things we like, that does not mean that they are going to be the same person as the average homeowner. so again something can be average good but might not be very good for the person just on the margin. let me also keep in mind economists we talk about the rational for subsidies because something generated a quote/unquote positive skern alt. that meerans i do something and you get some positive benefit out of it that you don't pay me for and therefore i should be subsidized to do more of it. the evidence is fairly clear that the positive things for homeownership -- do you live next to somebody who mows their lawn and doesn't keep trash in the front or have a car up on blocks, that said. those things are local. it's really a big impact on somebody who lives across the street. so the question is, you know, why should i hear in washington subsidize somebody in des moines no mow their lawn.

to the extent there are positive real subsidies to the except that they improve outcomes, they are either very localize to the family or very localized to the community in question. you work on capitol hill. i worked there for a number of years. every other person who comes here in the door says it's a great thing if you gave a subsidy for their industry and how many jobs they create. that's what shopped around. they are grossly skabexaggerate. let's think about housing for a second. we all need a place to live. an apartment building is not all that different than a condo. it actually takes the same amount of construction workers. there's nothing specific about the tenure that increases jobs. again, we all have to live somewhere. i think you should be skeptical of those job arguments that you often here. the chart you're looking at here is the lower bar that's the

fannie and freddie market share. we hit long term homeownership rates in this country in 1960. the growth of fannie and freddie which really in the 70s they had single digit market shares. this he were irrelevant to the mortgage market before the snl crisis. the growth of them has seen no long term indrees in homeownership rates. it's fine to say we want to do things for homeownership but maybe we want to do things that do things for homeownership rather than things that claim to do thing for homeownership. the lower bar is the average loan to value for the house. i will say, again, this is ancient history but it always surprises me to think that before 1960, the majority of homeowners owned their homes free and clear. no mortgage at all. it was actually their house, not the banks house.

this chart again shows the increasing level of leverage in households. so what all of these subsidies have done, they haven't delivered home ownership but we have delivered getting households swimming over their heads in debt. we've achieved that. i'm not sure that that's a worth while public policy goal but again that's one that we've clearly accomplished. i would certainly say that i think part of that relates that we have used that debt to run up house prices that are not shown here but has not run up ownership rates. the rational for the gscs that were created in the 30s. even the federal reserve, all of these institutions were created in the 30s, of course the fed was created in 1913, because we had a very fragmented banking system. in the mid-90s. a bank was limited to one location. of course that means if the biggest employer in town goes

belly up it means the bank will go belly up. you had a lack of diversification that many of these diversifications like fannie mae were meant to solve that. if you look at the great depression in the u.s. and canada they similarly had a great depression. we had 10s of thousands of bank failures. canada had zero. they didn't have a if ied or fdic but they had six banks well diversified across the country. many have tried to subsid ut ti for diversification. the point would be, i think bank of america is at 49 states but we have a very large number of region banks that are well diversified geographically. if you look at for instance, yes, there are too big to fail issues with all the big banks but they are also able to go to market in the same way that the

gscs are so i would argue the lack of access to capitol marketed, the lack of dif fe diversification we solved. we certainly need to remember the federal reserve purchased a trillion dollars in mortgaged back securities. the european central bank purchased about $700 billion in mortgage bonds. we continue to have federal home loan banks. so i would submit that we could end fannie and freddie not release them with anything and still lead the world in mortgage socialism. one of the questions often asked is if we don't have them who do we have? let me say i don't really look at this as an issue of how do we replace the entire 10 trillion

mortgage market, i think we have household that's are very too massively leveraged. we really need to be thinking more of a 6 or $7 trillion mortgage market rather than 10. i don't think it has been good for households. important to keep in mind average originalations are about a trillion a year. all of these have transition periods. nobody seems to be recommending an overnight fix. it's a six to seven to ten year problem. who would fund this? the securitiation system was something that promised to connect main street to wall street but the reality is the massive majority of funding for our mortgage markets still came from other financial institutions. it wasn't unusual in the crisis for say bank of america to take

