think about something like tax reform. but you have to interpret at carefully. >> you agree with this? >> they're actually two questions on the table. so let me address both of them. first of all i think that what chris says about the linkage between the trust and the performance of the economy, it

is arguably true for the last 40 years. but if you go back a decade before that, which is the time when the trust in government moved functionally from the world of our fathers to the world today. that is the early 60s to the early 70s. there it was not principally driven by the performance of the economy. so this is -- this is a short-term from god side, caught 40 years from it. but not something that is eternal. >> will actually, kennedy tried to solve it. and so on the broader question i think we need to distinguish between tax reform and tax revolution. tax reform, i will call the kind of reform that means what it

packs, more or less the way it was, even though it deals with it differently. tax revolution would be a change in what is actually tax and i suspect it will be easier for the american people to understand a proposal for this at this point than for tax reform. so let me give you an example and i am not a tax professional. but my gut tells me that it may be a productive proposal. so right now we are taxing labor pretty heavily. and we are not taxing carbon very much at all. but we claim we want more jobs and less carbon change permissions.

some have proposed it as a replacement for the payroll tax. there are all sorts of obstacles and at least people can understand that. and pending further inquiry there is an economic maximum of you tax something less you will get more of it. and what we want more of his jobs. economists say that corporations don't really pay this all with workers and etc. so i don't think they would mind a pay increase at this point by the way. i think that they would be net winners from that, but that is another point. so just to bust out of the conversation altogether, we are supposing that the 86. time time is a roadmap to the future of tax reform. that might be true. that was then and this is now. >> do we know anything about this to accept something like a

carbon tax? >> i'm not sure about it, although i think it a good idea. one thing i consider to be an over arching tension in american politics goes towards reducing the proportion of income taxes for federal revenue is at 70% or more is used by the top 20% and the perception is that that money all goes to the poor. so as long as the majority of federal revenue comes from the income tax, there has to be a perception in the american mind that we are talking about it. but that perception is real and the public's mind.

it creates restrictions on what you can do with social welfare. it creates restrictions on what you can do with taxes. so i think that a revolution is something that is incremental and as was pointed out people might not trust if they hear the phrase tax reform. they might not trust that they are going to be on the winning side. so there is something larger than his done, it is more visible and therefore you would allow people to own real opinions on it. >> i've never seen a question that shows support just in this way. those numbers seem to be pretty hard. but we don't have a lot of this and it's interesting because it

ranked in the middle but not very high and it was at the very bottom. so i guess i'm always suspicious when some opinions change radically. and so when it became real, and not so-called support that has evaporated and i think it intensifies and that is the general obstruction. >> there is a distinction, however. there is a distinction.

and i am unaware of any solid survey evidence either way. but it seems to me that if you asked people in question, are you in favor of increased carbon tax, the other one is no and heck now. but if you put this proposal on the table, what would you think about a proposal that would eliminate the tax on employers and employees now pay on their income, up to $110,000, which covers most of the territory of earners in the country and in return they would be a carbon tax, which by the way is a lot broader. so if you put all of that on the table, then you might get a different answer. and we certainly do so now. >> let's talk about framing.

we were talking about this and she was saying that we have a lot of focus groups on just the words tax reform. and when he discovered was the people hated the phrase with what was said before, that they felt that tax reform was a euphemism for we are going to raise your taxes. so when asking what words do they like, they are like modernized, fairness, but they didn't like reform. >> modernization was part of value. i think that that is why they were more positive and some

whites. >> and i think that there are limits to what framing can accomplish. one thing we don't know from public opinion research as it would take a long time and asked thing even in my own work. so when we give people information, it changes the response and they downgraded tax breaks. one thing that i'm concerned about is that is that change ephemeral or is it something that if we asked them a year later or six months later, that would still stick. so it's giving people information that might change their level of support for something. and then there is also learning. so how often does something need to be repeated by members of congress or the president for that piece of information that is attached to the pulp the idea to become learned in real and be

reflected this way. and that is something that we just don't have a handle on. >> fairness, anything to ring the bell. >> it doesn't matter what rings my bell, but what rings the bell of the people. and i had to lay that i'm in washington, i associate myself with skepticism about the framing effects. i know there's a lot of political science that has been talked about on that subject. but i think that it is easy for people who are doing the framing to overestimate the effort to give their efforts. a lot of evil want to believe that if we tell a better story we will get a better result. sometimes that is true, but often times it is not. but it surveys consistently to pickups get the schism without the tax reform. and it would be the beginning of wisdom stopped using a politically with the euphemism.

