campaigns have to be alphas of trying technology. the fec make it a restriction for using commercial applications. it's a challenge. but i think using square was an important example. using data to find out more and to create looka likes. you create models of what your donors look like. that's what you can do is you find by people's purchasing habits or the way they spend their time. you create models of the people you should run your campaign to. it kind of makes u. s you smart. that's where digital separates itself. when fund-raising mail goes out, the best is your first day. you should get better every day. that's the way to look at it. you are establishing a baseline and measuring against. this list is burn. i'm going to this list.

it's a different world view. >> most effective? >> i think the thing we did really well in 2012 in particular was applying best practices from large scale ecommerce to making donation process as efficient as possible. it's not super sexy but it's things like speed kills. the faster the system is, the more people donate. if at any point in the process there is any kind of lag, you are just introducing an opportunity for people to get bored. speed matters a lot. we used to joke about making the process as easy -- so easy that if people tripped and hit their head on the computer they would give us money by mistake. >> preferably more money. >> ideally. and doing things like amazon and large ecommerce retailers have allowed you to save payment information for a long time. you can buy with -- you go on. i want to buy that. shipped before you even had a chance to say maybe i don't need that. we like that idea.

when people get inspired about something, we don't want to introduce barriers to participation. so things like save payment information, no one had done it in politics. we had to build this in to our infrastructure during the 2012 campaign. it's something that's been a best practice in ecommerce for a long time. >> let's go to the audience and questions. let me invite anybody from the audience to be the brave first person to go to the microphone. let's see what happens. there's a hand up. while she's making her way to the microphone -- you will get there first. take the first question. when you come around, we will let you be number two. >> hello. a little short. my name is brittany. i'm in the graduate school of political management. zac, you were in our summer class. my question is, someone who is young and interested in doing what you do, i'm always being

told that you are young, you should be on hill. that's great and i love my experience. wanting to do what you do and especially wanting to do it in the 2016 campaign in some capaci capacity, do you still recommend doing the hill or trying to get in the private sector in. >> did you ever work on the hill? >> i would never work on the hill if i were you. >> i appreciate that. >> i never worked on the hill. >> if you want to do campaigns, that's the problem is sometimes the hill people think they're good at campaigns. i'm not good at hill stuff. you wouldn't want me writing your policy. if you want to do campaigns and that's what you are passionate about, you got to do it. you can work at firms who are assisting campaigns. nothing changes. when you are here, you are safe. the lights turn on. there's food, water, air conditioning for most part. you want to go where you are in the back of a grocery store in ohio being like this is what's it's like. if you don't go through that -- that's one of the challenges

with digital. did i ten years of toiling in the field before doing this. you have an appreciation of the tools and what you want to build. >> what do you mean? >> i ran programs across the country. phone banking, childcare, whatever it took to get someone in. i ran the most efficient -- >> i won't give your kid back until you vote. >> in order to get more volunteers. it was about having relationships. these what the bush cheney floor model was like. if this is what you want to do, you have to go do it. there are ways to do it in d.c. really, you want to get on a campaign and go do it, even if it's the last 90 days. then you find out if you want to do it with your life. you are making a huge commitment. >> michael, answer that. i would like you to keep in mind that we have a cspan audience and a national audience. a lot of people who would like to get into politics. i wonder what your advice would be. >> i think i agree with zac. i never worked on the hill.

>> don't come to washington. >> there's a big difference between campaigning and governing. if you want to work in government, work in government. they are not the same. there are people who -- some people who do both and do beth well. doing both well is pretty rare. i think zac's point about being involved in a campaign at the field level and seeing what campaigns are like is important. i started in politics working graphic design and digital content and communications. then i started working in politics and campaigns. i was a field director and a volunteer manager and a bunch of other pieces. then i put those two things together when digital became a thing. i think the advice -- if this is what you want to do, find a way to do it. there are campaigns everywhere all the time. right? there are always -- almost --

there are -- if you want to be a campaign person, there are off-cycle states you can work in. in a mid-term cycle like now, there are places to get engaged in almost anywhere in the country. there are competitive races and opportunities to participate in the process everywhere. there are physical and digital ways. we see good campaigns blurring the distinction. we should just be talking about engagement. i think the idea that we're talking about digital campaigning, this is probably the last time we should talk about that. the real ity is, if we think about the progression from 2004 of a friend who worked in a campaign who talks about the campaign manager yelling about, don't let the guys at the computers get us in trouble. 2008, our digital director reported directly to david pluff. there was a huge shift. now not only has digital been

elevated, but it's not subservient to communication. now -- it was called new media because it was new. now it's not new anymore. we call it digital. what's the difference between digital and communications? i don't know anymore. so at some point we're going to -- having a digital director and a communications director becomes redundant and strange and uncomfortable depending on -- >> afternoon. before i take your questions, i want to start with a quick preview of secretary hagel's week next week. on tuesday, the 16th, secretary will testify in an open hearing before the senate armed services committee in which he will brief the members on the president's comprehensive strategy to destroy isil. the secretary will speak here at the pentagon for benny adkins and donald slope, both served in vietnam and will receive the

middal of hmid -- the medal of honor. he will deliver a keynote addre address to the air force. the secretary is looking forward to discussing the importance of air power and how to sustain it moving forward. finally on friday the 19th, a week from today, the secretary will host a ceremony here at the pentagon in honor of pow/mia national recognition day. he will be joined by max kleland. he believes in ensuring that we account for and recover missing service members as a solemn responsibility. he views it as a personal commitment as well. he's looking forward to speaking to an audience that will include family and friends of the missing, former pows, members of congress, veterans and representatives of the major family and veterans service organizations. with that, i will take

questions. >> with regard to the president's announcement the other night in syria in particular, can you differentiate or explain the degree of -- extent of air defenses that are being considered, are being studied in eastern syria as opposed to the rest of the country? how much deeper, more concerning are air defenses in that part of the country? >> let me -- it would be difficult for me to speak with great detail to the air defense systems of another country. we have said all along that syria does possess, continues to possess sew fissophisticated ai defense capabilities. where they put them and where they move them around is difficult to say with -- air defense are placed in or near

what a country believes to be its most vulnerable locations or where they think the air defense systems can have the most affect. generally speaking, the eastern part of the country is more desolate, more remote, less critical infrastructure there than in the western part of the country. generally speaking, one would assume that most of the their air defense systems are based around the west and around major facilities and major cities. that said, bob, you know this, many air defense systems are mobile. it can be moved. it can be moved rapidly. i really don't have a perfect sense of what the air defense picture looks like in syria. but i think the implication of your question is, to what degree are we considering that when we consider plans for potential air strikes in syria. what i would say to that would be that obviously we want -- as

we plan and prepare for the possibility of conducting air strikes across that border, we're factoring in every possible contingency that we can. protection is a very high priority for us. no matter where or when, you are considering the use of strikes, you have to factor in defensive capabilities that could thwart those efforts. >> on the strategy, specifically, do military commanders really believe that isis can be defeat order ed or destroyed without sending troops in the field to fine the targets? one of the criticisms is you can't rely on others to do it. without having these men in the field, you are not going to have an accurate picture of the

targets. >> the short answer to your question, justin is, yes, let me try to explain what i mean. we have said all along, secretary hagel has been very clear, that there's not going to be a purely military solution to the threat that isil poses in the region, specifically inside iraq. there's not going to be a military solution here. we have been conducting air strikes now for a number of weeks. i think we're up over -- almost 160 of them. they have helped provide some space and support to iraqi security forces as well as kurdish forces. military measures are not going to be enough. the other thing i would say is, we have been able to do these very effective and we know we're having a tactical affect on isil and we have been able to do that without quote unquote combat boots on the ground. >> now you're doing more.

