.. .. by the way they did it in texas. >> just to finish the point very quickly so yeah it's a huge

story. the democrats are concluding on the wrong side of this. here we are in the biggest oil and gas revolution in the history of the world and we are talking about windmills. republicans have to talk about pipelines. they have to talk about something you talked a lot about which is overturning the ban on the export of american oil and gas. one other thing larry they have to take on the radical greens in this country that are anti-growth anti-development and anti-progress. if you do those things this can drive a real expansion. >> i was thinking the guy who is weakened over the decline in oil prices is close to a nervous breakdown right now. it's flat and mayor putin. there are a lot of scholars here so correct me if i'm wrong. i'm not a foreign-policy guy but if vladimir putin goes down with that not be a good thing for

america? >> correct me if i'm wrong. it's very naïve about these things. >> isis gets $5 million a day from petrodollars. we can define their enemies. i know they want market share. nigeria and other places are growing like crazy but i think the saudis gave us one. they don't like putin and they don't like iran and that was part of their decision not to try to meddle with the market. >> i agree with you. i think the saudis understand that oil and oil prices are a strategic weapon and they use it that way. >> i want to ask you again i want to come back to regulation

taxes than i want to ask you hydraulic fracturing and horizontal drilling our technology breakthroughs as you know. i kind of look at this as tech breakthroughs that happened to be in the energy business. aren't these principles going to be applied in other areas of the economy? >> of course and that's why it is so distressing that we are making innovation and entrepreneurship more difficult because it transforms every industry. i mentioned that small-business innovate at seven times the rate of big businesses. there's a reason for that. innovation, i was very proud. a hewlett-packard by the end of my tenure we were generating 11 patents a day. it's a rapid rate of integration but imagine the small-business

startups innovate at seven times that rate. why does that happen? it's not by accident. innovation requires risk-taking. risk-taking requires flexibility ingenuity creativity. those things are more difficult and big bureaucracies. they are impossible and big government bureaucracies but they are also actually more difficult in big companies with a lot of rules and procedures. you need the dynamism, the flexibility to have entrepreneurship and innovation. absolutely innovation is transforming every industry. one of the things we ought to think about as a nation when we think about giving everyone a chance, when we think about providing jobs and opportunity for everyone, when we think about economic leadership in the 21st century we have to be the innovation leader. we have to continue to be the entrepreneurial leader in the nation that we also have to lead in the industries that will define this century. we know what those industries

are. energy is one. biotech is another. aerospace, yes we need to be landing things on meteorites actually. all of those industries are going and of course information technology social media. those four and there are others but those form particular are going to define this century and we have to lead in those. we are beginning to lead and energy. no thanks to the obama administration. we continue to lead in information technology and we need to lead in aerospace, space technology biotechnology health pack as well and innovation will transform them all and is transforming them all. we are making it far more difficult. one last thing on the keystone xl pipeline if i may i think president obama in a less continued obstructionism with the keystone xl pipeline is an example of their hypocrisy.

the facts are clear. if you are truly worried about greenhouse gas emissions, what we are doing today that is transporting by rail crude, that is worse for the environment, far worse for the environment than the keystone xl pipeline but nevermind they say. nevermind they say. this is the triumph of ideology over economic growth. it is the triumph of liberal saying we are prepared to sacrifice your livelihood, your life at the altar of our ideology and let's not forget these poor coal-mining communities in kentucky and west virginia where drug abuse is now at 40%. the community has been destroyed because liberal ideologues have said we don't like how you make a living and innovation can make coal-mining, is making coal-mining safer and cleaner as well and no matter how many families whose livelihoods we

destroy in west virginia the chinese are going to continue to burn coal. >> harold hamm the leader of the north dakota fracking told me as they went in there and bought up land they made a lot of small dirt farms and created a lot of millions in fracking which i guess in america today is a bad thing. but also he gave a lot of jobs to field hands and roustabouts and people who have to operate these fields. my question to you is if fracking creates 80,000-dollar a year jobs and that the bls says the waitresses in north dakota are making 35,000 a year, pretty

good in prior to that they were unemployed. but there are more millionaires which is creating more income inequality. the way i look at it is a rising tide lifts all boats but i'm an antique. i'm a dinosaur. that was reagan talk. that was jon f. kennedy talk. we are all happier because we are all working but scholars at heaven for bed other left-wing think tanks are telling me that inequality is growing and it's bad and your friend thomas decayed wants to tax everybody 8%. so what is the answer here? >> i think there are two kinds of inequality. there is a kind we should be concerned about and the kind we should be less concerned about i think. if someone is a billionaire and he or she became a billionaire because they thought of a great idea, a new product that is

fantastic. i think we want those billionaire entrepreneurs and the u.s. despite the fact that they badmouth the u.s. immigration dynamism we actually have for big advancing economy more of those as a share of the much bigger population than any economy in the world, more than germany. the other end of the spectrum it would be like france. they don't get a lot of billionaires. so we want policies that create more billionaire entrepreneurs not because i care so much that they have a billion dollars or $50 billion but all the spillover effects like all those jobs where you just spoke about. but if that wealth inequality is because you work in an industry that is protected by government

in some way so things can get very big or somehow you are able to negotiate a great pay package that has no link to the actual performance that kind of inequality i'm a lot more worried about. we talk about innovation and dynamism and i know it's a theme. a lot of people talk about crony capitalism. if the reason we have inequality are one of the reasons is because there's a lot more cronyism in the economy for instance because we have a too big to fail financial system where banks are bigger than they were before the financial crisis and if something happens to one of these big banks are multiple banks despite what some of books we will bail these banks out again. that's the history of banking. the government always blinks when a big bank is about to go under. that is the kind of inequality and cronyism that i'm worried

about. >> arthur do you think the 12.8% flat tax and i'm going to stay with this inequality but i want to move it back into the framework of her forms you were talking about. 12.8% flat tax for everybody can be a substantial tax cut for the rich quote unquote. that's the argument. there are people on the left and most of the people on the left oppose that and there are even some conservatives that oppose cutting the tax rate. what is your feeling about that? the argument of taxing the rich and redistributing income income and wealth inequality and how does that tie into the flat tax? >> let me if i can just say we have tons of data. the irs is extraordinarily confident in finding out where anyone who has any money exist. in fact the first publication in the english language, not in the english language but the great

britain was the doomsday book which was a collection of taxes and great britain for the king so we could find what everyone had what. i will see right now that when we went from a zero tax on the rich to a 7% tax on the rich revenues went up down those people who are rich, i will concede that. just joking. we have records there. by 1919 the highest marginal income tax rate had a wit risen to 77%. the rate in 1920 was lower between cox and roosevelt and harding and coolidge. we cut the rate from 77% to 25%. the share of income taxes paid by the top 1% as is a share of gdp went through the roof during the 1920s. we have a beautiful economy and in the great depression we went

for my 25% tax rate to an 82% tax rate. tax revenues for the top 1% decline during this. math. it was along the steepest recession in u.s. history in my view because of higher tax rates. then you have the period of kennedy which you are right about there a cutting from 90% to 77% plus the investment tax credit and accelerated depreciation. he was a taxcutting supply sided crazy guy. tax revenues for the top 1% went up during the 60s and then we had the four stooges johnson nixon ford and carter. the largest assemblage of bipartisan -- ever put on her. you remember all those taxes. tax revenues from the top% went down 1%. we had a depression a terrible 16 years and then of course we

came to the period, does anyone have any water? i'm just joking. the skies opened in and the sunshine down and ronald reagan was nominated and elected. oh be still my heart. we cut taxes all over the place. if you look at revenues from the top 1% they went from 1.5% of gdp in 1978 before steiger hansen to 3.7% of gdp. the top 1% paid back with massive tax rate reductions. it's just incredible and the boom of all booms occurred. that is what i want to see larry. let me if i can say this and let me emphasize here it's not republican or democrat. it's not left-wing or right-wing. it's not liberal or conservative. it's economics. this stuff is independent of your ideology.

