date have raised serious concerns, but we'll look at it. >> i've talked to the universities; ta universities, talk to the municipalities because it is a big issue to them. >> thank you, mr. chairman. always an interesting time when you get to come hang out with us, right? it's never boring. i'd interested in this. i ran over here, so i'm doing part of this from memory. in april, there is something that is referred to the 387 rule. it's how taxes are -- or how you value if you've taken a stock interest and a loan -- >> 385. >> 385, sorry. that's it. thank you for correcting me. if i remember the preamble on

the rule proposal is 75 pages -- the preamble trying to describe the proposed rule was actually longer than the rule itself. where do you see that -- i know that a number of organizations, a number of folks from arizona -- we're a state that's very entrepreneurial and trying to desperately bring in capital and are worried about the sort of tax treatments underlying. i know i'm getting a little technical, but first where do you see these rule mechanics? >> congressman, we issued the 385 rule as part of our effort to make it harder for u.s. companies to invert, to take u.s. companies and change the address and avoid u.s. tax liability. the reason the preamble was a bit lengthy is we raised a number of questions that we wanted to get comment on, so we weren't surprised that issues were raised. we raised the issues themselves in the preamble. while we got hundreds of

comments, it all comes down to six issues, which we have worked hard at addressing. the purpose of the rule which was to stop inversions and taking unfair advantage of the tax code. >> those are two very different things though. on one side -- i despise the term earnings tripping between merged organizations or affiliated organizations and the recognition of do you consider in a stock holding or is a debt pledged with stock or convertible to referred. that's different than the inversion debate. you can see from my view of the world as someone who sees the world as an accountant with we sort of conflating some of the different issues. look, it's a hard read. i accept that. >> we have said all along the

best way to deal with inversions is through tax reform and legislation. we have limited administrative tools. we use section 385 which in its simplest way has broader impact than you need. we're working to address the consequences that are not central. >> do you think you're addressing towards the final ru rule, 279, the tax treatment within -- where you can't recognize the interest cost between the organizations. i think that was also within the rule sets. >> are you talking about the financial transactions between foreign subsidiaries of a u.s. firm? >> actually, i think it's within an acquisition and the cost in between. >> i'm going to have to follow up and get the specific question. what i can tell you about the way we have handled this

rulemaking is we have done it by the book. we've gotten comments. we've taken meetings. hundreds of conversations. we've talked to the committees of congress of jurisdiction, and i think we're going to be able to put final rules out that address many of the concerns that have been raised. >> i had one other question i've always wanted to ask you. if we would do tax reform, particularly if we clean up our territorial tax system, solution? >> i think what we have proposed and what i think there is bipartisan support for is something that is a bit of a hybrid system. we think there should be a minimum tax on u.s. income overseas -- >> no, i remember. truly if we developed a true -- >> i think the hybrid approach is better myself. >> i'm a territorial tax system person. would this go away? >> in answer to chairman royce's question, i think there is a basis for a bipartisan

compromise here. we worked very hard to do that. chairman camp put out proposals that overlapped with the proposals we put forward. i think this is something tax writers should be able to work through early next year. >> okay. can i steal 15 seconds? >> 15 seconds. >> we have our demographic crisis. you in a previous life did some great writings in talking about what's about to happen debtwise. can i beg of your organization to do a solicitation for the appetite for long-term u.s. s e sovereince? >> i'm talktalk iing .045, .065.

>> the time for the gentleman has expired. the chairman recognizes the gentleman from maine. >> thank you, mr. chairman, very much. mr. lew, thank you very much for being here. i noted when you walked in you indicated very clearly to me you had not taken your maine summer vacation. maine is a wonderful place to have a fall vacation. i'm sure your wife would greatly appreciate it. >> if i only got a fall vacat n vacation. >> americans are very alarmed and frightened about an increasing number of terrorist attacks at home and abroad. do you agree that the statement that iran is a primary sponsor of terrorism, yes or no? >> i have -- >> mr. lew, you were really good

about not answering questions. >> to have made that designation. >> do you agree that iran is a state sponsor of terrorism? >> i agree. >> i got it. do you also agree that untraceable cash is the currency of terrorism? >> i do believe that cash in the private economy is a big problem. >> okay. now let's go beyond. we agree on those two things. thank you very much. >> congressman, just to make clear -- >> my time, not your's. you authorized the cash being flown into iran. for whatever reason you authorized, that's fine. i think it was a mistake, but you did it. my question is the following. i know that the united states government owed iran this money. how about if we had instead put pressure on them to abandon their support of terrorism and

