>> [inaudible conversations]

is the only first lady to first lady to date, born outside of the united states she played an important role in the presidential campaign yet have difficulty winning the approval of her mother-in-law before first lady abigail adams. sunday night at 8 p.m. eastern on c-span a original series first lady's influence and image examining the public and private lives of the women that post the position of first lady and their influence on the presidency from martha washington to michelle obama 8 p.m. on c-span three. a discussion on driverless cars we take you to the brookings institution in washington where the deputy assistant secretary for science, space and health jonathan margolis joins in the discussion about how the u.s. and germany

are shaping research development and regulation of the driverless vehicles. live coverage on c-span2. [inaudible conversations] >> good morning everyone. the u.s. department of state and it is my pleasure to welcome all of you to the discussion on

bringing driverless cars from research to international market and introduce you to the the deputy assistant secretary of state for science space and health, doctor jonathan margolis. as a member of the service doctor margolis oversees policy programs in the areas of international science technology international health and body of defense and space and advanced technology and also conducted courses at the university of maryland, american university and the foreign service institute on these areas. doctor margolis began his career as anti-american association of incident of science policy fellow and worked in the numerous bureaus in the positions of the intersection of science and diplomacy and with that i will turn the floor over to doctor margolis. >> good morning everyone. my name is jonathan margolis and i do work at the department of state is the deputy the deputy assistant secretary for science

space and health. it's my pleasure to be here today at the brookings institution and i would like to thank brookings for putting together this distinguished panel to talk to us today about autonomous vehicles. let me also thank my colleagues from the embassy in washington for their work in bringing together the panelists today. the topic for today is one that is near and dear to the obama administration. i think most of you know that they placed a critical role on science technology and innovation. it underpins many societal goals whether security, economic goals, environmental, health its epicenter of them. and today science is global. many countries around the world are increasing their investments in the pedestrian oecd countries and the countries with aspirations to develop further further and bolder economies and

in the united states we are facing a situation where we have to start thinking about how scientists can engage not only domestically but globally so they can get access to the best minds that may be outside of the borders and institutions which are here. in the state department we have a concept we call science diplomacy. if we think about using science in the diplomatic goals and diplomacy to advance scientific goals this is very much a goal to use science to address some of the global challenges that may exist and the answers may come through international collaboration. this is part of what secretary kerry were to ask the shared prosperity agenda way of raising economic growth in countries around the world. in my part of the state department where i state department where i work in the bureau of international environmental and scientific

affairs, we mean ten over 50 bilateral science and technology cooperation relationships with other countries and the goal is to advance the science and technology as a part of the broad agenda of the state department might have for building relationships overseas. one of those countries is true of many and we are here today in large part because two days ago experts in the united states and germany met to discuss the cooperation as part of what we call the u.s. germany joint committee on science technology cooperation. that's one of the ways the advanced science diplomacy and in a meeting i described the identified areas of joint cooperation one of them was in mobility and so the topic we are discussing today is on the minds of those of us engaged in the cooperation in the united states and germany. he mobility is a central piece

of the innovation strategy and the discussions that took place earlier in the week between the two governments discussions that will take place today fits squarely with president obama's patronization of advanced vehicle technology as part of what will be the soon-to-be released national strategy for innovation. this technology i think you all know in the interest here today could be a transformative technology. experts talked about this in terms of not only the technology spinoffs but also reducing traffic fatalities and it says so here i'm not sure, but the panel will discuss that i'm sure about 2050. doing so will require a major investment not only in r&d but other issues. in the obama administration budget for 2016 and doubles the request for investment in

autonomous vehicles and proposes a number of pilot programs to prepare the roadways for safe introduction of the vehicles. clearly that is a u.s. priority. but if you think about this in the international context the technologies involved cutting applications will go far beyond the borders so we need to cooperate with others at every stage in the development process particularly those countries that have major automobile exporting capabilities and then you factor in capabilities. the major manufacturing companies in countries such as germany, japan, united states, others as well where the large settlement manufacturers in the world need to cooperate on the development of the technologies and also the fusion of the technologies in the environmental health and safety regulations that are going to be part of making this technology as transformative as it can be and this brings me to the next point and that is the enabling environment that will be necessary to create to make the

technology work. we need to work together internationally to make sure the new market takes advantage of the best approaches to innovation technology, safety issues and property rights protection a whole range of things to make this possible. the individuals on the panel today are in very good hands and i have the privilege to be with the group at the beginning about what we were discussing politics that are covering and your innate trait of folks that we have cover a wide range of capabilities not only from the development of the technology and the vision that we are trying to get to using those caught implications for society so they can apply outside of the government context and ultimately the international implications of how the mechanisms might be necessary. so with that is kind of a preview of what we are going to do and let me say again how delighted i am to be here to express the state department's

joy as co- sponsoring this event and i will turn the floor over to been to moderate the discussion. apostates. thank you all for coming out on a beautiful morning when we were normally be outside to talk about driverless vehicles. i want to do this in a discussion oriented way so the panelists all agreed to dispense with opening presentation statements and we are going to go right into a conversation. i am going to introduce the individual panel as i direct initial questions to them so as to not dump your time with lovely all available information into handouts that were given to their full bio.

we will take audience questions and so as you have a question please do wait for a microphone because we are being recorded on broadcast and please when you speak and introduce yourself and say who you are in the form that would be recognizably a question so to start with the manager and outreach innovation policies i want to start by defining the terms of the bullet. we all say the words driverless carvers as though we are all talking about the same thing and as though there is a generally recognized definition. this morning i was driving in a

non- driverless car my son said where he needed to be this morning and i have to explain to him with a what a driverless car was and actually it's hard because certain levels have been with us for long time antilock brakes cruise control various features and yet the phrase driverless car connotes a sort of total autonomy and so my question is what the heck is a driverless car and what is it in practical terms today and what are we aspiring for it to be in the future? >> that's a heavy first question but before i answer i want to thank brookings for tackling this issue and the other panelists for being here because this is definitely an issue that will only grow over the next several years and a couple of

decades and i think it is much bigger than people recognize and i hope some of the remarks will get that point across a little bit off on the international context. but to answer the question or to attempt to come a driverless car maybe a little bit of a misnomer. what we are talking about is an automated vehicle and there are different levels of automation. some of which he said are here that are here today in cars especially in some new cars. we are looking at currently in some of our mercedes-benz vehicles technologies like cruise control but adopted cruise control active brake assistance, these things that can take over if you are having an emergency that break for you to avoid an accident, things like that. so look forward, taking that as a current situation coming looking forward to 25 2030. we are looking at a level of automation on the scale it could

be a fully automated vehicle by that timeframe which would mean that there still would be a driver but the definition of driver would also change just as the definition of a car has changed in the past 50 years and 100 years and will continue to change as we move forward so we are looking at a driver that is more of a manager, vehicle manager and on the heavy-duty side we are looking at a logistics manager robert and a truck driver and that will will be for monitoring and being able to step in if there is some sort of a glitch or problem in the system. but the way that we see this moving forward for the autonomous vehicles in the future is kind of on the passenger side of the mobile lounge that will allow passengers and drivers to have a more relaxed environment as they are getting from home to work or day care or wherever you need to

be but still be able to take over on a saturday morning when you really want to drive on a nice country road. on the heavy duty side also as many of you know we produce red wine trucks etc. and just this week we released our free play and inspiration which is a fully autonomous 18 wheeler heavy-duty truck which has a license now to drive in nevada with a logistics manager behind the wheel for testing purposes and there are two of those on the road now so this has implications but looking at the logistics that can could have huge implications as well so i hope that answers the question of this progression of autonomy as the years go by starting with where we are today. a >> it does beautifully and i want to follow-up on follow up on the fully autonomous truck

because i suspect a lot of people in the audience walk in here without a sense that there are fully autonomous vehicles driving around nevada. did you know that? because i didn't when i walked into brookings this morning. so tell us about the truck. what is a fully autonomous 18 wheeled vehicle and how autonomous is fully autonomous and what happens -- what does it do? >> i don't want to go to into the details but i will say for those of you that say logistics management, freight, these kind of issues, this has the implications of something like this for the trucking industry and freight management in the united states and other areas is huge. the truck will have a driver not

called a driver that will be more attuned to where other trucks are where they need to go what the fuel economy is looking like. certainly in the future of the the powertrain for the vehicles are looking at fully electric or hydrogen so this has implications as well. so the future we see this certainly has a large part due to platooning and this automation will definitely help with that. as i said it is going to be greatly impacted by these kind of technologies such as the cruise control and they can travel exactly the same speed regulated not by a person's vote on the pedal but rather the computer within the truck that has enormous implications.

so that's kind of a system moving forward i think is going to change the trucking industry and the jobs of what it means to be a truck driver and what it means to be a manager and how we get good in this country from place to place especially because trucking accounts for a very large percentage of the gas usage in this country. it's much lower on a truck and on a passenger car. and it's also contributing on the road. all of these issues can be impacted by a level of autonomy moving forward. >> carlos is the head of reliable automation control the corporate technology fields.

i'm interested in your sense of the research and development necessary to accomplish the vision that we just heard. what are the missing pieces and what do we need to develop that we haven't developed and in the spirit of the sort of international side of this conversation how much of that is u.s. technology and how much of it is not u.s. technology and what is the interaction between the two? >> first of all, thank you for the invitation to this interesting panel discussion and the road to automation is more and more automated systems in our dalia lives so we have it in

a military area already somehow and the next step on the road. so the car industry is recently the driver for the technologies and other areas as well and i want to address for the research first of all the safety and accessibility of the system and is the system safe enough to some figures like the probability for failure before automated driving in the future [inaudible] but nevertheless there is a probability for failure.

every system can fail and we have to deal with that but on the other hand, the safety of the system. the captivation trembley shows -- simply shows it's not enough for drivers to show the system is fulfilling these conditions so we have to find new ways for testing and this cannot be done on a national level it has to be done on an international level. so the way that we come to that is modeling -- so it isn't the way that we did in the past just driving several miles and stop. the paradigm changes. the second point lead may not

see it in the next few years. it will take time. we have a way for automation and more functionality which will help the driver avoid accidents and it would increase so when we accept that the driver is a backup for the system, how hard is the driver coming back, what is happening to the driver during that time and is he still able to take over the system and how do we provide the driver if there is a possible flaw so there is an open question and the answer is ten seconds up to 15. you see the very end and we have to find the right way how we can solve this problem. their point is security and

privacy. as soon as the car is driving automated on the road come manufacturers and researchers expect this is done with a lot of environmental information. but the data could be corrupt. his label at the end and how do we guarantee and who is liable at the end if it isn't correct and how are we dealing with such problems? the fourth point is the social and ethical impact we have. it's also a research arena. so what is happening if a machine is causing an accident? this is a big difference. is it different around the

globe? when this is happening that the machine has a choice between two bad situations every situation is causing accidents but it's making a choice and it can be followed up because it is programmed. at the same could be done by humans that's different. and forth one of the capabilities of the autonomous systems is that they are learning so they are not systems that have a fixed state and are delivered to the customer at the end, it will change over a lifetime and this is still happening when we have the automated driving because assuming this car is using -- it would change over time so there is a learning system.

it might be in the car or outside of the car to the system system would remain the same as it was in the starting point and how are we dealing with that and guaranteeing that the systems are still safe? >> we are going to return to those momentarily because i have a million questions about that. but i want to hear from the fellow at the new america foundation and the author of the book about electric cars and so this is an interesting element that isn't the first time we have had or tried major transitions from one form of technology to another. some have been more successful and others and some have been promised for long periods of

time without materializing in a way that we would imagine. one of the lessons for the earlier transition in the current set of the transitions and specifically when you think about the experience and how they make it electric rather than internal combustion engine based, how much does that make you optimistic or pessimistic about grand promises of removing human agency or minimizing human agency from the driving in the first place? >> thank you for having me here and i'm part of being that this discussion. before i get right into the question i want to talk about ... what i think about when i think autonomous vehicles such as my experience of growing up driving around in a car. i had a ten brothers and sisters

and as you could imagine that is quite a brew to manage and so my mom would be sitting in the front driving around england rearview mirror trying to look at us and yell at us while she was in the front of the car and managing all those things at the same time. so i can imagine an autonomous system being somewhat more safe than the alternative. [laughter] i would also than say happy mother's day mom. you kept us safe all those years and we appreciate it. getting back to the book and about lessons from electric and autonomous vehicles i think the first thing i would say is these massive societal transitions don't just happen. they are driven by policy and it's important to remember that. and my book is an international examination of what policies are affected and what policies are

and how they can apply strategically over the course of decades they primarily look at china, japan and the united states which are the largest producers in the world cumulatively they produce produced more than 50% of automobiles in the global economy. and it comes to kind of an interesting conclusion which is that while all three of these huge economies and the government manage them or are regulating them or push for electrification during the period stretching from 2007 to the present day there's another factor that happened to have a much bigger influence on electrification and ended up being about technology driver for the entire industry and that was the state of california and the reason was the state of california has an institution

called the california resource board that made it a priority to drive the automakers and they did this over the course of decades and they used a specific set of market-based tools to make that happen and what they did is they told automakers if you want to sell cars in california, then you have to make a percentage of them electric which is a mandate. that is kind of draconian and expensive and inefficient. what if they don't have particular expertise? that could force them to develop a whole new set of technical capabilities that maybe they don't want to invest in that moment. so to make the system much or efficient as they overlaid a market and allowed the automakers to buy and sell credit they were awarded when

they sold an electric car so then what you have is a market driven mandate and that resulted in something much more efficient than if you have the mandate had the mandate behind the electrification of programs so this is applicable to the concept of autonomous vehicles that they are also different from electric vehicles. everybody loves to test the model as it is maybe the best in the world at this point in time, but the truth is what we are aiming towards is a whole set of social goods related to its climate, energy security and other things like that. as you can talk from my introduction i can see many reasons why an individual might want to have an autonomous vehicle so they are going to be much more powerful market drivers for automation than

there were for electrification. nonetheless, that doesn't mean we don't have to think strategically about the regulatory aspects into policies undermining the transition from a standard vehicle we all drive ourselves with and so i think we should take the lessons from california and realized there's a small corner of the global economy of the act strategically and acquire the policies over a long period of time can end up setting the agenda and that's why forums like this and bringing together united states and germany to talk about the global cooperation on standards and on the road map roadmap for the outcome of me going forward is so critically important. a >> last last, sonya smith is the professor of critical engineering at howard university and i want to ask above is

