i want to focus my remarks on how the new congress can control government spending and reduce waste. so i'm so pleased to follow representative price with those remarks. the first thing that the house and senate have an opportunity to do now is agree on a budget resolution. that budget resolution needs to address growing spending and debt at its root. the current half a trillion dollar deficit of this year has been hailed as a great improvement but to the extent that it is an improvement, it is a very fleeting one, indeed, because before the end of the decade, the deficit is projected to exceed trillion dollar levels again. so in order to rein in this growing deficit, it's important to know what's driving it and control it. what's driving this spending and the debt?

85% of the projected growth in spending over the next decade is driven by health care and retirement entitlements and interest on the debt. so that's where reforms need to target. to balance the budget before the end of the decade, we saw in the last house budget, it takes more than $5 trillion in cuts. that is assuming you start cutting right away. if you decide to cut in future years and not address spending next year, it takes bigger cuts to get to that ballpoint. so the sooner lawmakers can start cutting, the better. where exactly should they start? repealing obama care has to be their first priority simply because 44% of the growth in sbiltsment spending is driven by the health care law. so if we are to rein in growing spending and debt obama care is where we need to start.

this needs to be combined with reforms to medicare medicaid, and social security. during this process, lawmakers should be guided by focusing benefits on those individuals with the greatest need and delivering those benefits in a more efficient manner as we'll hear from my colleague justiceon thickner, improper payments are a big issue and health care are where some of the highest payments rate are in the federal government. beyond that too much waste duplication and overlap in the federal budget. sequestration has helped to cut some of that but sequestration is very small and a very blunt instrument. we need other reforms that get at reducing overlap and application and rooting out waste, fraud and abuse. one recommendation is to adopt a

waste commission that operates similar to brac. what that would do, guided by criteria, go through budget by agency, by program and identify those areas also guided by work from the government accountability office, identify those areas where we can reduce waste, cut duplication and make government work better and more efficiently for taxpayers. so that's another reform i think would help to root out big spending. while we're talking about sequestration, it was intended to be a mechanism that forces lawmakers to agree to important budget reforms florida actually address spending and budget crisis. unfortunately that mechanism failed but sequestration will return next year so we have another opportunity to have this debate. to honor original intent of the

budget control act and what the sequestration was intended to do, we need to focus on what's our core national priority, national defense. national defense underfunded in base bunl and lawmakers have been evading budget accounts using war account to fund things that should be part of the base budget. so recognizing that, recognizing we need to fully fund defense needs and cut spending in the areas where it's growing fastest and cutting those things where the government shouldn't be engaged in in the first place, namely priorities that are purely private or should be done on a state and local level, those are the kinds of guidelines that should guide the budget committee and that should guide lawmakers this year and the following year. >> thank you rom inna. jason. >> thank you. i want to start by saying i was heartened by the chairman's talk.

for a lot of us, i always joke on my 22nd year of my five-year in d.c. i thought i would go to colorado. i've been here longer studying politics and policy. oftentimes we hear members say one thing to another, sometimes they misspeak, don't understand the issue. congressman price wentz through a laundry list of thungs he wants to change that's been on our list a long time. it's very heartening to see him understand the issue and lay them out and be honest about them and the challenges in front of us. there was a question a gentleman over here asked about you don't get statutory changes -- you can't get budget changes for management changes. this is very important. we have to look at these, bring to your attention. one is improper payments. one is fraud. fraud, waste, abuse. something that happens when we give the wrong check to the wrong perp, wrong amount. doctors upd billing, not eligible for a program but still

get benefits. to give you an idea, take medicare, fee for service, last year we had $36 billion in improper payments to medicare. that's 10% of the program's cost. take something that seems to be very popular amongst democrats and republicans, earned income tax credit, 25% improper payment rate. that's $14 billion 24 25% of the program cost. these are things we look at again, try to cut down on improper payments. better management of the program of not just fraud but waste and abuse can save us money. whether it goes into the baseline or not it should be things we look at to encourage agencies to do better. on a similar note, congressman price talked about how the budget act imprisons some of the actions going on not just in the administration but congress. one of these you heard about in this town is year end spending, now what's called use it or lose it phenomenon. if the agency doesn't spend their money, they lose it it

all goes back to the treasury. we see this kick in september for agencies to spend more and more money on things they may not need just so they can go to congress and say, guess, what we spent a lot of money, give us more next year. i did some research there's more information online, we pulled down contract data, what agencies are doing by their contract. if you think about a 12-month cycle, year cycle, if you can smooth out contract spending, spend 8% per month. you may want to do more or less because you don't know where the money coming in. department of state had 38% of spending on contracts in the last month of the physical cam year. seems kind of high, doesn't it? you had hhs health care, 29% in september of the last fiscal year. some agencies do fine. treasury does 9.9. doe 6%. some can smooth out. we're seeing a lot of wasteful

spending happening at the end of the year. a look at how agencies are spending year end money and try to get centers to curtail that to control cost. this goes into the idea of the baseline, the idea of how you balance the budget by cutting. in 2011, when senator connie mack was around, we did a look at what he wanted to call one penny plan, which i called 1% solution. could you cut spending by 1% per year? if you could could you balance the budget. you could back in 2011. we started doing research. you didn't have to cut spending, you just had to control the growth of spending to balance a budget in a ten-year window. back in 2011, the government could grow at 2% a year and get 8% of revenues gdp and balance in the ten-year window. this is a very funny town because of the baselines. congressman price alluded to how we talk about base lines. they assume a certain amount of spending every year. assume for a minute that a

program is assumed to get 3% more next year. congress decides only 1% spending. democrats say you just cut spending. well, you didn't cut spending. you didn't at all. you're still spending more next year than this year but slowing the growth. we should look at, one, where should we control the growth of spending, where reduce it. second, make realistic cuts spending x this year. we want less than x next year and prioritize. we don't have a chance to do that. weird according base lines now, how they are interpreted by media and opposition to those who don't want to see government spending curtailed. that's very sort of problematic. also point to milestones, in other words, focus our attention to have a discussion. there as debt ceiling debate. there's going to be sequestration which will expire or controls that sequestration will come back in because controls for murray ryan plan will cease to exist and expire.disability

insurance trust fund going invol vent in '16. budget crisis in general. we have to focus on what does it mean to have priorities, what should they be, focus on what are our cuts what are slowing of growth, what are useful spending. we're not necessarily saying all spending is bad. yet we have three major entitlements growing rapidly. when congressman price tries to talk about saving the programs secure them and make sure they are around even with savings savings don't have to be cuts from zero, cuts from last year really need to slow the growth of spending. if we can slow the growth of the programs we'll go a long way balancing fiscal and balancing u.s. government. >> thank you. okay. let's open it up for questions. you guys have got to have something. right here. >> thank you for your

presentation, and i agree. i think when we start talking about what actually has to be done in social security reform medicare medicaid there is some concern about these programs growing into welfare programs, increased retirement age. i agree we can find place toss cut budget, look for the waste in the city. i, like you have been here longer than i thought as well. so we're looking forward to those opportunities. but to ignore the obvious that these three programs are driving this city's growth i would like to just hear a little more detail about are retirement -- personal retirement accounts on the table? will there be discussion and energy toward getting that in social security. number two. on medicaid questions sounds nice, say we'll block to the

states, will they get this done. is there any discussion on changing the program from this city to include vouchers to buy insurance similar to what the federal employees already have. how much new energy to new ideas? >> that's a great question. we aren't members of congress so i can't tell you what they are thinking. we speak to members of the staff, but on the social security side we also need to carefully talk about increasing the retirement age. when we say increasing retirement age the left says that's a benefit cut. social security when it first started, retirement age to get full benefit was 65. the average age people live to was 65 or 66. so you had benefits if you live that long. the average age you live on benefits, 78 going into 80s. so in some ways we've had artificial benefit increase by not tying retirement age to

longevity. we need to go back to a neutral idea of what social security meant. now we're looking at trying to fund 30 years of retirement on 40 years of work. the program is not sustainable about that. when we look at retirement, neutral position, people incentivized to work, not going on early retirement for benefit. what does it mean to work? a lot of people are working in their 70s, they want to. some can't. some work in hard labor jobs, they retire at 62 or 63. we need to look at how we increase retirement age to incentivize those who want to work longer but not those that can't work past 62 63, 65. still protects those with incentives. personal accounts, i don't know whether they are back on the table or not. i can tell you social security disincentivizes people saving. we need to go back to social