a thousand mortgages, sell those thousand mortgages to fannie e mae, they wrap those into a mortgage backed security and sells it back to bank of america. why would you have this round about process that adds complexity and cost to the model. yes, in that model fannie takes the credit risk from bank of america. bank of america still takes the interest risk. more importantly they cut their capital more in half by holding mortgaged back securities rather than the whole mortgage. our current system combined with the capital standards we have for banks encourages massive leverage in our mortgage market. looking solely at the institutional, the bank, the gsc, our mortgage market at the time of the crisis was leavage ed 60 to 1. freddie's guarantee business was

leveraged 200 to 1. if you're leveraged 200 to 1, you will fail some day. this is a guarantee. absolute lack of capital in the system. what i would propose is a system that we need to look forward -- to go back to in a sense. again, there are lots of problem in the snl crisis that were deposit based. some of we have addressed. most of the rest of the developed world rely on a deposit system. to me it also reduces what economists call a simatic information problems which are those i will take you a loan b inchtsds in the word where the lender makes the loan locally. the lender is a sense has is your current employer likely to be around. what's the local economy like. so i think there's a way you can do that and gather what i would call that soft local information

into the lending process that we have lost of the it solves some of those problems. as i mentioned earlier, securitization was completely bosel capital standard driven not really driven by the economic benefits or the activities. as i touched upon, i think we could actually reduce foreclosures and do better loss mitigation if the person who originated the loan held the loan. if you go to the local bank of the bank where you made the loan, he has a branch manager of you lost your job but i know your employer will hire again or they can figure out this person is never toing to get that job back. they can do a much better job. one of the things in loss mitigation is trying to figure out of the people would are behind on their mortgages, whose got the chance to get back on their feet and who doesn't. i think if you have that local knowledge that is embedded in that, you could make much better decisions in this regard. you don't have to get into all of these negotiations with different people in that.

the bank can locally make that decision itself. mentioned as well, the diversity economic geographic diversity problem i think we dealt with. so much of our mortgage market was capital marketed funded during the crisis whether it was overnight lending, these things aren't as sticky as deposits. what i moon by that, of course some of this is is tributed to deposit insurance and other to human behavior. dp deposits usually stay with the bank you can go to the fdic website. insurance total deposits have increased throughout the financial crisis. yes, people were taking their deposits out of these troubled institutions. they were not putting them under their pillows. they were putting them in banks that were safe. it means the business shifts from miss mmanaged banks to oth

banks. the blue line is auto sails and the housing starts. they followed each other down during the recession. they are subject to a lot of the same economic forces that drive them. the big spike in the auto is cash for clunkers. we basically went back to trend. it didn't change things in the long run. the point being here is despite the fact that we don't have a gsc for auto loans. i recognize we did bail out a couple of auto companies. that said it doesn't affect the finance side as much. we saw autos recover the same rate with the economy. this is a similar chart with the mortgage market being the hump shape and the other chart is consumer borrowing not including

autos so short term installment loans, credit card loans. so here again the recovery matched the economy in the recovery. the economy recovery is weak but it recovered along with the rest of the economy whereas the housing market did not. the point with the two slides is we've thrown these massive guarantees at the mortgage market and yet it continues to be weaker. the housing market continues to be weaker than other segments of the economy which this traditionally moves with. we have to ask what exactly are we getting for all of these guarantees we're throwing at this. despite again the fact that we have no gse, we have to auto loan gse, you can get them at relatively affordable rate. slightly above mortgage rates. you can get them fixed for up to five years, sometime seven years. the typical life of a mortgage is only seven years. people do not keep a 30 year mortgage for 30 years. so the fact is we can manage

that interest rate risk for some amount of time. we saw some recovery. interestingly enough, a lot of the debate, kevin touched upon the down payment issue. a lot of the opposition in mortgage finance reform is the sense if people had to put down down payments you would exclude a lot of people. the auto loan is an interesting area because the auto loans are pretty much under water the second you drive off the lot. yet we saw during this crisis and we saw regularly that auto loans performed better than housing loans. now, of course, i suspect that might have something to do with the fact that if you don't pay your car loan over a long amount of time you will get outside of your house one day and your car will be gone. funny how that incentivizes people to pay. obviously as we know on the other hand, i believe the median time to get somebody out of their house in chicago is a thousand days after they have stopped paying their mortgage. over three years. i am no way implying that people are lazy or playing the system.