international cooperation aspect jonathan margolis eluted up to it or talk about it very directly in the introductory remarks and in several of the co- panelists have eluted to that as well. when we think about auto development historically, we don't think of sort of international cooperation. we think of detroit or places in japan or germany but these kind of local engineering parts where the cars are built in the regional terms why is this different and what is the consequence of having a significant global cooperation dimension to this or being in a negative sense not having it? why does the global scientific

matter? >> thank you and i would echo my panelists in thanking you for asking me to be here. i think as the educator on the panel and each emphasize that part of the answers to these questions in the research and driving, the technology further has to do with incorporating students and faculty. we are one of the institutions of the partnership in the advancement of collaborative education and it's is a partnership among general motors and others to catalyze the projects in education and so to answer these questions it's important to not only involve researchers at the companies and faculties but also students as well. one of the things we do is collaborate on the global design

competition and this involves teams of students and faculty from across the globe. the team at the university is partnering with one in germany and the university in são paulo and toronto and new mexico state and we are on the global design project to answer these kind of questions. it is a very rich experience and the students are the ones that are going to be the early adopters and the drivers of the technologies. to get back to the question of why it's important to have a global perspective as opposed to the original engineering aspect when we talk about autonomous vehicles the subject banned all

of the disciplines. it not only stands policy committee spans engineering and creative design and atmospheric sciences. when you get all of these disciplines together in the educational arena it definitely enhances the educational experience for not only the students here in the united states but also globally. >> i want to push you a little bit on why is this more true in the area of autonomous vehicles than other vehicles or is it just the scope of the research necessary to do these things is so vast? why do like a why do the cds and holding companies and students universities in these areas but we didn't see it or maybe we did

and we just didn't talk about it when it was earlier generations of cars. >> i think there were different types of collaborations early on that as we move, come as the vehicles become more complex the issues become more complex you need a collaborative and a global approach to solve the problem. it's not just from the mechanical engineering and software from computer science. you also need a policy involved in that and it's extremely important so we need to reach out to colleagues and disciplines that we might not otherwise incorporate in a design or engineering type of process. >> i want to talk about safety. a bunch of people praised safety and we started with the possibility of the promise of

the zero accident fatality road systems. that sounds totally fantastical except that in defense of this completely fantastical hypothesis i want to point out that this year is safer to fly in the united states and not to fly in the united states. all kinds of accidents happen in your home you are actually safer on a commercial airplane than you are not traveling. [laughter] >> the more interesting it gets. so the possibility of truly radical de-escalation of the violence associated with roads you don't have to get to zero before you get to something that's really attractive and a policy matter.

on the other hand, as we heard the deaths that do happen will happen because of machine. and as we see in the military context, wind machines cause human death as opposed to people, we get really uncomfortable. so i want to float this up into the panel in general if you have a regime, technologically and policies in which many fewer people die but they are caused without human agency and by programming decisions made remotely or system failures, is that a wan or something that we will have great social difficulty accepting? >> i will try to tackle that first. this is another example of one of the issues that need to be

discussed across the country borders. this is something that is cultural which as we know is different in the cultures are on the world as well as the technology, etc.. and this is something that the auto manufacturers are looking at right now and we haven't had as much before on other technical issues on this kind of technology. as someone mentioned before, the issue of the inevitable crash and what the computer programming should look like for something like that and the liability in the situation like that. how to program these kind of technologies is really tantamount to make a paramount. so this is something we are going to be looking at already this year. one of the board members has convened a group of academia as

well as technical experts and representatives from the du and the german government to come together to discuss this every couple of months moving forward because it's going to have big implications. >> when i drive down the street -- and this has ever happened to me by david think about it you are in a situation where there is no good option. somebody's going to get hurt no matter what you do and you make a split-second decision and there is the policy behind the decision but it amounts to i'm going to kill that person, not that person or i'm going to risk that person's life to protect my own life -- there is no global policy about that but when you replace my mind with a computer you have to have a policy about that and it's called a code and it amounts to a policy level

decision on the part of the programming to kill this percentage that this person. what are the ethics of that click >> [inaudible] the difference if we are able to reduce the number of accidents on the road first of all that is a big advantage. the second thing is as soon as the machine is causing an accident [inaudible] it can follow the process. you have a split-second decision and who is really able to judge in the split-second what is the best choice we have here and the program made a choice based on

the system and as long as the process is transparent you know what is happening so now we have to discuss what kind of rules are behind that. we have to do it somehow, somewhere. what is better if you have the choice, 80 or be come about because in an accident. that is something we have to go on and then make this decision. >> it's a very important issue and has to be addressed. it's an issue that lends itself to the lot of washington pending in the high. the [inaudible] [laughter] >> we need to think about this really carefully about 30,000 people die every year in auto accidents. my father died in an auto accident. his father died in an auto

accident. it affects us all very personally and if we have a process of potentially eliminating 90% of those that is a win-win and backs the personal example my father died because of a mechanical belt jim. there was nothing that he could do about it. we were in the mountains in colorado. he was driving and there was a chemical malfunction and he gone off the side of the road. his father died because of human error, someone driving drunk and ran into him. you have the process of eliminating 90%, 95% of accidents or fatalities on the road through autonomy i think much more important than we have to get machines to make these decisions. let's save 27000 lives. >> i agree with you completely and i am very benjamite about

reducing the gap's. when i raised the argument in the context of robotic weapon systems, there is a mobilized constituency of the human rights activists who take the view that if you can have a grammatically greater compliance with the law of the war as a result of the foley folie à deux on the minus weapon systems, they object to this because you have removed human agency from the task of killing and so did i wonder if those of us that believe that actually aggregate debt reduction is a great good that should trump a lot of other goods are going to have a tough go to climb in terms of social acceptance of the idea that removing people from the chain

of command that leads to death is somehow presumptively suspect; what do you think? >> on a policy perspective into the policy perspective into the logical perspective, it seems like they are apples and apples. i think from a human perspective they look like apples and oranges. you are talking about robots that put people and things we are talking about here today are robots with transport people and try to keep them safe. i understand why there would be a constituency that would mobilize against robots to kill people. there will be those opposed to the autonomous vehicle but at the end of the day we have to meet some social decisions and i think the weight of the public opinion is going to be on the side of the safety.

>> india's educational development partnerships that use the safety and the ethics issues are kind of front and center of what people are working on or are they issues that are concerns but mostly there's a lot of excitement about the technology? >> there is a lot of excitement about the technology but i also look at it from a different perspective saving lives isn't only through the autonomy and going to be achieved in reducing death and auto accident. autonomy is also going to affect mobility and access to other services that will save lives, health care is one of them. so i think that in the aggregate, autonomy will not be

looked at in the same lens is just saving lives through the mobile accidents. those are the issues we look at through these partnerships. >> so what is an example of, you know, if there isn't nearly reduce traffic accidents, we've heard about the environmental benefits with respect to fuel efficiency but what is an example of the great social goods and reduced human suffering as a result of autonomy that is not fewer traffic accidents? >> we don't have specific evidence that an example that has been talked about is access to healthcare and people who are disabled. they may be able to get access to the healthcare services much quicker through and off on his vehicle van waiting for their friend are having to block or

get to a service so that is one life-saving result not a perfect design point that it definitely is an interactive benefit in the autonomy and i think again if you look at not only the lives saved and reduced auto accidents but also lives saved in personal mobility and access i think the autonomous organic is quite different from the drone strike. >> i would like to add one thing to that which is a couple of years ago i was at the doctor's office and when i was coming out there was up there was a gentle man on an electric scooter severely disabled and we started talking with him and is that you have a cool electric car and he said yes but what we are really looking forward to is autonomous

vehicles because there are so many things they can allow us to do that we can't do on our own right now so that is a really compelling argument. >> one issue that autonomous vehicles raise is that data collection. these are incredibly sophisticated sets of many sensors, all of them collecting a lot of data and processing a lot of data in order to make decisions. the data collection gets controversial and has different cultural baggage and different countries and different degrees and this strikes me as an area where the harmony might be quite difficult particularly between germany and the united states such as many of you know fight about the data a lot not just in

the nsa context but also principally in the business context. so now you have 15 years from now a giant fleet of the big data machines roaming around every city. what are the prospects for the regulatory harmony on the subject across the borders and what are the prospects for the cultural queasiness associated to the personal surveillance? >> first we have to differentiate a cluster of machines running around the country. they are collecting a lot of data about what is happening with this eta? is the car relying autonomous but arrested also drive --

there's a separation from outside because everything that is generating can forget immediately after the privacy issue. so they are not quite clear. we are needing a lot of data around the cars of the data used from outside of the car can corrupt the car. a second come as soon as it is sending the data outside, who is the owner is that the driver come is it the car owner come is

that the society? these are open questions we have to discuss and this is cultural and around the globe. they need harmonization anyhow. one thing that is for sure when the data is available and it will be used in there will have been here again. when it's outside of the car available it will be used. >> i just want to underline that. this is a perfect time to explain why this kind of collaboration between the government and between the companies and between one type of bodies and corporations makes so much sense it's important and informed by the academic bodies as well. we do a lot of information research for decades and

obviously most companies do interface at different levels but regulatory bodies and diplomatic missions executives etc.. so these are absolutely necessary because we need to make sure that moving forward the technology is advancing generally at the same pace as the societal adoption. the willingness to accept the technology and at the same parallel as the law and the regulation because we want to make sure they are harmonized and we have an opportunity in this to do so. cars have been around a long time. almost 130 years ago and at that time there was no need at all for germany and the u.s. to be talking about safety regulations and automobiles. now there's an overwhelming need there is an overwhelming need for the countries to be discussing this together.

so we have a new kind of technology that needs to be addressed societal and legislatively and we have an opportunity now to be doing that across country lines as informed by the experts with technology and privacy committee of experts as well as mechanical experts etc. so that's something we can't overlook as the process moves forward. there is no choice but working together. >> i would also say automated vehicles or autonomous vehicles are just one small facet of a significant facet of the changing relationship of the data and vehicles. we are a connected where they will have huge amounts of media and internet connectivity. the era that he will have we will have connections between vehicles and the infrastructure in the city that felt the car how fast to go and what kind of traffic situation is ahead. cars will be connected to each

other from vehicle to vehicle. we have whole regulatory structures being built around it as well and finally you have automated vehicles into sub we have to think very carefully about the date of transportation and how we are going to manage that emerging relationship. >> several of you have eluded to a distinct issue that we might call cybersecurity issue with respect to you have all this data and systems that are autonomous the vehicles like any complex computer system are subject to attack as we have seen in the data corruption and as we have seen in other areas

that have systematically not worked and have become very dependent on attractive targets for hackers from the lowest grade this data sponsor. is this a situation that we are now beating dependencies treating dependency is that we will eventually turn round and say my god how did we come to give the north koreans control over the traffic safety. as to make an example that i'm sure has nothing to do with the news. why shouldn't we be worried -- how worried should we be about the cybersecurity implications of having basically our cars the operation of the cars as network instruments both in

their own internal systems and the data they are collecting and relying on for safe operation? >> i am not so concerned about this. it needs to be done right and this is another area need to be talking between public and private sectors in the borders to effectively regulate these issues and make sure we are thinking about them in the right way. i know in our company we have internal hackers that are tasked with trying to hack our vehicles all the time. it's amazing some of the systems that are in the cars today are already very advanced and may be starting to inch up on the scale of automation such as these kind of assist and adaptive cruise control and the breaking i mentioned.

we have systems that would notice if you were getting sleepy not are getting sleepy not by looking at you but i how you are sitting and driving compared to when you first started and it will splash a little coffee cup on the -- to tell you why don't you take a break now. so those kind of systems are collecting data on you as a driver and the way that it is stored is certainly a cause for debate. i can only speak to our company but because we are based in germany, we are probably the most stringent, we are subject to the most stringent data loss on earth. so we are confident moving forward at that is the view we will take. >> talking about the data privacy we may have to differentiate between the data that is necessary to drive

autonomously and all of the data in the car we have a lot more as was mentioned already. so this is a free flow of information and you can decide what you want to do with that. ..

it is a small amount of data collecting everything by them selves. then we have not touched the issue at the moment. how is correct in the past already. so you can take a car and put some data because in the future we will see a different kind of car in the future. quite sure you can load your own have your special driving function and so on. this will be the future of the car, not just this autonomous driving. so that is when i start bringing new software into the car to corrupt the car in other ways. we have to be very, very

precise. it is not all data. the fewer the amount is, the better we can protect it. we have to have what will happen to a spirit >> this is why we see so many redundancies. >> and now they say it is not just cars. there's so many facets where this is a huge issue of the energy system. i just came from a two-year appointment from the department of energy and we talk about this all the time because the systems are now connected to networks. even a more traditional coal or gas fire power plants into the grid can cause some pretty huge problems. this is definitely a big issue and is an economy wide issue. >> you know just read a report about commercial aviation and

how secure aviation systems are. the answers seem to be that they are quite secure as long as they don't interface with the public interface same the public computer systems on airplanes which are not secure at all. the trouble is we have now interlaced them because people like to watch flight data. so the systems now enter back in ways that create vulnerabilities or the other things. >> lettuce goes to audience questions. if you have a question, flag me and wait for the microphone. we've got a lot of questions. the gentleman over here i saw first. please introduce yourself and please keep questions brief. >> thank you. i am nick farmer. could you speak to the idea of fully autonomous vehicles than the shared use.

there is not a personal car i own. the fully autonomous packages deliver food to people, cars buses, taxis in an urban environment. these have a paradigm change. trying to replace each individual's car has a lot more opportunity for quicker production. >> i think when you are talking about fleas talking about fleets, this is something we are already seeing that i mentioned a couple times. military use -- land vehicles and looking at the fleet air, they are definitely looking up this kind of technology. something in my car to go is a perfect platform for the technologies. in washington d.c., those of you who travel to other cities or

lots of cities around the world, you see smart cars which are little bit reminiscent if anyone has seen the google perception of what an autonomous car will look like that doesn't even have a wheel at all. it's kind of like a little transportation pod for one or two people. these kinds of systems are meant for urban environment like you said because they are small not for long road trips and generally go at lower speeds, which i think will definitely contribute to the more consumer expensive technology in an urban environment. not only from a safety perspective, that you said consumer applications as well, the kinds of companies like amazon or mcdonald's look at same-day delivery in certain cities. get your big mac in two hours, these kinds of things. this is going to be definitely contributing to the economy moving forward.

we like to think because we have the multilayer system internally that we have these platforms available from the small star car to the 18-wheeler heavy-duty freightliner, that this technology can be applied in different settings and in some team like we said we need to work on the regulation to make sure we are in lockstep. >> can i just say one thing on that? you can only really important topic. there's a heading in my book went to plus two equals 10. the truth is when you synergize these technologies of car sharing in car sharing and not tom and me and fleet management and you get all of these terrific possibilities in terms of more efficient use of capital urban land management. imagine if you could just eliminate parking. that is a huge amount of land within the city that we could

use for so many productive causes. it is important to think about these issues systemically and not just taken piecemeal and figure out what are the ultimate implications of potentially bringing these various technologies together. it is a terrific question and something we think a lot about. >> dynamic alan smith at the american enterprise in the two. my is for jessica. you are mentioning any autonomous trucks that are being tested in nevada that there is still a vehicle manager in the car. there is a public perception that technology will eliminate a lot of jobs but it seems that it's not the case at least in the short-term. it's very different level of skill to be a vehicle manager and to replace truck drivers or cooper drivers? >> that's a good question and

it's exciting for people in this field because we are looking at the elevation of this kind in a career from a driver to like you said a manager. someone who is monitoring all the systems in the vehicle. this is a high-tech job advanced training. i was mad event here a few weeks ago but it didn't industry and the kind of education that are going to be necessary nothing lowered for different industries in the country. this is a perfect example that i like travel agents we don't see too many of them anymore. this is a job, a career that will transform. i don't see layoffs necessarily. i see the elevation of this kind of a career, especially because once someone in his career is trained like this, that provides a lot more opportunity in the

current truck driver role. so from a technical tip obviously we need a humane time being with high levels of autonomy even once commercial licenses are grounded in certain states and countries. look in several decades down the line, that is the time we are looking at possibly no one in the car at all and send in alluded to with the disabled community. i was at ces at the mercedes-benz completely autonomous sedan. we had a big group of disabled advocates for the community who want to talk about the implications of this technology for the blind the death people with severe physical disabilities who are completely unable to manage their own transportation as it stands right now.