security part of retirement, part social security, part with employer provided pensions, third personal savings. right now we're underfunding personal savings because social security crowds that out. on medicaid, right now, again, we're congress, we focus on incentive, government programs, perverse incentives. are you giving wrong incentives to spend money. medicaid, it's an old joke, if you've seen one medicaid program, you've seen one medicaid program. 50 states, all different. state-run programs with federal matching dollars. the way the federal government gives money to incentivize states do all sorts of weird games to incentivize money. part need to remove incentives. we need to look at blocks and vouchers, more individual consumers with a steak where health care dollars go. that's not the system with medicaid. >> i just want to add that when it comes to discussing private

retirement savings i think it's so important people control more of their retirement positions and that comes with more control of their retirement dollars. social security's original purpose was to protect against destitution in old age. leaves seniors too low in addition to social security benefit relying on other welfare programs. one proposal i think is not receiving enough attention is to look at snugt a flat benefit that targets somewhere around federal poverty level so those individuals who worked 35 years do live at a level where it's sustainable, but that also means targeting benefits on those who need them the most. there are many millionaires who receive social security today. the question is, does that make sense. do they really need that

benefit? is it affordable to keep giving social security benefits to millionaires. so i think means testing is a provision that deserves more attention. but still keeping in mind that social security is only one part of the retirement safety net. it's not supposed to fund a comfortable, generous retirement. that is what private retirement savings are for. there's certainly ways and interest also on capitol hill to eliminate some of the regulatory barriers that are keeping especially small employers from offering retirement plans to workers. if you're looking at who has access to retirement plan to do and who doesn't those who don't tend to work for smaller employers and they are the ones who need those plans the most because they are less likely to go out and open an i.r.a. on their own. proposals like auto enrollment, i.r.a.s can do to help workers save for their retirement and be

in control of retirement positions. >> one thing to add up a good point, technical term for social security for retirement is actually old age survivors insurance trust fund. you're basically trying to in sure against old age and widows, widowers. it was never meant to be long-term retirement program that it's turned into. >> i know 40 years ago i worked for the government in a very minor way. they were doing that type of thing. at the end of the year they were given so much in their budget a year. they would come up with programs, take trips, go spend the money some way and say they had to have that amount and ask for more. i assume that hasn't changed in 40 years. i don't know if it's every been addressed. the other side, all these programs do need to be cut. we need to save on everything. what of the idea i can't remember if it was the penny plan or whatever, you just cut

back 5% every year. every organization would make its cuts. what would happen with that? >> it doesn't get enough attention for excessive or unusual year end spending happens. again, incentive isn't there. incentive is to spend it as you well know. there have been small pilot projects, department of justice had one for i.t. said if you don't spend all your money you can roll over for the next year so they don't waste it on computer systems. senator colburn before he left was interested in these plans. where can we find examples good for a pilot plan, give authority to hold onto some of that money some goes back to treasury, some stays in the agencies they can use it but also have gao or have somebody monitor and report on it. get some of the best practices and see what worked and what didn't for various agencies and try to expand. with the penny plan 1% solution, one of the problem in

general was across the board cut. as we all know budgeting means tough priorities telling one agency 1% is not a tough decision, it's not budgeting. it's taking a blunt instrument. what we should do is say cut 1% a year. we're paying you as professional management and executives reconciliation sets directives, targets. you get this amount of revenue, this amount of spending, these types allocations for committees. say you have to cut 1%. that's the target. you figure out where it goes. that way you can set priorities. until we do that looks like a blunt instrument, we've got to set the target and those who have the understanding of the programs and administration figure out where it has to go. if you look back through defense spending there are various times where departments secretaries of defense who have raised budget for d.o.d. were unliked because they had a pet project. cutting it, telling you can

decide where it's cut from was more successful and more liked we need to focus that way when it comes to the budget. >> if i might add one thing, if you look at where the budget is cut, where they have had flexibility, they have cut conference spending,ér/uju to nice locations to go to conferences. on the other hand it's also affected defense tremendously. i think in order to have lasting cuts we need to start looking at reducing the size and scope of government and that means eliminating programs. programs we know that don't work, outside the proper scope of the misdemeanor government. that's where it gets tough. that's where you really have that special interest pressure, people whose paychecks get paid by programs people who benefit from there. they don't care if they are in efficient use of federal taxpayer dollars but something they benefit from directly. for lasting spending cuts reducing size and scope of government is critical. i think brac commission can help

do that. i don't think it's a silver bullet but certainly a good place to get started. >> yes, sir. right here. >> why don't we use outside these internal reviews the inspector general of every department. that's internal. we don't want internal. we want external examination. there are plenty major consulting firms, think tanks. we can get independent people who really know what they are doing and who know math, they can report on what's going on here. they don't have -- i'm u.n. to political pressure. we've got to get reality, and we are not going to get it from internal. they all have some pressure and they all respond to that.

let's get around it and get the people who will tell us the truth. >> so the brac commission is intended to be a bipartisan and objective, independent of government. i do think gao and inspector generals are doing today good job identifying areas for improvement, ideaing areas for managerial improvements. the problem is those improvements rarely get made. to the extent that congressional action is necessary to make some of these changes there's so much else to do. very little glory eliminating a program especially if people face layoffs. there's less glory in that. so to some extent it's not that we don't know where to cut, we don't know which programs work and which ones don't, we do have some good government reports that help guide those decisions. but it's from recognizing the problem, the next step is

missing. where is the action to actually get rid of some of these programs. >> i think that's exactly right. it comes in the action. when you were talking, what popped in my mind ronald reagan's famous quote, wasn't about government spending but politics and foreign relations, which is trust but verify. that seems to work for a lot of issues we deal with in our life. when it comes to government spending you can have internal igs, do a good job, most part do a good job and independent. there should be verification or spot-checking where gao or outside consulting group is asked by congress to spot-check pick a few random, study them and report back to congress whether or not these studies were done properly and fairly. we know where a lot of waste and abuse is coming from. the problem is the action trying to solve them. that's one thing where i think 1% solution is worth. you're saying it's a lot. you have to figure how to do it. you have the benchmark. well, i can't do it here, can't

do it here. i don't care where you do it find the 1%. that's what we're paying for you, sort of a brac commission that could work. when you set a framework, someone has to figure out how to do it. >> i also think congressional oversight is so hard to do these days because the federal government has grown so big. there are over 2,000200 federal domestic assistance programs. it's very difficult to do proper oversight when government is just too big to do it. >> there's also and this goes back to congressman price talking about the '74 budget act. right now we budget every year. congress budgets and supposed to do oversight. with budget every year, where is the time for oversight. we might want to look at a two-year budget process. where budget done after the election and oversight in the election year, to look at reports, deliberate and talk about where spending was going. >> if only they used it for

that. >> right here. >> thanks for your remarks. one of the remarks congressman price made was he said the budget is not just a budge but a vision. i guess if i can take up that mantle, my question is about how much you think the cause could be hurt by focusing too much on the numbers and we just need to balance the budget rather than what most people would believe is the core problem reduce spending because government spends inefficiently and these resources would be better spent in the private sector. do either of you think we sometimes miss forest by trees by focusing solely on budgetary matters and not on spending at its core? >> i'll take the first crack. i think you've got to do both. too often a singular track says let's focus on the budget. that's the primary focus. you're missing the forest for the trees. what are you doing for raise money on spend it on cut, balance, slow growth.

talking about just the programs itself. the overall picture, deficits and debt do matter. congressman price mentioned we're $18 trillion in debt. he didn't mention that's over 100% of our gross domestic product. if everyone here worked an entire year and didn't spend any of it and paid it all in taxes, we could just barely but not quite pay off our debt. that's a whole year of work. it only gets worse. no one is talking about paying down the debt, we're talking at most balancing the budget, no more additional debt. at some point we've got to pay it off. if you haven't mentioned, the uk is paying off debt from 200 years ago. seriously they are trying to figure out whether to pay the debt from 1812 still rolling it over. what drivers of the fiscal position, the drivers and debt being interest. how we actually reform those programs. again, the idea is not just reduce the size of government but spend what we do spend

wisely. if you go out and talk to american people about wanting to cut government they want to cut government but they want the dollars we do spend to spend wisely. we're not doing that either. need a holistic conversation when we talk about the budget and the budget process. >> the budget is often the starting point. that's where the policies originate, tend to be in the budget committee. a lot of the rhetoric is around that. there are numbers associated with it. but i think when it comes to vision fundamentally we have a vision where individuals have more control over their own lives and less dependent on government. in health care that means control their own health care dollars and introducing more genuine market competition to control cost rather than government deciding what treatment and which gets covered and which don't. those are things that should be between doctors and patients and insurance companies. on retirement, too, these are the biggest programs driving growth and spending.