i'm just saying it's pretty attractive. i mentioned earlier the decline in mobility rates might actually encourage you to stay in place if you are in orlando and chicago and you've lot your job and you're looking at the fact of i can get three years rent free or i can, you know, move to dallas texas and try oto find a job and pay my own rent. if you want to subsidize and assist people that's an important debate to have, you can do it in a way that does not lock them in place. if you want to give cash or keys. relocation assistance. if you want to pay somebody's rent for six months. those things would be far more effective than the programs we have chose en to do because we have chosen to lock people in lace. also important to keep in mind, if you send a lot of time around economists and you read economic journals, they spend a lot of time debating market value and then they start of wave a magic

wand and say therefore this beneficial all knowing social plan will come in and fix everything. i'm the first to say we should have legitimate realistic world model maof markets and governme. some things need to be kept in mind in terms of any sort of government reform in the mortgage finance system. these are also some of my observations from having worked opt hill but also sort of my observations of having study public choice in some the incen there. you could imagine if your boss was going to go out and campaign

saying i think you need to bring the price of your house down. you won't get re-elected on that. my experience is the financial regulators within their discretion bend the will of the oversight committees. if everybody feels like they are making a lot of money, no regulator, no politician is going to stand up against that. the system in itself will look the other way when we're in a bubble. the system will overreact and clamp down when the bubble goes bust. you really need to have market incentives that lean against that. if you look at companies like fannie mae, enron. these short sellers identified problems long before the fcc or regulators. again, the political system will push the opposite. as i mentioned, i spent my time as the bubble was building on the banking committee. for every one person who came in my door and raised some concern

about the housing market being unstable. i had a 100 oather people who se all of these housing prices go up. all federal insurance programs are cash flow. there's no laock box for anything. banks pay premiums. what we do with these premiums is we them in treasuries. so they give us pieces of paper and we them in the fdic. what does pressure treesury yo sent it. so, again, any insurance program is fundamentally going to be cash flow. i've certainly seen on the other side. i remember i spent years arguing with the appropriation committee, they decided the

federal house commission was throwing off lots of excess cash that they could spend and did spend. i turned out being wrong. it doesn't matter now because all of that money has been spent. it's also important to keep in mind, you know, you will see that. we will see this increasing on capitol hill is the budget pressures continue to increase in the future years. the attractiveness for politicians will be how do i give transfers that won't be reflected on the budget. there's no better way and no more attractive area to do this than mortgage finance. you can hide the subsidies in a way that don't come back and blow up until later and it's somebody else's problem. let me say, the event was not a tail event. one of the things to keep in mind the competition in guarantees don't mix. let's go back to our econ 101.

it means that you earned 0 rent. that nobody earns excess profits that failure is pushed to the margin. i think one of the reasons we had a crisis where the banking markets were very uncompetitive to a world where mortgage finance became increasingly competitive. the problem is all of the competitive players whether the banks or gse's had guarantees. i'm a big fan of competition. i think competition binges consumer choice. we as a society needs to make a choice. we can either have extensive guarantees or you can have competition where there's wide choices for consumers. you can not have whole. if you have vigorous competition and guarantees, you will pay out at some point. also important to keep in mind that i will see a day where the housing market only goes up.

we haven't fixed the housing business cycle. there will be a boom and bust again maybe sooner than later. they have to assume that we will see another bust again. part of the problem here to me is fundamentally what we've seen with all of these guarantees of creditors is we've had government regulation substitute for the market discipline you would see. the regulators who never lose their jobs are being responsible for overseeing this. we've been told the creditors in the system to not pay attention because they won't lose anything. there's very weak incentives. my favorite example is i think it's arguably -- there's no regulator who did a worst job in the crisis than the new york federal reserve. people want to detail their various failings during the crisis. what did we do after the new york fed failed tremendously? we gave their president a

promotion to treasury secretary. good for him. you can screw up. you can not pay attention. you can not regulate and we'll never hold you responsible. of course to me if you want to have a system where there's monitoring that's effective, people who put their own money at risk, who lose their jobs and go out of business will have farther greater incentives to pay attention to the system. also a quick point some of the argument about homeownership that housing is save. you're seeing a 5 year moving of house prices back to 1890. the point here is you see pretty wide springs in housing. so the argument that is essentially a save asset that always performed well and you will never lose money has not been true. it's never been true. it's a risky investment. that's not say. all investments aren't risky. you shouldn't go into it saying it's going to be a win with no problems. so wrap up i will skip over some of the borrower/protection