>> if no one else has something come i feel like i have to. are there layoffs? yes. are there lots of layoffs? yes. is artificial intelligence transforming the way our economy works? definitely. will there be new jobs? yes. will there be as many new jobs as the old jobs that we lose? unclear. i think it is really important that we think about these issues in an eyes wide open kind of way and realize we are moving towards an era where the computers that only a human can do today. there is a huge feature piece in the economist for this coming week. i recommend it. it is very well done and anyone who looks at these issues and a balanced way is going to have to admit that they are going to be a lot of layoffs and huge transition in the kind of job available right now to a truck driver will not necessarily be

available 10, 15 years from now. we have to think about that from a policy perspective and plan for it. >> just want to say something about that. there was an accumulation that singapore university to replace on a university level. and then come the day came for the customer and the average time because of the shorter waiting time. and then they said okay we still need people to reallocate the fleet and this was then a third of the taxi drivers. they made the same with autonomous driving. so then they have to decrease the number. the cars have to reallocate themselves.

>> hi, laurie king -- [inaudible] i do question for jessica and four karl-josef about reliable automation and ethics. as i understand, one of the things that is quite difficult if you are an economist car making a decision you have to brake quickly to save the person in the car, but that could cause a chain reaction. it is quite difficult for computer programs to deal with things that counterfactual and calculating whether it is better to do one thing versus the other. i wonder, what are engineers who deal with this thinking about in terms of the right approach to making those calculations? to be no ethical decisions of this kind can actually be reliably automated and reliably commuted by a she.

do we need to know that before we have things like say a new mercedes doing testing in california, do we need to know and how much do we know before we can have these ethical questions answered in terms of what the car is capable of doing. >> as soon as you have an algorithm it is decided before. the rules are fixed. it is programmed. so with the acid choice to make an accident left, right, you know the calculation time is just making a few choices is much harder than the human brain so you know this will

happen in a situation like this where they stared we have to make it transparent that we want to have this reaction to make and take care of the situation before they are happening. we have an ethical obligation to make that choice to say okay we are choosing if you have a choice between killing a kid and killing an adult, you kill the adult or you kill the kid. whatever your choices. i am being a reductionist. when you have a choice and an answer to that is there an ethical obligation to lay it out and imagine the "washington post" and "the new york times" headlined engineers killing kid. do you have to do that or are you allowed to have a proprietary killing kid algorithm? >> interesting question.

you have to see the following points. we want to have it in the parliament of world. that is because we have to have again this discussion are this question you are asked as a physician somewhere in the third world have to do this decision every day. ethical moral decision and nobody is helping with this. and now as we have in our pocket here, we have to decide before. we are not making the decision. we are blaming the engineer. that is the wrong way. >> i want to add one thing. these decisions will also be adaptive. they will fall than they will change be dependent upon regions government, et cetera the same way one part of the

country in the same situation will not make the mistake and the same will be true. >> i would also say this called out for regulatory guidelines and government decisions. we make these decisions every day. we decide how much we are going to allow coal-fired power plants to emit in that kills people. i think when it comes to making these big ethical decisions about how stringently are going to regulate technologies that is actually be appropriate for the policymaker in many senses. >> i think as you mentioned the transparency issue, this is something we are discussing within the framework of the ethical debate to begin when it. the other german automakers are also having these discussions. in the news this week, one of our competitors voiced a concern that they didn't think they could be surmounted which we

disagree with. if years go by and there are some answers, that is something you have to tackle at the time internationally. >> when i reference the problem that the military and covert agencies have had in attempting to engineer exactly harm reduction, it will be totally different because these transport people, not robust designs to kill people. and yet here we are having the same conversation. >> that is partially because you are asking the question. >> i did not this question. >> in the military system the principal problem is different.

it is a situation and then a decision. >> so which is the company that has decided the ethical problems are not surmountable. >> they hinted this week that they are concerned about that. >> yes. >> by name is allen. i am a consultant and researcher in transportation travel behavior and investment. i am wondering about the critical interface between public investment infrastructure and technologies we are talking about. are there game breakers, are the critical interfaces that are important or are you going to be able to have the activity autonomously outside of whatever public investment partake in. >> so i think that if some team

that has to be studied carefully. that is my next project to look at what the interface is from a policy did and how we have to get our house in order to allow automakers to innovate what is much more efficient, much more safer. that is something that calls out for further research. >> i also want to bring up here in terms of infrastructure the specter of use issue, which is a little bit of a hot topic here in d.c. if you follow this right now and something we feel very strongly about what that end of the spectrum for automotive use. this is something talking about 10 or 15 years from now is going on right now.

>> when you're done with the microphone, just pass it to the gentleman in the back. >> name is brad thompson with our energy policy.org. i does have a question to touch on the safety issue and to touch on some of what authority than asked. i tend to agree that maybe the public support would be towards the net reduction. however, i think there could be potential pushback specifically looking at who is responsible for making programming decisions and whether that is the company by regulatory agency. i am wondering what the current regulatory framework looks like in terms of being able to support those types of decisions, particularly with the international angle is part of it. >> i'm sorry. i'm not sure if i completely got the question. the question is?

i know mac -- [inaudible] [inaudible] >> there is a terrific paper by john bell, which anything copies are out there about liability issues with respect to driving with cars and road liability issues. a lot of what you are describing as a regulatory architecture in this country is not a regulatory architecture. it is a liability and assignment after the fact architecture. you know the question of how you apply that legal system to a

system in which the point person on the decision may not be the driver is a very hard one and i don't think we know the answer to it. >> that's right. i say the systems are embryonic taking shape and autonomous vehicles are legal around to find. in times if they are legal or regulatory mechanisms that apply to who drives them, how they are driven, where they can be driven. on the federal level, you have a push towards supplying a regulatory agencies will feel with economy. working very assiduously on their connected vehicles policies right now. we have to think very creatively . >> to piggyback on mac, the framework is set up or getting

set up. the d.o.t. has a 2015 through 2019 multimodal plan for a vehicle obligations they are working on. this is a working group which is dirty been established. they're already have been several meanings. the correct people identify these kinds of discussions are well-placed already and have started. >> another dimension unlike the other area where this kind of automation has really taken place, which has been an aviation of one sort or another you do have a federal state issue here that is peculiar which is traditionally the licensing agency for driving mr. state government. and now you are talking about the agencies -- you know the decision-making entity would be a commercial product that

presumably doesn't have a license from the district of columbia to operate in our vehicle. so there is a question of how much -- how much autonomy does a car have before you really lose the foundation of state licensing rules that have governed car driving for the last 100 plus years? >> it is a tremendous undertaking to look at these regulations many of which were established in countries and states decades and decades ago and a century ago and look at amending them. >> we have a gentleman shaking his head with annoyance. let's let the gentleman asked this question and when you're done, pass it to the gentleman who wants to correct me. >> all right. i met like to note that her as a

third option when you're killing the the kid or the adult. kill the occupants of the autonomous vehicle appeared that is a third alternative in the algorithm. >> i think that will be of great comfort. >> my concern is dealing with the plane and at the technology because it was my good fortune to be part of the jet propulsion laboratory's in the 70s. we have not taught in this vehicle running around in the 1970s. the technology was on his way appeared there was an engineering model, but deployment and where it made sense in the continuity of programs, none of that came true. so four years ago and here we are again. today, you need a couple of things to go forward with an i would like to see anybody respond to this. one is a specific duty cycle. that weight maintenance is controlled. if utility electric propulsion that committee, which you don't have to do, but it could be that is controlled also said

that you know that your system vehicle systems are operable when you introduce it into the rest of the system. the other is i believe a hybrid that is in there and what we anticipate long ago. imagine you're driving along in your bmw c-5 or six on a nice country road. >> that's okay. [laughter] >> you on a nice country rugby approach the town you want to be in. he strode into automated mode, sit back and relax. the car confirms that he now proceed to a city that you know nothing about precisely to where your destination is. when you leave, you ask at the same manner and if you choose to take the freeway and forget the nice country road, that choice is a great way to introduce the technology along with mass transit and that is the specific duty cycle. because mobility for people who don't have a driver's license

never did or have lost it as critical. so if you work on a hybrid concept and get mobility for all the people you get quick deployment and acceptance. that was my comment because i've been in the field. >> a hybrid version is the road to acceptance. thoughts? >> i would add another element to the hybrid road to acceptance that is the last mile first access to transit system. that is the perfect way in order to sensitize the public to these technologies. >> i would say that most automakers completely agree with you. we love to talk about autonomous vehicles. autonomous vehicles drive themselves. for instance, if you talk to toyota, they do not use the term autonomous vehicles. they say automated vehicle. the reason is there a certain instances in which it is

difficult to write the line of code that decides whether someone killed the kid or the dog or the occupants are themselves or they do something else as yet undefined. toyota likes to talk about the fact that there are large stretches of highway and road in this country for which autonomous driving is quite simple to program and very safe and usually that is highway driving. the other thing that is relatively easy to do is low-speed driving. you can do that from a technical. not that big of a deal. it gets more complicated when you move into high speed in a dynamic environment. i think what automakers would like to see if a system where we can get 80%, 90% of the benefit where we can make the last critical decisions kind of off the table because you are never driving in an environment where they are likely to arise.

>> from a manufacturing perspective as a german manufacturer, i completelcompletel y agree with you and that is why our first big stab at this as a team we released earlier this year or showed at ces traveling around the world &-ampersand still have a wheel, a steering wheel because then our perspective, consumers want that choice and want to use the car differently on saturday morning versus a monday morning. and not everyone necessarily wants more than one vehicle. that is kind of the way we see things as having the comfort and luxury in a mobile lounge to drive it when you want or when you need to versus being able to relax when you don't. >> thank you for recognizing amount is sent to your comment about federal versus state. the house commerce committee as a lawyer for years i worked in

74 amendments to the motor vehicle safety act. i kind of know little bit about this. states have very little control over the equipment in the car. they licensed drivers, but motor vehicle safety equipment like restraints, which i'm surprised you guys haven't mentioned is the best example of forcing technology that was a federal proposed rule 30 years before it was finally adopted. it took a long time but in a way that auster's technology. in the federal system, you never know what is going to happen to the supreme court. this is a federal issue. >> i think you misunderstood my remark. i did not mean to suggest that all that the states were the primary regulator here. what i meant to suggest was quite the opposite. the more of the driving function you gave to equipment, the more

you lessen the role of the state and the more you give to the federal government the function we traditionally associate which is the day today operative driving function. >> it does raise a good point and we see it in environmental regulation that certain states or do certain things to go about and beyond. if you even keep one half of an eye on the auto industry in the last couple decades, you know we push for harmonization across all states so they don't have a patchwork of regulation and that will be the exact same issue we look at with automated driving as well. >> it brings us back to a bigger issue around standards and collaboration to make sure you don't have different infrastructure in different states that are not going to allow these vehicles to cross lines and countries in places like europe and cars frequently travel internationally as well.

the whole international aspect is really critical. the mac we have time for one more question and then i'll give each of our panelists a chance to wrap up in response either to the question or if he or she chooses to ignore the question that goes. sir, in the back. >> thank you all. this has been an excellent talk. my name is john lott said. they spent several remarks regarding it, but the human factors that lead to the acceptance. we talked about tesla's been arguably superior car to the alternatives because of the design. they cannot match as concern or anxiety until the second they use it. you mentioned about the mobile lounge.

what are the design factors in the human factors that go into the design of a vehicle that might be acceptable and desirable to the consumer that will lead to acceptance. >> this is a really interesting question and i am glad you brought it up because design is something that can't be ignored when we talk about consumer acceptance. as far as the regulations and laws come, if people don't want to buy is a problem. what we see right now in california and other states. we are a luxury car brand of music at this issue differently than the mainstream car brands. what are 15 mins and i put in autonomous.

-- is going to be completely different. for us it's a comfort in the privacy of good space if you think about the cultural aspects and people who generally like their own space and that is why their summer that tends to be the public transport system in this country. so we are looking at all of that for my luxury goods and i'm pretty excited about the way it's going. i believe that is my closing remark. >> let's go straight down to the line. one last point to the autonomous driving. it was interesting about five six years ago we conduct did china in japan and we were discovering in this study how much software we will have in the car in the next year. and they made some predictions about what would happen in the

future. sorry to say of the six years ago that we were wrong because now it's already in now that we have the first autonomous system the 17th and 18th in the car followed by 21 on the highway. so this is very soon coming earlier than predicted. and i guess there is a need in the world and that's the difference to your propulsion systems or your autonomous car. it took also 100 years to have electric cars on the road because we have since the beginning of the last century. there were more in new york on the road than we have in the

combustion engine to work on incoming again. i guess they are coming faster than we think. >> i couldn't agree more. to answer your question, our discussion has been kind of safety, safety and safety. it is perfect dignity and productivity in productivity. if you can have a mobile office that allows you to live in herndon and to me again. as you are in your office. that's a real game changer. the games are going to overwhelm opposition to autonomous field test. and the automakers will be thinking about how to integrate not just entertainment, but the rest of life into vehicle.