and i think that i am surprised to hear that many americans are satisfied with the results of modernization in the economy. for example, technological substitution. i will accept it for what it's worth. >> let me switch gears and ask you all about this. there are some interesting generic issues about bigger forms of government. we had just gone through one as of march 31. what is the experience of the affordable care act with efforts to do tax. >> i think it's pretty important have bipartisan support. and i think it's very important

given what we have seen. if you look at the question about whether it's working. i think we need strong bipartisan support. >> what about people really understanding this. >> the accumulation of additional information has not really changed attitudes very much at all. the public has a kind of way of approaching the issue and they form their opinions based on their values and journalists and social scientists and people like that change their views with more information and publics don't do that because they don't have time to read about all the fine print for the experience with the aca there. it always starts in the way they talk about this with their friends. so i don't think that the accumulation of additional information will significantly change this.

but what does seems to be a part of this is over it. matter of time. then the public will come to believe that it the right way to go. and they oppose it at the beginning. and so that is why you don't get strong suit for as well. >> what did we learn from informal care act? >> one thing is how polarized the public has done. there's a lot of angst and that has filtered down to the public. so just how much things are interpreted, when we are looking at survey research, they are just severe and very start. so you can't just provide information and think that attitudes are actually going to change. the information is consumed, but

then evaluated against for their own ideology, oftentimes it is coming from partisan sources. so you really can't and need this moment for people who really believe information about policy change. they need to take a stance that would otherwise go again what a person would expect. so the polarization has just created a situation where you really need bipartisanship. because one of the reasons he didn't embrace simpson-bowles, the second he do that publicly it would alienate people who identified with republicans and they are less likely to get bipartisan support in congress. ..

>> and so under nose circumstances, i think it's right that information, as aging

consumers, walter cronkite, you know, information in that old-fashioned sense is almost defunct. i hope not permanently, but what follows that is that if it's not information in the old-fashioned sense that changes people's views, it must be values. i think there's a third thing, and we hinted at this. mainly experience; rights? people will trust the kind of information that cosmgs to them through their own experience whether something is working or not, and i think the question of whether the affordable care act is part of the permanent american policy land scape is entirely contingent on not on what anybody says about it. i don't think an additional word on the subject, even crammed with information, will change a

single mind; right? when people reflect on this years from now, what will it rethrect? that determines what issue it is in the 2016 presidential election. i share the view that what happens between now and november is unlikely to have impact, but two and a half years. >> circle back to taxes. the numbers presented to us at the beginning of the discussion suggested that people's experience with the current tax code is okay. given people's reluctancy to make the changes, how does one sell them on the change they feel may be actually not

necessary. >> it's bipartisanship, certainly. >> it is bipartisanship. >> let me give you all a chance to ask a few questions. nobody's got any, i see. first of all, wait for the microphone, second, identify yourself, and, thirdly, we have a lot of people, limited amount of time to ask questions, please, don't make a speech, just ask the question and we get to as many people as possible. let's start towards the front and wait for the microphone. >> hello, i'm jackie coolidge from the royal bank and i want to hear more about the topic how are relates perception to fairness so on the one hand, most people fill out the ez. it's not that it's so complex

itself, but i think that they have the perception and small groups of people do that the complexity of the tax code favors, you know, a narrow group with expensive tax lawyers, accountants, and everyone else is consequently getting the short end of the stick. >> we know anything about that? >> so there is a survey done that asked people informational questions to see about levels of knowledge, and about income taxes and tax breaks in general and didn't ask about complexity, but if people knew that the income tax was progressive and what it was, and it was 60% understanding those items. where i don't -- i don't know of any questions dealing with complexity, but i believe that people associate, if you think of the other side of the coin of complexity being tax breaks,

which, you know, add complexity to the code, people have associated tax breaks with rich, and one thing that i know is that there's -- so we asked people their feelings about different group, and the rich are not well liked by the american public on an american basis, and so one strategy that people use is to link something, such as tax breaks, with a group that people have a certain feeling towards, so as measurements of tax breaks for the rich and people's negative feelings towards that, that's relatively consistent. that's maybe the window into people's feelings about the complexity. >> chris, two issues about complexity. one is the idea that the other guy is getting the better deal than me, and the other one is that taxes are too hard to do, and there's some people who said the turbo tax effect has eliminated that second one that people just put the numbers in, don't really care, but it's not that hard anymore to do your taxes.