you have said you're going to ramp up air strikes. >> i think you can expect that we will be more aggressive going forward. but we have been pretty aggressive so far. nearly 160, all very effective. effective without needing u.s. troops in a combat role on the ground in iraq. the commander in chief has been very clear. that's not part of the mission going forward. the other point -- i think it's -- we need to consistently make this is that the destruction of isil and their capabilities is going to require more than just air power. we have been very honest about that. and it's going to require partners on the ground to take back and hold the territory that this group has tried and -- it has tried to obtain and

maintain. it also is going to take the ultimate destruction of their ideology. that also can't be done just through military means alone. that has to be done through good govern answer in iraq and syria. and in a responsive political process so that the people that are falling sway to this radical ideology are no longer drawn to it. so that's really the long-term answer. >> i think people would be surprised to hear you say that there is no military solution given the nature of isis. this is primarily a military strategy, is it not? >> what is? >> to defeat and destroy isil has to be done militarily? >> no. this is not an army. this is a terrorist group. they behave in many ways militarily. they are unlike other terrorist groups we have had to deal with because they are concerned about

grabbing and holding ground, income control of inf infrastructure. they have vision of governing of their own, brutal as it is. they are not an army. we have been very consistent from the very beginning of this, justin, that there's a military component to the strategy but it's only a component. it's not the panacea to solving this. >> military theorists and planners use a concept called center of gravity when looking at an adversary. if isis is not an army, what are its centers of gravity or weak points that can be successfully attacked to allow the rest of the process to unfold? >> their ideology. when you talk about center of gravity in military terms --

again, i don't want to -- i'm not trying to ascribe to this group the characteristics of an army or military. let's use your logic. i think it's their ideology is their center of gravity. the center of gravity in military terms is the one thing that an enemy has that without which they loose their strength. we believe that's their ideology. back to my answer to justin, that's not defeated through military means alone. it's going to take time and responsive politics in iraq and syria. >> what's the military role? the strengths -- the role would be what? >> our role is to degrade their capabilities, which we continue to do, to support indigenous forces in iraq and hopefully in

syria to take the fight to them. we have vsaid it before. this is a fight, particularly in iraq, that the irrablg i caqis take on and win. to take ground away from them and degrade their capabilities, destroy their capabilities, to continue to wage war on the iraqi people. >> two, three weeks ago the president authorized surveillance flights over syria. he gave the authorization. in that time since then, how has the pentagon's picture of the ground -- of ground operations in eastern syria improved? >> i'm not going to talk about intelligence issues here from the podium. where i will go is i will tell you, obviously, in any preparation for military operations you want to have the best situational awareness that you can. to bob's question, you want to know as much as you can about

what you are up against. we are in the process of trying to gain that situational awareness. we're still in the process of trying to gain situational awareness. i won't talk about how that process is going or how much longer we have to do it or what we're learning. the direction has been pretty clear. we're going to be -- we need to be and we will prepared to defend american citizens and we're not going to be beholden to geographic boundaries. when it comes to going after terrorists. in order to be prepared to do that, which is our mandate, we're going to try to have as much knowledge and situational available to commanders as we can. >> since the president gave this authorization -- >> we continue to work at it. >> as of yesterday, the 125 personnel and aircraft, that wasn't set yet.

it was up in the air. is there a time line for that in the coming days available to us? why wasn't this set in place before the president gave his speech on wednesday? >> let me make sure i understand. you are asking the 125 you are saying we haven't set what we're doing? >> my understanding from this building is that you haven't figured out which assets overgoiovergo i -- which assets you are going to move over. >> we are working through sourcing solutions with the 125 personnel presence that will go to support intelligence surveillance and reconnaissance missions. there are still sourcing solutions that have to be resolved. that said, we're working at that very, very hard. i think, as i sewed yesterday, that in the next week or so, you are going to start to see elements of that 475 that the president announced starting to move in. what was your second question?

>> why wasn't this part of the strategy in place before the president gave list speech? >> this was part of the strategy that the president announced in his speech. the president himself said in his speech that inclusive of this approach was another 475. >> no, no. i'm just wondering why this wasn't always worked out before he went in front of the american people and said this is what we're going to do. >> you mean why didn't we know when he announced it that we were -- what exact aircraft we were going to send? we know very much what the requirements are. there are some specific sourcing elements that still need to be worked out. they're going to be worked out very, very soon. jim? >> you are aware the cia's updated assessment on the fighting numbers in isis from the earlier estimate of 10,000 to a range of 20,000 to $30,000.

given the president's commitment to degrade and destroy this force, but there's a military component to this, but giving the commitment, how does that increased number estimated number of isis fighters affect your assessment of the duration and the intensity of operations necessary to accomplish that mission, to destroy this fighting force now that the estimate is the that much greater? >> we have been looking at the threat posed by isil through very clear eyes. very clear eyes here at the pentagon. nobody has under estimated the threat that they pose. inside the region or even to western targets as well. we certainly support the intelligence community's estimates in terms of their size. nobody is under estimating the challenge that is ahead of us. as i have said, there's not going to be a u.s. military solution here, that we have to

have willing partners on the ground in iraq and eventually in syria. it doesn't -- the 20,000 to 31 sushgs ,000 doesn't change our estimate or the second's belief that this is going to be a long-term struggle. we can't -- it would be irresponsible for me to put a date certain down on the calendar and say it's three or four or six years. >> i'm just saying, presumably it's a longer fight if you have that many more fighters to degrade and destroy. >> we're not just simply about degrading and destroying them, the individuals, the 20 to 30,000. it's about degrading and destroying their capabilities to attack targets, particularly western targets. it's about destroying their ideology. while the numbers certainly got bigger and that's certainly

intensifies the scope of the enemy that you are facing, i don't think there's a direct line between that and the duration of the conflict or the difficulty of the conflict. believe me, everybody here at pentagon knows what we are up against and is taking it very seriously. >> one follow-up about ally support. secretary kerry is in the region principally to get allies on board, to do things you are talking about. also contribute to the military effort. based on the public statements of many of these countries, they're not exactly chomping at the bit to join in, including on this urge to have boots on the ground in some capacity. i'm curious, is the u.s., is the pentagon prepared to take the lion's share of the burden for the military effort if these partners don't pony up? >> two thoughts here. one is again we're looking at this -- the question seems to look at this through just military eyes. this is much bigger than a

military effort. putting that aside, the united states is leading this effort to build and sustain a coalition of willing partners. that's the key word, willing patter ins. everybody has to come to this effort with what they can, where and when they can. when we -- secretary hagel was in georgia and we had a stop in turkey. his message to both countries was, we would ask to you do what you can, whatever that s. we didn't come with a specific request in hand. some countries have signed up for more aggressive activity than others. some are willing to do transportation of assistance. some are willing to contribute monetarily to the effort. others are willing to participate in more aggressive military actions. but they all have to speak for themselves. it wouldn't be our place to do that. that said, we are seeing the

coalition build in size and scope. secretary kerry was in the middle east yesterday. you might have read the communication coming out. many arab nations agreed this is an issue they have to deal with and chip in. but each are going to do it in their own way. you said lion's share. i would say leadership. the united states particularly the united states military intends to and will continue to lead this coalition. again, military is just one component of it. >> the french have said they might do strikes if asked. secretary hagel spoke to the french minister of defense yesterday. has secretary hagel put a formal request to the french government to help with air strikes in iraq? >> it was a very good conversation with his

counterpart yesterday who will visit here in the pentagon in the near future. they did talk about in what ways t the french would be willing to contribute to the coalition. i will let the french speak on what they are willing to do and not. i'm not going to go beyond that, beyond the details that i put in my read-out of the call. >> one other follow-up question on a comment you made. you said we know we're having a tactical affect on the islamic state militants. does that include rehelping the iraqis retake ground? can you put more meat on the ground in terms of what you are talking about? is it taking away weapon systems from them? is it rolling back gains? >> to date, we have certainly disrupted their ability to operate in the country in the places where we have been going after them. limiting their freedom of

movement. forcing them to change the way they communicate and organize, self-task themselves. we know we have absolutely helped remove them from areas and from infrastructure that they had in their control or wanted to have in their control. the mosul dam is a great example of that. through the use of strikes we have been able to help iraqi security forces maintain control of a dam. we have helped prevent humanitarian disasters. so we know we're having an affect tactically. what i said yesterday and what i think you can expect is an incoming days we're going to be more aggressive and shift a focus from what has been to date primarily defensive in nature to more offensive in nature. >> can i ask you about liberia and the ebola crisis?