>> i would encourage us to think about the autonomous vehicles, not in terms of the direct benefit production in traffic accidents, but also the increased access that these types of vehicles can provide and the benefit to society is. >> i thought we were going to have to close. thank you all for coming. thank you all for coming. [applause] [inaudible conversations] >> a note that if you missed any of the event today coming you can watch it anytime in our video library.

>> now a conversation with author peter schweizer, president of the governmegovernme nt accountability institute and author of the new book "clinton cash: the untold story of how foreign governments and businesses made bill and hillary clinton rich". >> host: well the new unemployment numbers are routes and here they are. let show them to you. 5.4% of the unemployment rate. 223,000 jobs added, a seven-year low for unemployment in the united states. "clinton cash" is the name of the book. peter schweizer is the author. he joins us from tallahassee.

mr. schweizer on page 183 of your book -com,-com ma do you write that the clintons are perhaps the most sophisticated public speakers at their generation. they know how things work in the corridors of power and around the world. they know that foreign governments are trying to influence american foreign policy and they know that bribery is rampant around the world. they have numerous avenues for making money. some of those avenues might not be as lucrative as giving a $700,000 speech in nigeria, but they would be much cleaner. >> guest: yes one of the defenses you hear from the clinton camp is they are unaware of certain things and perhaps there is nothing seriously afoot. in this speaking phase. they have been on the international stage for a long time and a lot of the people

that contribute and pay for speeches by bill clinton and are not an insurance company in the u.k. or a media company in germany. these are companies that operate in places like nigeria congo south america and some of these individuals have sketchy history says that relates to issues involving financial crimes. you know i think the clintons are not ones who would you shocked that there is gambling going on a suicide in the film. they know exactly what is going on and that is what is so troubling that they don't seem to have a filter that prevents them from taking money from some pretty sketchy characters. >> host: why don't some of these foreign leaders give money directly to their own countries where it is needed rather than the clinton foundation? >> that's a great question.

the great christopher hitchens a liberal writer asked that very question and wonder why is that you have the oligarchs in the third world in places like india or africa. why are they sending multimillion dollars checks, 10,000 miles away to new york to the clinton foundation, extensively to send the money back to work in their own countries. the answer that hitchens basically gave us because it was a way of influencing with a former president and his wife is first a powerful senator and the secretary of state. that is what i think is so mystifying. if you're in a beta party age you name it. it does not make a lot of sense to send it to new york city. why not work with a lot of charities in india and that is one of the same things in

addition to these donations. >> host: can't expand. walk us through what happened in cosmic stan. >> guest: and central asia. it is a precedent government that is what they are. since the collapse of the soviet union. they are really rich in minerals and one of the things they have is a lot of uranium which feels the technology and also the nuclear technology and in september 2005, bill clinton is fair with frank who struck, the smiting a. they said nice things about the dictator of kazakhstan. he is granted as uranium sessions. weeks later he spends $30 million this is where it is interesting if that's not interesting enough.

this uranium deposit becomes part of a company called uranium one. uranium one is a canadian company and they start acquiring rights in the united states. what is also interesting as this is a small uranium company. eight other individuals connected with this company also start making major contributions to the clinton foundation. the chairman russ multimillion dollars checks. those contributions were never disclosed. we found them in canadian tax records. the financiers in the company are major clinton foundation contributors. you've got a shareholder named frank holmes is not only a shareholder uranium one he is also an adviser to the clinton foundation and a major donor to the clinton foundation. all of these assets are accumulated.

all this is falling to the clinton foundation and the russian government arrives. we have a long interest in uranium markets. this is a personal desire. he actually authorizes the release of funds to buy this uranium company. in order for russia to acquire what amounts to 20% or 25% it requires federal government approval. there is a process with the committee on foreign investment in the united states that requires a number of government agencies including the state department to sign off on this deal. they do sign off on the deal. what i think is troubling about hillary clinton in the midst of all of this is no other government agency that approves this is headed by somebody who receives $145 million to their foundation from nine individuals connected with this firm. the second thing that is

struggling if hillary clinton had a history up to this point of opposing precisely these kinds of deals. in other words were a foreign government wanted to buy a critical industry in the united states. both of those things raise a lot of questions about what the involvement was a mess. the clinton campaign of course that she had no knowledge of this. she was not involved in this. national polls showing half of the american people questioned her trustworthiness and honesty. i don't think her verbal statement on this is going to be enough for making there needs to be further investigation to see what the role was. i think of three years from now we have a secretary of defense who had a private foundation to receives $145 million from shareholders and a foreign company. it would not be as you do nothing to help them.

it should be here. >> host: with bipartisan self corruption and self dealing why am i now focus on one couple? do we simply have it in for bill and hillary? msm are trying to derail their prospects have been elected president in 2610? what is the answer to that question? >> guest: the answer is the last five or six years. both political parties. they were engaging in. they looked at what i regard absurd fund-raising practices on both sides. i got the displeasure of john boehner as a result of that book.

the clintons are unique and fit into this pattern. no post-presidency has been marked by as much money making us clinton has engaged in. they taken between 2001 and 2012 some $136 million. that is unprecedented in scale and scope. the second thing that warrants particular discussion here is they have created a new model and this model if it is allowed to continue and the successful is going to be adopted by others. it is basically getting around rules and laws that we have in place that prevent foreign entities from in lansing american politics. if you are a foreign company you cannot give campaign contributions in american political elections. you cannot give to a political action committee. with the ability to pay speaking fees to the spouse of the secretary of state, foreign entities now have a way of giving money to families of

elected officials in the hopes of influencing them. that is a very, very troubling development. >> host: peter schweizer, as you know, hillary for america and media matters have come up with less of what they say are errors he made in clinton cash for an hillary for the entire did not have veto power over uranium deal. they had many key information that oa and acquisition has no evidence. is there anything you think hillary for america or media matters or any other group has gotten right about an error you made in this book? >> guest: no. what is surprising as they say the book is a guide that the actions don't indicate this is what they believe. if callers want to add them up

and i'm glad to go into detail. it is a classic example of misdirection. one of the things from the spokesman was the statement that in this uranium deal the shareholder sold his shares and the company before hillary clinton became secretary of state. i point that out in the boat he agreed to know if he has shares or not. the problem is brian fallon doesn't talk about the eight other individuals who are giving to the clinton foundation who are shareholders in the deal who are the chairman of the company who are engaged with the company and giving to the clinton foundation at the very time the state department is considering this deal. they want to selectively try to steer the conversation one way without looking at the larger facts and they are hoping that people won't actually read the narrative of the book enables her to take their word for it which really is quite remarkable on their part.

>> host: "clinton cash" is the name of the book. peter schweizer is the arthur. phone numbers are up on the screen. if you would like, you can go to her face but page. if the.com/c-span. we have a discussion going on there about the book. let's begin with the call from john in great falls montana. you are wrong with peter schweizer. >> caller: i would like to get off page a little bit and speak to the fact that people like mika and george stephanopoulos just attacking you personally on your ability to do research on the clinton projects about their love for his personal attacks. defend yourself a little bit. thank you. >> guest: i don't feel the personal conversation is a fact. it is fair to raise questions about the research of the project.

i will say the stephanopoulos interview this week was a little bit odd in that george stephanopoulos worked for the clintons. he was part of the war room for the clinton campaign and he of course mentioned for a four-month i was a speechwriter in the george w. bush white house. but he certainly served the clinton administration much longer than four months. i thought i was anxious and decision on the part of abc news. i don't mind having a conversation. it has been troubling if the allies that the clintons, paul bacall, james carville had engaged in vicious attacks against me. they try to misinterpret her dredge up a book i wrote 17 years ago. i am very encouraged by the fact that a lot of media outlets sure the material early on. their investigation unit have

all confirmed reported missing the book and i think it is now incumbent upon the clintons to stop this sort of statements that former president clinton has said about me and engage in a conversation about a very troubling pattern. >> host: you ask in your book i realize how shocking these allegations may appear. are these activitieactivitie s illegal? that is not for me to say you wrote. >> guest: if you look at the tone of this book and peggy noonan of "the wall street journal" has a column today about the book. she points out it is a very somber tone. i'm not on throwing. i am not making outrageous accusations. i am playing not just the facts. that is what i'm doing. i am not an attorney. i don't pretend to be an attorney. what i will say is if you look at the recent cases of political

prosecutions on corruption, whether that is in virginia senator menendez in new jersey or if you look at the case in oregon with keith sovereign and his resignation, i would contend what we know now the fact pattern with the clintons is far more troubling and developing that it was in any of those cases. that is why i think this warrants investigation by either the fbi, a federal prosecutor or a congressional committee with subpoena power. ultimatelultimatel y you need to look at communication. you need to have people under oath in a serious questions about the flow of funds and the decisions made a secretary of state and how they benefited those giving her family money. >> host: william is in eureka california. democrat. >> caller: hello good morning. i only have one question for you. it's not a short answer. don't answer this shortly.

i want to annex the nation. would you show us much enthusiasm writing about the koch brothers? thank you. >> guest: well, i focused my research on effective public officials. by the citizens could have a bigger debate about the role of money in politics. we could every vigorous debate if there is too much or whether there ought to be restrictions. the koch brothers don't actually vote policy. i look at elected officials. that is what i did and throw them all out. that is what i did and extortion. i have both the local parties have criticized by john boehner and other republicans for those books. hillary clinton was america's chief diplomat. she chartered america's foreign policy. she had enormous power when it came to national security are posture overseas. during her tenure, her husband took in tens of millions of

dollars in funds from foreign governments, foreign corporations and foreign financiers that had this on her desk. the results are astonishing. to give you one example, the caller might be interested in a democrat. this is a very controversial with you. hillary clinton and secretary of state is reviewing the environmental impact and making a designation on the keystone xl pipeline, which is a very controversial issue. during that time her husband signed up to do 10 speeches for about $2 million from a financial firm in canada which happened to be one of the largest shareholders in keystone accel pipeline stopped. they never paid a speechwriter before when she was not secretary of state, when she was not reviewing the keystone accel pipeline. suddenly they come up and offered $2 million to do the speeches and he gladly does them.

three months after the last payment, hillary clinton reminds the 79 keystone pipeline. you can look at this and say it is a coincidence. the problem is to say that replicated over and over and over again. what i asked the caller to do with not give me a short answer yes or no as to whether he would read the book, but actually read the book. if you don't want to put it in my money and buy it give it serious consideration. is there traveling patterns of behavior and they have not challenged any of them. they have not challenged the payments the timing they got their money from, the decisions hillary clinton has made. >> host: peter schweizer, "politico" recently stated you are looking into a book with jeb bush. >> guest: gas, we are engaged in research. obviously, is governor of florida you don't have quite the global state. but the clintons you have a

longer time in public service then you have a jeb bush. but we are following the same methodology. so we are looking a flow of funds. it is always for me about follow the money. it is about flow of funds, did the decisions benefit those who are contributing to campaigns or giving to jeb bush's foundation. .. mansion that was connected to it individuals that benefited when he was governor. we're looking at airport and land deals, things related to educational reform. we expect a major report out in september. we are following the same model that we did here. partnering with major investigative units of major publications because they have a capacity to get answers from political figures that i cannot, as an author. authors tend to get ignored by political figures. if you get a call from the

washington post, the new york tibc you're going to engage because you kind of have to. that's part of the model we'veis in penn embraced. >> host: john from pennsylvania. go ahead. >> caller: thanks for having me. you've done quite a patriotic duty here. i mean, first of all for you to partner with "the new york times, thwashingt times," "washington post," these are far lefton organizations.you and you are clearly you are very credible. i've been aware of i mean i was we troubled personally back from as soon as the president clinton left office and the obvious he wasn't done for all his legal issues but embark on this page speechmaking. he went before financial institutions lobbyists, getting 250, 200000, 500,000. as you indicated earlier, then

made the clintons between the two of them with the book advances and speeches they know 10 years over the $100 billion. what you're talking about as far as this foundation, this is a whole new idea with getting all this money in this foundation. ashas understand they are only spending on the actual, you know, helping the poor 10% or 15% of the funds that come into the foundation, the rest of it is going to salaries and headquarters. >> host: we got to the point. >> guest: i think the call brings up a lot of good point. first on the speaking fees i think we all recognize ex-presidents will hit the lecture circuit and i don't think we might get at a certain level. with the clintons though it particularly troublesome because bill clinton's wife at the time is first a powerful u.s. senator

and second of all has become secretary of state. when you look at the pattern of the money that they're making from the speeches it's troubling. consider one statistic. bill clinton has been paid 13 times the total of 13 times its entire speaking career $500,000 or more to give a speech. of that 13 times, 11 of them occurred while his wife was secretary of state. some of them it's hard to not see them for what they are. for example, bill clinton had never given a speech in nigeria when his wife was not secretary of state. she become secretary of state a businessman in nigeria who is very close to the nigerian government which is highly corrupt contracts for him to give two speeches for $700000. as secretary of state of think silver clip has to do is look at foreign aid recipients like the

government of nigeria come and get the rampant corruption and they're not improving it federal law says they are not to get at. the only way they can continue to receive u.s. aid is if the secretary of state grants them a waiver which hillary clinton did. again you can look at what they then say maybe that's a coincidence but you find that pattern repeated over and over and over again. as regards to the caller's question about the foundation, they get about 10% to other charitable organizations. the clinton foundation model is incredibly unique. you look at the website and you see bill clinton and chelsea and hillary clinton holding children in africa or in asia but the clinton foundation really doesn't do a lot of hands on work with people in those countries. they partner with other organizations that do. they function kind of as a middleman as it were. and the world needs is a middleman it's not like doctors without borders or american red cross or some of these other