issues and dodd-frank. i also want to make a quick point. this chart is credit score of the borrower credit card risk to value. we're not talking prepayment penalties or crazy features. what you see is the scores are normalized so in the far right corner at the top where it says 1.0, that is probably the prime. that is a prime borrower who puts down a sizable down payment and everything else is normalized as a multiple of that so in the far of the corner we can see that borrowers that have ltvs over 95% that have ficos under 580 are eight times more likely to default than borrowers who put a sufficient amount of equity down. the point is despite all the talk, kevin talked that qm does nothing about ltv or fico. almost all of the attention in dodd-frank to mortgage finance

reform were product features like down payment. documentation. a lot of data and evidence on that. those things are rounding airs wh errors when it comes to the down payment of the borrower. you can also make loans with no down payments if it's a prime borrower. if you make a low downment loan to a subprime borrower, you will not get your money back. that's been repeatedly proven over and over again. to me we need to be able to focus on that mortgage finance. i will say as an aside. we're the only developed country in the world where somebody with a history of not paying their bills can get a mortgage. it's true. you go to europe. if you have a history of not paying your bills or even in socialist france if you don't pay your mortgage they garnish your wages. so we're massively borrower friendly but we should be open to the ramifications of it. what this tell me, however, we do not need guarantees for prime

borrowers that make down payments. all of the debate about federal guarantees for the mortgage market is about subprime borrowers who don't make down payments. so some of the policy principals i would leave you with is reform and again. i'm happy to talk about having tortured myself, i'm happy to talk about this but i think for this congress they are essentially did. i don't think mortgage reform happening in this congress. i hope in the future we should have no capital ash it rauj. i think we need to get away from picking winners and losers in terms of which sectors of society one of my opinions where we've seen decades of wage does heing stagstagnation, bidding ue

price of housing does not make workers more productive. build plants, build equipment, build human capital. you can certainly do all those things poorly as well. those have a chance of increasing wages and reducing wage stagnation. we shouldn't have it off bummdg. we shouldn't use finance as a tool for redistribution. do them on budget. do them appropriated. there are a variety of ways to do them honestly. there are ways that will come back and blow up at you. with that i, i will turn it back to john. i think we got a time for a few questions. [ applause ]

>> are you advocating any positions to one increasing the duration and amount of claw backs and using -- i realize that the concept of contingent capital. >> any sort of system of insurance whether it's public or private has moral hazard. if you create that with a government guarantee how will you control it. my position is not you should give the guarantees and look the other way and hope it will come out well. you can't do that. so you have to do these efforts of how do you align the incentives back in a appropriate way. to me, the principles i follow is it's first got to be simple so i'm in favor as long as we have government guarantees like deposit insurance and implicit guarantees, i think we need more capital in the system. i think it needs to be clearer

capital. get rid of the risk based capital rules and i would be the first to say bosel 3 has moved in a better direction in this regard. what is capital has to be real capital. the banks were the same way. i remember fannie and freddie were solvent for months only because we counted deferred tax losses as capital. that's ridiculous. that's a fraud on the american people. i am sim apympathetic to claw b. i think institutions that go belly up and are bailed out, certainly clawing back. i only use this as an example, i don't mean to pick on fannie mae and the banks but the fact that frank reigns walked away with $90 million and left the rest of us to clean up his institution is obscene to me. there's a big variety of cultural aspects of different

institutions. the way you have to get rid of that in my opinion is you have to let these institutions fail, be reorganized. how many more times do we have to bail out city. it's pretty clear they have a rotten corporate culture. >> the claw backs -- >> i think claw backs are a reasonable approach. i wouldn't rely solely on that. if you structure them correctly they can be simple and transparent. the tension with convertible capital, i guess i start from the premise and we know there's debt on this side, equity on this side. i think it's a continuum. you just have different places in line. so i'm against bailing out creditors. if we are going to be in a world where they are protected, whether it's convertible capital that switches to equity, i think that's a reasonable approach if we don't think we will ever go into bankruptcy.