economics is all about incentives. if you tax people who work and you pay people who don't work do i need to say the next sentence to you? you are going to get a lot of people not working. if you tax rich people and give money to poor people you are going to get lots of poor people and no rich people. if you have two locations a and b at the raise taxes in b and lower them in a a it produces manufactures and people will move from to. it's economics. raising tax rates on the rich kostas revenues. that's the one area everyone agrees to. it does. lowering tax rates on the rich provides a lot more revenues and that is exactly what we need larry. we need a low rate flat tax to bring the system into providing the most revenues we need in the least damaging fashion to the economy.

>> jim pethokoukis you have a different view. you want republicans to avoid tax cuts on the top and rich and you want to focus them on the middle class directly and other so-called conservative performers do. it's a legitimate disagreement. how do you respond to art laffer and fleischer program more efficient? >> for folks on the right we have had a tremendous victory on taxes over the past 30 years. we have gone from a 70% top tax rate and tax code that was not indexed for inflation to one that is indexed for inflation and even now it's at 40%. so i am all for dropping the top

tax rate but if you look at where taxes were then and where they are now and the fact that 45% of americans don't pay personal income taxes and the fact that we are not at 70% anymore and the growth gains that we get by dropping it from 402 where some house republicans want to put a 25 or 28 where was in the 1920s. the fact is you have to take in account or one most americans are going to get a tax cut. americans got tax cuts and a good chunk of americans are going to get a tax cut. this is going to be a revenue loser in which i wouldn't care so much if we were at gdp of 25% as opposed to 75%. you are going to lose revenue. you are not going to get a good chunk of the american people a tax cut and if i was going to come out of the box with a growth plan the number one thing

i would come out of the box with would be cutting taxes high in taxes for wealthy americans who have been doing very well. a fascinating poll which i dug up while you guys were talking a poll came out over the summer. they asked folks what do you prefer, economic growth or increasing income inequality and hear some good news. 16% of the people preferred candidates who want economic growth versus less income inequality which i think is a great statistic. likewise by 62% to 33% they prefer candidates focused on economic growth to provide more opportunities versus a candidate who is leveling the playing field. i think it's very encouraging but then i asked the same people are right you want economic growth the one opportunity, what policies do you think will get you opportunity?

the number one policy, that's pretty good, or reduce regulation on business. next increase the minimum wage. that's at 58%. guarantee all workers a living wage 57%. cut taxes and a high-end income and job creators 40%. cut tax rates on high income workers. i'm more interested in the policy than the politics and the messaging. i think given the fact that middle income taxpayers have not had a raise in years to think the corporate tax code is in worse shape than the personal income tax code. is there anybody else who wants to bring up the idea come out of a box with a set of policies to address the everyday concerns of the middle-class voters which includes getting a good job and includes take-home pay and also includes whether they can send their kids to college without

saddling them with enormous debt. again having your lead idea cutting the top personal tax rate i'm not sure that would be number one on my list. >> no let me follow up and i want everybody to react. you also propose a significant 2500-dollar increase in the child tax. is that the middle-class tax cut that you think will work and i want to put the politics aside. >> it's indisputable that if you let people keep and this is a tax credit which would be applied against your income and your payrolls taxes. it's not fundable. you have to make some money. it's indisputable that if you allow people to keep more money

they will have more money. if you let people keep more money they will have more money and i think that's a good thing that they can spend on childcare or they can spend on getting their kid tutoring if one of them has trouble in math or for a college education. as part of a broader portfolio of a pro-middle-class agenda when combined with a source of deregulation i think business tax reform is a very powerful thing not just for economic growth but also for politics to middle-class america. we basically think republicans have nothing to offer them but mitt romney didn't care and show no empathy for them. if voters go to the voting booth

and they think this is the man or woman who their big priority is cutting taxes on the job creators and high-end wealthy people helping -- hoping they will work more and invest more think it's a political loser and on economic grounds is not a top priority. >> i will take you back to jerry brown. also lefties in the democratic raising rates in the lowest in having a flat tax. people understand the flat tax is fair and correct it if you make 10 times as much as i do you should take 10 times as much in taxes as i do. when you get into this fuzzy land you don't have a standard. that's a good standard. gets rid of all the bureaucracy but i do want to go further. >> why didn't people flock to the romney tax-cut? >> if you read the whole planet was terrible. romney wanted to do tax cuts for

people other than wealthy people i need separate provisions in there. they wanted to increase the progressivity of the tax code. i voted for romney not because i thought he was any good but because i thought obama was worse. we haven't had a progrowth agenda since bill clinton and bill clinton was one of the best presidents we have had in one of the most disgusting people we have ever had but a great president i voted for him twice. >> do you think that top rate where it is currently at calvin coolidge levels would raise revenue? >> would raise levels. >> do you think we are on the wrong side? >> clearly we are. work -- look at warren buffett he pays 61 hundredths in taxes because he has gives to his family foundations. he doesn't pay taxes. you go to the top 500 people

they all have their income in unrealized capital gains and they all have their all 501(c)(3)'s. forgive me but what you do is get rid of all that stuff and have a low rate so it doesn't matter. we all make choices based upon what we think is right not because of our tax dollars. it's really wrong to tell people if you spend 40% of your money in taxes you will spend 40% of your time trying to avoid them. get that rate down so people lose interest in taxes and don't look for deferred income specials and let them try to make money and grow the economy. >> keeping telling a voter that i'm going to cut the top tax rate for people who have been doing very well and by the way i'm not cutting taxes for you and to some people on the right would do for those 45% who aren't paying taxes you have to

contribute. i'm going to raise your taxes. that's a wonderful strategy. >> we are missing something this argument. we can argue about their rates but at least half the problem with our tax code is its complexity allows people to game the system. the tax code is used to -- to further certain people's interest. it just is so we have to fundamentally reform the tax code not just in terms of its rates. absolutely in terms of its rates but in terms of its complexity and i also think that we get it wrong when we say that as a requirement for tax reform, my view of tax reform is fundamental simplification of

the tax code as well as a discussion of what the rates should be. but i think we missed something when we say you know whatever we put forward should be revenue-neutral. let me just say this government takes in too much money. the only way to begin fundamental reform of governme government, fundamental simplification of government, fundamental focus on performance in government instead of just out-of-control growth year after year after year regardless of who is in charge is to actually start sending less money to washington. how many people, i mean you all know this but i started my career in washington d.c.'s working for at&t after i got an mba after becoming a secretary and i sold to the federal government trade anyone who has