organizations that are actually doing hands on work. that clinton foundation is more like a management consulting firm working in the area to charity. this is the reason why for example, a charity navigator which is well regarded as an evaluator of charities can you can look online. it won't even write the clinton foundation because of what they call its unique business model and they've been deemed by the better business bureau because they lack internal controls as it relates to finances and governance et cetera. there's some real problems there. >> host: eugene debs in hickory, kentucky. please go ahead. >> caller: first of all i'm not a republican, democrat libertarian. i'm an american antidote believe in being affiliated with a party. my question is if you or i or any other average american were brought up the question by congress and asked to give over

information, and we destroyed it would we be walking the streets, or would we be behind bars? i mean our congress gives them 30 days the way i see it give them 30 days to distort evidence and that's exactly what they did. and if we did that they would come into our homes they wouldn't need -- aspect i think we got the point. peter schweizer? >> guest: well and income you are referring i visited e-mails and the servers at a think it's a huge, huge problem. remember hillary clinton was on the watergate committee as a junior lawyer and it was of course those 18 minutes i think was that richard nixon erased. we are talking 30,000 e-mails that are just vanish. on top of that year this

additional problem as i point outout in the book that hillary clinton as a condition of becoming secretary of state, this is something the president-elect obama insisted on, they were required to disclose all the contributors every year to the clinton foundation. pretty basic requirement. hillary clinton promised the same thing in her testimony before the senate foreign relations committee. bill clinton went on cnn and said we will have complete transparency. we were researching this book and went through canadian tax records we found that lo and behold that's not true that there were undisclosed donors including the chairman of this russian on uranium company who gave $2 million. those donations don't show up on the clinton foundation website. it's now been acknowledged their more than 1100 donors that have been not disclosed. i think we will find there are more. so think about this for a second. the president-elect of the united states barack obama he

signed a written sort agreement with him that you're going to share you're going to share all the could you been insufficient that you have come and on a basis for condition for you taking the job. and almost immediately because some these donations to start flowing in early 2009, almost immediately you violate that agreement. that is shocking and really to me raises huge amounts of questions and i think that's one of the reasons why you have such a hyper is to hide% of these americans in recent surveys who say they don't trust her, they don't believe she is honest. >> host: greg from virginia. democrat. >> caller: good morning. i appreciate the research that you have done. i am a democrat but i'm definitely against the clinton dynasty as icy and also the bush dynasty. i have to ask you, this does sound really bad and i'm not surprised all. at all. i think it's one of those

absolute power corrupt absolutely. and this does not surprise me in any way. i have to ask you with your skill set and your resources to me i'm wondering if you would ever consider researching dick cheney and george bush in regards to the iraq war and halliburton connection and all those things where i really feel like there was a lot of money made through that war where we should never have gone in there. i think that's why we win. i think it was a lie. i think it's much worse than kind of the corrupt corruption the clintons i'm sure arnold and when we have our wonderful american soldiers losing their lives. that to me is a far worse since it is the gambling if you've ever considered -- aspect let's get a response. peter schweizer? >> guest: yes. i haven't consider looking at things that far into the past. i can to look at things that are contemporary but look, i always think it's a legitimate issue and a fair path of investigation

under no there are people who have done some work in the area. i think it's always legitimate to ask questions about when an elected official is making the decision who's making money on it. i'm not suggesting that every elected official that's the only calculation been made. i think to our coincidence that might occur. i think there are other things factor into. maybe money didn't matter but what i most troubled thoughts and most concerned like looking at patterns. that's what drew me to the insider trading in the stock market. it's one thing if the guy makes a lucky stock trades at a certain time but when you find an elected officials seems to be really, really good at taking stock market and he's buying stocks that are in an area like health care where he's on the committee that looks at health care, that's a problem. and what drew me to the clintons is the cluster and a consistent pattern of the flow of funds. but i think it's always a legitimate issue and should be researched because in the

elected government official republican or democrat when they're in a position of power they have enormous capability to hurt people or to help people. and i think it's always fair to see was being held into is being hurt. and efficient financial motivation or connection involved motivation or connection involved in in that spirit if you can't get on the phone in that spirit if you can't get on the phone lines and what courses but you can go to her facebook page were conversations happening about "clinton cash" at facebook.com/cspan. here are some of the comments. why don't they take some of the caching of the american people with the? if the book is full of lies in the clintons should sue for slander. and john posts quit making this guy credible. he is a conservative flamethrower them back in the day. so that some of the conversation that's happening online. next call for peter schweizer comes from peter in valley college -- valley cottage new york. >> caller: thank you very much

what you are done. i think you're a patriot but, unfortunately, this investigation will go nowhere. the fbi director will not investigate the attorney general, will not investigate as you recall with the lois lerner situation, director mueller did nothing to investigate. mrs. clinton was part of the obama administration and his appointees will not do anything that tarnish his his administration. as you can see that former president clinton he stated and when he was being interviewed that he didn't say that he did anything wrong. he said there is no evidence. you know as well as i do that if it were you or i and we did what we did with our server with our e-mails, the fbi would've been in there that day, that very day to confiscate your computer.

so this is good because it exposes it but as far as justice is concerned nothing will be done. i proposed that they should change the way these appointees are appointed. they should either be from the opposite party in order to get out of the transparency. but when a friend of the president is the attorney general it will never be any justice. thank you sir. >> guest: i think the caller raises a good point, that is when the department of justice or fbi chooses to investigate or prosecute there are political pressures brought to bear and there's no disputing that. i'm not an attorney. i don't pretend to know exactly how that process works, but look, by any objective standard if you compare the evidence that we have in this case come in this book and you compare that to cases, whether it's in virginia over senator menendez

in new jersey or out in oregon it's far more compelling here than in those instances. that's what i think this information is crying out for attention. i am encouraged because i think there's a lot of news outlets that are pursuing these are stories. they thought it the structure now of what's been going on. they see how the system works at the clintons set up around themselves for self-enrichment so they are mining these very rich veins for further information at a think we will continue to see stories on this. it's not going to go away. and it's a question of political courage, whether it's people that are at the department of justice, whether it's people on capitol hill that have power and investigative capability whether it's a u.s. prosecutor somewhere. to have the courage to take on let's face it a very powerful political machine that's very aggressively goes after people that even question the practices. there's a question is going to take courage but i'm an optimist by nature and i think that's how we have to approach these

things. that justice will win out in the end. >> host: eugene calling in from jackson, michigan, on our democrat line. you are on with peter schweizer. "clinton cash" is that the name of the book called mac destler. this "clinton cash" to me is what you're just has made a living from the entire republican party is made a living off of the clintons for 25 years. and the more books and stuff i guess, the more popular they are at the better policy they are. this book here is one of the best things that hillary clinton's got to be elected president. well, it just you make a living off this come and that is "clinton cash" is what you are making. if you want to really change something, why don't you have the fortitude to run for public

office? because you know there's not as much money in that that's what you are doing right now. >> host: peter schweizer? >> guest: this is the first book i've written on the clintons and i think if the caller is correct that this is the best thing for the clintons and i look forward to both purchases from the hillary clinton super pac. that's all i can say. they have done two things simultaneously. they have claimed that there's nothing to this book that it is a dead end their words. but at the same kind of mounted a very aggressive campaign against me. so what is it? is that they died or something are concerned about? i think they're concerned about the they've seen the recent poll numbers but the fact that well over half of the american people don't consider hillary clinton trustworthy and that approach to this that i think reinforces it. she's not discuss these issues at all. she's avoided it when the press pool has asked her questions about. when the book was first coming

out before cannot be selectively leaked it to allies inin the press. they then had chelsea come out to vouch for the wonderful work of the foundation is doing and the ethics of the family. when that didn't work they had bill clinton make these sort of frankly bizarre statements about me from africa and it still hasn't gone away. so the question becomes does an individual who wants to be the leader of the free world president of the united states, doesn't she want to just come out and answer some simple questions about his? and that's what i think all the people are expecting. >> host: but as this book will try to show you, ghost speechmaking to does not happen in a vacuum is part of a larger pattern of activity, that has never before been exposed to public scrutiny. you going to say that there is nothing clearly illegal about these payments "their sou size, a raerio -- peter schweizer's book is published by harpercollins and

by the way a longtime clinton associate will be on this program on the "washington journal" on monday morning to take your calls as well. alex in flint michigan, please go ahead. >> caller: mr. peter, you guys is always doing the same thing. you are trying to create a lot of hate and discontent in the country over every little episode that goes on. i recall you saying earlier that you don't want to do bush-cheney halliburton because of so long ago but it's all about chasing the money. you said that earlier when you're speaking. you said you want to chase the money but you don't want to go back to far, but you go back to four interview with cheney and bush and halliburton and iraq and all that, weapons of mass destruction trying to find -- but you guys, like fox news and guys like you, all of you all do

is create hate and discontent in the country like ambulance chaser lawyers and hustlers making money off of hate and discontent. >> host: peter schweizer? >> guest: i'm not sure if the caller her to part of the conversation took we are doing an investigation of jeb bush, and unlike dick cheney he is contemplating running for president. and we think that's relevant to people on to see what information is there. so i would encourage him in september if he's so inclined to see what our reporting and what information comes out. on this larger point, i mean i would encourage them he probably doesn't want to buy the book, go to the library and read it. is not a hateful word in the book. the book is very dispassionate. there's a column in "the wall street journal" today from peggy noonan talking about the fact that it's just basically recounting the facts and laying out the narrative.

you have guys like professor jeffrey sachs from columbia university who was hardly a conservative who heads up the earth institute who was on msnbc this morning talking about the fact that yes that's right, the clinton-gore and the lines, there's a flow of money going in there's some troublesome things going on. i'm not sure what to tell the caller. i don't think it's able to bring up concerns about foreign money flowing to the families of the secretary of state while she's making decisions that affected them. i think that's a legitimate story. >> host: page 113, the ericsson corporation decided to sponsor a speech by bill clinton and paid him more than he ever been paid for a single speech $750,000. according to clinton financial disclosures in the previous 10 years disclosures, ericsson had never sponsored a clinton speech but now it apparently what you mean by this a big a time? what was happening?

guest: >> guest: this was in 2011 when they decided to get a single biggest payday ever been $750000 for a single speech and again as he recounted that never paid him for a speech before. erickson, the swedish telecom company was in trouble with the state department at this time. they had been selling telecom equipment to iran. they been named in state department reports about some equipment developers and other repressive governments. there's state department cables that came out through wikileaks usher the state department officials under hillary clinton were pressuring the swedish foreign minister to deal with companies like ericsson that we're doing this. so my question is why did ericsson decide at this point in time to pay bill clinton is outrageously inflated speaking fee that is higher than it ever been paid before? i think that context is

extremely important. again you can look at that case and say well maybe it's coincidence but the propagation of the same thing with a keystone xl pipeline case i brought it. you have a case involving united arab emirates that takes place. they are multiple examples are just the timing of these payments and the size just does not pass the smell test and deserves further scrutiny us back next call from taylor and spartanburg, south carolina, republican line. go ahead, taylor. >> caller: thank you for having me. i was wanting to basically talk about big money in politics and dana especially from foreign donators. that really raises my eyebrows of who's donating and what they're donating for because they could potentially inhibit a national security risk because you never know what there a gender are. and when a certain bill comes around, goes this way, go that way. i seriously think that taking for donations from anybody outside the united states is a

big no-no and especially that we should put a cap on the actual amount you can that we can be a little bit more tense in the theater for the american people and people not -- [inaudible] basically, and another thing isn't like jeb bush -- >> host: we are going to stick to the forum, the for foreign money concept you brought up the go ahead. >> guest: i think the caller brings up a great point and that's what dick is so troubling and makes the situation with the clintons so unique. we have a vigorous debate in the united states about the role of money in politics. is it free speech? should there be restrictions? are the restrictions to low? are they too high? as a vigorous debate will continue to have. what we don't have a debate on is the fact that really anybody seriously things without a foreign money influencing our political process. there was a case brought a couple years ago before the supreme court were a couple of

foreign nationals suit tuesday it was unconstitutional to prevent foreign nationals from contributing to campaigns. the supreme court came back 9-0 to say no this is an eminently sensible rule. so we came -- we have this national consensus on foreign money. what you have with the clinton foundation and bill clinton's speechmaking is a conduit for foreign businesses foreign governments and foreign financiers around those rules. and to say that welcome their tossing tens of millions in some cases hundreds of millions of dollars at the clinton but it will have no effect strikes me as absurd, especially if you're the same person who's concerned about domestic money in politics. it's all money in politics. and what issue did with u.s. citizens. any other teacher did with individuals that should be play no role in influencing our leaders. >> host: michael georgia,

democrat. >> caller: good morning. this is really funny. a republican how well. [inaudible] listen to clowns like this. i've worked in the government. there's no way that republicans work in the state department because there are republicans working in the state department. were sent back and allow hillary clinton, i was about to say president, hopefully, president clinton to be bought off. these guys are just throwing out a bunch of accusations and this and that. and has no proof. c-span should be ashamed for having him on for an hour with nobody to speak on the other side. thank you. >> guest: well, i'm sure lanny davis woody moore than adequate job when he appears on monday. again all i can say difficulties i would encourage you to at least read the book. you intended before you read it. and his statement about their people and state apartment that

wouldwould not allow this topic to happen one of things i point out in the book is a book called the clinton-gore is about how at the state department delivery clinton brought in people to senior positions and get some of those people so-called special government employee status. which allows them to maintain their outside commitments. so you of individuals who are doing work for the clinton foundation who are also working for the state department at the same time. and they did this by producing a law that instead of years ago. this law was set up so if you had like an astrophysicist at the university that nasa needed their expertise and they wouldn't have to give up a tenured position they could come to work for nasa for six months to help them on a project and then go back. the clinton's abuses that can put political operatives in s. is ge employees. so again i mean, i understand people are passionate about their views to understand the

caller so as his and i respected him but it's all that hard to condemn something we haven't even read it and you're not even aware of action with the book contains. >> host: in the train 11 chapter, chapter five there's a story about blowing. irrespective of the book called clinton cash. peter schweizer is the author. the untold story of how and why foreign governments and businesses help make bill and hillary which is the subtitle. peter schweizer will be put to these guests on in depth in july july 5 and he will spend three hours talking about all of his books and taking calls as well. lanny davis will be on "washington journal" on monday to respond to some the things that mr. schweizer writes about in "clinton cash." thanks for joining us from tallahassee guesstimate always a

pleasure. thanks peter. >> a live picture from nike world headquarters in utah and oregon where president obama will be delivering remarks on trade -- beaverton oregon. is expected to make the case for bipartisan trade promotion legislation. last month ron wyden and orrin hatch introduced legislation that would fast-track trade authority given the president a 40 to negotiate trade deals that would be subject to a vote without amendments in congress. again depression expected of remarks on trade. we also expect he will probably comment on the april jobs report as well which should employers adding two under 23,000 jobs in april and to unemployment rate coming down to 5.4% 5.4 present her again that the president and oregon live here on c-span2. we expect him to begin his you marks any time to. will have it for you on c-span2 but until then more from today's