disavow their goal in their public statements about destroying israel? what if we had not transferred -- you had not authorized the transfer of cash to iran until they gave up their goal of destroying israel and stopped sponsoring terrorism? >> as a simple matter, we wouldn't have been able to resolve the dispute that left america at risk of having a $10 billion settlement. >> that's not my point, sir. >> that's precisely the point. >> why in the world -- i'm asking the question, sir. why would you continue to withhold those payments until they stopped sponsoring terrorism? >> congressman, i think you're mixing a bunch of things up. we have taken dozens of actions to stop entities that support terrorism. we take our sanctions very seriously. >> let's move on. you're not going to answer the question, mr. lew. you're really good at not

answering questions. last year the administration of which you're a part floated a horrible idea, which was to tax college savings plans. you agree that was a very bad idea? >> congressman, that was withdrawn before it was -- >> i know it was. the reason it was withdrawn, mr. lew, is because there was so many of us that made such a stink that it is a bad idea to tax college savings plans to make it more difficult for kids -- >> we have done a lot to expand college opportunity -- >> i thank you very much, mr. lew, for agreeing with everybody. that was a horrible idea. here's my next question to you. >> i hope you agree that expanding pell grants is a good thing. >> there's roughly $24 trillion of private pension savings out there, retirement savings, folks who are trying to build up nest

eggs to augment social security when they retire. do you think it is a good idea to tax retirement savings like your administration thought it was do you think it's a good idea to tax -- >> i'm not sure i understand your question. >> do you think it's a good idea to tax retirement savings. >> we have promoted retirement savings. >> do you think it's a good idea -- >> what proposal are you asking me to comment on? >> your administration thought it was a great idea to tax college savings plans until you folks walked it back. do you think it's a good idea -- >> if it's your proposal, i'll be happy to look at it. >> i do not advocate for that, so you don't either. >> i thought you were proposing it. >> of course i'm not. you know better than that, mr. lew. >> i would tell you i don't think it's a good idea. >> great. we agree on something. you think it's a bad idea -- >> we have iras, 401 (k)s, all kinds of tax protected savings for retirement. >> can i get your commitment and will you speak to the american people right now, if the administration sends out a proposal to tax retirement plans you'll stand up against it, sir?

>> i think i can safely say in the next four months we're not going to be sending new proposals. >> will you stand-up against it if that jz floated? >> congressman, we're in the last four months of this administration. if it was two years ago, that would be one thing. >> i'm assuming since you think it's a bad idea we're on the same page. thank you, mr. lew, you will stand up against any attempt to tax retirement savings. >> congressman, do not put words in my mouth. i am happy to answer detailed questions. >> time is expired. we recognize the gentleman from pennsylvania, mr. fitzpatrick, chairman of our terrorism task force. >> thank you, mr. chairman. mr. secretary, proposed staff reallocations at the treasury office of terrorism and intelligence, cfi, have raised concerns about how they might affect execution of tfi's various missions but also raise questions about compliance with appropriations language, civil service rules and constraints on gathering and use of financial

intelligence data. further the amount of information on the proposed moves supplied to congress is minimal and appears tfi is proceeding with them at full speed. that despite bipartisan staff admonitions to slow the process down until this congressional buy-in for fear of creating disruption in this critical part of our country's effort to stop the financing of terrorism and other financial crimes. the fact that the plans are intended to be complete before a new president, a new secretary or deputy secretary takes office raises the possibility that they may not agree with realignment creating more disruption as further moves or reversal might have to occur. so with that in mind, mr. secretary, i have a couple of questions. first, what is the purpose and what are the specifics of the proposal if you can share them with us, please. >> congressman, tfi is an extraordinary organization. i couldn't be more proud of the work they do and effectiveness

they have. it's a new organization, pulled together, cobbled together from a number of different subagencies after 9/11. >> can you tell us about the proposal specifically. >> one of the things good management requires, particularly with a new organization, trying to make sure you get it right. i think the current acting under-secretary adam szubin. >> what is the proposal. >> i'm happy to get back to you. i have deferred considerable attitude to the secretary because he's an expert in all the details work they do. >> appreciate it. you may not have the answer to the question but if you're agreeing -- >> what i can answer on. >> staff has repeatedly asked for this information and not received any information about it. >> we have scheduled a briefing on the senate side. we're happy to schedule a similar conversation on the house side. the challenge here is to ask how