done business with the federal government knows that in the last six weeks of each fiscal year every government agency spends every time they are entitled to whether they need to or not. and they do so because they want to make sure that the appropriations process is focused on the rate of increase for the following year. not what have you actually spent or what do you need to spend so if we are going to reform the tax code lets start with the principle that we must fundamentally simplify and get it as simple as possible and that's actually have a debate about whether it needs to be revenue-neutral at all or whether we actually should start down a process of having government spend less. >> we have done some polling at heritage on the subject of tax reform. it's the number one issue for economic growth and i think you are onto something here. when we do these polls what we

are finding is when you asked people about tax reform the one word that comes shining through and we may not like this but the word people want from the tax system is fairness. that means what we have to do is define what fairness means. >> sorry to interrupt you but what most people know in their bones is it that so complicated that i can understand it it's not fair. most people know that. if i can understand it i can figure out whether it's fair or not. if i can't understand it unless i have 100 accountants on my payroll it ain't fair. >> they also think somebody else is getting something. these rich people are getting off with not paying enough and i've come to the conclusion if you are going to do a big change in the tax system precisely because the way you talk about in this discussion you have to do the big bang.

you have to blow up the system and start over. what's interesting about the last presidential election the one thing that people remember about, republicans got a pretty lousy deal last time but what was the one thing people remember? 999. remember that and i think you might've had a hand in that one. there's just a variation that people want something that's understandable. they think everybody is going to pay their fair share. there is pro-growth and i will add one thing given the scandals we have had over the last are dramatically reduces the role of the irs in our lives. >> by the way i have an e-mail coming about the fair tax. the earned income tax credit which i generally favor along with the child tax credit are two of the highest fraud tax parts of the iris system. i was reading and a surprise me.

i didn't know that much about it. the child tax credit has definitional particularly when it comes to things like adoption or abandonment for example and we will get into the breakup of families in a little while. so those are issues. steve i know in your distant dark past you have flirted with the fair tax national sales tax. i think you have overcome that but i want to get some specificity because we have an e-mail. dave camp has introduced the tax reform act of 2014. he says it's a band-aid for tax reform. this person wants us to push the fair tax act h.r. 25 which would be a 135 page bill that has been buried under the table and the irs needs to be abolished and the fair tax accomplishes this. i always thought the fair tax

was -- but putting that aside if we had fair tax would we abolish the irs? i don't think so. you would have so many complications with the fair tax and you would have give up some carveouts. are you still on this fair tax thing? >> i think, like the idea of a national consumption tax and i do think and every time you don't have to fill out a 1040 form. you just pay your tax with the cash register. whether that's achievable right now probably not. i like our idea of some kind of flat tax system and by the way arthur some point that may be the stepping stone to moving to a consumption tax. as you know larry arthur and i have done a lot of research in the states and we have a nice little experiment. a lot of states like new york

and connecticut and new jersey my home state of illinois and the state you rants for senate and in california have high income tax rates. we find conclusively larry that states that tax consumption and don't have these high taxes and by the way when we talk about that one or two or 3% with all due respect let's remember who those people are. they are the employers in this country. they're the people that create the jobs. that's a really important thing. you can't have one without the other. because i view the problem that you identified jimmy as a pre-tax income problem not opposed tax income problem. the middle texas problem is that they are paying so much income income tax. it's that their wages and salaries aren't right. >> the tax plans i have heard it

doesn't cut their taxes so what you are telling them is that by instituting a tax plan which by the way requires blowing up the current system so first we will blow up the current system and then i'm going to put in a new plan. it's a very difficult plan but a new plan that will increase economic growth and down the line you will get a better job and have more income. the economics of that i think a better tax code will do exactly what you said. a consumption tax they're all different flavors will create more economic growth and get more people better lives. i think that's absolutely true but as a political matter i think it's going to be extraordinarily difficult to do that. i think there is a whole spectrum of issues. we have talked a lot about taxes here so while republicans are

talking about tax plans and i do a lot of blogging and every commenter on my blog has a tax plan. every conservative american has a tax plan. so we are talking about tax plans and democrats are talking about -- while we are talking about finding this perfect tax plan democrats have been working on health care plans, college plans regulating the internet financial reform and i think it is big international oxygen from the right. we are very focused on taxes and again i think frankly business tax reform is probably more pressing. >> i want to stand up for that point. the work coming out of aei and elsewhere shows the real

beneficiaries of business tax cuts is the middle class, the workers. it's the working wages and the thing should be sold frankly as an income booster for the middle class. it's not butter should be sold that way. it's also going to enhance competitiveness for businesses but as long as you stick the pastors in their jimmy you have got yourself a hell of a middle-class tax cut and that is what ryan wants, to put the pastors into that so they can drop back to the lower rate. i think it's terrific politics. >> and i had one thing? one thing is what you end up with any piece of legislation is how you going. i don't think we should negotiate with ourselves beforehand can compromise the plan. you go with what you think is the right plan but of course you are willing to negotiate and compromise to get a good plan and i think you are right on that stuff. you should never let the best baby and me of the good.

when i look the fair tax i think it's a great plan. i don't think it's as good as mine but it's good. i would vote for it every day that week and twice on sunday. tax reform what i don't want us to do i don't want us to pre-negotiate with ourselves and put in all the things and then get in there and find that we have absolutely nothing. >> there's a certain level of possibility and coming up with a tax plan and we have the cbo and places like the tax policy center. for any republican to come out of tax plan which any of these private models is going to say this thing is going to lose $4 billion a year or i think most voters that is not going to pass the smell test. whether or not those novels are right. >> with jerry brown we had a huge increase which was plastered all over the world. that is why jerry brown did very well. >> by the way steve moore i just

want to note i lived in new york and connecticut and on the way to work i pass new jersey. each of those states has a very high income tax treaty to the states has a very high sales tax and each of those states has a high corporate tax so each of those states is declining and shrinking. that is kind of a problem i have with 999. when i heard 999 i heard connecticut new york and new jersey because you don't start with nine. you could start with nine but nine is just the beginning and hence that is why worry about that. i don't want to commit the sin that my friend jimmy p is worth that amount we do is focus on taxes. i think there are other issues to focus on in the remaining period of time, read going to noon? how far are we going on this? i want to raise a point to carly

fiorina of the issue that i've read about a lot is the issue of marriage versus family breakup. i do worry that we are creating a permanent underclass. i do worry that the bottom quintile has lost its social mobility. on these points i am certainly reading with the left liberals have to say because they are looking at the same data that we are looking at. so some great work is that brad wilcox from aei? this guy is doing some great work and has worked for heritage that i read in the daily signal every day which i love. married families make a whole lot, not a little bit, a whole lot more income and wealth than unmarried. and number two got the issue of family breakup seems to be the key to poverty, to inequality

and to the closed door the upward path of america. maybe i should throw education in there too but i'm looking at family breakups. this is a big thing. part of it is economics. part of this culture. it's got to be addressed. anyone running for president has got to address this. >> let me just segued that by saying on this debate about tax reform or any of our debates about policies. i think sometimes conservatives start with the policy and try and relate it to someone's life and i think we need to do the opposite. i think we need to start with people's lives and talk about our principles and our policies in relation to their lives taken

and politics matters because it impacts people's lives in real ways and policies matter because the impact people's lives in real ways. i think sometimes we get very abstract and we talk about big models and big numbers and what people are thinking about is the microeconomic reality of their life. they need to understand how is what you are proposing going to make my life better? which leads me to your point. i think the data is becoming unmistakable. i'm unmistakable. i'm a businessperson so data matters to me. results matter to me. it matters to economists. as nice matter to politicians by the way but to your point art the data is crystal clear about the impact of certain policies on economic growth.