"washington journal." >> [inaudible conversations] ..

begin with you. are the states fiscally healthy today? >> guest: they're doing a lot better than five years ago. revenues have been increasing for about six quarters, give or take a couple of quarters where estimates didn't come out, mainly because of actions by the federal government and uncertainty at federal level. revenues are back. job cuts abated. we heard a lot about job cuts. new employment report shows state and local jobs are up by 8,000.

that is good news. state and local governments were a drag on national economy for last couple years. now they're contributing postively again. >> host: what do you mean they were a drag? >> guest: they dragged gdp growth. they contributed third of a percentage growth positive growth. during the recession because they were spending less they took away from economic output. >> host: i read a report that state governments took in like $2 trillion. that is about the size of the federal government, isn't it? just about the same size? and that's increased over the year since the recession. is it because of tax increases? is it because of revenue increases by job growth, et cetera? or is it a combination of all? >> guest: actually taxes if anything have been cut over past couple of years. i think some governors are eager to get rid of their income taxes increase sales taxes. during the recession there were temporary tax increases but a

report that my initiative at the urban institute put together half of those expired on schedule as you would expect. i think revenue increases we're seeing now reflect an improvement in the underlying fundamentals of the economy. >> host: go ahead. >> guest: i was going to add to that to give you a sense what was causing increase. one thing i want to mention in 2012 there was higher level of expenditures compared to revenues. in 2013 that reversed to total revenue being greater than expenditures and one of the major drivers was from the social insurance trust revenue and if you looked at, i don't know if you have slides three available that talked about the different types of revenue but basically the state pension system is what brought that up. it was large increases in that area. and that's what brought that major increase. it wasn't from taxes as tracy mentioned. it was more from the state pensions. there was unrealized gains in

the investments in those markets and that's what really made it, so over $200 billion increase just in that sector alone of revenue. >> host: was that because of growth in those pensions or was it because of more contributions to those pensions? >> guest: more than the market improved because the way the economy was boeing. that was a major contributor. >> host: let's look at this. the census bureau has prepared a whole series of charts to help explain why states are doing better. by the way we'll put the numbers up on the screen too. if you want to participate talk about your state whether it is fiscal health is back and what you think about that, we've got a policy analyst plus we've got the person who put all did all the work to give us the facts. so, we'll be talking about that and you can see the numbers there on the screen. let's start with this one. state government, total revenue surpassed total expenditure. >> guest: that is essentially what i was talking about where

that large you know differential between total revenue and expenditure for 2013, that bass, that was driven by the state pensions area of insurance trust revenues. the insurance trust revenues is made up of a few components, workers' compensation, unemployment compensation and the state pe ion system and it is a state pension part that had that increase. that is contributing to that $210 billion -- >> host: how was this changed in the last couple of years particularly since the recession? >> guest: okay, well i can actually tell you as far as in 2008 and 2009, for instance there were actually, the expenditures exceeded revenues in those two years. the years following that, in 2010, 2011 there were actually, like the revenues were greater than expenditures but then there was this dip back again in 2012 where expenditures exceeded revenues again. so this so for 2013 that was a

big story, that revenues were up again and that this market was increasing and showing improved economy. >> host: cheryl, what are we looking at here? >> guest: this was personal income taxes. we can see sort of the trends in how the economy is going by looking at personal income tax revenues. so with this chart, we're looking at, if you notice there is a lag in income taxes compared to the recessionary period. so income taxes are really, it is not predictor of a recession. it kind of shows you what is happening afterwards. so the impact -- >> host: during the recession period tax revenues go down. >> guest: after that. they start to rebound as -- >> host: do we pay more in federal tax or state in in state and local taxes? >> guest: federal taxes.

federal government has advantage raising revenue. hard to evade taxation leaving country. certainly some people have done that in other countries. in europe, for example it is easy to do. it is easy to move from state to state to evade taxation. governors frequently warn if you increase taxes too much people will leave. the research shows that is a little bit mixed. but, generally the federal government raises more revenue and transfers same amount of revenue, 11% of state and local governments have advantage to spending money. closer to people and preferences. can tailor preferences to local geography and local need. >> host: tracy gordon lee, i want to ask about two states and use those as case studies of the wisconsin, because of some of the issues we've seen with regard to the unions and public pensions what is the health of wisconsin today? >> guest: wisconsin is facing budget challenges because of massive tax cuts it made.

i haven't kept up on latest with wisconsin, a number of state kansas is in the same boat, they have $600 million short fall because of income tax cuts. on the other hand north carolina is exceeding its revenue estimates even though it drastically cut its income taxes. so the presumption of a lot of governors if you cut income taxes you will see gains in growth that offset those revenue losses. in someplaces we're seeing that borne out although we don't know why that is, not necessarily obvious it is because of tax increases. some colleagues of mine at burr ban institute at brookings institution look at growth over time, results are sensitive to which years you look out. so it is not really a robust relationship but we have this grand experiment going on right now. >> host: throw one more at you california, for years we've heard about california. >> guest: california is exceeding its revenue estimates.

>> host: why? >> guest: health of the economy mainly. they had increases in tax rates which have persisted actually. so, it is a high-income state. very reliant on income tax which puts it in a precarious position because when the income taxes is good it is very very good and what its bad it is just awful. the chart that cheryl brought shows aggregate experience all states. some state reliant on the income tax had a large challenge to face during the recession. >> host: what is your home state, chairman lee? >> guest: pennsylvania. >> host: what is the status of pennsylvania? >> guest: pennsylvania has a new positive tom wolf, trying to push through tax reforms but i haven't been tracking the day-to-day deficits and surpluses in the state. the sector as a whole is doing much better. certainly you have regional variations. one story during the recession oil-rich states like north dakota doing just fine. we see that changing in alaska in particular. so in the last quarter which we

have data, alaska saw 50% reduction in tax collection compared to one year earlier. so you have this great variation, one of the reasons this area of study is so interesting. >> host: cheryl lee, what is this chart states with the greatest and least change of personal income tax from 2013 to 2014? i guess i just didn't quite get this. >> guest: basically talking about a magnitude of change. not necessarily changing that they had it is more based on like percentages. what tracy mentioned about north dakota is so true. they had a decrease with their income tax that was actually 24%, decrease there, in between 2013 and 2014 because of the fact that they weren't able to, and they had overall, like slight decline in their tax revenues because of the fact that their severance taxes were not able to buffer that income tax reduction. and it is, as tracy mentioned in

the beginning, a lot of governors -- >> another typical day at nike isn't it? it is an absolute honor to host president obama today. i want to welcome to nike, mr. president. [cheers and applause] i'd also like to welcome representative bonamici and blumenaur who have been so important with partnership through the white house in their support of trade promotion authority. [applause] then i want to thank our partners in the oregon business community for being here today as well. [applause] you know, nike is a true american success story. 40 years ago we began selling shoes out of the back of a van. today we lead our industry

helping athletes reach their potential in 190 countries and that journey was made possible because of the power of trade. nike is a company that stands for a lot of things. innovative products, pursuing athletic potential but we are also proof that trade works. and we believe that companies should see that kind of success all companies. we see it every day at nike. free trade opens doors. it removes barriers, it creates jobs, it lets us invest more in the things that matter. and that is innovation, it is creativity, and people. thanks to open market, nike employs 26,000 people across this country. here in oregon nike and our more than 8500 employees add $2.5 billion to this state's economy every year.

[applause] of course, as our many friends who joined us today prove, economic growth like this doesn't happen in a vacuum. trade has powerful ripple effect. but free trade is not just critical for our present success. it drives our future growth. a free flow of boards goods in the global economy unleashes our capacity to invest and to innovate. i'm proud to say if the trans-pacific partnership is ratified nike will accelerate our efforts to begin advanced manufacturing here in the united states. [applause] over the next decade that could mean 10,000 new jobs in manufacturing and engineering

from nike and our partners and up to 40,000 jobs across our supply chain. the future of nike and this country depend not only on what we make but how we make it and we want to get to the future faster. and that's why we support president obama's strong leadership on trade and his hard work on the trans-pacific partnership. so thank you and now please give a huge nike welcome to president barack obama. [cheers and applause] ♪

[cheers and applause] >> hello oregon. [applause] well, who arranged this day? every time i woman come to oregon this is what it looks likes. yeah, it never rains in oregon, does it? never. all right. well listen, it is wonderful to see all of you. first of all please give mark another round of applause for his hospitality. [applause] and, thanks to everyone at nike for hosting us today here in federer plots. you know, the white house is cool.

[laughing] we've got a basketball court. actually it's a tennis court that we repainted some lines when i came into office. so it is a combination basketball tennis court. there is a putting green that president eisenhower put in. can you imagine by if i had put in a putting green? things have changed. [laughter] but, you've got all that, and the 18th tee box from pebble beach. come on. [applause] i'm sure some of my staff is running around right now in the michael jordan and mia hamm buildings. they want to be elaborates for your new gear. but, it is wonderful to be here. please give it up for two people who fight every single day for oregon workers your representatives in congress, they do a great job.

early bloom men your and suzanne bonamici. they're both here -- earl bloom men your. [applause] and there are two people who couldn't make it here today but doing a great job, give them a round of applause. that is senator ron wyden and representative kurt schrader. [applause] great to be at the such an iconic company. a company that helps athletes succeed, from, the individual to the world stage. as you've heard i have come to oregon to talk a little it about trade. which, initially may have had some people thinking, what is mariota going someplace we didn't know about? yeah. and, he's going to be great.

he is an outstanding young man. he will be terrific and from hawaii by the way. local boy. but this is important and i want to tell you why i think trade deals and our willingness to go out there and compete on the global stage is so important. before i came out here, i had a chance to meet with some small business owners from across oregon whose workers make everything from bikes to tea to stationery to wine. they know how important this is to them. sometimes when we talk about trade we think of nike or we think of boeing or we think of ge, we think about these big multinational companies but those small business leaders came here today because they understood that these markets outside of the united states

will help them grow and will then them -- help them hire more folks. just as suppliers to nike, boeing ge, or any of those other countries understand that will be critical to their growth and their ability to create new jobs. in fact that's why ron wyden is not here because he is in washington, d.c. as we speak quarterbacking this on behalf of oregon small business es and workers. small businesses are the backbone of our economy, like nike sometimes they grow into really, really big companies. they employ millions of people. 98% of exporters are small businesses. they're the ones who made who make made in oregon and made in the usa mean something and they represent something essential about this country. the notion that if you've got a good idea you're willing to work at it you can turn that idea into a business.

you can grow that business, eventually, who knows what might happen. you can give other people a chance to earn a living. even as you do well. that's america's promise. and it is up to us to keep that promise alive. now that problem is was threatened by almost everybody just about seven years when the economy nearly collapsed and millions of americans lost their jobs and their homes and their life savings but thanks to the hard work of the american people and entrepreneurs like the ones who are here today and some pretty good policies from my administration, we're in a different place today. [cheers and applause] we're in a different place today. now this morning we learned that our economy created 223,000 new jobs last month. the unemployment rate ticked down again to 5.4%, which is the

lowest it has been in almost seven years. [cheers and applause] that three million new jobs over the past 12 months. nearly the fastest pace in over a decade. and all told, over the past 62 months in a row, american businesses have created 12.3 million new jobs. i should add by the way, 62 months ago, when i signed the affordable care act. so obviously it hasn't done too bad in terms of employment in this country. just thought i would mention that. [cheers and applause] predictions of doom and gloom. just suggest those who were making those predictions and check the statistics. [laughter]

just saying. so, small businesses deserve a lot of credit for that. in fact over the last several years small businesses created two out of nearly three new american jobs. the question is how do we build on that success? we have to be relentless in our efforts to support small businesses creating jobs to help grow the economy. that has been the purpose behind many of the policies i fought for as president. i have cut taxes for small businesses more than a dozen times. i pushed for investments in infrastructure and faster internet. that is why we made health care more accessible, affordable portable, to give people the freedom to change jobs or launch the startup without worrying about losing their health insurance. and, passing trade agreements is part of that agenda, if, those

trade agreements are the right kinds of trade agreements. if, they make sure that they're growing our businesses and helping american workers by selling goods made in america across the rest of the world. i've been talking a lot about this lately. i view smart trade agreements as a vital piece of middle class economics. not a contradiction to middle class economics. it is part and parcel of it. i believe our country does best, everyone get as fair shot, everybody plays fair, everybody plays by the same rules. that makes sure everybody get as good education. that means women are paid the same as men doing the same work. [cheers and applause] it means making sure folks have to have sick leave and family leave and that, you know they

can balance work and family in a fair way. it means working to increase the minimum wage across this country, because folks have some of the toughest jobs sometimes get lowest pay. that is part of economics, middle class economics. but you know what? so is trade. we've strifed to make sure our own economy lives up to high standards but in a lot of parts of world the rules are unfair. the playing field is uneven. that puts american businesses and american workers at a disadvantage. so the question is, what should we do about it? some folks think we should just withdraw and not even try to engage in trade with these countries. i disagree. we have to make sure america writes the rules of the global economy. we should do it today while our economy is in the position of global strength.