do you take an organization that used to be separate organizations and make sure that it is as healthy as possible to do the very important work it does. that's what the acting under-secretary has been looking at. no final decisions have been made, still a work in progress. >> on the work in progress, knowing where it's going, my concern is in response to mr. poliquin's question, sir, this is the end of the administration. it will get us on record. >> he was asking me about it. >> to change the alignment, you need to come to us with specifics, i would ask with the specifics do you know, what impact would it have on the treasuries ability to, say, enforce bank secrecy act? >> we obviously take all the responsibilities including bank secrecy act highest level of seriousness. i would be -- there's no aspect of tfi's work that isn't important. >> do you have any idea the impact of these proposed moves on the bank secrecy act and enforcement by treasury? >> the objective is to make sure tfi as an institution operates more effectively and

efficiently. >> you're speaking to all the questions at 30,000 foot level. you don't have any specifics? >> i didn't come here today with the plan in front of me. we'll follow up with staff. >> appreciate it. mr. secretary, any declared whistleblowers at the agency? >> not that i'm aware of. i'm looking back. my staff is not aware of. >> not that you're aware of. have any staff at tfi been ordered not to speak about the proposal i spoke about in my first question? >> i know there are some things in the clearance process and we have to go through clearance process internally within the administration but a normal process. there isn't anything specific about this. >> why can't tfi redirect a portion of the 7% growth and fte in the president's fiscal year 2017 budget or what ends up appropriated in a continuing resolution. >> if i could ask, submit a

question, i'm happy to take it. that's at a level of detail that i'd have to look at the question in more detail. >> mr. secretary, i appreciate your willingness to try to answer the questions. are you not able to answer any of the questions here today? >> congressman, i pay attention to a lot of details but these are small details and i don't understand the question. >> first of all, needs to be included so that we understand the appropriations process our response as well. >> i agree. >> we'll get you the questions. >> i'm happy to answer the questions. >> how long will it take you to answer these types of questions. >> if you give me the question today, we'll get back as soon as we can. i'd like to understand the question and give you a complete answer. >> thank you, mr. secretary. >> the time of the gentleman has expired. the chair now recognizes the gentleman from colorado. >> mr. secretary, good to see you. thank you for your service. thanks for coming in and answering these questions even though my friends are kind of pounding away. appreciate the way you handle

this, the seriousness of this, but also your willingness to have a little bit of give-and-take with my friends. so i'm going to just talk about a couple of things. first to thank you and thank the president. when president obama took office, my district was 10% unemployment. we are on average 3% today, that's the suburbs of denver with oil and got not doing very well in my state which would put us at 2% unemployment. strong economy foreclosures which had been off the charts at the beginning of the obama administration now very strong housing market. almost too strong. hopefully supplies start catching up with demand. lots of jobs, strong economy. i just want to thank you for your part in doing that. because it's been a long, long road. so thanks to you, thanks to this administration. the other thing i want to talk

about and say thanks but we certainly aren't there, since the chairman is here, he knows this subject, it's marijuana and banking. he knows it because i always bring it up. because we have to confront this and deal with it at some point. at least 25 states have some level of marijuana legalization, some kind of regulatory structure in place. medical marijuana or recreational marijuana. if you have the state that is have cannabis oil to deal with seizures, that's another eight states and several have it on their ballots this year. the federal law particularly in the banking sector and state laws kind of run smack-dab into each other. i appreciate the assistance the administration and treasury has provided to give banks some potential path to allow legitimate businesses to be able

to have banking services. so thank you for that. now, my question is this proposed 385 rule, debt equity kinds of transactions between subsidiaries or parent subsidiary and money going offshore, i know you all are trying to deal with inversions and i appreciate that. so i guess i want to ask, talk to you about it. i want to you tell me what you think the 385 is intended to do and i would just ask you all to be looking at those transactions as sort of been in the hopper. then this new rule comes down, and it changes the economics of the deal in a tremendous way. i'd ask you to consider either grandfathering in those deals that haven't yet closed or maybe closing and the effects on those particular deals. so i turn it over to you, sir.