when we do reforms, we don't only make fiscal position better and help to control the debt and reduce the debt over time but we're giving people more control over their own lives, greater ability to spend their own health care and their own retirement dollars and make the decision as to when to retire and how long to work instead of being merged and oftentimes pushed strongly by government to make a certain decision because of the way the rules of the game are written. give individuals more control. they will be better off. we'll have more market competition and it will make us better fiscally and hopefully stave off tacks in the future and reduce growth and make everyone worse off. >> keep in mind, the budget when it comes to priorities it literally is an institution or persons statement what they think is the priority. it's where campaign rhetoric

meets reality. this is on paper. this is what we said we're going to do committed to doing this is how we'll find it. this is it. this is the blueprint. you've got to lay out your vision in the budget. that's where you're specifying these are our priorities. no more campaign rhetoric, this is reality. let's go for it. >> i appreciate the question because it's exactly what we're trying to do over two days. our theme here of opportunity all favoritism to none fits very well into this. there's an inverse relationship between how big the federal government gets and people's personal freedom. we are making the argument here as an organization that big government breeds favoritism and cronyism. when there's all this money at the trough, that's when you get that deal making that happens. we want to pair that back for people's individual freedom, for their opportunity of so putting that in that context putting these reforms in that context i think is important because yeah, i think the subtext of your question is we can be a

little like too focused on fred sheets and too into our numbers. i think that's right. you've got to know the numbers, get it right. got to balance, do all those things. got to tell people why. i think that's important. i think we have time for one more question. >> your interest in the idea of a waste commission, something like that. would you comment on the political prospects for something like that happening? are there model bills out there potential sponsors? who do you think -- is there bipartisan sponsorship for something like that? what more can you tell us? >> i think there is interest but momentum is slowly building. there's one bill in the house now by representative doc collins that would go through the process two appropriations bills at a time. there were bills in the past. i know there's more interest. representative kevin mccarthy

mention to "politico" he wanted to present to new congress. i'm hopeful if not optimistic if not this year next year there will be more movement on that. >> jeff sessions was pushing this idea. we're working now with the new team over there in budget to see if the senator will take it up, too. it's out there. it's percolating. >> okay. thank you to the panelists. we appreciate everyone being here again. let's take about a 25-minute break. we have senator cruz coming up. congressman, jim jordan many others. we have a full afternoon. feel free to take 25 minutes or so. if you need to run out of the building, there's plenty of sandwich shops around here to get something to eat. otherwise make yourself at home on this floor and we'll start back up in 25 minutes.

heritage is beginning their two-day conservative policy summit. speaker later this afternoon will include keynote address by texas senator ted cruz. we'll have all that coverage live for you. as you may have heard the organizers saying they are going to break here for 25 minutes, so that puts it about 2:00 eastern. whenever they begin we'll bring it live. we'll bring senate rules committee, keystone xl pipeline. we'll have that markup session for you on c-span3 as 8ñen÷well. in the meantime we're going to show you comments this morning from the head of heritage action former senator jim demint. >> thank you, mike. thank all of you for being here. happy new year to everyone. it's great to have so many joins us.

heritage is honored to have so many joining us leaders on the hill, thousands joining us online and our friends in the media for our sect annual conservative policy summit hosted by heritage action. last year's summit had 73 members of the media joining us including fox, c-span, cnn abc. over 19,000 people watched our live stream on our website and we expect even more this year. i'll be returning this afternoon to introduce senator cruz and tomorrow to introduce senator rand paul so i hope i'll see you back here again. at heritage we see ourselves as representatives for freedom minded americans a vocal constitutional conscious to the federal government. a north star that helps lawmakers navigate a precarious landscape fraught with special interest pulling them in all

directions. the pressures in washington keep congress in a fox hole mentality fighting one battle after another without telling americans where they are trying to lead the country. but conservatives can inspire and motivate showing americans how our ideas and policies can make america better. this is the purpose of conservative policy summit, to inspire americans with real solutions you'll hear from congressmen and senators about policy ideas that will build stronger and safer communities, a stronger economy with more job opportunities and a stronger america. it may shock you to hear but the congressmen and senators you'll hear today are the real progress i was in washington. they are fighting against the status quo committed to ending business as usual in washington.

and showing americans how we can progress to a better future. it's all about opportunity for all and favoritism for none." we see the needs addressed to nimble government where people have many choices in all areas of their life, not just the one choice offered by the government government. if we can do it with cell phones and computers, we can do it with education. especially values. americans must be free to decide what they believe and what they value without government-sponsored intimidation. those who call themselves progressives in washington are the protectors of the status quo. the ones calling for more failed big government solutions. it's the independent minded conservatives who are offering the road map to real progress.

ask yourself, where are the bold student-centered reforms on education coming from now? certainly not from the liberty leaders in lock step with teachers solutions trying to shut down parent directed choices, public charters and more opportunities for students. but they are coming from people like representative luke messer who will be here to tell us about the choice act a plan to return dollars and education decisions to families. or ask mike lee and representative ron desantis about the hero act which aims at reforming education process in higher education to break the liberal monopoly in universities and give students a lot more for their money and more marketable skills. what about new energy solutions that will lower the cost the cost of living for regular americans and eliminate our dependence on unfriendly foreign countries for oil. don't look to the radical left,

those who call themselves progressives but never saw a pipeline they didn't want to shut down or technology they didn't want to regulate or air they didn't want to tax. instead, look to the representatives like jeff duncan whose expand act will encourage modern approach to energy reduction and incentivize further development. not by carving out tax breaks but by lowering rates across the board. ask yourself who is dedicated on shining spotlight on corruption? who wants to cut waste, fraud and abuse? it can't be this administration, which the associated press has determined is the least transparent in history or the financial giants who are too big to fail, but not too big to bail. if you want to end the secrecy and cozy relationships between big government and big business, turn to people like jeb

hencer ling whose path act gets government out of the mortgage business and taxpayers off the hook. or catch tom price this afternoon who is dedicating to filling the house budget committee with sunshine so every american can know their money is being spent wisely. these are just a few of the innovative legislators we'll be hearing from today and tomorrow. the fact is, our guests see a problem and say we need to change something. the political establishment sees a problem and says, we need more money, and more of the same. it is obvious, then, who offers real progress. for real progressives all of the solutions have something in common, no matter what the issue is, in order to give people freedom in education prosperity at home and dignity in society, we need to clear the roadblocks

of cronyism ahead. decades of mismanagement in washington have left the path of opportunity littered with hazards. the snow banks of favoritism can freeze congress to inaction. boulders and back room deals can stop us dead in our tracks. so we must clear out these obstacles to move forward. we must not be tempted by detours just to avoid confrontations with the left because they will fight to hold every inch of ground that they have taken from freedom. we must be willing to fight to retake freedom's sacred ground. this drive to real progress will have many backseat drivers and naysayers. there are so many people who benefit from the status quo. the people who condemn capitalism and business on the campaign trail instead of distancing themselves when they get in office, they

invite their cronies to help write legislation to eliminate their competition. and what is the result? regular americans get shut out of the decision-making process. small businesses are subjected to expensive regulations, crafted by the big dogs. and equality under the law comes second to sweetheart deals. this is neither the free market nor responsible regulation. it is cronyism. it is the single greatest road block to reform. and you can find it everywhere in washington. but today we are giving notice to those who use the law as profiteers. whether they walk in the halls of congress or wall street. these are the folks who have bent the greatest institutions of common good to serve their own ends. our rallying cry is opportunity for all but favoritism for none. the policies we'll hear about during the summit reflect this vision. i know millions of americans across this great nation share

it. it seems that the only place that does not share this vision is washington itself. i ask you to join me in welcoming all of those progressives who come here today with better solutions for a stronger, and prosperous americans and i look forward to being a part of it with you. again, thank you all for being here. [ applause ] heritage foundation president and former senator demint start of two-day conservative summit, they are in a break right now. we expect them back in just over 15 minutes at 1:00 eastern or so. to start off a discussion on conservative labor reforms we'll hear from indiana senator -- indiana congressman todd rikita. other speakers include ted cruz who will be keynote speaker

later and we'll have that live on c-span3. the white house briefing is under way on our companion network c-span. the white house spokesman saying the white house erred in not end sending a higher level official for the march, coming under criticism for that. also according to the associated press, the twitter and youtube accounts of the military command centcom has been hacked. taken over by hackers claiming to be islamic mill tans that report from the associated press. we will be back again as we mentioned at about 2:00 eastern here on c-span3. also want to let you know today at 2:00 the house comes back in, the senate as well. later this afternoon in the senate, they will take some procedural votes on the keystone pipeline. that passed in the house last

friday. they approved the measure, which would grant construction program for building the remainder of the keystone pipeline. shortly after that vote friday we talked to a capitol hill reporter about what's ahead. >> lauren gardener covers energy issues for cq roll call and joins us on capitol hill. you tweeted about nebraska position landowner and keystone xl case, time for the president to put an end to this damn thing. how does that change the dynamic of the president's decision nebraska supreme court says they can move forward. assuming the senate passes it what's next with the white house? >> well, with the nebraska decision coming out today that just means it takes away one of the reasons why the white house has said it's not making a decision yet on the pipeline because there was no legal route through nebraska. that's been upheld. the state department can now ask federal agencies across government to submit their comments on the national interest determination to them.

so it will still be at least a couple weeks yet for agencies to do so but we're expecting that process to get back under way now. >> with lauren gardner saying with us, thanks for waiting. go ahead. >> caller: yes. i was watching the proceedings on your show. i find it hilarious that the republicans are talking about how they are so much in agreement with certain unions. everybody know that they are not for unions. so i wonder after all this is over, are they still going to be in support of the unions? >> well, i'm sorry the labor argument has been one that's been a big argument by business groups for why this should go forward, labor unions tend to have a lot of support for democrats. that's a reason -- that's something democrats should take into account when considering where their position should be on this issue.