we also now see in the united states we have empirical evidence that supports the data. we have 30 out of 50 states run basically under republican policies and economic growth is better. we are starting to see a real differential between a state like texas and the state like california. that's hard to deny and people feel in their lives very now we come to the question of poverty and i think the data is pretty clear. the data is pretty clear. getting a high school education is an incredible determinant to someone's future earning power. so if someone doesn't have an opportunity to get a decent high school education because they have no choices really to get a good education where they have no chance to have a real teacher in front of a classroom that cares about them than they are

going to be stuck in a life where they cannot fulfill their potential and earn as much as they are able to. we know that. the data is clear and i think conservatives on that point need to be crystal clear that liberals and democrats are on the wrong side of this issue. look at what happened when now mayor bill de blasio said in his campaigning that he wanted to limit the choices of schools in new york city. who is it who walked across the brooklyn bridge in protest of those policies? it wasn't high income families. it was low-income families. hispanics and african-americans who thought you were going to take away the only chance my child has. so we know education matters. yes we know marriage matters. we know that if you have a stable family unit everyone in the family does better. we know as well that we have

almost 40% of children now are being raised in single-family households. we also know so i think we need to be careful with this. we also know that too many women live in a situation of violence and abuse in their homes. it's kind of hard to tell a woman who has perhaps escaped from domestic violence the answers for you to get married. that may not go over so well but i think the point is we have to be focused on what are the things that make someone's life better and we know what they are. yes a stable family environment. so when we look at our entitlement programs and those entitlement programs make it more difficult to get a job because of all the things you have got to give up when our entitlement programs make it difficult to get married because

of all the things you are going to give up and the liberals defend those programs they are the ones destroying people's livelihoods. >> tax policy is the marriage penalty. >> they are the ones destroying people's livelihood so i think think we had to position our policies from a position of empathy and compassion and belief in everyone's potential to live a life of dignity and purpose and meaning. it is why i am conservative because i know our policies work better to lift people up. we can't talk about it in the abstract. we have to talk about it in personal terms. >> by the way remarriage is it okay? >> yes absolutely. >> remarriages where you marry the same person several times.

>> we have done a lot of work on this issue at heritage and i am sure all of us have experienced this. let's say we have your friends on wall street or the country club republicans. we don't want to talk about the social issues. just focus on the economics in one of the things i think came through what you said carly is the social issues are economic issues. you said it very well marriage is one of the great economic plans out there. a job is the ultimate stimulus plan and what i think we have to do is conserve this i'm socially conservative myself has come about these issues in that way. that's not the point. that is about behavior virtues that lead to success in life. it's not complicated.

it's the old formula. if you want to get out of poverty don't have kids out of wedlock. you get married, you don't do drugs. you graduate from high school and if you do those things where you have a small chance of being in poverty. my point is we have to talk about those social issues in economic terms because these are what lead to success in life. >> i think it would be a good idea. as carly noted the data is there and the data is really compelling, indeed overwhelming. but i think to a great extent leadership and have political people talk about our culture. it's not an inconsequential. you just have to do it. the other thing you mentioned, de blasio my favorite mayor. the guy now doesn't want choice in schools and charter schools. he doesn't think we need a

police force in new york city. that is one of his newer ideas that he routinely throws that under the bus and refuses to defend it. i think all these issues are related and they are social issues. democratic party three years has been socially very conservative not unfortunately in the last couple of decades but the democrats are on this. they used to have white working males and females but males particularly manufactures co-workers and miners left the democratic party because there's no cultural discussion of values anymore. i fret that the gop doesn't talk enough about this either. >> social issues are economic issues and the democratic party doesn't talk about those issues anymore. i am pro-life but if you want to

talk about economics you will find there are a lot of people in the african-american community who understand that community has been devastated by abortion. if you want to talk about the worry in some states about demographics working against us because we have an aging declining population and then you think about the number of lives that have ended in this country for abortion that's an economic issue. we are not going to all agreed on all aspects of abortion in this country but even on that issue that people tend to shy away from there is clearly common ground. on this social issue that is the democratic party that clearly has become incredibly extreme. i get asked all the time how can you support the republican party platform on abortion? i sable how can you support the democratic party platform on

abortion? would have basically says is any abortion at any time for any reason at any point in a woman's pregnancy including now in new york, the legislature wanted to pass a nondoctor to perform an abortion up to nine months. that is extreme. it is inhumane and it's also really bad economic policy. >> latinos and african-america african-americans, asian, you are absolutely right. by the way we have a population decline. the population is slowing down substantially. that's an issue for growth with older countries with declining population tend to be less unabated. it is you are going to talk to people who think the pro-life message and marriage message while at the same time you were

saying i would like to cut the minimum wage and cut medicaid and cut the itc without having something to supplant that with going to be an ineffective message. >> i have not set any of that. >> not you personally. republicans want to cut the itc. they think medicaid is an effective but they don't have an idea on what to do to replace it. >> i think you're absolutely right that conservatives must offer solutions. i happen to believe we have a lot of solutions. my point is i think we have to communicate those solutions in the context of people's lives not in big abstract terms but in the context of people's lives. >> can i just say one of my other beefs about the current environment is there's too much pessimism. there is a psychology of pessimism in this country that

drives me crazy. i am a reagan guy about both the value in the truth of optimism. from my own life, i have had my ups and downs. i think if you believe in a higher power you have to be an optimist and i think we need more of that in this country. my final thought is we need positive agendas, positive. we talk about pro-growth. we need positive agendas. i don't care if the democrats want to positive growth agenda. i'm fine with that. the last democrat who did was jon f. kennedy but my point is positive optimism, lifting up rather than tearing down. i still believe america is the greatest country in the world and i will tell you this there's no reason why a candidate for president either party cannot say your other problems but here

are the solutions. we can do this. we can actually do it in a fairly short period of time. i learned that from reagan and i will never forget it. steve moore jim pethokoukis art lather carly fiorina thank you for your time in heritage foundation thank you for your sponsorship. [applause]

energy secretary earnest moniz review the white house is an idea that gender of the bipartisan policy center saying the is committed to and all-of-the-above approach to energy independence. the international energy agency also released its report card on u.s. energy policy at this hour-long event. [inaudible conversations] >> good afternoon everybody. i'm jason grew me the person of the bipartisan policy center and we are delighted to have the opportunity to host this discussion on behalf of the u.s.