one of the mistakes made during this crisis was in several financial institutions the subordinated debt, it is sold to the public as if this institution gets in trouble you're gone. you're the first in line. we bailed out subordinated dealt holders in a variety of institutions. that undermined decades of effort to try to build market discipline into the system. there are ways to to it badly and ways to do it well. the concept is is one i'm very supportive of. >> hello i'm currently interning, we've seen a lot of government financing in the housing system, that's why the housing market got inflated and the bubbles happened and through finance and frannie mae and

freddie mac. the biggest thing is increasing debt within our students. do you see a similar trend in the university debt system where they are making the tuition bubble even more. >> i think it's interesting to me because a lot of the mortgage subsidies that i talked about do not increase homeownership. some of the student debt has increased participation in college but just like in the housing market with subsidies have been captured by the providers. it's the same it education. you go back and look at trends of how many classes faculty teacher on average and you see that over the last 20, 30 years, you know, it's unusual for senior faculty if you're treating a class a semester. the number of university presidents that are earning over a million dollars i'm not picking on university presidents specifically but there are a lot of data points that suggest to me that much of the subsidies going to student debt have been captured by the universities themselves and not the students.

i am worried we are leaving people with a tremendous amount of debt that they will have to pay off. we need to do in the housing market and education market, find ways if you're going to provide subsidies do it in a way that doesn't end up running up the cost of what you're trying to subsidize. i know that kevin might have something to add here. maybe not. he's at a university so he maybe can't talk to that. >> i've been at nine universities and never had to go to a faculty meeting. again, student education was paid more by cash up front from past savings or subsidize from government. now you're leveraging whenever you have high end leverage you have malinvestment. the problem is people can look back and say education is historically always paid off. that's true. that was also true of homeownership and even true of people making low down payments gnat past. protectively that doesn't mean it's true at all. you've really changed the equation in the terms of the

amount of leverage you've put in. when you put that in others are going to capture those benefits. so i believe that there's incredible rent seeking on the part of university faculty and university administrators that end up giving you very little value relative to money spent. that's why the unemployment rate is so high with new glads that are more toward political science. unless you're coming to capitol hill, a lot of those guys are waiting tables right now. it's a big problem and there will be a student loan bubble that bursts. >> the one difference to me between education and housing at least on the surface there are not a lot of people who won't try to tell you that we shouldn't try to make education more affordable. if you remove the subsidies, the pricing is going to fall. there's not as much resistance to tuition falling.

one of the arguments is we can't have housing prices fall. there's much more opposition to doing things in the housing sector that will bring the housing cost down. i think competition and guarantees don't mitch. one of the fundamental problems in the housing policy is this confusion that we want it to be about consumption and investment at the same time. we as a country don't want people sleeping on a heating great when i think is -- that's not something we want as a country. but fundamentally if you want housing to be about consumption then you can't be about making it more expensive. the only way you make it a good investment is by limiting supply. fundamentally, this is where i will channel progressive, housing to me is a basic necessity of life. why do we come up with policies to make it more expensive. i would like to make it more cheaper.

unfortunately, we have a world where we've convinced people that housing is the best investment in the world and get into it and make a lot of money. we should accept the importance of housing as a roof over your head not some, you know, casino that you can gamble. in again, i emphasize, you cannot have it both ways. we got to make a public policy choice of what we want it to be consumption or investment. >> well, we're a little over time so why don't we cut questions off now but if you have a question that wasn't answered i'm sure our scholars will stick around for a little bit. thank you so much for attending. please join me in thanking our scholars. [ applause ]

>> on the next washington journal, the foreign policy initiative leader discusses u.s./russia relations. we will talk to the founder of mom's demand action for gun sense in america. shannon watts. and andrew roth of the club for growth will discuss their opposition to the highway trust fund bill and their role in the 2014 elections. washington journal begins live at 7:00 a.m. eastern time on cspan.

john adams was the second to be elected to the white house. he was the second northerner to be elected to the white house. he was only one of two anti-slavery presidents to be elected to the white house. he was deeply feared by the south that worried that his vision of a unified country in which the federal government and the states were partnered in a relationship that enabled the federal government to play a leading role in binding the country together through infrastructure projects, through

supporting manufacture and so on, that he was deeply suspected by the southern states who thought, indeed, that he wanted too much power for the federal government. >> fred kaplan on the live of our president john adams. . >> the heads of republican elections for congressional and governor's races held a news conference wednesday to talk about the 2014 midterm elections. they discussed campaign fund-raising. building grass root networks and their online strategies. this is an hour. >> good afternoon, everyone. i want to welcome all of our guests here today. mike shields, chief of staff in the public and national committee.