despite the complexities. is there anything to that? >> well, so, you know, a lot of this is differentiated by social economic class. we ask questions about tax, knowledge on the tax system and taxes, unsurprisingly is highly diff differentiated among class. the more education you have, the more money you have, the more you put the right response on these, and, also, i think there's a difference by socioeconomic class on how people do taxes. you might have upper middle income class that feel they do it themselves in a weekend in their living room, but, you know, a lot of working class folks go to a store; right? you see them all over the country, like, you know, american tax company, or whatever, you know, local stores that have do taxes, and the differences how people interact with the income tax is heavily weighted on socioeconomic class. those who go in, gets a refund,

you know, and pays someone from a tax firm 20 bucks, they sat there for 20 minutes; right? those who are likely to navigate the complexity use turbo tax versus doing it themselves. >> another question? yeah, right here. >> thank you. i'm edward, a retired "new york times" economics cor speedometer, covered taxes for several years, and i have a comment, if i may, and then a question for you. a comment is this. you said opposition -- explained opposition to tax reform by saying the opposition is concentrated, and i think that it means a few people get increase in their tax liabilities. when you say "diffused," i think what you could say, and a lot of people benefit, is, well, if you put it that way, well, then,

isn't there more support for it? i think it's because the benefit is only a little. you might comment on that. i have a question. of the several interesting things you said, i thought the most interesting was you couldn't persuade mondale to embrace tax reform, and i wonder why that was and whether the thinking sheds light on the part that he supports nowadays? [laughter] >> first, let me respond to your comment. you know, by my fuse, i think that was shorthand for a set of attitudes and spodgeses very similar to the ones that you mention, by diffuse, i mean, broad by shallow. in shallow in two senses.

first of all, the benefits converge on average taxpayers are perceived as being small in relation to their liabilities than is the case for the concentrated beneficiaries who stand to lose a grease deal, and second thing i meant was weak in the sense as not arian didn't, not very passionate opposed to the passionate opposition to the removal of something very valuable from your wallet. people resist pretty powerfully. you know, i think there's something of a statute of limitations in politics, and if so, you know, mine has run, and so i can, you know, i can report without naming names that i sense a great deal of time trying to organize the policies

processes as mr. mondale oorks issues director that would have led to an endorsement of tax reform at least in principle. it is my -- i know for a fact that as this process nears what i hope is the end, there was a little news item in the old center column of the wail w5*8 -- "wall street journal" that reported this fact, and some people who were quite important to the mondale campaign were not mused to learn about the candidate's impending endorsement of the approach, and there was a certain amount of pushback. i was camed on the carpal tunnel, and that was that. i don't think it's broadly imlym nateing about american public opinion, it is, i think, quite

revealing about the interaction between the policy and the financial wings of the presidential campaign, and i suspect that not all that much has changed. >> any about risk aversion on the part of politicians? >> that's what they are. yes. >> and that may have something to do with the difficulty of tax reform. >> other questions? yes, sir. yep. >> nawng, i'm mark, a fiscal adviser to a number of foreign countries, working with imf, us aid and u.s. treasury. this has been a great presentation, i'm not going to make a speech here, but i have a question. this is a country made up of peoples from all over the world, but we just so narrowly gave the last tax reform, we add milt, not much of a reform, was 1986, but we had reform in south

africa, russia, for sure, all places where this stuff has really been done. are we another planet? does american exceptionalism prevent us from looking what happened elsewhere? i would -- not to interrupt, but is there a research program op what we can learn from tax revolutions that happened elsewhere? thank you. >> have you seen research on this? >> i have not. >> well, i know that there are comparative studies on public opinion and values, and that the holding on to the idea of smaller government and less spending is something that is at its level, uniquely american compared to other countries, so -- >> well, i think political

systems make a difference. if mr. putin decide he wants tax reform, i spent russia has tax reform. things are more difficult here. [laughter] >> [inaudible] >> well, yeah, i -- i think that in, you know, from the standpoint of concentrated effective political power, the king of jordan would be happy to trade places with the president of russia. that's a conversation for another day. i think that, you know, the thrust of the question which i think is most operational for american purposes is the fact we can want conduct tax business in total isolation from the way the rest of the world conducts its facts business, and that's one of the things that is driving an agitated discussion about corporate taxation right now,

and that, on two fronts. first of all, you know, the -- it's my recollection when we did the 89 # 6 reform, we linked most, if not all of the countries of the oecd and had lower rates for corporate taxes than they did. the situation now is exactly its reverse, and people are trying to use that fact as a driver for corporate reform to reduces rates. it's not workedded yet, but they are trying. the second an nexus with our coe and rest of the world is really important. it's generated by differences in the taxation of profits. one of the big collisions right now in american tax policy, a divide, in many republics, are people who want to treat taxation of profits earned overseas in a way that reflects