>> here is rick in oregon, independence line. what do you think rick? how do you feel about the keystone bill? >> caller: i support the pipeline. i do think they ought to be able to put an amendment in there to contribute to the disaster fund such as it is with $0.08 a barrel. i've made my living for the last 14 years off of working in the service industry for the alaska pipeline. and it absolutely amazes me how these people can spout out that there's only 35 possible jobs that are long-term. there are thousands of people working from the 70s up on the alaska pipeline. there's people who have retired just on that one project. it seems that they don't have any actual idea how many people it would take to run a pipeline that long. it's not like you put oil in one end and it comes out the other. there's pump stations along the way. as i said, i work in the service

industry. i'm a food service provider. there's good long-term jobs there. it's much safer to put oil in a pipeline than ship it across the sea from saudi arabia or opec nations who really don't care for the way our western lifestyle. >> your comments get to another major argument that's come up here, especially by supporters of the pipeline. they say the oil is going to get to market anyway, it's just going to find other pipelines or move on train or move on barge down a river so that that's an issue that supporters have definitely seized upon in this debate. >> in weirton, west virginia, richard on the independent line. go ahead richard. >> caller: just want to add my two cents to what your former independent caller stated because he has experience on the alaskan pipeline.

i am my own centers manchin, mckinley, basically i'm in favor of the pipeline with the proviso that they do pay into the disaster fund. and i suggested the idea of what i referred to as a transport tax, which is a small tax based on the number of units you move through the pipeline and put that through the deficit. that ought to like soften the idea of the injectors. that's all in u.s. flash 18936 and 1976. >> lauren, on that disaster fund, there was a little talk about that at the end of the debate. what's involved with that? >> oil spill liability trust fund is a for spill cleanups. the way the law is written oil sands doesn't fall under the

definition of crude oil. that's been an issue that democrats especially have seized upon in this debate for a very long time that they%zr think that oil sands producers should have to pay into it. now, if this were to come up in the senate debate you also run into an issue of tax legislation not originating in the house as it's required to do. so we'll see how that plays out next week as debate kicks off there. >> let's go to new york to brooklyn and john on our democrats line. >> yes good morning. thank you for taking my call, c-span and good morning, miss gardner gardner. my question is there was an earlier senator that put a map of the entire oil distribution of the united states. now we're going to be adding this xl pipeline to the oil distribution. i'm sure all the oil distribution that goes down to the refineries down south actually refine different types of crude oil.

the xl pipeline seems to be the only pipeline i'm here that seems to be refining the oil that's 20 times more emissions in terms of carbon emissions. if we do not do this pipeline, when canada transports it to other countries that can refine this oil is it that other countries do not have the same refining capabilities that the united states has? and transportation is a very important issue in terms of tankers and things like that. but ultimately, who is refining it other than the united states for the refineries that we have that's capable of refining tar sands versus other countries refining tar sand oil and then the whole picture globally adding carbon emissions to the world, the amount that we have right now. that's where the complexity as to me compared to the distribution of our oil systems in the united states. >> okay, john, thank you. we'll get a response. >> well, the refining capacity

in the united states, it depends on the region. in terms of what type of oil they're most equipped to refine. and in the southern united states, many refiners down there are best equipped to handle very heavy viscus crude. and that's where a lot of the oil has come from to those refineries in the past. but supply from those countries has gone down in recent years says why keystone is so important. it brings a greater supply down to the southern. >> she says unusual that the u.s. senate has been asked to vote on a bill setting a pipeline through u.s. simply because canadian company wants us to do so.

when the senate takes up their measure, how much different will it be could it be from what the house debated? >> well, the senate debate will be different in that they'll be considering amendments. has promised an open amendment process. so we can expect to see bill supporters trying to garner up some support for amendments that are seen as having a lot of bipartisan backing. anything from energy efficiency to maybe liquefyied natural gas exports. democrats will bring forward ideas for trying to get republicans on the record on how they think human activity impacts climate change. >> monday night on "communicators," martin cooper, inventor of the cell phone on spectrum issues and the efforts to provide for the growing needs of mobile phone service providers. >> the ultimate in the spectrum efficient technology is what's called dynamic spectrum access. and that includes a whole bunch of things.

includes cognitive radio. and i know you've heard a lot about that. and it includes some new technology that's just starting to become laboratory available where we can use satellites to actually create a model of the world so that when somebody transmits, they will know whether they are going to interfere with somebody else. you put all these things together. i hesitate to tell you how much more efficient we're going to be be. because you would laugh me out of this room. but we're talking not about tens of times improvement or hundreds or thousands, but millions of times improvement. and that's not as crazy as it sounds. till now, we are a trillion times more times more efficient than we were in that time. the thought of being a million times more efficient in the next 20 or 30 years is not as crazy

as it sounds. >> monday night at 8:00 eastern on "the communicators" on c-span 2. well we're back live to the heritage foundation in washington. the afternoon of the first day of a two-day conservative policy summit being hosted by heritage. at 2:00 they're going to hear from todd rikita of indiana leading off the panel on conservative labor reforms. also talking about energy later today. energy free market solutions. we also plan to bring you live the house rules committee. they'll be meeting to take up a couple of measures dealing with rolling back some of the dodd/frank financial regulations law. the house tried to pass the measure under suspension last week. they didn't get the votes, they're bringing it under rules and plan to. and that rules meeting at 5:00 this afternoon. live here on c-span.

both the house and senate are coming in. the house coming in working on a couple of bills beginning at 5:00 this afternoon. they'll gavel in at 2:00. but return for legislative work at 5:00. the senate's also in at 2:00. and they have a couple of votes this afternoon about 5:30 on moving forward with approving the keystone xl oil pipeline. that measure or house version of that measure was passed on friday afternoon as you heard in our discussion a few minutes ago. passed in the house and now moves over to the senate. the white house, meanwhile, the news briefing is underway, at least for a few minutes over on c-span and c-span.org. the white house saying it erred in not sending a high-level official to the march in paris. the associated press reports more than 40 world leaders attended that rally aimed at showing unity following the terror attacks. the obama administration was represented by the u.s.

ambassador to france josh ernest says despite the failure to send a higher ranking official, there should be no doubt about the strong relationship the u.s. has with france. he wouldn't say what led to the white house decision to send only the ambassador. and that's the reporting of the "associated press" on the briefing still underway, as we mentioned. and you can follow that on c-span or c-span.org.

this afternoon, they'll pick up on day number one of their conservative policy summit. they heard earlier from tom price of georgia on budget issues. other members of congress, house members, he'll lead off a discussion on conservative labor reforms. jeff duncan of south carolina will be part of the discussion on energy solutions. and the keynote speaker this afternoon scheduled for 4:00 eastern. and we'll have it when it starts. ted cruz of texas is speaking at heritage today. and they have another day planned, as well. the house and senate coming in both coming in at this hour. the senate later today will take

several votes in anticipation of moving forward with legislation approving the keystone xl pipeline. president obama's at the white house today earlier. he proposed strengthening laws against identity theft by requiring notification when consumer information is hacked. and word today of an international hacking. the twitter site of the u.s. military central command was taken over today by hackers claiming to be working on behalf of islamic state militants. american and coalition fighters are launching air strikes against isis in iraq and syria. the a.p. says the site was filled with threats that said, quote, american soldiers, we are coming watch your back. other post gds ings appeared to list names and phone numbers as well as power point, slides and maps. josh ernest did comment about it in his briefing at the white house, which is wrapping up and you can follow that up over at c-span.org.+&(eñ

it looks like it'll be a few minutes yet before todd riqita speaks. we'll have it live once it does start here on c-span 3. tom price of georgia is the new budget chair in the 114th congress. in the u.s. house, and he spoke to the group earlier today.