obviously today the goal is to give you an idea of where the republican party at all levels from the local level onto the federal level stand as we head into the midterm elections. each of the folks up here is going to give you about a ten minute description as to where the committee they are doing and the races had a they are overseeing. when that's done we'll have time for a brief q and a period. obviously we will ask you to raise your hand. i will call you on you. the organization you are with and then we will go from there. we will try to hold this to as close to an hour as possible. there will be time afterwards if you want to talk to any of these individuals later. with that, i want to introduce mike shields, chief of staff of the rnc. >> thanks john. i want to thank all of my colleagues for joining us here today. i've been around the party committees most of my career, i can tell you we have an unprecedented level of cooperation had a goes on between all of the folks that

you see working up here and all of their staffs. i think it's one of the reasons why we feel so confident going into this election season how well we worked together, the amount of information that we can share with one another. when you don't have the white house and you have different groups that are all working sometimes there's not that unifying force but i think we're all headed in the right direction. we all believe that we're a very confident about what we're going to see this fall. i think another thing i will pick up from is how confident we feel going into the fall elections about where republicans are. where we're headed. there's some very common things that we're seeing in a lot of the different races that make us feel good about where we're headed. we have a lot of work to do. we still feel very good going into the fall elections. this isn't working. side arrow, this one? oh, right there.

sorry. apologize. that was the first point. we're working together like i said from the rnc's perspective has been a real pleasure working with the house and senate and governor's campaigns. building out the national ground force that we have, working on the data solutions that they need for their campaigns. it has really been a partnership working with all of them. here you can see a map of where our ground game. we have built out following their lead. we really do our targeting for where we need to put the troops that we have on the ground based upon where they are telling us they have targeted races and this they need help. there's a lot of different rolls to play on a team. we are all different teammates together. as many of you have heard from us in briefings, we decided at the start of this cycle was to ask ourselves some existential questions. what's our role? what can we do best? what can we only do? we decided there were really two things that we had to focus on, building out the ground game and

working on our data infrastructure. there's a lot of tv add that's will get run. you will hear from my colleagues in how they focus on that messaging and they do -- the candidate recruitment and a lot of other things very well. what the rnc knows we have to provide that back bone. it starts with a full time national ground operation. we launched what we call victory 365 this year. it's an update of the old victory program at the rnc. we started in june of 2013. you see the states that are on the this map, we have staff here across the country that are permanent staff. they are there to work year round in precincts and local areas. it is esaensentially community organizing. it is not an rnc in a works five months about an election. in the past the ground game had been done the same way. we've learned that doesn't work. if you are going to start putting people in the communities and building relationships you need to be there a lot sooner.

we've been sending out money throughout the entire cycle following their lead as to where they need that help. i think you can see some of the numbers. we currently have 16,000 presink ka precincted captains. we're not trucking volunteers on a bus over a weekend. these are folks that live in these communities. they know where to go knock on the doors and are building relationships with local voters and it's a volunteered force. we have over 200 paid staff across the country. 91% of the rnc political department does not work at the rnc. we're really building a true volunteer army to help us in the elections. >> there you can see there's 304 field staff. 24 state directors. 280 actual field staffers across the country who have opened up

147 different offices. we have supplements that with operatives that work with state parties and campaigns that help train them and utilize the data tools that we've put out in the field so that campaigns can work with us on that. we have 30 hispanic engagement staff. sasian engagement staff. not just looking at hiring someone was a coalition's director down the hall but putting our engagement staff as a part of our field staff so they are in the communities looking to get those voters. what you can't do is suddenly at the end build a relationship in a minority community that the republican party might not have had before. we've been putting that lead from the house, senate, gubernatorial campaigns where they see they needed that and