>> congressman, the principle objective of the rule is to try to shut down inversions and shut down the use of kind of blatant tax avoidance devices. there were a number of issues raised in the preamble to regulation, the draft regulation saying we know we took a kind of simple approach. that's going to raise concerns. we'd like to get comment on each of the issues that might not be central to the core purpose. not surprising we got a lot of comments. the comments kind of circle around half a dozen issues. we've been working on each of those issues to try to come up with policy solutions that address what might be peripheral or unintended impacts protecting the core objective of the rule. we're making very good progress. i think that the business community feels that we have

listened to the concerns raised. that's certainly what i'm hearing. we have listened to the members of the tax writing committees of congress, and many other members of congress. and we're working to try to finalize the rule. critics of the rule quickly asked us to add enough time to the comment period so that it would be impossible to do a final rule. we did not want to do that. we want a good rule. we'll only do a good rule. if we don't finish with a good rule, we won't do it. i think we have time to do a good rule. >> i appreciate the fact you have been taking comments from folks. i want you to again, particularly those instances where there is this look back of three years or 36 months, there is potential for a deal -- and these are big and complicated deals that you take into consideration the fact that they were under way as this deal, as this regulation came into play. please look toward some grandfathering on this. >> thanks for the comments at the beginning of your remarks.

>> time of the gentleman expired. chair recognizes the gentleman from indiana mr. stutzman. >> thank you, mr. lew. good to see you again. i appreciate your time here. i would like to talk about the situation at wells fargo bank. looking at an article you have a couple of quotes. i would like to read them. it says after the senate hearing the other day that senator robert menendez of new jersey said they will hold a hearing of aggressive sales tactics next week. they want fair and comprehensive review they said on monday. now treasury secretary jack lew is adding his voice to the criticism. the pattern of behavior is something that needs to stop. it is not acceptable to do things designed to increase either an individual or firm's bottom line which deceiving customers or passing on charges

that are invisible or they don't know about. this is a wake-up call, he continued. and should remind all of us in firms that culture and competition make a difference how you reward people, how you motivate people, what values you hold people to matter. you said that, correct? >> a couple of words i think were misquoted there, but yeah. >> looking at the timeline, i'll talk about the cfpb. i don't think the cfpb is serving the american people. this is case number one, proof number one. you look at the timeline that we know that wrongful termination lawsuits were filed against wells fargo by former employees alleging fraudulent accounts back in 2009. wells fargo started seeing a cfpb presence in the wells fargo offices in 2011 early 2012. is that correct? >> i can't comment on a specific regulatory matter.

i don't have visibility into any of the internal details of regulatory actions. >> okay. then in mid-2013, cfpb apparently first hears of the problem lu through whistle blower tips. the point i'm trying to make, cfpb is not doing its job. >> i don't agree with that comment. >> when did you know about the situation at wells fargo. >> congressman, i was not aware of the situation and the scope of it until the final action. obviously, there had been news coverage. the full magnitude of it was a matter that regulators were looking at. but for the cfpb, the penalties would not have been in place. >> that's true. but the greater penalty to wells fargo is going to come from their customers. i'm a wells fargo customer. i'm mad. i'm upset about it. i'm mad at them, but i'm also mad at the cfpb, i'm mad at the

government because 5,300 people were fired. this is not just small scale. >> congressman, if you're proposing increasing cfpb resources so they can have more people watching, i would be happy to work with you. >> i knew would you say that. that's always the answer from a failed agency is give us more funding. we can go in and find this. they were in wells fargo as early as 2011, 2012. approximately 939 employees were fired for improper sales practices in 2011. another 1,000 in' 12. another 1250 in '13. first hears about it through whistle-blower tips. what were they doing? >> congressman, i really can't comment on what the regulatory actions -- the, i just don't, they properly do that

independently. what i can tell you is for a brand-new organization, the cfab has done an enormous amount of good work to make sure that the american consumer when they get a mortgage can understand what they are getting. make sure banks cannot put in place the kinds of provisions that led to the subprime crisis in '08. they have a cop on the beat roll as well. i think it's a good thing they were there to levy a penalty against this behavior. >> i don't see how it could take this long. 5300 people talking somewhere, somebody had to know something. i don't know how you didn't know about it. when did you first hear about it? >> congressman, i don't recall when i first heard about it. i just told you the scope of it was obviously quite dramatic in the final regulatory action. >> i tell you, the american people don't trust washington and now this has happened. this was supposed to prevent situations like this happening. >> let's agree on what we can agree on. we should have tough regulators watching to see things hurt consumers get stop. just work together on that.