[applause] because if we don't write the rules for trade around the world, guess what? china will. and they will write those rules in a way that gives chinese workers and chinese businesses upper hand and locks american-made goods out. that is the choice we face. we're not going to be able to isolate ourselves from world markets. we have to be in there to compete. the question is, are we going to make sure that the rules are fair so that our businesses our workers, are on a level playing field? because when they are we win every time. [applause] when the rules are fair, we win every time. so this is why i'm such a strong supporter of new trade agreements. they're going to help our workers compete and our businesses compete. this is not a left issue or a right issue or business or a labor issue. it is about fairness.

and equity and access. and like earth issues -- other issues that we waged a slow steady fight song over the last seven years, this is a question of the past versus the future. so the trans-pacific partnership that we're working on, this is the biggest trade deal we're working on right now has to do with the asia-pacific region. and it reflects our values in ways that frankly some previous trade agreements did not. it is the highest standard, most progressive trade deal in history. it has got strong, enforceable provisions for workers preventing things like child labor. it strong, enforceable provisions on the environment helping us to do things that haven't been done before to prevent wildlife trafficking or deforestation or dealing with our oceans. these are enforceable in the

agreement. and nike operates in the pacific region so they understand the competitive pressures they're under. nike has factories all around the world. and let's face it, mark, i think doesn't mind me saying it, some of these countries don't have the standards for wages and labor conditions that we have here. so when you look at a country like vietnam, under this agreement, vietnam would actually, for the first time have to raise its labor standards. it would have to set a minimum wage. it would have to pass state work place laws to protect its workers. it would even have to rotech workers -- protect workers freedom to form unions for the very first time. that would make a difference. that helps to level the playing field. it would be good for the workers in vietnam even as it helps make sure that they're not

undercutting competition here in the united states. so that's progress. doesn't mean that suddenly working conditions in vietnam will be like they are here at nike. or here in portland right away but it moves us in the right direction. and in vietnam or any of the other countries in this trade agreement, don't meet these requirements they will face meaningful consequences. if you're a country that wants into this agreement, you have to meet higher standards. if you don't you're right. if you -- out. if you break the rules that is -- we already meet higher standards than most of the rest of the world. that helps level the playing field. this deal would strengthen our handover seas by giving us tools to open up out markets to our goods and services to make sure they play by the fair rules we

helped write. truth is we have one of the most open markets in the world. folks are already selling stuff here we have to be able to sell there. that requires us to enter into trade agreements to open up their markets. i hear oregon wine is actually pretty good. someone said the pinoir in oregon is top-notch. we have some wine makers here. i want to make sure japanese wine consumers have the opportunity to partake. in an excellent oregon wine or, we got some oregon beef producers and ranchers around here. you know beef is really expensive in japan. [applause] let's make sure they try some oregon steaks. it is good stuff. and that is one of the best things that can happen for our businesses and our workers opening up markets previously been closed, particularly

markets where they're already selling stuff here. there is a lack of reciprocity. it is not a fair deal right now. we want to make it fair. now, i want to acknowledge because this looks like a very well-read and informed crowd there have been a bunch of critics about trade deals generally and the trans-pacific partnership and what is interesting typically they're my friends coming from my party. and they're my fellow travelers on minimum wage and on job training and on clean energy and on every progressive issue they're right there with me and then on this one they're like, looping on me. i tell you what, i've run my last election and the only

reason i do something because i think it is good for american workers and american people and the american economy. i don't have, i don't have any other rationale for doing what i do other than i think it is best thing for the american people and on this issue, on trade i actually think some of my dearest friends are wrong. they're just wrong. and here's why. first of all they say this trade agreement will cost american jobs and they're really basing this on some past experience looking at what happened in the '90s over the last 20 years as there was a lot of outsourcing going on. . .

at the higher end of the value change are able to access these markets. the fact is, over the past few years are manufacturers have been steadily creating jobs for the first time since the 1990s under my administration. after a decade away from the spot comment business leaders have declared the united states the number one place for a third year in a row. [cheers and applause] so, the point is outsourcing is already giving away to insert same. companies are starting to move back here to do more dance

manufacturing -- advanced manufacturing. this trade deal would help that. as mark may mention with the transpacific tartar ship it will make new investments in advanced manufacturing. not overseas, but right here in the state and far more products would be made in the u.s.a. that means thousands of new jobs in manufacturing and engineering and design at nike facilities across the country and potentially tens of thousands of jobs along the nike supply chain here at home. [cheers and applause] i spent 6.5 years trying to rescue this economy. six and a half years of trying to revitalize manufacturing, including restoring an american i know industry that was on his

back and is now fully recovered. so i would not risk any of that if i thought the trade deals were going to undermine it. the reason i am for this is because i think it will enhance it and it can say. that is point number one. when you ask folks specifically what you oppose, they just say nafta. nafta was passed 20 years ago. that was a different agreement. in fact, disagreement exists some of what was wrong with nafta and making labor and environmental provisions actually enforceable. i was just getting out of law school when nafta got passed. [laughter] [applause] number three, you've got some critics saying that any deal would be rushed through. it is a secret deal. people don't know what is in it. this is not true. any agreement that we finalized

with the other 11 countries will have to be posted on 94 at the 60 days before i even sign it. then it would go to congress. and you know they are going to do anything fast. [laughter] there will be months of review. every t. crossed, every i..a. everyone will see what is in it. there is nothing abstract about this. this is a very deliberate plan. which will be subject to scrutiny and i'm confident when people read the agreement for themselves, they will say this is the most progressive trade deal in history. number four, critics warn this would undermine regulation. even financial regulation. they are making this stuff up. this is just not true. no trade agreement will force us to change our laws. this agreement would make sure our companies are discriminated

against in other countries. we already treat companies from other countries barely here. our companies don't always get treated fairly bare. sometimes they need some way to settle disputes were not subject to the whims of some government bureaucrat in that country. that is important. we want our businesses to succeed in allying over there because that is how the workers will get more jobs in the united states. finally, some critics talk about currency manipulation. this has been a problem in the past. countries trying to lower currency because it makes their goods cheaper than ours more expensive. there is a time when china was pretty egregious about this. when i came into office i started pounding on them. every time i meet with them i talk about current fee and we push back hard and china moves and in real terms the currency

has appreciated by 30% since i came in office. we will keep on going after it. that is not an argument against this trade agreement. if we give up the chance to help dismiss this other stuff in the world's fastest-growing markets that does not do anything to stop currency manipulation. the fact that some folks are just opposed to trade deals out of principle the reflected principle. what i tell them if you know what these trade deals, and means it must be satisfied with the status quo. the status quo hasn't been working for our workers. it hasn't been working for a business. there are people here who will tell you why. i will just give you a couple of examples of small businesses who had a chance to be with today. a portland-based greeting card company. really nice. [applause]

they sell their cars in australia which is a member of this transpacific partnership agreement. the ceo -- there she is. if they could more easily reach customers in japan they would sell half the volume they sell in america. that is a lie. right now the logistics of exporting to japan are too complicated. this agreement would help solve some of those problems to sell more greeting cards in japan, presumably in japanese. [laughter] there'll be a translation process. [laughter] i am teasing. the trade deal that held by customs accountable for getting products delivers swiftly. the more you can higher in the

united states. further products. canned fruit, berries other products depend on exports for 20% of its annual sales. right now at exports to four members of the partnership we've had together. japan, australia, singapore and canada. selling in these countries right now could mean dealing with unfair rules designed to prevent our products in the markets under this agreement that would change. it becomes more simple and consistent. people around the world eating oregon berries all year long. [applause] the winery. [cheers and applause] we've got a lot of drinkers in here. [laughter] a winery family run in dayton,

oregon. one of the top export markets of japan. under this trade partnership those terrorists would be eliminated and wineries across america would grow overseas. the brother and sister came to run the. [cheers and applause] day see if we can make it easier to do business with countries that are already trading partners, countries that are allies, that is a good thing. this deal would be a good thing. so let's just do it. [cheers and applause] it took a while for you to catch that. [laughter] i thought that was pretty obvious. so listen. a lot of folks are skeptical about trade.

they haven't always lived up to the hype. labor and environmental protections were not strong enough. i saw for years in chicago and towns across illinois, and manufacturing collapsing, outsourcing is real. some of our manufacturing case shifted over the last 25 years and it wasn't good for manufacturing or communities or workers. that is the truth. it had benefits. other jobs were created. we got cheaper goods, but there is wrote displacement and real pain. for many americans, this is not an abstraction. this is real. but we've got to learn the right lessons from that. it is not that we pull up the

draw bridge and building notes around ourselves. the lesson is we have got to make sure that the trade deals that we do shape our ones that allow us to compete fairly. and i took office i decided we could rethink the way we do trade and the way that works for working americans. i didn't think this was the right thing to do just for companies. i don't think this is the right thing to do for working families. i would not be fighting for it. if it comes for working families, i will sign it. i ran for office to expand opportunity for everybody. the all-american idea about who you are, how you started a period for who you love and america, you can make it if you try. [cheers and applause] so, yes we should be mindful of

the past. but we can't ignore the reality of the new economy. we can't stop the global economy and our shores. we've got to harness on our terms. this century is built for us. it's about innovation. it is about dynamism and flexibility and entrepreneurship in information and knowledge and science and research. that is us. we can't be afraid of it. we've got to give every single american who wakes up send their kids to school punches and every day, the chance to do what they do best. old and saw the best products and ideas in the world to average corner of the world. [cheers and applause] because nike we do not just have the best athletes in the world. we also have the best workers in the world.

[cheers and applause] we also the best businesses in the world. and when the playing field is level nobody beats the united states of america. [cheers and applause] nobody beats the united states of america. [cheers and applause] thank you. god bless you. [cheers and applause] ♪ ♪ ♪

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♪ ♪ >> if you missed any of the presidential remarks in oregon you can watch the event again in our video library at c-span.org. ♪

♪ >> as you heard the president speaking about the april jobs report released today showing employers added 223,000 jobs last month bringing the unemployment rate down to 5.0%. the lowest rate since may 2008. we have linked to the report on our website. you can find it at c-span.org. an international political news coming david cameron and his conservatives won a resounding victory in the british general election with complete results today showing the party had secured an overall majority in parliament. "the new york times" writing about was a stunning disappointment for the opposition labor party and its leader ed milliband who had shifted away from the more centrist gandhiji in the late 1990s and early 2000 under tony blair. mr. miller band step down over the party's direction.

the pre-election opinion polls select today's flight race that returns mr. cameron to 10 downing street for a second term with five seats in the house of commons to act on his agenda without having to rely on support from smaller parties.

>> the current law affects your

tire and september 30th. yesterday the senate nutrition committee held a hearing on ways to strengthen and improve these programs aim to develop new policies. members heard from witnesses from the federal state and local levels on issues related to school meals in attrition. the hearing was chaired by senator pat roberts of kansas. >> good morning. i called this meeting of the senate committee on agriculture to order. welcome to our first hearing on child nutrition, child nutrition reauthorization. i commend my colleagues senator stabenow for her leadership on this issue and more especially the hearings last year. the richard b. russell national school and the child nutrition act of 1966 authorized critical programs of great importance for kansas, our nation, farmers,

ranchers growers vulnerable populations, including a horrors hungry children. the school lunch program is a major national security to safeguard the health and well-being of the nation's children and to encourage the domestic consumption of nutritious agricultural commodities. coming out of world war ii congress saw the need to establish the school lunch program in no part to ensure our military had a sufficient supply of eligible individuals to defend our nation from global threats. additionally, current research regarding the need for adequate nutrition during a person's development of stages provides further support for what congress knew even back then. hungry children do not learn. with threats to our national security and increasing economic

competition, it is imperative that our nation's youth are physically fit for military service and are not malnourished at key times in brain development. furthermore, the original twofold intent of the program still holds true today. first, the program provides a safety net for our most vulnerable populations mainly children that are at times about sufficient food. secondly, the law requires a portion of the assistance for the school meal programs to be in the form of agriculture commodities produced in america for a nation's farmers, ranchers and growers. as we begin the reauthorization process, it is important to remember the purpose of these programs. these programs are not about anyone's legacy. they are about ensuring the nation's security and that her children are well-educated and

productive contributors to a competitive economy and about helping those among us who cannot help themselves. i plan to conduct the reauthorization with full cooperation with our distinguished ranking member in the same way in which i am seeking to conduct all of our business here at the agriculture committee. first, with the give of our constituents in mind we are here for farmers, ranchers small businesses, rural communities and program participants and stakeholders. we are here to write their interest and there will into law, not to impose the governments will and interest on them. second, this reauthorization will include rigorous and her oversight of these programs. periodic exploration reauthorization of legislation does provide congress with the opportunity to review in a value a programs and this opportunity

should not be taken for granted. it is our responsibility to closely examine each program. not every program needs a major overhaul. but every federal program can benefit from increased efficiency, improved integrity and reduction of waste. our committee will conduct the reauthorization and open and transparent manner that gives members an opportunity to pass good legislation for their constituents. i would like for this to be a bipartisan bill and i am pleased that senatorsenator stabenow feels the same way. we can develop a well-rounded bill doubled per the operation of these important programs. it is also my intention to complete the reauthorization on time before the programs expire at the end of september. i understand there are some that may prefer we not succeed in this endeavor.