department of energy and the international energy agency. as i think many of you know about every four years the iaea conducts an in-depth peer review of the member countries energy policies and the broader landscape and today we are looking forward to the iaea and failing its in-depth view of the united states energy policy. a friendly audit this i would like to imagine it. the last of these reviews happen in 2007 where the focus was on the energy policy act of 2005 and a number of significant policy changes that we are still benefiting from greatly. it would be an understatement to suggest that some things have changed since 2005 and so very eager today to hear from the iaea, its views on how we are doing, how would we manage the remarkable transition from scarcity to abundance? what are the impacts and improvements in our energy

efficiency and our significant increase in renewable energy and efforts to address climate change and a host of other issues that are of interest to all of you. so it is my great pleasure to introduce our two speakers. first secretary ernie moniz. i think i can safely say everybody knows. secretary moniz joined the in may of 2013. ps i say knew his way around the building which is no small feat because he served as the undersecretary in the clinton administration. he also served as the office of science and technology policy and he has been a professor at the massachusetts institute of technology. director maria moniz has been the executive director of iea since 2011. she hails from the netherlands and has had a remarkable braided

leadership positions. she's been the minister of economic affairs and twice served as an elected official in the house of representatives so it's a good terry monies he will lead us off and we will hear about the study and margot anderson will moderate our conversation. >> thank you jason and thanks to the bbc for hosting this event. it is a great organization and one that is always a pleasure to be here with. i want to give my greetings to executive director van der hoeven with whom we have worked closely for several years. i must say this in-depth review took me a little bit of time to get used to as a career academic. i was accustomed to giving the grades and so now we will see how this goes. i will say a few words to open

this up in terms of the few things we are doing and then look forward to hearing maria's presentation. the iea that maria heads i think you are all very thin layer wi with. an organization certainly borne in eight time of energy security concerns around oil and remains of course extremely engaged in a energy security discussion but now it's a much broader discussion than it was four decades ago at the founding of the iaea and also a few words about that and i'm sure maria will touch on that theme as well. we all know as jason alluded the enormous changes that you had not only in the four decades but also the six years since the last in-depth review was carried

out so i'm not going to try to review all of those but let me just say a few words about what are clearly some of the priorities of the administration and the present administration and the department of energy. first let me say a few words on climate policy. obviously in terms of the president's approach we talk often and in a quite committed way about pursuing and all-of-the-above approach which really means making the investments to enable all fuels, all pathways to the clean energy future to be part of a low-carbon future so that is what we are doing and of course most recently the big news was the joint announcement in china again that you are all aware of. the united states committing to

a pretty ambitious target of 26 to 20% reduction by 2025 and china putting forward what is also an ambitious plan. i want to emphasize that the one major part obviously is their statement about co2 in the 23 timeframe and that is i would say extremely significant in terms of the commitment of the chinese government to pursuing a carbon strategy to clearly take responsibility to be part of the solution. but i do want to call attention to the other part of the initial commitment that they made, the one about 20% nonfossil energy. if you start working the numbers on that, that is very ambitious. that is a gigawatt, technically a gigawatt per year.

that is a gigawatt of energy production equivalently. a gigawatt a week to 2030 and if you put in reasonable capacity factors that is you know every month a gigawatt of nuclear, two gigawatts of hydro, 2.5 gigawatts of wind and five gigawatts of solar every month until 2030. ..

to address the issues and, frankly, to encourage policymakers to be aggressive. so so we we will continue to keep that focus on technology, on cost reduction, and we we will do so across the board in terms of fuel and technology. let me tell you a few words about energy technology. technology. i will talk about one of the specific initiatives we are engaged in with the iea and the european commission. clearly stimulated by the ukraine russia situation,

the g7 with the eu with direct support and collaboration with the iea started the process looking at energy security and coming pretty rapidly to the conclusion that perhaps we don't say it enough that energy security is a collective responsibility among allies and friends as opposed to a purely national activity. the united states with our dramatically increased oil and gas production, by the way, 26% increase in oil production in two years, 2012 the 2014, two years, 2012 the 2014, so were talking pretty big

numbers. but even with that, with our enormous gas supplies we should not be complacent in thinking that somehow energy security is not something in which we have a stake. we remain coupled to the global oil price for one thing but secondly the energy and security of any of our allies and friends is an issue. that, i thought was in and of itself kind of an important focal.of a new discussion on energy security. furthermore none furthermore none of this is perhaps new. putting it together we understand that energy security is also not the discussion of the time when iea was founded, the first oil embargo. it is a much broader discussion that clearly doesn't fall diversification of supplies and supply routes. right now in europe of course the discussion on that is principally focused around natural gas as opposed to oil, but oil, but it is a broader statement. in addition the development of transparent competitive markets is an important part

of energy security. addressing climate change because of what it inherently involves is a part of energy security. enhancing energy enhancing energy efficiency is a part of energy security by working on the demand side. improving infrastructure resilience is an important part of energy security, and i will come back to that. putting in place emergency response systems including reserves, one of the main functions in the iea, taking account of the importance of fuel substitution, all of these elements of energy security. so what we're doing in our case is the charge coming from the g7 leaders, as i say, say, viewed in a much more expensive context with

europe, with partners and other parts of the world like japan for example going east of the eu in some cases we need to take an integrated view as we are putting together a roadmap to what would be the medium to long-term directions that we need to plan toward as we look to a clean and secure energy future. the iea, as i as i said, and we already discussed it specifically doing a major outfit -- a major effort around the gas markets which is something we we will be integrating into our energy security work. the third element i would like to mention, this bottle of water here, a third element i will mention is that this monday we had a

trilateral meeting of the energy ministers of canada, the united states, and mexico, the first time that such a trilateral meeting had taken place in seven years. just as was said about the six years since the last in-depth review, these seven years of similarly change the energy world completely, completely, and it was certainly time probably past time for all three countries to get together. let together. let me just say a few words. first of first of all, it was an extremely positive meeting. among the initiatives agreed to and enshrined in an animal you is that we have we will have an effort on our side led by the eia to do data integration for

north america. frankly we just don't have a very good handle on a lot of the data across these three countries : we think we do it turns out that we have different sets of data. we don't have good maps that look at the integrated energy infrastructure and would be very impressive energy forum going on in mexico, we expect not only on our northern border but our southern border to see a lot more. i would say that mr. recruit from canada and i were certainly impressed prime minister cole post description. i would even use the word breathtaking scope and ambition of the reform plan. so this is going to be exciting. one of the first steps is to get a common integrated data

approach. approach. that will be complemented by looking more specifically at the issues of resilient infrastructure across our countries. finally, i will just say my last word will be a little update. some of you heard this before on the radio energy review. review. this was tried by the president formally in january although mentioned in the climate action plan of june 2013. at its essence the goal is to integrate the equities, the concerns, the capabilities of agencies across the entire government with equities and our energy policy. that list of those with equities and energy is practically the entire administration. so under white house chairmanships chairmanship department of energy functions as the

executive secretariat. we carry out the analytical arm of a major effort to integrate all of these threads. this year to get going we have no problem saying that a a four-year process could be a series of one-year proxies. for for the first year we are focusing on energy infrastructure, the transmission, storage, and distribution of energy. this will be coming out in the january, but just to give a little flavor because it is an enormous effort and we are optimistic that it we will be a consequential effort as to how we pursue an integrated energy approach and how we pursue a coherent discussion between the administration of the congress. the flavor of that while we have a focus often specifically on energy infrastructure pay