>> let's fire a bunch of cfpb regulators. >> you're going in a place i wouldn't go. that's not fair. >> we are firing them at wells fargo. >> we can continue this conversation. >> thank you, mr. chairman. >> time of the gentleman expired. the chair recognizes the gentle lady from utah, ms. love. >> thank you, secretary lew, thank you for being here. we're getting close to the final moments you get to head out. i ran across an analysis done by the corporation for enterprise development in the institute for policy studies. the analysis stated that it would take 228 years for black families to amass wealth of white families in the united states. is that something that the administration is concerned about? >> congresswoman, i'm not familiar with that analysis. we are very, very concerned about the differences in asset accumulation and income earning capability.

>> it was interesting because in your opening statement, it almost sounded like you thought that we were doing okay and that everything was -- >> we're doing a lot better. we have consistently said the benefits of growth are not being experienced as broadly as they should be. and the difference in terms of the impact of the housing crisis on the only asset that a lot of african-american families had, their home was disproportionate. there is still a lot of work to do. >> it also states that it's going in a different direction. when we look at all of the industries, we just talked about the cfpb, we talked about some of these other agencies that made it more difficult for black families to get ahead. what we are concerned about and what i see often is a lot of the time, the majority of the time, these are agencies that actually hurt the people that they vow to protect. i was wondering if you were looking into some of these policies, and if you could see the same things that aren't just my opinions, but opinions of

people on both sides. >> we have done quite a number of things to look at financial inclusion, access to the financial system, access to credit, to actively promote more inclusive in practices both in the private sectors in terms of things we can do. when we have summer jobs -- >> are you looking at the current policies that are hurting american families, especially the poorest among us and seeing if there is any way to correct some of those policies? that's what i'm asking. i'm not asking you to do more, i'm asking if you are seeing any areas where we can undo some of the damage. >> i don't agree what the source of the damage is but agreeing the result is unacceptable. >> i have very little time. i just wanted to get your opinion on that. >> it is an interesting subject.

i would love to spend more time on it. it is one of the central topics we have to make progress on. >> in the next few days my colleagues and i are scheduled to have a hearing to examine the implications of the financial stability board for the, for u.s. growth and competitiveness. since you are here today, i wanted to take the opportunity to ask you a few questions about the fsb. many of us are concerned about the extent u.s. regulators refer to international bodies like sfb when it comes to promulgation of regulations that impact the united states institutions and united states economy. another international organization similar to the sfb is the basel committee on the bank supervision. european members of the basel

committee are pushing back how they assess credit, market risks, with some european members reportedly threatening to reject the proposals. it seems the european regulators are willing to defend their rules, their institutions in such organizations. why are the united states regulators, by contrast, so willing to defer to the agenda of the fsb? >> i don't think that is an accurate description how u.s. regulators participate. we used our involvement in the fsb and all the international bodies to drive an agenda -- >> can you give me an example where your treasury colleagues rejected or resisted fsb initiative? >> fsb only makes decisions by consensus. it doesn't get to the decision

ifitis noot consensus. we drive that process -- >> you never objected? >> no. i didn't say -- >> can you give me some example? >> i've got 10 seconds left. we are happy to get back to you in writing. >> yield back. >> gentle lady yields back. i'd like to thank the secretary for his testimony today. all members will have five legislative days to submit additional written questions for the witness to the chair which will be forwarded to the witness for his response. we would ask mr. secretary that you respond as promptly as you are able, without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. this hearing stands adjourned.

c-span brings more debates this week from key u.s. senate races.

tonight, three debates starting at 8:00 p.m. eastern on c-span. first from pennsylvania, incumbent republican pat too maniy faces the democrat. then florida senator marco rubio seeking re-election against patrick murphy. from ohio, rob portman debates ted strickland. that's at 10:00 eastern on c-span. tuesday, live coverage on c-span 2. a debate from indiana to succeed republican dan cotes who is not seeking re-election. republican representative todd young faces evan bayh. that's live at 7:00 eastern. after that, another debate to succeed a retiring member of the senate, louisiana republican, david vitter. several candidates will take the stage including john kennedy, republican congressman charles and democrat careline fayard at