>> and some of the deadlines that are coming up early in the year so that you can hopefully get a handle on what we're looking at. i can't tell you how excited i am about the opportunity to chair the house budget committee. the opportunities that we have are really remarkable. the past four years if we're honest, have been a muddled mess. from what we've seen from the senate democrats and the kind of activity that the house struggled to get through the floor. even though they would put -- good policy in the senate that just got shoved into harry reid's bottom drawer. and so i can't tell you how excited i am about the opportunity to work with a senate that i believe wants to get something done. i think we're in a win/win situation. if we can get anything to the president's desk, we win. because if he signs it, it'll be good policy for the american people. if he vetoes it, then it begins

to demonstrate to the american people that contrast that we've been unable to do so because of the muddled mess over the last four years. that contrast between the folks who are really trying to solve the challenges and the problems that we face in this country and who's standing in the way. the president's going to be laid bear and the emperor has no clothes. the budget as you know isn't just numbers. on a sheet of paper. tstz it's our vision. the kinds of policies and programs that we would put in place to address the challenges and the problems that we have so that we can provide for an opportunity for all americans to have a greater opportunity to succeed. and that's what a budget is. and so we will -- we will lay out our path for real hope and real opportunity as we move forward. a few years ago many of you will recall that the chairman of the

joint chiefs of staff then mike mullen was asked what he thought was the greatest threat to national security for the united states. the greatest threat. this is the highest ranking military officer in the country was asked what the greatest threat was to our national security. and you all know what he replied, the debt. the debt. $18 trillion and growing at this point. now exceeds the total debt now exceeds the gross domestic product in this country and we're on an absolutely unsustainable path. and the budget committee is where we begin to get our fiscal -- >> i'm back. hope everyone was able to get some lunch. i know there are still folks out who are trying to pick up their lunch and they'll be trickling back in as we hear from our next speaker. our next speaker is also a member of the budget committee. you just heard from his chairman. if you want to have any

follow-up questions on budget, you've got another budget member here. but we are -- it's not going to be the focus of his talk right now. the focus of his talk right now will be the indianapolis colts. and their road to the super bowl, which i'm very much looking forward to. no, anyway, congratulations on that. that's pretty cool, it's sad to see peyton go out like that. but it is what it is. the congressman has been a champion on lots of pieces of legislation. in a lot of pieces of legislation have specific focus on the working class which is one of the major themes we're discussing here. an opportunity for all favoritism to none. we want to put an agenda together that appeals to the working class in this country not just to those well connected at the top and those at the bottom, everybody. in addition to the act which will be his topic this morning, he has legislation that would

take bold steps on medicaid reform because he understands the need to change the federal state financing structure, which encourages great cost. it's very much in line with our red tape rising project that we produce annually here at the heritage foundation. if you work hard, you deserve to be rewarded. individual recognition for your excellent work. this simple proposition totally undermines the big labor cartels because it is powerful and it is true.x;vñ please welcome congressman todd riqita to the panel. >> thank you, tim, i appreciate that introduction, especially on this cold, dreary washington day. and the weather's bad, too. no, happy new year to everybody. it's good to be here. i calm again, with a terrific

sense of honor to represent the people fourth district. and by extension of the people of indiana as a whole. this production today because heritage, i think, is very, very important. it has been for the last several decades and it will be for the future of this republic. if we choose to keep it. and i make that paraphrase from that legendary story about benjamin franklin coming out of constitutional hall and that what's become that elderly lady that poked her finger in his chest and said, young man, what kind of country have you given us? and he paused and said ma'am, you have a republic, if you can keep it. and at the end of the day i think that's -- i know that's what brings me here today.

and i think that's what brings you all. whether it's here in the audience today to chime in and to tune in or online. very pleased to follow the new chairman of the budget committee, dr. tom price. he's been a mentor of mine over the last four years since i've joined congress. and always comes to the table with a clear mindedness, great ideas, and these ideas are bold. and i expect him to follow in paul ryan's footsteps in that regard and leading the budget committee. it's at the budget committee where these discussions about keeping our republic by reducing entitlements, reforming the size and scope of our federal government. i'll start with the 302-a numbers and the narrative we put in there about what's really driving what's our $18 trillion of debt right now. but today, i come with work from the education and workforce

committee that we're focused on. that i expect to continue to gather traction and gain momentum. and i also bring greetings from senator marco rubio who is the senate counterpart leader on this legislation called the raise act rewarding achievement and incentivizing successful employees. and was discussed in the introduction, it's simple it's five pages. it's going to be hard for me to get five minutes talking for a five-page bill. but it really is that simple. it is currently under current law illegal to pay unionized employees more than their union negotiates. now, that might be obvious to many of you in the audience, perhaps not all of you, but many of you. it wasn't obvious to me as a new congressman. i really didn't understand it

until you think about it for 30 seconds or more. of course, it's not in the unions, the union bosses' best interest to allow any of their employees to be paid really on merit. to go outside the union contract. in fact, if you think about it a little bit longer couple more seconds, it really is against the very definition of unionism. so this bill the r.a.i.s.e. act would simply allow employers. employers of union shops to regardless of the union contract, or in addition to the union contract give employees a raise based on merit. a raise based on merit. fairly simple idea. very pro-worker. some may say anti-union. but i really don't think it's that. it does make the union prove their value. to the employee.

and maybe that's a discussion that we should have separately. i do want to be clear, though, that the employers cannot selectively under current law give raises to anti-union workers to undermine the union. okay. that's a law as well, and the r.a.i.s.e. act wouldn't make that illegal. that would still stay illegal on the idea that okay if you're one of my employees and you start aggressively going against, being antiunion, we'll give you a raise for that. that's still an illegal discrimination. that's not what the r.a.i.s.e. act is about. it's about pure merit. if under whatever objective measure an employee would otherwise get a raise, even if in the union shop, this would make it okay. economic research tells us that the average worker's earnings

would rise 6% to 10% when pay is performance based. we think that passage of the r.a.i.s.e. act could increase the average worker salary between 2,700 and $4,500 per year in performance pay bonuses and merit raises. and when you think about i just read an article today from the united way and howard county which is part of indiana's fourth district. families who they've studied are struggling just above the poverty line. and that's worthy of debate, as well. what should it be. and these families that were studied, the conclusion was that any kind of upset in their income, certainly a loss of a job. even a major car repair bill could bump these families down below united states poverty line. so this is just the latest example of how people are really struggling. but how the free market, performance-based pay, judging people on merit right and

isn't that the title, basically of today's summit. fairness for everybody. base people, judge people on how they do and what they do and not on favoritism. how that could really help. it's also perhaps not a direct answer to, but certainly a pivot for this whole idea about minimum wage, which we know doesn't work. why doesn't it work? oh, i want that young person to have their first job, part-time or otherwise. i want employers to hire more people, not less. and, of course, as we know, raising the minimum wage does the opposite of that. but what a great answer this could be to that discussion. whether it's at the dinner table or talking across the country or the world in a forum like this. the answer to the minimum wage.

yes, the way to put more money in people's pocket is through something like the r.a.i.s.e. act. where people can get rewarded for what they do. for the value that they add, for the dignity of their work and not as necessarily a hand out to a union negotiated contract. that's the discussion we need to have, i hope we get to have during the panel. that's the kind of discussion i think america needs. i think america expects, and certainly americans deserve out of true leaders. which, again, i find each and every one of you to be. if for no other reason than you're sitting in here on a rainy, cold washington day listening to a guy like me talk. but, again i want to thank the heritage action for allowing me to speak today. and i look forward to the great questions on the discussion. thank you.vlynr