can you give an up to date timetable for the 25-bed facility that dod is deploying? and also given that the liberian health system is completely overwhelmed and given dod's capabilities and capacity in fighting infectious diseases, why is the american military not sticking around to staff and run this facility? >> take the first one that we are actively trying to get this 25-bed facility to liberia. there are logistical training things that need to be done before that can be loaded on to transport aircraft and get down there. we're committed to getting it down there. we will provide personnel to go with it, to set it up. but not healthcare workers to staff it. they will get -- they will set it up, make sure it's operating properly and we will -- then they will leave.

so that's this initial component. but what i would also tell you is there's a very active discussion going on across the whole united states government about the threat posed by this terrible disease and the urgency with which the international community needs to respond to this. the u.s. government will -- i'm convinced will continue to play a role here in trying to address this crisis. and as a part of that role, the department of defense has capabilities that might prove helpful. we're a part of that discussion right now. i won't get ahead of decisions yet. certainly, there are capabilities that the military possesses that might prove useful. in addition to this facility, again, we're having those discussions right now. >> i don't understand what the

point is of -- you have a country where there's one doctor for 100,000 people with a public health system overwhelmed. you're going to build and leave a 25-bed facility there for health workers who are completely stretched thin. why not stick around and run it the way the british have done? >> i will tell you that there's a very active discussion going on right now about u.s. government efforts -- by the way, it's not like the government itself -- our government hasn't done anything. there's been a lot of effort by usaid to help address this problem inside africa. dod, we have a number of doctors down there that have been down there trying to work on this problem. so there has been a lot of effort applied. there's an active discussion, as i said, to consider other things that can be done. it's important from a military perspective -- that's all i can speak to -- that whatever

capabilities we offer to this effort, it's got to be the right capabilities. most of military medicine has been focused over the last 13 years and actually designed to be focused on battlefield trauma, battlefield injuries, the kinds -- there is a limited capability against infectious diseases. all i'm saying is, whatever we would contribute, whatever unique capabilities we might have, it needs to be appropriate to the effort -- overall effort and in support of a broader whole of government approach, certainly in support of the usaid. i would leave it at that. >> is there a problem goating peop -- a problem getting people to volunteer? >> we're in discussions right now. the department of defense, the one thing we're good at is rising to the call and to doing

everything we can where and when we can and lending appropriate capabilities. without getting ahead of decisions that haven't been made yet, i can assure you that regardless, we're going to continue to contribute in the best way that we can. >> per day cost on the campaign? >> no. >> any assessment done about what this expansion might mean in terms of cost? >> the costs -- we're always looking at cost. i don't have an estimate for you today. i will take it for the record. as i said yesterday, for the operations that we have been conducting, they are being sustained through current year funding. >> is leadership being targeted, isil leadership? >> we have not targeted leadership to date. as i said before and i will say it again, you will see a transition to a more offensive

effort in iraq and certainly when you are going after a network like this, one of the things that you also want to go after is their ability to command and control and to lead their forces. >> i want to go back to the communicati communication. many iraq countries signed after the conference. turkey didn't sign in terms of the military campaign conducted against isil. what is the expectation of the administration from turkey in that sense, in terms of the military campaign and other contribution can turkey make to this coalition since the president revealed the frstrate? >> we didn't go to turkey with a specific request. our expectation is they are an' lie. they are going by virtue of her

geography is going to be a partner. they indicated that they would be and that they want to be. but it's up to turkish leaders and people to determine how and when that is manifested. we're not going to dictate to that. >> if turkey doesn't contribute -- >> i don't think it's an issue. i think turkey will contribute. they have indicated that. they're going to do it in their own way. in accordance with their own mandates from the turkish people. >> to follow up on the question about ebola, that outbreak has been raging for months and months and months. i wonder whether the fact that you are still in discussions about what to do is because you don't have facilities that are relevant to that outbreak or because there's some reluctance to offer dod facilities. has dod offered to make things

available and the question is whether we want -- whether the administration wants to do that? what is the problem? >> the question presupposes that we have done nothing. and that's not true. since the outbreak began in march, the whole government -- i can't speak -- i shouldn't speak for anything but the pentagon. but the whole government has been engaged in fighting this outbreak. we have asked for -- we got program funds approved for ebola response, around $30 million. this will include funding our effort to get the 25-bed hospital down there as well as diagnostic equipment and supplies and for training as i talked about. we have requested to reprogram $500 million in this fiscal year's overseas contingency funds for assistance to include west africa. some of it to be for west africa, some for iraq.

again, we are actively working to look at capabilities that we might be able to provide that would be of use to nations down there but also as part of a broader whole of government approach. so the notion that we have done nothing since march is just not true. as a government. and at the pentagon, we're very actively engaged in this. >> you can give us an update about the outlook for the anti-government training for syrian fighters assuming congress agrees it can go forward and authorizing the money. what kind of power can it generate? how soon do you think it could have an affect in the war there against syria? >> we have said that as part of having willing partners in iraq, we also know we need willing partners in syria. that's why we have asked for this $500 million through the budget for training capability

for modern opposition. as you know, the saudis have indicated that they are willing to host training for us, which is a key component of moving this forward, to have a partner nation in the region that you can physically do this training. so that's very helpful and we're very grateful for that. there's details to be worked out on that. another thing is the vetting -- recruiting and vetting process. there's no easy answer there. the syrian opposition is not a monolithic group. it's not a recognized military force. there is no single recognized leader of the opposition, certainly not from a military perspective. so there's a recruiting and vetting process that we need to work out and we're working hard on that, as you might imagine. that said, we believe that over the course of the year that the $500 million would help us --

would help fund, we think that now that we have got a partner in the region to help us facilitate this training that we could train more than 5,000 fighters over the course of one year. now, that would be in phases. wouldn't be at once. the training itself would not take aful year. but we think that we could get more than 5,000 done in one year. again, that assumes that you have got a stable and reliable recruiting and vetting process and nobody is underest maiting t the challenge of getting that done well. there's work to be done. secretary hagel continues to call on congress to pass that budget request, specifically that $500 million so that we can get moving on it. it's going to take -- the question about how long it's going to take to get started. the long pull in that is the vetting process. it's difficult to give you an

estimate. i think it's clear to say it will be a number of months before you can actually start and then it's about -- it's a year-long pipeline of training opportunities. >> you can give us a sense of how it will work on the other side of the training? will they be -- will they go as soon as they are done? how is that going to make a difference militarily to the conflict? >> i don't have details on how they will graduate from this and then go off to fight inside syria. we do think that a more capable and trained modern opposition can have an affect, a significant afikt fect inside s. going back to -- i don't know what question it was i talked about good governance. there's not only not good governance, it's disastrous

because of the lack of legitimacy that he has to govern his own people. he himself is a big part of the problem. he himself is responsible for the growth of isil inside syrian borders and their ability to recruit, to train, to equip, to sustain themselves inside syria. so it's important to get a modern opposition that is capable with basic military capabilities to fight the asad regime as well as isil. >> if you take syrians out of the battlefield to train them, that leaves the battlefield open for isis to take more ground. are there people that are going to fill that gap while they are being trained? >> the question sort of indicates that this is this -- like an army. it's not. yes, you will have to take some fighters out of syria to train them, to make them more capable. when they go back, they are more

capable, they are more ready. i think it's safe to assume that the modern opposition has struggled right now against isil. isil continues to be a lethal presence inside syria. we believe from a cost benefit analysis that it's worth the risk to remove some fighters out of the country so that when they return they are more capable. >> who will cover the ground while they are being trained? >> the problem inside syria right now is isil has the ground. we need to take that away from them. we, meaning the big we, not just the united states military, not just through air power, but with a competent partner that you can work with on the ground. >> one quick question about the navy jets. do we have more details on that? have we found the pilot? can we get more details on where this occurred? >> as of the time i came out here, the navy was still searching for one of the two pilots. the other pilot had been recovered and was being treated

for injuries. i don't have a lot of detail on the mishap. i would point you to navy for the details on that and the specifics. obviously, the secretary was made aware of it immediately after it happened. our thoughts and prayers go out to both families. i will come be a to you. i already got you. >> the army has identified a problem with a lack of leaders in key combat commands. i'm wondering if secretary hagel is aware of this and whether there's enough being done. >> the secretary has had numerous conversations with army leadership about this and other organizational challenges that the army faces. he believes passion nally in the power of diversity at all levels

of the military, not just the upper leavels and has been a strong advocate for increasing opportunities for all american citizens, those who are qualified to serve in the military regardless. so this is something he's focused on. he will maintain focus on this. but he's very comfortable and very confident that secretary mchugh and the general, just like the other service secretaries and service chiefs in their leadership and their ability to manage through those kinds of issues, he is very comfortable, confident that to the degree there is any diversity challenges, not just from a racial perspective, that they understand his guidance and they will lead through it. nancy. >> i would like to go back to comments you made about the $500 million and whether it was capable of providing syria.