challenges the waterway challenges, getting stuff onto the water has a challenge in the dimension that i have to say i personally have not appreciated until we went through this data exercise and analysis. on the other side of the.-- and we we will be posting these papers soon. in looking at the natural gas transportation infrastructure what we found is that the macro scale the challenge is not as great as we had thought them although their are clearly regional issues that we will have to be addressed. a little tiny flavor of what we will be a very, very broad study around our current challenges and what we need

to do to have a 21st century of the structure going forward. that gives you a little bit of the flavor. i think i would like to now turn it over for a report card. [applauding] >> thank you very much, sec., for your very kind words. i words. i would like to thank you and also acting assistant secretary are kind for his staff and the department of energy. his counterpart at the department of state and the us allegation treaty for their cooperation during this entire process, and i would also like to thank the bipartisan policy center. thank you very much for that. and we present we present the findings of our refuse energy policy in the united states. it is true. you mentioned it already. developments in the united states energy sector in recent years have bolstered the united states energy security

sustainability and economic competitiveness. but of course as we all no, challenges remain and there is much to be discussed from the oil and gas industry to significant steps forward in energy and a tooth of energy efficiency and the main focus of our report, long-term sustainability of the electricity sector. well, you know, we all know and you know and i think it is good that you mentioned a a number of things that are really already looking forward to long-term development is a sustainable electricity sector requires clarity, and this means predictable, predictable, effective, policies to encourage investment, create coordination between integration of renewables in the common understanding of the future of nuclear power. this is something that i will return to what i present our recommendations, but first let's have a look at what is changed. six years ago the last

in-depth review was published and we said that the united states needed a more consistent national level energy policy. in those days there was an absence of the link among energy, energy, environmental security policies and as such we recommended that the united states seeks closer coordination between congress, administration, and state and state government. to a large extent these concerns are being addressed , not only by the introduction of the quadrennial energy review but more recently by the climate action plan. plan. the united states has undergone other significant changes since that time. the resurgence the resurgence of the oil and gas production, and this am unconvinced to love unconventional gas is but a real game changer. the energy costs, for for example i'm making a substantial additional contribution.

strengthened over the past six years. already mentioned health countries coordinate a collective response to major disruptions in oil supply through the use of emergency oil stocks. france and the united states have a strong a strong position, start sql 247 days. industry commercial stocks of 141 days. as well as the northeast, the northeast. the oil industry over the past six years, largely the result of the growth in production. production. that was a book that was expected to continue the prices have remained at levels seen earlier this year.

using oil prices continue to plunge in november and early december. and the short-term outlook remains unchanged. should players continue to function price drops continue their will be an impact on production as marginal products to become economical and this includes emerging shale plates and the pullback in drilling might also be required, most notably at the backup formation in the event of further sustained price pressure. now, another defining feature of the energy landscape the united states has been the unexpected rise in shale gas production. revenues will impact the economics of gas shale production. on average higher gas prices will be required to offset for the loss of oil driven and liquid revenues in many

shale formations. we expect global global oil prices to feed into higher gas prices. the scale of the adjustment is closely dependent on the actual level level of oil prices and the persistency of the knew oil price. the united states has moved quickly from two decades of increased dependence on imported gas to being a possible energy exporter. and with the doe approval the export of energy to countries, the countries on the path to becoming one of the world's largest energy suppliers. this can only be a good thing. higher us natural gas prices however alongside lower asian oil linked gas prices might reduce the attractiveness of many us energy projects and cost control we will prove increasingly difficult for the energy sector. now something else, this

part of this and gas production, it is cold that remains the largest source of energy. nonetheless all we have its share of generation decline as the sectors which is to a less expensive and cleaner natural gas. climate plans and environmental regulation on emissions will also give right to the closure of coal capacity. but there is still forcing more than 250 gigawatts of coal capacity remaining. let's let's have a look at the power sector. i noted that there is increased coordination between congress, the administration, and state government, but their are still purchased the bill. the climate in greenhouse gas emissions policy in particular remains an unsettled dispute area of energy policy between the executive and legislative

branches of government. we all the words are nothing without action. in this regard in my view this great opportunity for the united states along with china and other emerging economies to take a: drive for real action. we agree the recent us china joint announcement on climate change and clean energy corporation would together account for over one third of global greenhouse emissions from the united states. we need and real policies that build on such pronouncements. the climate action plan released in june 2013 proposes the use of executive power under existing laws to tackle harmful emissions. epa has proposed a clean power plan to cut carbon

pollution existing power plants. it has proposed a specific rate based goals of co2 emissions from the power sector as well as guidelines for states to follow developing plans and achieving state specific goals. these are exactly the kind of plans that will see political climate commitment effectively realized. you mentioned energy efficiency and renewal. the united states is also made progress on reducing energy consumption. the united states has achieved the largest improvement in energy density in recent decades. from relatively high levels as energy performance standards are implement. since 2000 8/1,000,000 low income homes have been weatherized to improve the energy efficiency for less oil and after 2009 provided

more than us$12 billion of direct investment, dollars of direct investment, notably for low-income homes, public buildings along with more than us$20 billion of related investment in modernizing buildings, green jobs, electric technologies. energy efficiency codes, standards of building a protected two for projected to produce work in 30% improvement in the energy efficiency in new homes and buildings when compared with the 2,006 building energy codes and equipment standards. progress, renewable energy has surged up the last decade, and the united states a seven goal to double renewal renewable energy production by 2020 compared to 2012. however, there is always about. there a but. there is no explicit national policy mechanism to ensure the country reaches this target. many states are put in place renewable portfolio standards and

instead the federal government has employed upon the mechanisms to support renewable appointment. and yet the durability of some existing federal incentives such as is for global energy production tax credit remains a persistent uncertainty. and yet another extension reminds investor confidence. moreover, lack of timely clarity of a blending level under the renewable fuel standard has created some difficulty in the market for global transport fuel. so this lack of long-term policy durability will present a challenge for investment in new projects that has to be addressed. a more balanced approach would extend to ptc for a fixed. of five years while gradually will gradually reducing his level to zero on a permanent basis which

would provide greater investment certainty and spur continued cost reduction. the story continued cost reduction and real cost. let me have a look at the transport sector. in the transport sector of the largest oil consumer we all no new regulations of been introduced to reduce energy consumption. the program was finalized to improve the fuel economy. more stringent fuel economy standards model year 2012. standards for heavy-duty vehicles, manufactured during model years 2,004. significant accomplishments signaling to the world the

united states is serious but controlling emission. in emission. in fact, these vehicle fuel economy standards are projected to save about 6.3 billion 6.3 billion barrels of oil over the life of light-duty vehicles. heavy-duty vehicles built between 2014 in 2018 the equivalent almost one half of oil. alongside equivalent emissions savings. put another way, this will result in a vehicle fuel economy improvement trajectory from 2,014 roughly parallel to the improvements in the eu, japan, and china albeit from a much lower starting. these standards are too significantly lessen the impact. in addition, the united