>> labor economics here at the heritage foundation. and the senior fellow at the manhattan institute. and i'd like to invite them up. please join me in welcoming them. and we'll have a conversation here. >> okay. i would actually like to just before we get started with questions from the audience, james if you'd like to deliver a few remarks. and diane, if you would like to, as well, then we can get going. >> i think that congressman riquita highlights one of the kor problems. it was written for a different era and economy. national labor relations act was passed in 1935. it has not been substantively vetted since 1969. the economy was different back then. and if you think about the

economy and the world labor law was written for, it was a world when almost a third of the workers in the economy worked in the manufacturing sector. where very very few women worked outside the home. in that world and economy you had a notion of general representation. one union negotiates a contract. now, when pretty much everyone's doing the exact same thing on the assembly line. and this is a manufacturing company which was much less -- used far fewer skills than the case today. had one contract cover everyone is a workable system. what do you do in a knowledge economy? what do you do in an economy where each worker is not performing the identical task day in and day out? but where the worker's abilities abilities, their skills their talents, their efforts are not just, you know core to what the employer's looking for, but what the employees are looking to be rewarded for. so much of the work that

employees do today is not something you can just reduce to a computer algorithm. a lot of the jobs have been automated. and so in a knowledge economy, the notion of a general representation contract ignores a lot of the value that workers bring to the table. and in addition to that the union movement has not updated the business model. it's not just the laws, but the union business model itself has not changed since that economy. if you take a look at everything the unions have been doing, the policy pushers the union movement have been getting behind. it's been all about making it harder for workers to say no to their services. it hasn't been about modernizing their offering. it's been how do we make it harder for workers to say no to a union contract? so the so-called employee free choice act which would've gotten rid of secret ballot elections during workplace organizing and replacing it. you don't try to get rid of the

secret ballot if your goal is to -- if you think you've got a good product to sell you don't try and say, you know, let's allow us to send our organizers to your house at night and try to persuade you that way. that's not a sign of confidence in the product. a lot of what i know she's going to discuss, is exactly this. unions try to make it hard for workers to say no to their product. and if you look at polls of workers, only but 1 in 10 nonunion workers say they want to organize. 1 in 10. that's why union membership has fallen to a 96-year low. union membership is now considerably lowered now than it was when president roosevelt signed the national labor relations act. i think the solution is to update both u.s. labor law and, you know, u.s. labor organizations to also come into the 21st century to be more reflective of today's economy. the congressman's act is a great way of doing this.

there's a grocery store in pennsylvania about two years ago, they wanted to give two dozen of their hard working employees a raise. they thought they'd done hard work and wanted to recognize that. the union actually came in filed a grievance and forced the company to rescind the pay increases given those two dozen workers. it's not just that they couldn't give it out. they'd already handed it out and had to lower the workers' pay. and some of the newer hires were going to get paid more than workers been there longer. and that was not allowed. that is so out of touch with today's economy. and i think that's something that needs to be changed. employee involvement programs. this is something you see very commonly in european companies. who have a employee involvement program. where management can come in and in a systematic way get input from the workers in the company. and how things are run. now, a lot of companies actually find this as useful. why? because they want things to work smoothly. very often, the guys in the

front line of the company have information that the senior executives don't have. and you want to be able to work systematically with them. but under u.s. law, the only way to have an employee involvement program, if it discusses working conditions and wages if it's run by an independent outside union. and that means that a lot of companies do not want to create an employee involvement program. because it's greater than the benefit they see. and a lot of workers get stuck with no voice on the job. where the company wants an employee involvement program, as we saw in chattanooga where it's a german company. they like the employee -- sorry. volkswagen, it's works council. it worked really well for them. and they wanted in the u.s. but they first had to get their workers to vote for the auto workers. and the workers themselves said, no, we would rather not have an employee involvement program or works council program if it means we have to get stuck with

this union. i mean what a stunning indictment of the current labor model when the management is encouraging the workers to vote for a union. and the workers over the objections of their bosses say we don't want this union. we don't want what it's going to bring to this company. if that's not a wake-up call to -- for the labor movement to update their policies and for the u.s. to update their laws. why would we force workers into an employee involvement program if they wanted to be done separately? indiana just passed a right to work law. we're seeing several other states are looking at right to work. very excitingly, we're seeing counties in states where the legislature will pass right to work. several counties in kentucky have passed their own right to work laws based on the state's statute that delegates to counties, the power to pass economic development measures. why is right to work so important? unions don't have to earn members business. they can simply compel it. they can force you to pay dues or you get fired.

what is the incentive for the union to offer a quality product? if they have captive customers. how does any monopoly act? what's it say about monopolies? what's going to happen to prices? they're going to go up. what's going to happen to the quality of your services it's going to go down. well, that's what happens in any workforce that's organized by a union. if you're in a non-right to work state, you have to pay. we have a study that's going to come out in two weeks. we find in nonright to work states, charge 10% higher dues and pay their top officers about $20,000 more a year. that's what happens with a monopoly. if you want an agile company that serves a worker's needs you have to work to earn that business. and in too many unions that's not the case. imagine if maintained their monopoly over the fund market. do we think they have have ever come up with the iphone? or the equivalent of iphone is not being implemented today in

the u.s. because there's too much coercive power given to workers over unions. we ought to be updating our labor laws to encourage unions to serve workers instead of forcing workers to serve unions. >> thank you very much, congressman. i should say that this r.a.i.s.e. bill is extremely important and it's very brave of the congressman to take on the union movement by putting forward a simple bill like this. a five-page bill. and who could object to someone who works harder getting a raise? if it passes the house and the senate, i dare president obama to veto it. all these working men and women are going to say why shouldn't i have my raise? are you going to be vetoing my raise? and what the national labor relations board has been doing recently are going what i think is outside the law. just shows that brave people like congressman riquita should be applauded for putting forward

these kind of bills. just to give you a couple of examples of what the national labor relations board has been doing, just before christmas, they decided that suits for unfair labor practices against mcdonald's franchises, your local mcdonald's restaurant were going to be counted against mcdonald's usa, the parent company, they were going to be charging mcdonald's usa as a joint employer. now, for the past 60 years if you work for a franchise, that franchise has been your employer. so if you work for jiffy lube, that jiffy lube is your employer because it sets your wages, has the opportunity to hire you fire you set your conditions of work, your breaks. and now, with a wave of the hand, the national labor relations board is saying a joint employer is the parent company. what it means, of course, is that unions have a lot more leverage over the franchises.

and to bring unfair labor practice acts. because a suit against a local franchise isn't worth very much. but a suit against mcdonald's usa, yes, that could be worth billions of dollars. and what these unions want to do is have mcdonald's usa sign an agreement saying we will allow unionization of all of our franchises in exchange for our not bringing suits against you. now, i was really curious about how they got the legal grounding to change the law like this. so i called the nlrb because they usually write a legal document called an advice memorandum. i called them up i said, could i see the advice memorandum that justifies charging mcdonald's usa as a joint employer. and the spokeman there said who asked to remain anonymous said well, we have it but i can't give it to you. we are not releasing it publicly. we are saving it for the trials that we're going to be -- that are going to ensue against

mcdonald's usa and the franchises in the spring. so here, they have, they say that they have the legal reasoning. but they're not letting me see it. i understand some congressmen, maybe even congressman riquita. they are not giving it to congress, they're not giving it to me, not giving it to mcdonald's usa or the franchises they're suing. and this is something one would only believe about russia or venezuela or cuba. you wouldn't believe in the united states you would be charged with breaking a law. and you wouldn't have the rationale to see why. now, something else they're doing is again, right before christmas, they brought out this quickie election law which says elections for union representation have to be held within eight days. well in the past it was 30 days, and part of the 30 days was taking up, looking for the bargaining unit. which group of people are applicable to join this union. and these people were invited to

vote for or against the union, whatever they chose. well, they decided, the nlrb has decided they're going to vote first and then decide who is eligible later. isn't that a great idea? well, the two -- the two commissioners the republican nlrb members wrote in a dissent from the rule, and i'm quoting, to state the obvious when people participate in election it is significant whether they actually have the right to vote. whether their vote will be counted and whether the election's outcome will event affect them. in this respect, the nlrb's approach would be intolerable in every other voting context whether it involved a national political election or a high school class president. now, this is the kind of thing that we are -- that we are up against. the whole country is up against. the nlrb just changing the rules

like this and unions say that they want higher minimum wages. they say that they want $15 minimum wage, the sciu has been promoting this in fake strikes against fast food companies. and in some cases, cities and counties and jurisdictions and states have actually passed a higher minimum wage. seattle, for example, is going to have or now has a $15 minimum wage. but what's interesting is that in the union contracts, the unions are often exempt from the minimum wage. so under the minimum wage law, it says that union contracts are exempt. you have to pay $15 an hour. but if you have a deal with a union. if you allow union to represent your workers then you can pay less. so what does it do? shows the unions don't have any interest in the workers'

benefit. second, they are doing this to make themselves more valuable. there's a high minimum wage and they go to the employer, they say, look, there's this $15 minimum wage. but if you allow me to unionize your workforce if you sign what's called a neutrality agreement, which isn't neutral at all, by the way, because it takes away the employees' right to vote, then you won't have to pay $15 an hour. you can pay $10 an hour $11 an hour. that's what they are doing in some of these jurisdictions. in fact, they would have done it here in washington, d.c. if the walmart bill had gone through. if it had not been vetoed by the mayor about a year ago. so all i'm saying is these issues are very, very important. we need to congratulate the congressman on his act and make sure it gets through and gets sent to president obama. and if he fails to sign it we need to make fun of him and make it clear make it public that he's vetoing workers' raises. >> thank you diana and thank you, james for your comments.