people are asking -- the united states spent $14 billion in iraq, training forces, spend years training them and left a capable force behind -- a government behind, good governance behind. they were unable to stop isis from spreadingconfidence this will stop isis from expanding in syria where there is hope of little kind of governance. >> you have to start somewhere. nobody is saying the $500 million is going to solve all of the problems. not at all. the u.s. government support for modern opposition has happened -- has gone on. this would be a major contribution now from the defense department. but nobody has said that this is going to solve all of the problems in syria or it's going to -- it alone is going to result in the complete destruction of isil inside

syria. nobody has said that. what we have said is, you have to start somewhere. and you got to have willing and capable partners on the ground. we have willing and capable partners on the ground inside iraq. yes, there were some army divisions that didn't do so well in the first days of this, folded up and walked away. that surprised everybody. what we're starting to see now, thanks in parts to the assistance not only the united states has given, but other countries, we're seeing the iraqi forces form into much more capable fighting force than they were. another reason why we're going to transition now from a purely assessment mode to a device and assist mode so we can continue that progress. same thing with the kurdish forces. you have to have a willing partner on the ground. we don't have a partner on the ground in syria. this is meant to start that effort. it's -- nobody is looking at it -- it alone as the panacea. >> is it something you see that

funding-wise this would be the start of something you would ask for an additional $500 million over the course of time? can you help me understand in terms of expectations the american pub llic should have i terms of what they will be capable of? you talked about how this is a starting point. can you flesh out what that looks like? >> your first question was? >> the $500 million, do you anticipate that this is the first of several requests? >> our focus is getting the $500 million. as we talked about yesterday, it's difficult to talk about the end when we're still trying to get the beginning of this started. that's where our focus is on. the secretary really wants to work with the congress to get that money appropriated. to your other question, i mean, what this will do -- this will help us train -- appropriately

train vetted syrian opposition that can help defend the syrian people, that can help stabilize areas under opposition control, that can facilitate the provision of essential services, that can deal with counterterrorism threats and then eventually promote conditions for a proper political settlement inside syria. if i had to give you the laundry lifrlt of what we hope this training for a modern opposition would do, it's that. >> can you just tell us a little bit more about the iraqi army and their capabilities? what's changed over these past few weeks or months that's going to make them capable against going against isil? what's our coordination? we're advising and assisting? are they taking the lead? what kind of semantics? are you con fi dent in the iraqi

army today and why? >> one of the reasons we're trying to move to an advice and assist is to help them get more capable. they have been doing well. not perfectly but they have been doing well. they continue to need support, which is why as i said before we're going to move from largely defensive support to more offensive support, to help give them more space. >> hey, bomb this target or do this for us. you will act on your own? >> we're in constant coordination with iraqi security forces. the commander and chief was clear, we're going to move to an offensive role inside iraq against these murderers. i don't think there's -- there's not going to be a lot of speed bumps on the way to doing that. that said, we do coordinate every day with iraqi security forces. that's why we have the two joint operation centers, baghdad and

irb irbil. the iraqi security forces are getting better. they have held the ground around baghdad. they have retaken ground north of baghdad. they have been able to, with our help and assistant, hold on to the dam. they and the kurdish forces, working together, which is not an insignificant thing. isil has helped increase the cooperation between kurdish and iraqi security forces. they work together. they were able to retake the mosul dam. that was an iraqi led operation that we supported. you will see that strengthening and growing. they have had challenges. there's no question. over the last three years, after we left, they were not managed well. they were not led well. they were not resources well. they were not trained well.

we alone cannot turn that around. that's why it was so important to have a new unity government in iraq stand up. as i said turning more positive that reregard. there's still work to do as they stand up the government. we they have the prime minister and his officials have proclaimed they are interested in becoming a government that is responsive to all iraqis. that's helpful. it wasn't happening before. it's a long answer to your question, but i think i got to it. >> american security contractors and the expanded campaign now we have american piers going there to protect them to provide security. >> i don't have any on the use of contractors there. but again everybody wants goes back to 2002 and 2003. this is not going to be the iraq war. this is the counter terrorism

campaign against isil for which there's a military proponent to which we'll contribute. i think i'll give you the last question today. >> it was good. yeah. my question is morphing but i have to ask you this question. do you regret the details about the foley rescue attempt were leaked to the press or handed out to the press given now the assessment is that they've gone to brown with the hostages and dispersed them and seemingly made them -- >> we regretted a the time we had talk about it. there was no intention of ever having to talk about that rescue attempt. because of leaks to certain reporters, it forced our hand to try to provide some context to that. it's not about do i now regret it? we still regret we had to talk about it.

thanks. there's one more. >> on your last comment secretary kerry took a lot of heat for saying it's not a war. you're backing that up it's not a war in your mind. you guys are all in agreement about that. that this could go on for years and we could be there for years. bombing but we're not at war. what i said was it's not the iraq war of 2002. but make no mistake we know we're at war with isil in the same we're at war and continue to be at war with al qaeda and its affiliates. thanks, everybody. if you missed any of the defense department briefing it's available in the c-span video library. go to c-span.org. the cato institute holds a discussion on corporate will of tax laws and mergers. hear remarks from the senior fellows and the cato institute and we continue with our

coverag coverage. >> good afternoon. thank you to dan and cato for inviting me to talk. i thought what i would do is to understand the current battle over inversions and how we tax u.s. corporations overseas income. i think the white house's position is most companies that have overseas operations do so primarily to exploit cheaper labor overseas. on the other side, i would say most republicans in congress think that most corporations have overseas service local markets. your perspective on this issue

colors how you think we should tax overseas corporations. the administration thinks every dollar earned by a u.s. company whether they earn it here in the u.s. or elsewhere should be taxed at one same rate. in order to take away any single tax advantage that a company might have to take things overseas. people who believe the opposite would argue that we want to keep u.s. corporations as competitive as possible abroad. because operating overseas also creates u.s. jobs. in the late '90s pepsico became active in eastern europe. they bought a lot of soda pop plants and potato chip factories and started doing a lot of production overseas. there's no conceivable way pepsi could service the overseas

markets producing pepsi and lays potato chips in the u.s. and shipping them 3,000 miles overseas and semiing them there. the volume is too big to make any sense. i would argue that pepsi creates all kinds of jobs in the u.s. by having these jobs abroad. the alternative is some other company with no u.s. roots and no reason to hire u.s. workers to do back office management, i.t., marketing and stuff stuff like that.