i caution those individuals that these programs are too important not to reauthorize. gambling, fortune telling or using a crystal ball to predict a better reauthorization in the future is foolish and shortsighted. it is time for folks to come together and be part of crafting legislation not just stand outside the process hoping it fails. we have been in a listening mode in preparation for the reauthorization and that culminates in today's hearing. i've traveled throughout kansas, visiting school direct heirs, talk to my parents school administrators and others involved in these programs. we have had hearings last year and we have our experts here today. as we seek to cope with learning to legislative form several priorities have become clear. first, reauthorization provides an opportunity to review programs and improve the effectiveness and the school

meal programs have significant error rates and improper payment levels. these have recently been highlighted in reports from the department of agriculture office of inspector general and government accountability office. we need to improve the administration of these programs to reduce errors. but do so in a way that does not layer additional federal bureaucracy and overreach on those seeking to feed hungry schoolchildren. second, it is evident that evolving programs encounter different challenges as they try to adopt changing times. each new challenge is met with additional modifications guidance or regulation enemies can unintentionally evolved into very complicated systems often outdated or needlessly cumbersome. we need to identify areas in which we can simplify and make

things easier for those implementing and participating in the programs. third, my travels in kansas. and i am sure that this opinion is shared by many on the committee have also indicated that we need some flexibility. many folks are worried about what flexibility means. to me, flexibility means we will still protect the tremendous gains already achieved by many and provide assistance to others so they too may achieve success. this programs can't help anyone if they are workable. the department of agriculture and others have worked very hard to help those who are not meeting current standards and have promoted statistics with high rates of compliance. yet we have schools currently struggling and i understand at least 46 states applied for the

recent whole-grain wafer and we have additional sodium restriction still on the way. lines in the sand and uncompromising positions will benefit nobody and especially not the hungry, the hungry children these programs serve. working together, i am confident we find a way to preserve the traditional quality of school meals so that a one-size-fits-all approach that prevents local flexibility. these programs historically had strong bipartisan support. amazingly in 2004 and 2010 reauthorization passed by unanimous consent. debate leading up to those bills also included significant controversy similar to the issues we face today get republicans and democrats worked through the process to gather came up with legislation everyone could support. finally it is vital the legislation not contain

additional spending. that is just where we are. we have received many bipartisan suggestions for ways to improve these programs, but many have considerable price tags. our budgetary constraints are real. our responsibility to constituents include not spending money that we don't have. i look forward to working with senator stabenow in each member of the committee throughout this reauthorization process. i am also appreciative of the witnesses here today. a special thanks to ms. cindy jones who has been our shotgun rider if that is the proper term has traveled from kansas to be on our second panel. i look forward to hearing from our witnesses regarding their experiences with these programs and i thank them so much for their testimony before the committee and taking their valuable time to come here. i now turn to my colleague, the chairperson emeritus at the

committee, senator stabenow for any opening remark she may have. >> thank you mr. chairman. i look forward to working with you on this important issue. we have been talking and looking for ways we can move forward and i look forward to working with you on this as well as the entire committee. as we continue the work we began last year to strengthen child attrition programs. i want to thank the witnesses as well. you bring perspectives from all sides of the issue. there's a lot of important pieces to this legislation and it's important to hear from you and work together to move forward. as we all know our children's health and well-being really are at a crossroads. obesity rates in children has tripled in the last 30 years. today, one in three american

children and teens are overweight or obese. we are announcing health problems typically unseen until adulthood. high blood pressure to type-2 diabetes were young people who should be focused on little league or going to the prom. this obesity epidemic requires a commitment on our part to continue moving forward with the nutrition policies put in place five years ago in order to give our children to be healthy and successful. last year this committee heard from retired military leaders, desperate to help improve the health conditions of our soldiers and young workers and as the chairman said the school lunch program actually started as a result of our leaders and the department of defense. in his testimony retired or start air force general richard hawley said that obesity is one of three main reasons why an

estimated 70% of body count people who walk through the door at the age of 17 through 24 one of three reasons why they don't qualify for military service and they indicated that was the largest reason. their concerns are echoed by more than 450 retired generals and admirals who are trying to raise awareness about the impact that poor childhood nutrition has on our national security and its cost to taxpayers. this recruitment crisis also requires us to continue moving forward with the nutrition policies put in place five years ago. in addition to childhood obesity issues we have the second challenge of childhood hunger. as we approach the end of the school year, more than 20 million young people,

20 million students who eat at school because they qualify for free and reduced price meals will struggle to keep any meal let alone a healthy meal in the summer. this hunger crisis for our children requires us as well to continue moving forward to strengthen our summer meals programs and other supports for children. we also have millions of pregnant moms and children in our communities who are nutritionally outbred, which can lead to low birth weights increased childhood disease and impaired brain damage. that is why continuing to protect and strength than the wic program is so important. it is for these reasons and many

more today and the reason we must take the process we authorize a child attrition programs seriously and i appreciate that the chairman does. the good news is for the first time in years ... though we are beginning to make progress on these issues. obesity rates have begun to stabilize in some areas. more children are eating healthy breakfasts and lunches than ever before. children are eating 60% more vegetables 23% more for his according to the harvard school of public health. as i have said many, many times, it seems to me that our children are worth continuing the requirement of school meals for a half a cup not very big not a whole lot bigger than this. a half a cup of fruit or vegetable as part of our commitment. not the whole commitment at a very important part of our commitment to her children's

health and success. we know there's much more to do. the attrition at its core is preventative medicine and child nutrition is about doubling the playing field so that any baby, any child, any team, whether in detroit or rural kansas were a suburb of overland to a or a farm in iowa as every opportunity be healthy and successful. that is why it is crucial this committee worked together in a bipartisan way to ensure these attrition programs continues to operate efficiently and effectively and that we continue to move forward for our children. our children and families are counting on us to do just that. thank you mr. chairman. >> thank you senator stabenow for a next-line statement. all members be advised to have a vote at 10:30 let's just change

that. the vote has been postponed until 2:00 this afternoon so we can finish. [laughter] it is amazing what you can do with a new congress, senator. [laughter] >> i object. >> let the record show an objection was heard. let me introduce our first panel. stephen lord managing director general accounting office, forensic audits and investigating their base. mr. lord serves as managing director of the audit and investigative service at the gao. he oversees a highly trained staff charged with conduct special audit and investigation for major federal programs prone to fraud, waste and abuse. mr. lord has received many

awards over his 30 year career including the words for a meritorious and distinguished gao service. the steward, welcome and i look forward to your testimony. please go ahead and i'll introduce ms. neuberger for her statement. >> thank you, mr. chairman. thank you are invited me to discuss the recommendations of the 2014 report on the meals program. as you know i mentioned in opening remarks, the school lunch and breakfast program plays a very important role in providing for the nutritional needs of schoolchildren across the nation. at the same time the national school lunch program is on the list of high error-prone programs due to its large improper payments raise.

they can do controls in place for $15 billion in federal funds spent wisely. we would discuss two things. positive action to strengthen oversight of the program or additional opportunities identified to enhance controls. in terms of usda action, the department has worked closely with congress to develop legislation that requires school districts to directly certify student in a snap program and according to usda officials on the direct certification reduces the administrative heard it on school districts and also reduces certification errors and helps adversely impact the access to the program. another positive development if state agencies now conduct reviews of school districts

every three years as opposed to every five years as was done formerly. we think that is an important part of the oversight process in the effort to help ensure correct eligibility determination. despite these positive actions, we did identify additional areas where they could enhance verification without compromising legitimate access of the program. first, we believe the school district for these questionable applications can be strength and. of the 25 school districts re-examined 11 did have the poor cause verifications, but unfortunately nine school districts did not conduct any verifications of questionable applications and the remaining five districts said they would do it on an occasional basis when prompted to do so by outside stakeholders. that is why we recommended usda for the verification process

they consider issuing additional guidance as needed. we also recommended usda consider using a computer matching to help identify household whose income exceeded eligibility thresholds under the current standard verification process it is difficult to detect all household of the income because the verification process on a small slice of beneficiaries with annual income within $1200 at the eligibility threshold. in our work we found that nine of 19 household applications were not eligible for free or reduced benefits by two households would be subject to standard verification process because of the way they define error prone applications.

a broader window instead of using computer matching techniques would strengthen verification process and again without adversely impacting access to the program. the report also recommended usda explore expanding the verification process to include those who are deemed categorically eligible for the program by virtue of their participation and other public assistance programs such as snap, et cetera. we found those applications are generally not subject to verification and just a few examples in our report we found one household that was certified through the process and they had a foster child, yet when we interviewed the household

occupants, we found they did not have a foster children. they were enrolled automatically eligible yet when we contacted state officials, they said the individual is not enrolled. so we found some examples. even again these examples are not generalizable to the entire population, but enough examples suggest usda needed to take another look at that. the good news is u.s.a. agreed with all the report recommendations in the collective impact of all of the recommendations went implementable will help strengthen the verification and oversight process again to ensure only those truly deserving of the benefits received. chairman roberts, other members of the committee this concludes my prepared remarks i look forward to any questions you have. >> mr. lord, thank you or a kindly. our second witness, ms. zoe

neuberger. ms. neuberger joins us today from the center on budget and policy priorities or she is a senior policy analyst. she works on the school meal programs and wic and has been with the center since 2001. obviously a veteran and knows what she's talking about. i didn't mean to insinuate you didn't. previously, she was a budget analyst for these programs at the office of management and budget. welcome, not a i look forward to your testimony and insight. >> thank you for the invitation to testify and improving accuracy of the school program. as he said in a senior policy analyst at the budget and quality priorities and i'm off to policy institute that connects research and analysis on budget and tax policy as well as poverty and social programs. roughly 50 million schoolchildren, about 30 million a day school lunch in a typical school day.

that is extraordinary breach of extraordinary breach amount includes one and 2,021,000,000 low-income children for whom school mills may be the healthiest and most reliable meals together. they are also nearly 100,000 schools that operate the meal programs and they do a remarkable job. to process applications, provide healthy meals and keep track of the eligibility of the students so they can claim the appropriate part of reverse that. their work means we have fewer hungry children and students are better prepared to learn. as you could take him to school meal programs play a vital role in the health and well-being and they must continue to play the role will also administer the programs accurately. the department of agriculture just department of agriculture just estimate of department of agriculture just estimated the net annual cost of launches that did not meet nutrition standards is $444 million. that is unacceptable. the programs must make sure funds are used for meals that meet federal criteria. fortunately we've got powerful tools to address the issue through the verification process in place there's a new rigorous review process.

usc has instituted oversight measures and usda had a national representative said national representative said that not only measures errors than their costs but identifies a great deal of information and the causes of errors which allowed specific and effective policy solutions. there are also challenges to improving accuracy and a vast and complex system whose main focus is to educate children not administer the programs. the school meal programs operated nearly 100,000 schools nationwide and there is wide variation among them. they are staffing, resources and technological capacities vary widely. there's also variation in the way children get meals in the lunchroom of the classroom and how the school checks in the category and comes to meals. small schools have different operational and administrative capacity than large districts that serve hundreds of thousands of students in meal tracking and accounting systems range from paper systems to state-of-the-art software. schools are not currently set to

do the eligibility determination that other public and if the programs do. the snap program or medicaid had teams of professional eligibility workers who spend all day everyday sort in the details of applicant income and household circumstances. in schools or maybe a cafeteria worker secretary who handles applications for a few weeks at the start of the year. the question is given the tools of the program's disposal how can congress improve accuracy in the program? an example can help show the way. beginning with the 2004 reauthorization building a 2010 congress set a clear expectation for districts and state to improve the use of the rigorous programs, primarily snap to improve children for free mails automatically. because the programs are relying on a more rigorous income assessment, the approach saves time and reduces errors. in the past decade there've been striking improvements.

nearly half of all children for free or reduced price meals are now approved without having the application. the enormous implication played a role by setting an expect patient and providing tools and support to mean it. i written testimony describes many steps congress and u.s. da taken his strength of the meal programs and there's certainly room to do more. it is important to strengthen oversight across the board, provide extensive help to districts that struggle with error and pursue innovations that open up ways to improve back or say. for example, exploring the use to identify applications that have incorrect information is worth trying. usda plans to develop a modern electronic application of the first time and other promising innovation. as you consider ways to improve accuracy i urge you to consider these four questions. first, does the proposal have a proven record of reducing

errors? required households to submit pay stubs at the application have not actually been affected when tested. second, will maintain program access for the most notable children? nearly 60 million children live in a household experiencing food insecurity and weed out on a worsened the problem. third is the administratively feasible. adopt a more time-consuming documentation or verification system might prevent errors that could cause others at any step to the process and the process in poor schools have to spend much more time determining eligibility at the expense of the priority. for this cost effective. information management systems can be effective of my cost to much for a small school district. as noted, it is critical strategies not reduced meals for children who need them. they continue sending a clear message for officials with the program accuracy that will be

masher and federal officials will support them in implementing improvements. thank you very much. >> thank you very much. do you think a shift from the current verification process that emphasizes the cause verification would enhance the program integrity and secondly, would it have a negative effect on access participants? >> again editor, there is a way to do it without adversely impacting people who truly deserve it and what we found in our work is the cause together revealed questionable application. some school districts were not doing any cause verifications of questionable applications. there is definitely potential there to do that more consistently across school districts. i should add the usda requirement, school districts are required to conduct these

types of reviews. anytime we see the type of inconsistency that gives us can earn. >> ms. neuberger, like to know more about the point of service when they determine how the meal will be paid. you have cited this in your statement as a step in which many errors do occur. can you walk us through what happens exactly the the point of service? i am not an expert, but cindy jones is and we are at a lot of points of error. if you could point that out for me please. >> sounds like you've had a chance to visit school not programs which is great. at the rest of you have to have an opportunity, take acid because there's nothing like seeing it firsthand. [inaudible] [laughter] let me describe a typical scenario. he might have a cafeteria with a 30 minute lunch.

i'm a dozens if not hundreds of students coming through a line. sometimes this choice about what they take. not always. when they had to kneel on the trade they go to the cashier at the end of the line. the cashier needs to check the mail to make sure it meets nutrition standards and figure out who the child is to make sure the child has food right category. that is a process that has to happen quickly when you've got lots of students waiting in line and only when they get to the process do they finally get to me. this is not a sophisticated interaction. we are talking about a seven or 8-year-old and a cashier and that has to happen fast. that creates opportunity for error. also more models are being tried now to make it easier for kids to get meals. for example, older students may have a card in the hallway to pick a paper that can take it with you to class. that makes it easier for students to meet and reduces errors related to what is in the meal because they take a prepackaged meal.

that is a very fast transaction where you have a process for knowing who is taking the meal and keeping track of the meal served in the classroom. the process is decentralized and that means there are opportunities for error and you need to react accordingly. >> thank you for the application. a question for you both. his electronic data matching the method of additional verification that would be least burden on to school food service providers and which of the other methods of improving program integrity do you recommend will cause the least additional burden? >> sure i will go ahead. data matching is used at two steps in the process. versus certification that the approval point reuse data from snap everywhere and in certain states medicaid data to automatically enroll kids. the application process has been a source of error and the fewer families have to go through the

eyes the more that can be automatically enrolled, the more we reduce opportunities for error. the program has been moving in the direction of the last five years or so many more students directly certified as a result, even though more children in the category now because of the recession, schools have to process applications for 2.5 million fewer families had much less paperwork. the other place where data can be used as a verification stage, checking application and that is where there is room to look up more data sources sga are recommended. i would caution against expanding the number they gave verified because many families don't respond to the request that they don't have those datasets and data could be a very big way. >> i'm not worried about the privacy issue. more than a little worried. at any rate let me say i have a

concern about holding states accountable to a different standard, i.e. three years and then we just got a report from the inspector general of the food and nutrition service indicating and i think my figures are accurate here from the study that was just how errors 1.9 billion school lunch errors 770 million school breakfasts. we are not the pentagon or for that matter any other agency. that is a considerable amount of money and i don't know if either one of you have had access to the information or if you would like to make a comment. but it should be of concern to the committee. >> i agree with you mr. chairman. the proper payments rate overall for the program is about 15.25%.

the good news is that i've declined slightly from last year, assuming the data is reliable. at the same time, close to a billion dollars of the improper payments were in the certification area. >> i apologize for interrupting but i am already over time. we have a lot of people waiting. basically 1.9 billion -- 789 million, states are asked to audit every three years. the last report we could come up with was clear back in 2005. that it's been 10 years. we are holding the federal component of this which is of course now playing a much stronger role three different standard and that is a different concern. why 10 years?