and we're with you on that. one of the things we really want 2015 to be about is an opportunity to put different legislation on the president's desk and to force that contrast. that's how we get the mandate that we want in 2017 is by legislating in 2015. >> walter russell mead very eloquently describes the kind of demise of what he calls the blue model. and when he talks about the blue model, he talks about the new deal. big government, big labor. that took the country from that period of time that's not working anymore. and james, you alluded to this in your opening remarks that big labor has not updated their business model. i like the raise act, i think this is one way to point out

that the blue model is passing away. and that we're moving from a transition from the blue model to whatever it is. could you all comment on whether -- maybe congressman it would be valuable to hear what you think union members in your district think about this. do you have hope they see that the insufficients open to this new model. >> thank you for the question. and thank you for the compliments. i did mean what i said during my remarks. this isn't an antiunion bill, it's a pro-worker bill. and it's really not a chance to make a union dig as much as it is to -- recognize that, you know, workers deserve to be paid for what they're worth. to the employee. employer. regardless if a union contract's in place or not. now, it's not my first rodeo.

i understand what this means to the traditional union that tim's talking about. that's not the fault of the worker who is doing a good job. that's the fault of the model that you mention been in place since 1930s and completely outdated. but that's for the union shop. and the stewards and officers. how they intend to add value in this 21st century knowledge based economy. meanwhile, i'm a conservative libertarian leaning republican who wants to do good for middle class and lower class people who benefit from the dignity of work. who get their happiness like we all do because we're human from that idea that we add value. not that we're given something based on whether or not we work or not, whether or not we add

deserve something. when we work add value, it earns our happiness. and that's what this is about. and unions for way too long have been denying people that dignity. that you earn your success based on the value you add. not on the handout you're given. based how long you do something or how long you work somewhere. or whether you work or not. that's a whole other discussion about the scope of entitlements of the entitlement state today. the letter that you -- that was mentioned earlier we did. congressman tim wahlberg sent a letter out at the end of november inquiring about the mcdonald's usa situation. and, you know, it's touch and

go. we'd like to get a response. also, i'd like to say that the raise act had last congress 83 co-sponsors. all right. so this isn't a pie in the sky bill and it's not necessarily, you know, to sneeze at. this is real. if we can cross that co-sponsor threshold, which is arbitrary, but still, i think if we can get there early this year, this bill could really, really move. it's doable. and it can get to the president's desk. and you're right. what a great contrast that would be over the president finally has to explain why something so pro-worker helped the middle class, helped the lower class help all of us, but be so a-- >> i think the core problem with the blue model and particularly for unions is the coercion. they can force you to accept the contract. the contract that says you can't accept a bonus and you can't

accept a raise if the union hasn't negotiated it for you. they can force you to pay dues. and i think the you know there's actually a lot the unions could learn actually the construction trade unions. if you just take away that coercion. what do a lot of the construction unions do? run their own job training programs. they -- they basically train like building some of these large construction projects is a very skilled labor and their own training camps where they teach workers how to do that. if unions were restructured more along the lines as a trade association or an employee association that provided services like job training so that the union label doesn't mean that, you're going to be a headache for me running the company. but this is a high-quality worker who i know i can count on. where the unions provided skill certifications. if they could help workers navigating the economies, with things like how do you plan your 401(k) and picking mutual funds for your 401(k). providing networking opportunities, you know. more modernized version of the

union hiring haul. you can imagine a union movement. if they were providing their health insurance benefits, removing more and more away from employer based. if unions offered their own health insurance. you could imagine a union movement that provides a value to the workers. but the unions aren't going there right now except in a few handful of sectors. and for the most part, that's because of the coercive powers they have. they don't have to make the reforms. it's easier to say, you guys have to accept our contract and pay us $500 a year. and if you don't like it you're fired. and, you know once we can move away from that, i think there is real value for unions to add value to workers. they're just not doing it right now. >> it's not just that they're not making these changes. it's that they are on purpose trapping their workers within the union model, within the union. so james mentioned 401(k) plans.

well, they don't have 401(k) plans. they just have the old defined benefit plan where it takes a very long time to be vested. and if you leave around 20 years, then you don't get anything out of it. you have to stay 25 years in order to be vested. you can look at these contracts, which are actually in the bowlels of the department of labor. you can look at them. what they're trying to do is diminish portability. pension portability, diminish the movement. they want to keep people within their own webs. and that -- that's extremely harmful for the workers themselves because these days there's an individualized movement. people go in and out of different companies. i must have had at least 10 or 15 jobs. i joke that i'm working down the think tanks in alphabetical order. aei, manhattan institute. i wouldn't want to be in one job for 25 years. and most people don't want to be like that either. and the hypocrisy of it, when you look at the websites and

they say join us for a better pension plan and you can look at the labor department data and find these pensions are 47% funded or 50% funded or 60% funded. they're dramatically underfunded and they need more workers not so they can give them a better future but so they can be paying their retirement benefits that then go to someone who is already retired rather than have it just be kept for them for when they retire themselves. so there are major problems in the current union model. and that is why union membership has been decreasing every year. the labor department, in two weeks, we'll see a different decline. have it on very good authority. >> thank you. okay. questions from the audience. yes, sir, right here. >> i must be missing something. it seems to me it seems to me that the panel is in agreement that unions would be against the

raise act. however, we're giving them a great opening for the next negotiation. i would like to be the union representative coming to you and saying we're looking for a raise raise. it's got to be more than the maximum that many of my workers are making now. because you gave this person a productivity raise. you gave them a raise for being a good worker. so we really want 20% raise but the minimum will be 10 because you've already said you can afford a 10% raise by giving it to this worker. what say you? >> well, one we know the unions have come out strongly against this bill. last time, one of the teamsters called it the bosses' pet.

you know, it's not how it works you should be commended from that. it's much more, oh he's the boss' pet. so we know first of all, others are against it. secondly, the unions are already pushing for higher wages. don't need any sort of excuse or you've showed you can pay that. well, what the business has showed is when that worker's that much more productive, he's created additional profits that enable him to pay at a higher wage. that's what the academic research on performance pay finds. is that both business profits go up and the workers' earnings go up as the congress mentioned 6% to 10%. but comes out of the higher productivity. if you don't have the higher productivity, you don't have the money to pay the higher wages. that's something the unions would understand. you know the fact that you've given one hard worker a 20% raise, doesn't mean you're able to give that to the entire bargaining unit without running a deficit.

>> the most dramatic example of unions coming out against merit-based pay is the teachers' unions in new york and other parts of the country.l;c+s where states and city governments have offered them higher wages in exchange to go along with the merit based pay. in other words, if they take away the tenure, they can all be earning much higher wages. and unions have come out solidly against this kind of compensation. they don't want, they want only on the basis of seniority. they don't want teachers to have higher pay. even though this would benefit our children, give our children better educations and a higher expected lifetime earnings on top of that. >> right here, sir. >> that leads to my question as to what percentage of unionized employees are working for the government and being paid by taxpayers.

>> roughly 50%. it's a stunning statistic that we found a few years ago. when i say union member, what's the image that pops into your head? there are twice as many in the u.s. p post office as the entire industry. they've shifted into government. >> yes, sir. >> is there -- going to raise that, still, precluding from the general right to work? provision. are they still plans to go with promote right to work, you know merit shop type legislation? thank you. >> two separate issues. appreciate the question and the clarification. this doesn't really impact or have to do with right to work. the experts chime in on the

observation there. but it's not intended that way. it's a really two separate issues. and as far as a national right to work push, if that was your question, seeing much more action and interest at the state level. than anything that we're doing in congress. >> this wouldn't impact right to work one way or the other. it would deal in modifying. >> we do see more and more states becoming right to work. and interestingly enough right to work states have created more union members over the past five years. and union membership grows more. so unions should be in favor of right to work if they want to increase their membership. >> other questions. all right. what are the prospects on this? how do we get this moving across the health?