whole range of production activities in peoria, illinois. they do a lot of production overseas as well. and the question is where do they do -- which kind of production do they do here, and which kind of production do they overseas? caterpillar does the very low margin, low cost production tractors. that do those overseas and closer to the market. where that cost of shipment relatively large p portion of the total cost where they can't be that competitive to put a boat, ship it down the river, and5m ship it across the ocean to asia or europe or africa or whenever. what they produce in illinois are the costly high margin tractors that get shipped all over the world. and the advantage to having operations in production operations in china and brazil and across the country is that across the globe is that it

makes cat pillars huge markets and competitive there. one of the things we need to be cautious of. if we were to say screw this let's simply go back to a worldwide tax jurisdiction and get rid of all deferral and make u.s. corporations pay the same rate on every dollar they earn no matter what. caterpillar and pepsico will do less things overseas. they'll sell the operations and hurt jobs and production here in the u.s. as well. in 2007 i was part of a team of economists who did a report for the u.s. treasury on corporate tax reform and one of my task was to talk to a bunch of ceos and senior tax officers from manufacturing company and ask them about why they locate certain operations overseas and more than one said we're located our headquarters are in the united states solely because of an historic accident.

if we were starting out the huge company now would we locate a headquarters here because the tax advantage. and another fortune 500 company tax officer told me they estimate when they're operating in the e.u. their average tax disadvantage is about 5 percentage points. that's significant. that makes it more difficult for u.s. companies to compete. i think one other thing we need to ask ourselves when we're looking at our corporate tax rate which pointed out have a lot of flaws in it. who actually pays the corporate income tax? i think the best way to look at it it's paid by bad evil corporations. it's has to be paid by one of three groups. the shareholders and the form of lower capital or the workers who get a lower wage rate because there's less capital they use and they're less productive, or paid by the consumers. because they have to pay higher

prices because the tax. and i think in the last decade, preponderance of evidence on the left and the right suggests it's primarily bore by the workers. the liberal tax policy center suggests it's somewhere like that as well. so i think we need to be aware of these things when we're condemning companies for doing these tax. one other thing a company pointed out to me, when we talk about why companies do locate operations where they do, a lot of the drug companies put their operations not at low cost places but in switzerland. why? it's certainly not because there's cheap labor in switzerland. it's primarily because of tax reasons. so what is the answer? dan i think was going to wrap it

up giving a couple of thoughts. i'm going to jump the gun bit. there's a proposal out there that was written about in the sunday new york times and getting a lot of traction by a tax law professor in new york, his argument is we need to go to something akin to a value added tax or sales tax. and generate the bulk of our revenue that way. and use that revenue to dramatically lower not just corporate tax rate, which he would drop to something like 13 or 14% but personal rates as well. at least that's a more honest tax code because it would be taxing people it would be more visible. we know that taxing capital investment isn't a good thing. we would rather not tax effort but taxes con sunsumption is a

efficient way to do it. and one swoop we would turn an uncompetitive tax code into something that would be the envy of the rest of the world. a thought to think about before dan gives you the answer to the universe. thanks, dan. at that point in time, i assume it must be similar one-fourth of u.s. exports are sales from american companies to their foreign sib side area. it makes a big difference the jobs exports in america to have american companies to compete for market share abroad. i want to put all this in context and wrap it up. inversions, as i indicated, were big lad decade and congress passed some legislation i think can be financial protectionism orifice call protectionism. that sort of slowed it down. but as david indicated, you can't completely stop inversion as long as you have free movement of capital, as long as

you have a huge barriers in terms of companies operates around the world. now inversions become a big issue again because of cross border mergers. it makes sense for the reasons that have been discussed for these inversions to take place. with the foreign company becoming the official parent and the u.s. company become the sib side area. even though many n many cases the headquarters stays in the united states. let's look at a couple of slides to put it in context. it shows the wave of inversions last decade and now today. here is a different look at it. the numbers aren't the same. this is from the democratic staff of the house ways and means company howi inversions have taken off. it's clear a lot of them are happening. and the question is why. well, taxes are a dominant factor. it doesn't mean the only factor.

it could be that tim horton and burger king would have reason to merge regardless of tax code. there's no doubt about it the vesters at burger king are saying we'll have a more profitable company if we can escape the worldwide tax system of the united states. and indeed, as david mentioned, we had the highest corporate tax rate in the industrialized world. some people say the entire world depending how you count a few countries. but the real problem is not just that we have the high tax rate, we have a system of worldwide taxation which is a second layer of tax imposed on american companies for the income they earn abroad. never forget if you're an american company and earning money at some place like switzerland you're already paying the swiss corporate income tax. does it make sense to declare it a second time and pay tax? we have deferral, which a allows

them to postpone it. but at the cost of locking up their capital and keeping it overseas. here is a map showing major countries. who would thought that the united states would have a higher corporate tax rate even than france. you look at the major competitors and corporate tax rates are about half our level. it's 25.1. they're down with the latest data to closer to 24%. so other countries are reacting to globalization they making sensible changes to make their

business environments more friendly. the united states is sitting still. maybe we could have sat still in 1986 but other people continue to do the right thing now we're in trouble. she here is a map showing high corporate tax rate. you don't want to be dark colored. the united states is dark colored, as you can see. the real key, as i said before, is not just the high rate. it's the worldwide taxation. countries around the world have not only been lowering their corporate tax rates but territorial taxation. there are probably very few pure worldwide tax system. even the u.s. isn't. among the countries territorial often time st. louis a few exceptions. it's more like a continuum. on that continuum, with bad policy being here pure worldwide taxation the u.s. is farthest in the wrong direction. here is a chart you won't be able to remotely understand but

it was a study looking at corporate tax systems around the world and ranking them how business friendly they were and investor friendly they were. 100 countries and the united states came in 94th. this doesn't just look at the tax rate. it didn't just look at worldwide taxation. it looked like things like appreciation policy. but, again, you don't need to be able to read any of the numbers. just understand that 94 out of 100 is not a good place to be on that kind of chart. and if you look just at the countries that have some form of worldwide taxation you see the united states stands out for having an extraordinarily high corporate tax rate. you'll notice that there aren't any major countries as david said where the only major country that has worldwide taxation. so now let's sort of ask ourselves the fundamental question. the purpose of the panel today. what are the reasons? the good reasons, i'm going to

postulate zero. what are the bad reasons? desire for more revenue, financial protectionism, political demagoguey. look let let's look at this. well, okay, wait, it's a 10 year number. what are corporate tax revenues over ten years? the bar you can't really see is the amount of money that is, quote, lost to inversions. and i think if you didn't do static revenue scoring you would see you wouldn't see that sliver of revenue compared to the $4.5 trillion that 19.5 billion wouldn't even exist. here is something i think is very important.

here is another chart from our friends at the tax foundation. people don't understand that american companies pay a lot of tax over $100 billion to foreign government. what demagogues are saying this company they're not going to pay tax. they pay a lot of tax at their overseas operations to foreign governments. whether you invert or don't. whether you're an american domicile company or foreign domicile company if you earn income in the united states you owe to the american corporate income tax. let's finally address the run away pant. some people say it's costing jobs. no, it's not. the headquarters stays in america the operations stay in america all that happens is you're making your charter at the filing cabinet in someplace like delaware and -- it happens

electronically. i would assume david would know. all that what happens is the charter goes from an electronic filing cabinet in delaware to an electronic filing cabinet in someplace like london. in the long run though suggesting if we have a high corporate tax rate, guess what? there will be economic reasons for jobs and investment to go to other countries. that would be true whether inversions exist or don't. that's a problem we have to address. the high corporate tax rate combined with worldwide taxation that's what creates the inversion problem which is just a small slice of the overall challenge that we face. inversions are not tax evasion. it's not cheating at all. it's dealing with the laws a its. a flawed law and companies try

to do their fiduciary responsibility. companies pay tax on the u.s. source income inversions simply deal with avoiding the extra layer of tax for u.s. based companies. morally speaking an inversion is no different from me deciding i work in washington i could live in maryland, d.c., or virginia. i choice to live in virginia because my taxes are lower. am i wrong or immoral to do that? but i simply made a sensible decision based on my household just like companies make sensible decisions for their shareholders, workers, and consumers. the obama administration doesn't seem to understand it at all. you may remember from the 2008 campaign obama was talk abouting bad companies that were registered in the cayman islands.