working to hire those staffers. we think that we've got about 30,000 by the end of the election we need to get to so we're well on our way considering now we would have been standing up a lot of victory offices around the country in a typical election cycle in the past. we've already made 1.3 million voter contacts. so those volunteers are not just out there learning the ropes but they have been out there doing voter contact and using the tools we've put in the field. the primary focus are the 10 million plus low propensity republican voters. both parties have lower propensipropen propensity voters that we need to focus on. using the voter scores that

we've now brought online that are now available in all 50 states. we have a new 1 through 100 voter scoring system that we discussed with some of you. we used to put them category, we now have aprn extensive nationa survey that puts them in a 1 through 100 score. it's available to all of our campaign so we can really zero in in a granular way. we used that the in the 2013 special election. of course the canvassing tools that we put in the hands of all of our volunteers. we now have a system that all of our parties have been purchasing. we now have a canvas app that loads up the information. we gather information at the doors that immediately gets put up into the rnc data file and base and shares with the campaign so we have real time information being generated by

those volunteers. they are out gathering data and making our file, more robust and more accurate. the voters scores are being enhanced from now through the election. weekly we will be doing thousands of poll questions that will give us a running track of certain issues across the country and continuing to enhance those model that's we have on the voter scores. skip ahead here. talking about our strat edge eye , strategic initiatives, we also have our 14/14 program working 14 weeks back from the 2014 elections to get women volunteers more engaged in republican party politics. this is a proactive program. our cochairman susan -- sharon day is heavily involved in this.

working to recruit women to get them more involved in republican politics. we believe in what you can do to help us. we think that will eventually generate operatives and candidates in the future. our youth program. we now have a youth director that's working to organize college campuses. in the past we had looked at college republicans as volunteers that we could shift somewhere else but we now look at them as an army of folks that can help win in areas that they are and enroll them in the 365 fr program so they are using the same strategies. i have to say, of course, the nrcc did a brilliant job of doing in early, doing a lot of persuasion mail and running a fantastic campaign with david jolly. we were working opt ground game. they spent 3 million and did

some very smart things. we were working hand in hand to provide them the tools, the scores, and the volunteer base in florida 13. it was really the first live fire way of those things were able to be implemented and we won by less than 4,000 votes. we beat the democrats at their own game. they saw we were able to implement a lot of this and win an election. what we are working very hard to do is to implement this across the country and all of the races we are going to be involved in. just talking briefly about the gop brand. 53% of americans believe it is more important to have republicans in charge and act as a check in balance on president obama and his policies. i think a lot of the voters that we're looking at in polls looks at 2010 in how independents break and how our base is motivated going into this election. the gop holds a 15 point

election advantage. 27% believe the country is headed in the right direction. these are all very, very, very bad numbers for democrats and one of the reasons we feel optimistic. also even with minorities. i don't -- we would never say at the rnc that by putting our strategic initiatives program together that by hiring an african field staff that we will carry 50% of the votes in the 2014 elections. our goal is to start cutting into the lead the democrats have. it's a long term process. as you can see in this survey here just going from 11% to 16% is a pretty good improvement for us. we think showing up and being part of the community matters. if you took five% of some congressional districts, they can't win the race anymore. we really think it's a very significant thing to do. working with the nrcc.

we did a big national survey to provide our candidates with tools on how to push back on the false narrative of the war on women. the gop wins when we stop allowing the democrats to set the false narrative on this. women's priorities, the economy, government spending, education, health care are things that when we actually manage to get our message through to women, they cut in our favor according to the survey data that we've seen. they are not happy with the status we could either and they are looking for really prag gmac solutions. harry reed is busy blocking working families bills that are being sent to him and our eng e engagement efforts. obama's approval rating standing at 40% now considered the worst president since world war ii. of course 40% approval of

handling and obamacare. you see this when you see senators and people completely avoid appearing with the president. it's only july. it will only get worse as we continue. just to let you know in terms of the messages that research pieces that will be coming out from the rnc sort of shows you where our focus. obamacare, energy, the economy, government mismanagement and a weakened democratic brand. want to turn it over to my colleague at the nrcc, the executive director lisa hicey. >> the first slide demonstrated where the house playing field is right now. i was surprised when nancy pelosi made her comments about where she saw the election heading in november.