>> i always get this question. i probably get -- i have a different job if i was right. but, look, we've got to just keep pushing it. one of my people asked me you know, still as a relatively new member, i'm starting my third term and people have asked me what my observations wither coming in as a new member. one relevant to your question is is, i didn't realize how many quote, unquote, pro-union republicans are in our conference until you realize, frankly, why the davis bacon act, for example, fails on rider votes and appropriations. it was -- new to me. i didn't expect that. and, again, i've said it three times already i'm not anti-union. i grew up in northwest indiana. the second person in my family to even go to college.

i grew up around dinner table that always talked about the social and economic value of a union. you know i grew up in the steel mills. this is pro-worker. to the extent it provides challenges and perhaps there are opportunities for unions. that's a separate discussion. but i do know this would help workers. because it rewards them for the dignity of their good work. and that's what we should all be about. and so you know, i think there's going to be an initial suck in you know of the breath when some members hear of this. but if they really think it through and it's all our jobs, including mine and senator rubio's, as well really all of ours have this discussion with members of congress and the broader communities, this can move. 83 co-sponsors. last congress. easy to re-up those 83, build on that cross the hundred

co-sponsorship threshold and move this to the senate and then to the president's desk and let him explain himself. >> yeah, i would add -- i see the unions having a difficult time arguing against this. the rhetoric the last time this came up. there was a vote on the senate floor, offered this amendment by senator rubio. and actually, all but one of the senate republicans voted for it. but the rhetoric of the unions around that time like i said the boss' pet provision. and then you had the president of the icu saying, allowed the employer to hand out arbitrary and unfair pay increases, end quote. do you any worker who believes they've received an unfair pay increase? yeah, i'm pretty sure that most people in this room and watching this would be more than happy to receive an arbitrary pay increase as long as it was an increase. i mean you know that sort of rhetoric. it plays well within a narrow slice, i think of the population. but most people, you know you start talking like that and

people think you're from mars. i mean let's, by all means let's have more arbitrary pay increases. the more the better, please. i think the arguments that workers ought not be able to receive are performance pay. this is only one way. only raise the wages above the contract. and the bill. >> yeah. >> right. >> that's going to be a tuflough argument for them to make outside the narrow subset of the population. and i think that's a subset of the population shrinking every year. >> great. this is -- sorry, did you want to add on that? >> oh, it's because under the union model it's the more senior workers that get raises and that's important for them. the seniority model. and reversing that with the r.a.i.s.e. act might get younger people get raises whereas older, lower performing people wouldn't. and that's where the union has a fundamental disagreement. >> great. thank you. well, this is a great issue, and this congressman is a priority

issue for us here. so we'll be doing everything we can to help you push it and look forward to action on this issue in 2015. thank you to the panel. and congressman congressman. that. >> thank you all. >> thank you. >> we'll take a ten-minute break, folks, and we'll start our next session at 3:00. thank you. >> you may have heard the moderator say 3:00. 3:00 eastern they'll start their next panel. it will feature jeff duncan, congressman from south carolina and the topic will be free market energy solutions. this is day number one of heritage's two-day conservative policy summit. it will be capped today with the

keynote speak from ted cruz. that's scheduled for 5:00 eastern. on capitol hill today, the house and senate both in. the house back in later for their legislative work. the senate moving forward later today with keystone legislation. as the senate came n protesters broke into shouts and briefly interrupted today's senate proceedings. they're under way. can you follow that live on c-span2. until they resume here at heritage, we're going to show you the comments from earlier starting off the program earlier today, tom price, the new budget chair in the house. >> and some of the the dead lines coming up early in the year so you can hopefully get a handle on what we're looking at. i can't tell you how excited i am about the opportunity to chair the house budget committee. the opportunities we have are really remarkable. the past four years, if we're honest, have been a muddled mess

with what we have seen from the senate democrats and the kind of activity that the house struggled to get through the floor, even though they would put -- we would put good policy in the senate. it just got shoved into harry reid's bottom drawer. i can't tell you how excited i am about the opportunity to work with the senate that i believe really wants to get something done and hopefully get things to the president's desk. i think we're in a win-win situation. if we can get anything to the president's desk we win. if he signs it, it will be good policy for the american people. if he vetoes it, it begins to show to the american people the contrast that we've been unable to do so because of the muddle mess over the past four years. the contrast between the folks who are trying to solve the challenges and problems we face in this country and who's standing in the way. the president's going to be laid bare and the emperor has no clothes. i can't tell you how excited i am about moving forward with the budget committee.

the budget, as you know isn't just numbers on a sheet of paper. it's our vision. it's the kinds of policies and perhaps we would put in place to address the challenges and the problems we have so that we can provide for an opportunity for all americans to have a greater opportunity to succeed. that's what a budget is. we will lay out our path for real hope and real opportunity as we move forward. many years ago many of you will recall the chairman of the joint chiefs of staff, then mike mullin, was asked what he thought was the greatest threat to national security for the united states. the greatest threat. this is the highest ranking military officer in the country. asked what the greatest threat was to our national security. you all know what he replyiedreplied. the debt.

the debt. $18 trillion and growing at this point. now exceeds the total debt now exceeds the gross domestic product in this country and we're on an absolutely unsustainable path. and the budget committee is where we begin to get our fiscal house in order. why do we to want do that? it's not just numbers on the page. it's not just making things add up to zero at the bottom line to get a balanced budget but with a debt that size, paying the energy on the debt servicing that debt, every single dollar that services that debt is a dollar that can't be used for education, that can't be used for health care, that can't be used for transportation, that can't be used for energy, that can't be used for national security. it is literally at a point it is at a point of choking off the actual vitality of our great country. so, that's the reason. it's not just numbers on a page. it is making certain that we

provide for a greater amount of opportunity for all americans. you all know now we find ourselves in a nation where we're spending about $3.6 trillion a year. $3.6 trillion in its entirety. $2.6 billion is medicare, medicaid, social security and interest on the debt. interest on the debt is scheduled to approach $10 trillion. all money we can't use for something else. 2.6 is the amount of money we spend for medicaid medicare social security and interest on the debt leaving about $1 trillion, round numbers, about $1 trillion for everything else. so when you think about the federal government you think about roads and energy and education and national defense and all kinds of things, legislative branch, commerce

everything else except for medicare medicaid social security and interest on the debt. you are a bright audience. you know 4 of the 6 years we've had deficits of greater than $1 trillion. four of the last six years. which means you could do away with the entire federal government with the exception of medicare, medicaid and social security. the entire government. everything. in those four years you wouldn't even balance the budget. that's the magnitude of the challenge that we have before us. so when you hear folks say you don't need to worry about social security, you don't need to worry about medicare, you don't need to worry about medicaid, they're doing just fine. not a problem.vw÷ thash not only irresponsible, it's deceitful. they're just not telling you the truth. we as a nation can stick our heads in the sand but we can't save the programs that vital for so many of our fellow americans.

that's the same sometime on the revenue side the money coming into the federal government, as you well know, is at its highest, absolutely rate ever. more money collected in the last quarter from the american people than ever. if you've got that kind of debt growing debt deficits those kind of revenue numbers, increasing absolute numbers coming into the federal government, the problem isn't revenue. the problem is spending. and you all know this so very, very well. now, the three ways to solve the problem, right? you can raise taxes. that's our favorite way to do that from our friends on the other side of the asooilisle. or holding down the spending that's been available to it on the discretionary side. the nonautomatic side, the nonmandatory side. those numbers have been coming down in real numbers minimally but coming down each of the last four years.

but where the problem is, mandatory spending, medicare, medicaid, social security. or you can groat economy. that's where we hope to put our major efforts at the budget committee, is to putting in place, or laying out the vision for how we would grow our economy in a very positive way. expand success for the american people. we are intent on building on the success we've had already. as we mentioned, budget's been laid out. demonstrate how you get the balance. i've demonstrated some remarkable things that can be done, if you think creatively and have faith in the american people and have faith in the free market system that has made us the greatest nation in the history of the world and we will

build on that success. we will lay out a budget this year. the budget has to be done by the end of march. we will lay out a budget this year that will come to balance within what's called the window. within a ten-year period of time. i hope it's shorter than that. i'm excited with the new members we have on the budget committee 10 or 11 new members on the budget committee. we'll challenge them to find those ideas and come up with creative solutions so we can get to balance in a shorter period of time. second, one of the most important things we can do at the budget committee, that is to normalize the debate about controversial issues. as tim mentioned, four years ago, no would have given us a prayer, a prayer to be able to lay out a solution to save and strengthen and secure medicare and thought we would be able to sustain the onslaught of the challenge from the other side. everybody said -- a lot of folks said, no, you can't do that. and we worked and convinced our

colleagues and convinced our friends and moved forward with a positive solution. so positive that the romney/ryan team in '12 on that proposal won the senior vote in this country. what that says to us is we ought to make certain we find those other yashz where we can begin to normalize the debate about how you truly solve the remarkable challenges that we have. we believe it's important to save and strengthen and secure medicare medicaid and social security. save strengthen and secure. the other side apparently believes they're all right with them going broke because every one of them programs are going broke. every single one. social security disability insurance program runs out of all of its monies next year. this isn't in 2080. this is next year. the urgency is huge. so, we believe that it's important to put in place the