he said it must be the biggest building or tax scam because there are 12,000. he was wrong it was 18,000. his vice president used to be a senator from delaware. building in delaware unlike the house which is five stories tall. si how many companies are registered in this building in delaware? 221,000. i actually have a company in this building, it turns out! i didn't know it until i looked up the address on corporate documents. the key point to understand is that companies choose a place of domicile for legal registration purposes on the quality of the corporate of business and tax law. it has nothing to do with where their headquarters are. there are obviously not 221,000

businesses operating there. where a company operates fundamentally is going to be the on the basis of economic factors, market access and things like that. where they choose to domicile is a function of good business and corporate tax law. unfortunately the politicians don't seem to appreciate that. they prefer to demagogue the issue. thank you very much. we'll be happy to answer questions until we get close to 1:00 i want to mention a couple of things. moving to a territorial system is the way to go. but fundamental tax reform is where we want to get. and all the major fundamental tax reform proposals would solve this problem. that would include business transfer tax, national sales

tax, where the income tax proposed be anumber of folk including the old usa tax and more recently by the heritage foundation. so there's more than one way to solve this. but all of them moved to a territorial in many cases border adjusted tax system. when you do that, so you to do a couple of things right. one is how you treat interest. and make sure that the interest is allocated correctly. you have to figure out what the u.s. sources and foreign source income. the second thing you have to get right and chairman camp had a number ever proposals in the international discussion draft that did so. the tax treatment of intangible. trade markets, patents, copy rights that sort of thing. you're accurately measuring u.s. versus foreign source income. if you get those things wrong

instead of entirely fixing the problem we end up having a system where businesses can gain where they allocate the expenses and therefore distort what their income in terms of u.s. versus foreign sources. one last thing talking about how business are unpatriotic because they're not paying more tax than the law requires. i don't believe i've seen any of the politicians send in charitable contributions to the federal government. they also pay what is due under the law and no more. i suppose they're unpatriotic as well. >> as dan said, take some questions. yeah, in the back. [ inaudible questions ] are there ways to take advantage of lower tax by taking out loans

from their foreign partner and paying interest? is that a possibility? >> i'll take that. yeah. it absolutely -- it's fairly unusual, but in effect it would become a multinational merging. but there wouldn't be as much gain to it because the primary advantage getting from inversion is approved treatment of their foreign source income. >> could take advantage through -- >> right. the foreign partner contemplate a merger between a 100% u.s. company and foreign corporation that has no u.s. income. that foreign corporation is presently paying no u.s. tax on the income. and the u.s. corporation is paying tax on the u.s. income.

after the kind of merger you proposed, there would be the same thing. the foreign source income would not be subject to u.s. tax. and hasn't been before. and the u.s. source income would be something to tax. remember, in any of the inversions transactions the u.s. source income subject to tax. we arguing about the proper treatment of income earned outside the united states. and the united states is the only major country that asserts the right to tax income earned outside of its borders. >> foreign company would be excluded from -- because it's a business expense and excluded from u.s. taxation? >> i think you're getting at the fact our base erosion rules aren't all that great. i think that's right. i think a lot of people have acknowledged that. if you do a comprehensive corporate tax reform.

you have to fix so companies can't easily maneuver and push income that is earned the united states and abroad. i think that's right. i think it's a fair point. i think that's a question that dan alluded to that as women. i think it's something that has to be dealt with in the context of doing some kind of fundamental corporate tax reform. i think the other thing i would argue is the proposal to drop the corporate rates down to 13, 14, or 15%. all of a sudden, that -- that's no longer something that becomes very attractive. no one would have any incentive to do something like that. >> i'll add one thing. we already have an extensive and onerous set of rules that govern what you're talking about. whether companies try to gain the transactions between u.s. divisions and foreign divisions. people think that the transfer pricing rules are wrong, then the irs should move them or

legislation should be undertaken to force the modification. i tend to be a little bit skeptical as to whether or not we suffer from a problem with businesses being undertaxed in america. the point was fundamentally right. if we didn't have a high tax rate, companies would have no incentive to try to overstate their expenses here and understate their income here. if we were ireland it would be the other way around and companies would be trying to go through extraordinary efforts to declare their income here. that's where the high tax rate becomes a big issue. ly disagree with one thing i said. i don't like the proposal. 20 years from now we'll be france we do that. i don't trust giving politicians a new source of revenue. even though on paper the proposal clearly is better than the current system. it's just i worry about the long ru

run. >> hi. i was at the conference in february i heard we'll probably have a -- before that i'm going use it as a lead in to my question. i've discussion of consumption taxes and flat taxes and all of these very, i mean, i have an economic background. i get it. all the high minded but realistic tax reit's probably going to be revenue neutral for political reasons. it may get more progressive getting down a lower rate while maintaining revenue will probably require depreciation schedules and making

concessions. so given the preventions you disagree with. given the premises what kind of tax reform would you anticipate being freeze snbl. >> i think in the next two years there won't be any. i think it's telling michael who identifies himself as a democrat put out something that former republican assistant secretary for tax policy, a couple of former heads, republican heads of the council of economic advisers have spoken highly of that. it could be that i have no idea who is going to win. i could see a republican president pulling a nixon goes to china and being the one it does something like the proposal. i think the fact there are so many people who think who spend

their day and nights thinking about tax policy who like this thing suggest to me there might be some possibility to do something like this. i think dan is right fund. ment tal tax reform will be difficult. dan's former boz informed me he thinks 1986 was a unique situation that allowed for some kind of fundamental tax reform. from now on we'll have to do something incremental. i don't -- moving to something like what has been suggested is not a possibility at all. let me say something about the broader issue of taxing, quote, consumption versus the moderate tile income tax. would it occur to you get your apples by chopping down the trees? that's what double taxing capital is about. in the long run with that

example, we realize, wait that would be an insanely stupid way to harvest apples. you wouldn't have the capital, ie, the tree to produce apples in the future. and yet that's what the perverse double taxation and the american tax code discuss. when public finance economist moving to a consumption base tax. it doesn't mean a cash register tax. it's not a good way to harvest the apple. >> i'm sure you know the quote by bob lucas. he was asked what would you do in term of public policy? he would get rid of tax on capital income. he said it's the only free lunch he sees out there in the world these days.

>> sure. over there. >> i was listening for it when you were giving your presentation. i don't know if i missed it or you didn't miss it. there's no mention of actual tax rate. the tax rate that corporations paid vis-a-vis other countries more importantly that's around the latest who say we're around 12 to 15% and how much we bring in per gdp compared to other world. which is how much we bring in. that was about 2.6 or much lower than the other countries we compete with. when you say highest on paper, the actual meat of the argument is where the numbers matter. how much we're bringing in and how much we tax corporation. the legislation you mentioned 15% would be a little bit more.

mr. coburn, i think mr. sanders put out and said it was 12.6% was our average in the corporate tax rate. i understand the logistics of saying it's a negative and nonstimulus and it causes companies to take advantage. i don't see how that compares to the realistic nature of what they're bringing in and what the money is. and i want to hear i guess you would say another version of the motivation you're saying that companies take advantage of an emergent because it can. it's good for shareholders and thus consumers. but i guess to present the other side of the argument in a same fashion would be there's a pharmaceutical companies caping me. they were going to take advantage until a press release that came out. the idea there was they were going do tax purposes abroad but there are many benefits they received by being here. obviously their company stays here you're saying it's just a complete paper thing. where they go abrosz in terms of

taxes. they double the manufacturing and stuff like that. the argue was the research and transportation infrastructure. you know the argument that goes into helping the companies that the american taxpayers. we expect a little bit back in profits. can you address those factors? which is more of a con comprehensive rather than 35% on paper and. >> the first thing is that these companies don't avoid u.s. taxes. all that happens in an inversion is overseas taxes. taxes on the income earned overseas instead of being deferred simply aren't taxed. so to suggest they're avoiding u.s. taxes is a canard. that's not how the world works. the second thing about the corporate income tax and the effective rate 12.5% is not what people customerly think of it. there's some kind of debate about what is the average tax rate that a u.s. corporation pays and it depends greatly on