the overseas rate opposed to people who want it to reflect the american rate, and some people believe that we have more than a trillion and a half parked overseas in large measure because american corporations with significant internarcotic corporations are reluctant to repatriate them at american rates. stay tuned. i think an increasingly thelings between our operation and tax code and operation of tax codes of other countries around the world, is going to drive the discussion of the american tax system. whether it will drive change any time soon, i can't tell you. >> yes, sir? >> it was a nice presentation, very informative, thank you very much. i am a candidate of public policy program, george washington university.

as an international student who has been here five times a year, i always have a benchmark to compare constitutions here, developing countries, and i see -- i feel a little disheartened you have dysfunctional institutions, and -- [laughter] i was reading the gongses by admissions that talk about per specttive institutions. they were talking in the context of the developing countries, thinking what institution would qualify here, in american national congress here, came to my mind. you also mentioned revolution. [laughter] what type of revolution should be it be on a scale of mild to extreme, what should happen to the economy, the government, that jerks them in that

direction? >> well, very, very briefly, and this may be, you know, the cock-eyed optimist in me breaking through my pessimist shell, which is thick, but i would not be surprised, and i defer to experts in public opinion to the near right and far right, e would not be surprised to see the next american presidential campaign waged on the slogan of he or she can get things done. that is, i think that there is a pent up desire for the american people to breakthrough this endsless gridlock and actually come up with an agenda that the person who is legislated president of the united states has the ability do execute.

i think the longer this goes on, the more the desire for leadership, not just presidential leadership, but starting there, that gets things done is likely to build; right? i think -- i think of it as a metaphor. you know, think about the plate lock-in position, and there's an enormous amount of energy generated tugging against each other and don't move, and then something lets lose, there's there's a big move all at once. i -- i believe sometimes in certainly in the next decade, and i hope sooner than that, this pent up public desire for a clear course of action ably executed by political leadership is a dominant thing. that's why i believe that certainly on the republican side, they are likely to have a

talking point, and then the climb that i get joshes done is not merelily a promise, but evidence-based spp >> let me ask you. i think this is a really important issue. if that's right, argue and assume he is that the next president gets legislated on at least a part on a platform of, i can get things done, is tax reform the thing that they would start to get done? there's a long list. there's immigration. there's entitlement reform. there's budget deficits. there's taxes. probably others i forgot. if you were domestic policies logic to one of those candidates, would you suggest they not only make their platform, i can get thicks done, but i can get tax reform done? >> you talking to me? >> yeah. [laughter] start with you. everybody else gets to answer too. >> probably not.

with a provider, if the economy in 2016 looks like the economy today, i i would not leave tax reform. there's a bunch of other economic issues ahead of the coming tax reform. if things look belter, and 23 the next congress, which i believe the is 114th surprises us by getting off the dime and passing immigration reform, which is not impossible, but i keep on saying with each coming congress it's not impossible, and it's always impossible, so go figure, but there might be -- there might be space to move tax reform up to the frontier issues. right now, no. >> you mentioned tax reform is always kind of in the middle. same question, if you advised a presidential candidate, would you -- >> glad i'm not a political

operative, but that said, i would put tax reform at the top, i mean, if we're in what was called a permanent economic slow down. people are december prate, and can address deep economic concerns. i putt it in that cluster of things to address, serious economic weakness. i put it in the word "immigration," that is, if it continues through 2016, if the economy continues. >> i think there's a disconnect between issues people height lite to get legislated and what they want to govern on, and what we know about large policy chains is that it occurs in the first two years of the president's term, but under the condition that their party criminals congress and the public moved is in their party's favor a and so those things align to get revolutionary change. you know, one potential i see that could create tax reform, think of the overoffering goals,

republicans wanting to lower tax rates and all area, and the democrats wanting to build social welfare state, and 234 a sense, this period reflects a stalemate between the two parties. i mean, with the passage of aca, the democrats have come close to kind of rounding out a national welfare state, and through changes to marginal rates and expenditures lowered rate, and so there's only incremental changes for those -- if you take those and, you know, two of the parties, and so there is a potential, i think, a window for tax change based upon the idea that how much more can you really get if your goal is to lower marginal rate? how much more do you get if your goal is to build a national welfare state, and there's, you know, that might create an opportunity for the parties to s