states is the largest electric vehicle market in the world and don't do approximately 43 percent of all electric vehicles sold worldwide to. this vehicle deployment is supported by the federal government through consumer incentives ranging up to 7,500 as well as substantial d&d with 2 billion us dollars. states have taken the lead on deploying infrastructure from tax credits for installing charging stations in louisiana, maryland, and federal government support programs such as the workplace charging challenge which aims to achieve a ten a ten fold increase in the number of employers offering workplace charging. 1% 1 percent of sales. in order to meet fiscal

incentives should be maintained to support this market. infrastructure needs to be expanded. all levels of government now need to build upon the success is to ensure that a potential of electric vehicles can be met. we all no that the federal government remains one of the largest funding entities for reserves. a critical role in achieving all fields of energy. the department of energy provides a path to achieving national energy goals and demonstrate the government's firm commitment to basic research, development and

the deployment of clean energy technologies. the quadrennial technology review is providing a platform to help align energy technology and program priorities to achieve national energy goals and guide the department priorities over five years. the the government should continue to develop approaches to secure a stable, long-term funding environment which would help meet energy technology goals and avoid negative impacts on programs to. now, we all no that the united states is rich in co2 storage potential in both oil and gas reservoirs. the united the united states is among the global years and ccs related reserves. in 2,013 there were 19 large-scale ccs projects in operation all in various

stages of development, including in eight major ccs demonstration projects and again the county project is an example of the scale of the challenges as well as rising capital costs facing the technology. furthermore, the legal landscape of ccs remains unsettled. a federal a federal regulatory scheme for permitting underground storage facilities is in place. there are gaps in areas such as space ownership and long-term liability, some of which are being addressed by individual states. here again is required. let me turn to the electricity market and resilience of the electricity sector was the focus of this refuge. refuge. as much of the final report is taken up with this, now today ten regional transmission organizations operate both electric power systems across a large portion of the united states and canada. the structure has many uses.

conversely in regions without the structure the electricity system remains fragmented with less efficient use of existing assets. now, despite the success of markets trade of electricity across the borders of utilities remains difficult and the balance between consolidation. it will become more critical as wind and solar power continues to grow and greater access to balancing is required. electricity is no longer about networks and load balancing. climate change and extreme whether of fundamentally changing the way we view energy assistance unless the united states is experiencing regular weather

disasters system resiliency is become a greater priority than ever before. given the scale of challenges ahead we must increase the scale of combined public and private efforts to improve climate progress and resilience. thankfully regulators have begun to respond to the threat and a providing guidance to enhance the resilience of the bulk power system, and you can imagine these efforts must continue. the point's climate is not the only threat to energy system security over the past two decades released a roadmap to achieve energy delivery system cyber security which features a a

strategy and related milestones for addressing cyber security. it it is an example of strong distributed. regarding investment the 2007 act made it the policy of the united states to support the modernization of the electrical grid. the power sector will require 2.1 trillion us dollars between 2014 and 235 that is to be greater coordination and extra voltage system.

this work has started. there's a need to better cooperate operations -- to better coordinate operations as well as market planning roles. effective policies for planning and fighting cost allocation and cost recovery are also required in order to achieve the levels of transmission investment required to deliver reliable and least cost service. greater deployment of renewable or require access to balancing of flexibility sources over wider geographic areas. that that means more interconnection. and despite these advantages offered, for example, the mass response market has been slowed. the framework and regulations should encourage private sector investment in these advanced technologies and practices. we expected we expected almost 600 gigawatts of new generation capacity will be

needed before 2040. well it's up to the market for regulation also has a role, in the federal government should consider developing a policy mechanism or long-term position to ensure that there is a supply, and this is particularly relevant in the case of nuclear power. so now to our key recommendations. first, the previous highlights the absence of a free link at the federal policy level among energy and environmental policy and security policies and recommended united states seek closer coordination and development of such policies. the quadrennial energy review process processes at work across this concept. we recommend that the united states complete a process leading to the quadrennial energy review and utilizes its outcome to reestablish a stable and coordinated strategic outlook for the energy sector.

the united states has within its grasp an opportunity to set itself firmly onto the path to a secure sustainable energy systems. of course can always recommend that the united states grasp this opportunity and address some of the weaknesses we have highlighted. to do so, we recommend supporting the development and implementation of demand-side measures and energy efficiency policies with an emphasis on transportation and building. offering greater offering greater durability and predictability and fiscal incentives for renewable energy in order to maintain investor confidence and continuing to enable the development and deployment of carbon gas storage is recommends on the sustainability of the electricity sector. develop effective coordinated national policies to reduce the uncertainties which impede investments in energy electricity and secure

electricity infrastructure. smart grid, renewal energy and climate resilience. greater coordination between different grid operators in order to facilitate the integration of greater shares of reliable and nobles. a clear strategy how the federal government will provide long-term support. the six years since our last review and i i look forward to seeing some more perhaps even greater progress. thank you for your attention. [applauding]

>> five. on the executive director of the energy project here at the bipartisan policy center. instrumental in energy policy. without their lead he cannot have any number of the successes that we have had. thank you for your service. when you get your questions ready when you do have a a question with the roving microphone tell us who you are. that would that would help us out a great deal. what a difference less than a decade makes. given the three big forces, we mentioned the forces under way in the energy sector comes out of one of

the worst recessions ever. major implications for not only with the federal government did to help out that what the responses were on the consumption of. have some what of an up evil that is caused us to look and think of how we get energy policy done. in the next over the next seven or eight years. i heard the secretary said he was looking for a great. let's have been involved in teaching. a nice figure. >> we will take the challenge. who has a question. >> how do you move toward

new sources of energy and away from traditional sources at a a time when we have $60 oil and low gas prices. >> the question in oil-producing. quite happy. it will help to recover your economic position faster. the other hand, use the opportunity. here is an opportunity for a number of countries you are now using a lot of money to phase out the fossil fuel subsidies.

countries like mexico, malaysia, and indonesia want to use these opportunities to at least give get rid of part of their capacity. many people in this country quickly make use of the situation. in 2015 should be achieved as well but now we have an opportunity to do something like that. that. the third thing i would like to mention on this issue, many countries in the world including the united states have done a lot in energy efficiency. renewables, so these are

assets that are more important than just low oil prices. >> optic that up. first of of all, make it very clear that the relatively low prices for oil and gas in the united states are available for consumers. we already see some of that affect coming answer. we certainly saw a big jump up in terms of job creation over the last month. so we start with that. that's clearly very important for consumers. related to that. obviously relatively soft,

europe, china, anything that helps that going. now, having said that we still are committed to going to a low carbon future. a few points. even as we celebrate increased oil production and dramatically reduced oil imports we can't forget we still have a major oil importer. we do not take our eyes off the ball of continuing to reduce oil dependence electrification of vehicles. we are actually seeing it's not a huge number. substantial penetration, increasing penetration. next going to renewables, efficiency we do have a

large number of states that remain a strong renewable portfolio standard. that is one way of continuing the employment. policies which are not economy wide like the proposed epa rules on power plants mechanisms to keep pushing toward low carbon future. finally going back to the technology issue in the cost reduction which is absolutely central. making tremendous progress on the butt the problem of

energy and technology focus, maria showed the research development demonstration portfolio and that is clearly important for addressing that continued challenge that we we will have in one year, ten years, 30, 30 years to keep driving toward lower and lower carbon. there there is a third deed that i don't want to forget, deployment. as for addressing the much more immediate term. the loan program. $34 billion of commitments often, all of the above, and we have $40 billion of remaining commitments.