industry for retailers it's in the 30s. for energy manufacturers it's in the late high 20s higher 30s. the effective question is for every additional dollar profit that a company makes, what proportion of that do they have to pay in taxes? and it's true that the companies a lot of companies are able to get all kinds of tax breaks take -- depreciation. the point that remains every dollar a profit company makes they to hand over 40 cents to the federal government. that's harmful. so the effect it's sort of like my effective tax rate as an

individual might be x but my marginal tax rate is going to be whatever tax bracket i'm in. the other thing to understand about looking how much companies are paying in tax there are a lot of effects there. one of the reasons why ireland clents more taxes is because their tax rate is so low. i think kevin has said the american surprise research did research saying the tax rate was 25%. you ask five economists who get nine opinions. everyone seems to pretty much agree that we're losing revenue in the long run by having the corporate tax rate at the current level. and i think that's a strong example. >> any other questions? >> another way of putting that in formal economic terms is the

lost output. the highest from the corporate tax. it's the most destructive tax in our system. we need to reduce it. and the general hear from tax notes articulated a lot of potential con train how we move forward in tax reform and revenue neutrality on a stat tick basis on the corporate side is an e grooelg egregious mistake. we don't want to ignore the economic effect of improving our corporate tax system. it we improve the corporate track we'll get a strong growth effect. and that will benefit all americans. both in terms of creating jobs but also creating higher productivity and higher incomes for years to come. >> i'm curious about the distributional issues. it would result in people making

less paying a higher percentage of their income than people who are making more. so i'm wondering for that is something you think needs to be addressed and if so how. >> i'll answer it briefly since i think dan wants me to get away from it a little bit. it increases the minimal level for when you pay an income tax to $100,000. so 85% of all u.s. households wouldn't pay any income tax at all. he introduces a rebate for lower income americans to kind of like an accelerated amped up income tax credit to soften the blow. >> other questions? >> sure. question earlier about the international comparisons as a gdp. i understand part of the reason the comparison may not be entirely accurate is a large percentage of our business

income is taxed as individual income. and therefore compared to corporate income tax could be misleading. how accurate is that? >> you're right. a lot of american businesses sole pro pry or its, partnerships they pay tax on a 1040 tax rather than schedule c. david would have more knowledge on the specifics here. let's look at things such as international comparisons on dividend taxation. if you look at what all the guys do when they do the international comparison, i think on capital gains we're the second highest dividend we're the fourth highest in the world. these international comparisons the u.s. doesn't look very good. and ultimately of course individuals are the ones who invest they make the decisions

on foreign corporations how much to put in the corporations, how many to create. and the tax treatment is harvesting apples by chopping down the tree. >> in the united states and in canada, they are roughly half, i think, of business income. that would be llc, partnerships, s corporations as well as sole pro pry or p -- the bottom line is the businesses are almost not exclusively but almost domestically. they wouldn't show up in the aggregate corporate tax revenues. you're point. the larger public traded partnerships are treated as c corporations.

>> time for one or two more question questions. >> i want to follow up with mr. -- doctor, i'm not sure what it is. >> mister. >> my dad is a doctor. so that works out. i want to ask following up on what you said on macroeconomic. do you think that tax reform wasn't constrained by a -- >> as the basis for neutrality. do you think that would be more revenue. swarm to the fences so to speak. you see what i'm saying? >> yeah. absolutely. if you look at the formal academic literature on excess burden or deadweight loss, almost universally reaches the conclusion that where you want to get is a consumption tax base. there's a lot of ways to get there. the literature in terms of the

potential gains from that vary. but if you were to go to consumption tax base with forgiveness for poor people, the potential gdp gains would be over a 10-year window would be in the 10 to 20% range. they're very large. that would mean we could restore dynamism to the american economy. you need to step back, i think, and say we've had many years of policies that basically did not improve the tax base. in fact made it worse and raised marginal tax rates and it's not mono casual. there's many reasons. the economy certainly isn't growing well. i think we would agree on that. and the tax system is one of the reasons. it's also one of the most effective ways to cause economic

growth and to lead to a renewal in our economy and broad prosperity. this shouldn't be controversial really. i mean, it's basic fundamental price. it's something that all economists disagree about. you can disagree how much growth you'll get and you can also disagree about what you might think of as trade-off if you have a particular view of what is fair or equitable. the trade-off between equity and growth. there's really very little disagreement in the economics community that hasn't been politicized about what is the right kind of tax system. sometimes it's taking capital income out of base. sometimes it's talked about as consumption taxes. sometimes it's talked about as

income defined. there's very little difference of opinion about what the tax base should be and how positive the impact would be. >> one thing to that. it ties into the question we had about the treatment of lower income people under a national sales tax. what matters is the reason growth matters is because growth is the only way people enjoy higher living standards over time. i don't really care about the gap between the rich and the poor. i care about whether the poor have a chance to have upward mobility. some people will look at the income distribution. if i'm a poor person i would rather be a poor american a rich company. i would rather be a poor person in hong kong than in france where the government is supposed to be doing the lot of stuff for

me but i'm trapped. if you look at the income distribution and tax policy. people make the mistake in thinking that the economy is a fixed pie. we want the pie to grow faster. and not because we're concerned about bill gates getting richer but everyone else in the economy getting richer. >> i had a study that came out last year. i looked at the oecd countries and what they've done in the corporate rates. and from 2002 to 2013, there were 113 different corporate tax rate cuts. at least 1 percentage point or more. it happened in the oecd. of that number, only 8 were paid for by some kind of tax increase somewhere else. if you look at what happens whenever oecd countries. normally what you see is a year

or two. there's been anningment about what is going on there and how it applies to the united states. part behalf is going on in europe is they have a closely integrated economies and so capital is very mobile between one country and another. and there's a lot more dine nammism than in the united states. i think this issing something dan pointed out earlier on. the world has changed a lot in the last 20 years. capital has become more mobile. you would expect in the united states that revamped the corporate tax code and made it more competitive and friendly to capital and investment. you should expect more investment to come. not just to 0 coccur in the u.s >> you reminded me of something. it ties into the question from

over here in terms of taxes as a share of gdp. adjusted gain or companies are moving it from one place to another. the chart i showed earlier corporate tax rates have come down dramatically around the world since 1980. now they average about 24%. taxes have not gone down. so corporate income tax as a share of gdp have remained stable. but corporate tax rates have come down. obviously it's not just a gain of companies shifting money from one country to the another. the same thing is true for individual tax rates. in order you're looking at the curve. we were above the revenue maximizing tax rate. now we're closer to the revenue maximizing tax rate.

i would like to continue to go farther down the curve. the right now the u.s. corporate tax rate is above the revenue maximizing tax rate. we should fix that. you fix that and maybe you don't need to worry about the worldwide tax issue because companies might start wanting to declare income here rather than in ireland or switzerland. >> we are just about out of time. one last question. i'll invite each member of our panel to see if they would like to give a closing statement. >> i want to say when dan made the comment he doesn't think living in virginia makes him -- i would argue i agree. we think you're immoral for many reasons other than that. i mean, the eversions debate, if you will, shows we have a broken

tax system. undoubtedly we're not going fix it in the next two years. we're going to put band aids on it. i would hope the band aid or whatever we chose over the next two years to do on the tax front won't be destructed. the one point is that significant tax reform, fundamental tax reform has the ability to make life changing differences to the average american. we need to fix our tax system. it's complex. it's economically destructive. it makes our businesses uncompetitive internationally. you've heard smaller firms disproportionately to larger firms. it makes entrepreneur more difficult. our tax system is among the worst on the planet. and we need to address it and n a conductive positive way. and we need to do the work over the next two years to make it so

that it was a new congress and white house where perhaps more interested in doing what is good for the country than partisan gamemanship. we can move forward and do what is right for the country. i was going to flatter ike because i played basketball with him. i wish he was half as good. since he tookeol

saying investors keep away. our tax system penalizes what we should be trying to encourage and welcome assuming we want more growth and prosperity for the american people, thank you. >> on that happy note. thank you for coming. please join me in thanking our speaker. [ applause ] tomorrow former presidents bill clinton and george w. bush launch the presidential leadership scholars program. they're in partnership between the presidential centers of bush, clinton, george h.w. bush and lyndon johnson.