obviously, those democrats are top targets for the cycle. i can tell you the numbers that we're seeing out of these districts, these democrats are in real trouble. not long ago, we launched something called our drive to 2045. it's obviously an ambitious and aggressive goal but the generic ballot that we're seeing in our battleground districts, obama's numbers, obama's prove approval, they are much worse than what you are seeing in national surveys so in our battleground districts i'm probably seeing plus 5 to plus 7 worse numbers than you are seeing in the national polling. we've got great candidates you know, to get us there. how do we get there. today we've got 235 in the house. we are going to pick up two seats one in utah with the retirement of jim mathison. one in north carolina, those will be ours. that puts us where we need to pick up nine in our 31 offensive target races.

these races, you know, as we put this map together we didn't do it cavalierly, there's a path to victory in all of these races. we got tremendous candidates in all of these districts. i think this also demonstrates where the landscape is. recently they laid down their fall tv reserve and laid down our fall tv reserve. 68% of our skinning is pinning offense. 48% of their is on defense. their mission is to stop the bleeding as they go into the fall. our is obviously to expand and maximize our opportunities. that's will be our goal. really quick. i don't want you to spend a lot of time because i know robs stuff is much more interesting toa all. i will quickly highlight some of the them and this is one of the most exciting recruitment classes that we've seen in a

really long time. i have got here about 15 candidates that i will run through really quickly starting with martha mcsally in the arizona two district down in tucson. running against ron barber for the second time. she came with only 2,000 votes last time. she's a first female pilot in combat. she's írñy$)ñ

owner. he's a state senator. the fargo newspaper so that he was collin peterson's worst nightmare. running out in san diego, california 52 running against scott peters, he ran into mayor's race in 2012. he won that part of the congressional district with 57%. there has not been one public or private poll since he entered the race last year that has him losing. if elected she would be the youngest female ever elected to congre congress. she's 29 years old. when he retired last year, this became a great pick up opportunity for us. she just came out of a tough primary fight. we're really excited about her election this fall. evan jenkins was a democrat until last year. he switched parties. this is all about the war on

coal. obama's approval rating in this district is 22%. so he's in a fight like he's never been in before. carlos carbella running against joe garcia in the southern most district in florida. he's a rising star in the party. rye an costelloe, running again three time loser who ran in the past several cycles. there's an open seat out in northern virginia. nobody works harder than barbara. this will be a great race for us. i'm real bullish on illinois. the numbers that we're seeing there in the governor's race are tremendous. our two candidates are bob dold

up in the northern part of the state and the chicago suburbs and make bost in the southern most district down there. they are both running ahead of their opponents. interestingly in illinois and california, last cycle. we have a lot of their freshman democrats that none of their voters know. they sort of checked the box for at the presidential level and their numbers are very weak in the illinois districts and in the california districts. bob dold recent public polling had him beating brad snider. in the new jersey open seat. tom went up on tv and came out of a great primary fight in june. tyrnies ethical problems have not gone away. it's a very serious fight of his own. he will have to spend a lot of time. stuart mills is running against

nick nolan in the district next to collin peterson in upper minneapolis. this guy for a first time candidate he has such a natural abilities and instincts. i've never seen anything like it. he has got a great shot against nolan. jeff gorel -- this is a seat on people's radars against julia brownly down in ventura county. he's an afghan war vet on navy reserve duty as we speak. he's an assembly man who won a very tough district there. lastly we have lee zeldon who is running against tim bishop. another democrat with serious ethical problems in long island. lee represents in his state senate district the bluest part of the district and we're really excited about his chances.

was i under time? i will turn it over to rob. >> that was great. >> there you go. >> good afternoon everyone. i'm rob collins. executive director of the nrsc. when we started this 18 months ago, the question was always could we recruit candidates who would win their state? could we get them through the primary process? could we train them up to run a campaign that was modern and ready to take on the democrats? i think by most standards, everyone would say that our recruiting class turned out to be pretty darn good. the primary process like in any primary process is always bumpy but the candidates who made it through can win a general and starting back in september and continuing today, we have invested hundreds of thousands of dollars in training and travel and time to make sure our candidates -- we don't tell them what to believe but just making sure that they talk in a way that's relevant to their voters.

so real quick, overview of the senate, this is kind of tough to do. history. president's lose 6.6 seats on average going back to 1950s in their second midterm elections. we need six seats to pick up the majority. we have 14 incumbents up for re-election.