and the chatter of a few years ago we should really be forgetting this is a highly successful portfolio that is getting clean energy out there picked. we will continue that over these next years, and this has impacted deployment and in further cost reduction. >> thank you. right here. i'll come over here. >> thank you. i was interested in integrating the electricity market. state-by-state control. i'm curious what you are actually recommending. are you recommending a

takeover over you talking about integrating on some other level? was practical? >> i think you answered the question already. it's not about taking over because that's not going to help. compare the united states with your, well, there's a certain similarity. if you are not capable to have the right connections between the states it we will be very difficult to balance and help each other when needed. rich and renewal. so it's not about taking over and about how do you

better regulate, what the regulators can do and have a look at what the federal government can do. maybe it's time to have something in place that encourages this kind of cooperation so that you can really balance not only within your safe but the regional basis. the regional basis meaning a number of things. what you mentioned about the electricity market between canada, the united states, and mexico is exactly the same. what europe is doing, having a lot of hydropower. so this kind of mechanism is very important. >> clearly there is this set of different regulatory structures with various

boundaries that don't match physical realities. however that the system that we have. it's also not only a question of state's regulatory authorities that need to be addressed, and i want to emphasize the need to be addressed. the solutions the solutions within the system. of course, we also have another challenge, utilities,, utilities, for example, in different parts of the country. so many different business structures that even things like how would you structure incentives, simple tax incentives work very well from a certain class of utilities. all we're doing in the quadrennial energy review, a very strong focus on states and legions of, one reason why we carried out 14 regional meetings and we

very firmly believe that regional solutions are important. we can do some things to enable that through technology. for example, the apartment through through the recovery act funds have a massive push on deployment of phasers. now we have to kind of integrate those of the decision-making tools located at the regional operators to take full advantage of that. the other the other thing is we need to have flexibility in the proposed epa rule. the 111dd rule, flexibility to states and regions to work together is absolutely central to the construct.

you figure out a way to meet those targets and you may want to find that it's more efficient to work regionally. we will be doing what we can , sometimes through our convening power to try to advance those kinds of regional solutions. >> i no the sec. has a pressing appointment. one more more with a yes or no answer. >> high. mr. secretary, you mentioned that the two counterparts in canada and mexico were encouraging in terms of integrating energy data. are there other energy integration projects such as

announcing creating a better investment climate particularly in mexico? >> given the moderators will the answer is yes. [laughter] first of all, the reform their carrying out in and of itself is critical for the investment environment, but it was more night. i'll give you another example of an integration, two other examples of immigration that were raised by the ministers. one was integration in terms of emergency preparedness and response which could be a very valuable initiative, not easy. super storm sandy, the canadiens absolutely stepped

forward to provide important assets. fewer problems at the border reposition waivers. a strong interest in working together on human capacity development for the workforce that we all need and potentially the mobility of the workforce. >> a great thing. want to to get you out on time. thank you. >> on a some look at some of the programs you will find.

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next homeland security sec. j johnson's about his department security initiatives on aviation and cyber security commenting on the hack attack against sony pictures. he also discusses efforts to implement new immigration policies related to president obama's recent executive action. from the professional services council and arlington, virginia this is about 45 months. after. [applauding]

>> good afternoon. i was talking about how served in the pentagon during the clinton administration and was reminded of the time that i had as general counsel of the department of the air force from october 1991 until january 2001, my first experience working in the pentagon. my first time really around the military. i had a lot to learn in terms of military culture, acronyms, and military protocol which is most people in this room now a strict. who you are in the pecking order, your grade, your civilian equivalent matters for everything in terms of who gets on the phone first, where you sit the car over

your offices, your acronym, how you are referred to, how people write e-mails to you. it matters for much, so i had a lot to learn. so i was told, your four-star equivalent. while. i went from being a private law practitioner in manhattan to a four-star equivalent. as a civilian. as a civilian presidential appointee in the pentagon. i will never forget the one day i'll was writing in staff car with a two star general. i was new on the job and wanted to defer to him, so i allowed him to sit in the right rear of the staff car. number you're not allowed to do that. you're a four-star equivalent. if you do

anything other than that you are degrading your own office and position which is not fair to the people work for you. point taken. from that that moment on i always did careful calculation in my head about things i have to make judgments on an instant so this was now a couple years later, maybe a year or two later. i'm at an air force conference call the comic conference, chiefs and the secretary have it wants her pussy year with all the four stars in the united states air force. we were having dinner. this was an airbase in florida._having dinner at this club, an club, an officer club, and were all moving toward our cars. i was good on the bus. the chief of staff of the air force, mike ryan says, i'll give you a ride in my car back to the lodging. i said okay. i'm a four-star equivalent. he's like for the quarter.

and it's his car. i i will love him to get into the right rear of the staff car. so i went around the car the left-hand side, god side, got in the back of the car on the left-hand side manager. general ryan got into the driver seat. i personally. his exact saved me adding to the right front of the car. we said the pledge of allegiance year. i no it like everybody here does. there's a time when i actually forgot. i hesitate to say this. in new york city to have this wonderful program called principal for a day. i was general counsel of the air force owes principal for a day at ps 143.

he gets to speak on the pa system and give the morning announcement. morning announcement for the parents. and parents. and now students we we will have mr. johnson said the pledge of allegiance. it had been a don't no how long since i said the pledge of allegiance. on allegiance. on the trial lawyer. i'm not usually a loss for words. i now no how. i want to talk to you about what's going on in the department of homeland security. there's a lot going on. i was just on with andrea mitchell on msnbc. we had so much to talk about. about. no shortage of things going on.

as most of you in this room know, the department of homeland security is the third-largest department of our government with 240,000 personnel, a $60 billion budget. a comeback to the imminent. we are responsible from another thing's counterterrorism, cyber security, border security, port security, maritime security, things counterterrorism, cyber security, border security, poor security, maritime security, aviation security, administration and enforcement of immigration laws, protection of critical infrastructure, protection against chemical bio

threats, nuclear threats to the homeland, protection of our national leaders and response to natural disasters. we include cbp which is itself the largest federal law enforcement agency in the country, ice, immigration and customs enforcement, citizenship and immigration services, tsa, the coast guard, the secret service, fema, the federal law enforcement training center, federal protection service and others. altogether 22 components. in my view counterterrorism most and will remain and others. altogether 22 components. in my view counterterrorism must and will remain the cornerstone of our departments mission, the reason we performed right after september 11 and it is still a dangerous a dangerous world in terms of the terrorist threat to the homeland. many of the leaders of core al qaeda responsible for the attack are either captured or killed. core al qaeda had a relatively conventional command-and-control structure, but things are becoming more complicated in terms of the terrorist threat. ..