sunday we'll hear from bill clinton as he and hillary clinton attend the 37th and final steak fry ed by senator harkin. senator harkin sat down to discuss with us the steak fry and how the tradition got started. >> well, i put in a request to hillary. i spoke with her personally sometime ago, but she was getting ready to do her book tour. he was finishing her book and going to go on her book tour and she said i just don't know what that's going to be like and how that's going to transpire she said, but i would like to do it. can you just give me some time to figure out what my schedule is going to be like and i said sure. then i saw bill in california i was at the health care event in california and i saw bill

clinton there. then we started commiserating about this and this. he was signing some of his books for some people in a room. there were just the two of us. so i told him i invited hillary to speak at my steak fry. and he said you should come too. he said you want both of us? i said that would be great. you're good friends of ruth and mine. just couple to couple. that would be great. think about it. he said i will. and they did and it's a great honor. they've been good friends of ours for all these years. bill and hillary clinton provided great leadership for our country in the past in their respective ways. i served on the committee in the senate under ted kennedy with hillary clinton all the time she was in the senate. we had great working relationships in the senate.

i think she did an outstanding job as our secretary of state. as i traveled around the world the last few years, it's amazing how the stature that hillary clinton has globally among women and girls all over the globe. she saz kind of lit a fire among women and girls in different countries around the world and holder in highest stea esteem. we're excited to announce it's launch week for the 11th annual student cam documentary contest. $100,000 in cash prizes will be awarded this year to middle and high school contest winners. this year's theme is the broesd

ever. it's the three branchs and you. we would like do you tell a story that demonstrates how a policy, a law, or an action by either the executive, legislative, or judicial branchs of the federal government has affected you in your life or your community. the competition is open to students in grades 6 through 12 and students may work alone or in groups of up to three. contestants are asked to produce a 5 to 7 minute video documentary supporting that are chosen topic and include some c-span programming. that $100,000 in cash prices will go to 150 students and to 53 teachers. and the graxx" prize winner wit $5,000. the deadline for entries this year is january 20th, 2015 and winners announced in march. visit www.studentcam.org for moreñi information on the conte "the three branchs and you."

matthew olson said the u.s.' ability is crucial. held at the american political science association this is about an hour 45 minutes. >> welcome. i'm, quote, nsa surveillance and its consequences. the theme fits nicely into the larger theme of the convention entitled "after the digital revolution." the controversy surrounding the nsa deeply implicate by government and nongovernmental actors. violent jihadists build

technology to build their movement in state use it to trace these threats. as legal and national security scholar has said, terrorist movements often reflect resources, tools, and aspect of the society they attack. they use digital technology to attack us. to build their movements. and we use it to track them. in a sense, we feed the very forces that we're fighting. so digital technology is provided great benefits. it also enhance threats. many say the paradox applies to the nsa. it, too, uses digital technology to protect us from terrorism, but there's also potential for abuse. it reminded me of james madison

federalist 51 said we need government to protect us but at the same time we need what he called precautionary precautions to protect us from the government. if indeed there are angels, they don't dwell on this particular earth. we're fortunate enough today to have a distinguished panel to discuss the nsa and set the stage for what i hope will be an interesting q & a. i'm donald downs, university of wyomi wisconsin and i'm the moderator of the discussion. given the situation in the world today whab is going on in iraq and syria and elsewhere the discussion is all the more relevant. that said to get a grasp on the nsa and what it does is difficult. for one thing, the government is modified the programs repeatedly in recent years due to judicial, political, and public pressure.

add together fog is a classified nature of the nsa's work and the complexity within the fisa courts, complementy of the fisa courts and the executive branch. we have to know what's going on, but also see the forest. and i hope that the panel today will get the right balance. if the legislative session is watching this plenary session, welcome. we'll give you a sampling of the questions we'll be dealing with. how legal are the nsa's programs? how effective are they? indeed, what are they? how serious are the dangers and threats that nsa programs address, and how do we define these dangers for legal and policy purposes? is there a way to obtain

sufficient data without sweeping it into metadata? just how different is foreign intelligence gathering from domestic law enforcement? how much overview is provided by the systems of checks and balances in our constitutional system? such as judicial review, checking, public opinion, the press, inspector generals, the executive branch oversight, and have such checks been sufficient? the nsa has often done its job in secrecy, especially in the past. what's the proper balance between secrecy and openness in

a constitutional democracy? what is the role of legitimacy in whistle-blowers? is spending a few years with putin punishment enough? how has the simple growth of new technology been responsible for the nature of nsa programs? how does the press deal with the publication of stories involving national security? how do public opinion and the press shape policy and the government response? and finally, what the classic tradeoff between liberty and

security? there really is no necessary conflict unless we become unbalance on one side or the other. before i introduce the panel, i want to say something very briefly about the programs to sort of set the stage and the panelists will say a lot more about them. the nsa was established in 1952. the core mission, as i have said, is to gather foreign intelligence through surveillance and this mission is distinct from the normal operations of domestic law enforcement. indeed when the foreign intelligence surveillance act was passed in 1978, it's main objective was to give the government the power to do what's necessary when it comes to foreign surveillance, at the

same time, preventing that power from leaking over into the domestic sphere. american citizens are distinct from foreign intelligence dangers. of course, what happens when there's a third category? when american citizens are involved in foreign intelligence? that's sort of that third area where a lot of controversy arises. now since 9/11, for the most part -- this is sort of my reduction of the program. two of them are content based, surveillance and telephone

surveillance. if it's purely foreign intelligence, it lies beyond the purview of the fourth amendment. if it pertains to american citizens, there are legal standards in such investigation that should be covered by the law. the second set of programs involve metadata collection. the program has been dropped or seriously modified, but the telephone program remains. this is largely covered by section 215 of the patriot act, the business records provision. metadata has been stored by private and public service providers. time and length of the calls, the id of cell phones and cell phone information, websites visited, and the like.

this data does not itself pertain to the actual content of those communications and at one time the supreme court held such information is not held by the fourth amendment because it's been given out the public. but those conversations occurred as it is now. in order to get into the content of this, a fisa court authorization is required. there's a big debate, our first speaker will address this, as to whether or not prior authorization is required to authorization is required tometf independent to the content. meanwhile, the extent of the

metadata programs was not really known until edward snowden in early 2013. after the fisa amendment act of 2008, all four programs were given legal cover, but we know now the fisa court and the nsa have been involved in a lot of back and forth in recent years over compliance. some say this tension shows the fisa courts are doing their job. others say it shows they haven't been sufficient guardians of our civil liberties. in the wake of snowden's disclosures, the government in recent months has discussed three different reform proposals. i don't want get into those now for reasons of time. it'll be interesting or not to see if they go forth given recent events in the middle east. remember back in 2009, we had

the christmas underwear bomber. there seems to be a pendulum effect given the immediacy of terror threats and reform. i will present them in the order that they will present their initial comments. first the laura donohue. she's written extensively on the nsa and recent matters. she's advised leading privacy groups and assisted in legal litigation. professor donohue will talk about the legal implications of mainly the bulk metadata

program, but also section 202. second speaker will be matthew olsen. mr. olsen is now the director of the national counterterrorism center in washington. before that, he served as general counsel for the national security agency where he held the position of chief legal counsel. he also served the department of justice as an associate deputy attorney general. mr. olsen has also had the honor of serving both the obama administration and the bush two administration. he will talk about the nature of terrorism, the threat it present, and what the nsa is doing to collect intelligence to support our counterterrorism efforts. he'll also focus on the surveillance and the role of the nsa programs, the role they play in the ability to identify and

disrupt terrorist threats. third speaker will be martin baron. executive director of the "washington post." for that time, he was the executive editor of the "boston globe, " the "miami herald," and the "new york times." he'll talk about the press and how the press deals are reporting sensitive national stories and how it reacts and negotiates with the government regarding such stories. perhaps martin and matt wihave engaged in some interaction in the past. peter feaver is a professor of political nc