8:00 eastern on c-span 2. thursday, the candidates in ohio senate race meet for another debate. senator rob portman and ted strickland live at 7:00 p.m. eastern on c-span. from now until election day follow key debates on the c-span networks, c-span.org and the radio network. c-span where history unfolds daily. >> president obama getting ready to host the final state dinner. the italian prime minister is the guest. we have coverage tomorrow at 6:30 eastern on c-span. we got a chance to talk with the italian ambassador to the u.s. about the dinner. >> ambassador armando varricchio. how did the state visit come agent with the italian prime minister? >> it is an important event that

is a sign of a special relationship between the united states and also have to say a special relationship between president barack obama and the prime minister. >> how did italy get selected for what could be the president's last state dinner? >> long standing traditions between italy and the united states. we are partners with allies. we have very strong and important community in the states. our leaders share the same view of international topics. they do consider that democracies have to stand together and both the united states and italy have a special responsibility. >> why do you think now? why now? you know, it's been eight years, why now, italy? >> italy will chair the g-7. there will be members of the

security council. next year in march, celebrating six years of eu. italy is a prominent member of the eu and importance of integration. i think, also, this european framework ranks among the priorities of discussions between president obama and prime minister varricchio. >> where are we working together? >> in many fields. we have military working standing side by side in my theaters. we share responsibility and our common endeavor to fight terrorism. we want to tackle the global issues ranking from climate change to migration. these are issues where countries of the great tradition like italy share the same interest

and the same approach. >> what's going on this week at the embassy as you prepare for the state dinner? >> as you can see here, it is rather lively. there's a great sense of excitement. we are really excited by this event. we are -- we have many, many things to care about. but, i think myself and my staff, we are excited and happy. >> the prime minister, what kind of leader is he? what should the american people know about him? >> he's a young, talented leader, very, very dynamic. the youngest prime minister ever in italy. he brings this sense of enthusiasm, this sense of italian personality and i'm sure that the americans will come to know and love a young guy and the way will be here with his spouse. >> americans will see him with his wife.

they will have an arrival at the white house. the americans will see the pageantry that goes into a visit like this. what is the coordination like tat office, our embassy here and the government? >> they run smoothly. colleagues of france, the white house, at the secret service. there are so many details to take care of. but, as you said, a happy event, a celebration. we are happy to celebrate with our friends and colleagues. >> any special protocol for the italian prime minister? >> it is when he comes to state visit. we will try to follow the different procedures with a jolly spirit. i think what really matters is that we consider this as a celebration of a friendship, a long standing friendship, but also it is important for us to

draw a common agenda for the future. >> what is that future agenda looking like? what's the common ground? you talked about the military, but what else. what will they talk about when they hold their joint news conference? >> if i draw the line of the challenges, both president obama and prime minister varricchio have the same approach. we consider globalization requires on the part of leaders great care. we have to harness the process, but we rest convinced there are many opportunities ahead of us. >> does the prime minister have concern that is he'll talk to the president about when he has his meetings with him behind closed doors? >> yeah, the two leaders know each other very well. they have many meetings in different international. so, they know each other very

well. i don't think what the prime minister will bring here is this -- i won't say concern, but deep understanding that in order to tackle these challenges, our countries, our democracies have to build bridges, stay connected because integration is the only way to harness this process. >> what do you think the italian people are hoping to get out of this visit for their country, for their leader to come here? will they be watching? >> for sure. italians are excited. i'm sure when president obama and first lady together with the prime minister and his spouse will be seen together at white house. i think this will be a great image. they will give the sign of strong boned and our fellow

italians will love it. >> mr. ambassador, thank you for your time, appreciate it. >> thank you. >> watch the state dinner for the italian prime minister tomorrow starting at 6:30 p.m. eastern on c-span. watch c-span's live coverage of the third debate between hillary clinton and donald trump on wednesday night. the preview from the university of nevada las vegas. it is at 8:30 p.m. eastern and the debate is at 9:00 p.m. eastern. stay with us for viewer reaction and your calls, tweets and facebook postings. watch the debate live or on demand using your desktop, tablet or phone. listen on your phone with the c-span radio app. download it from the app store or google play.

public tv hosted a governor's debate between marvin nelson, doug burgum and marty riske. they were asked about budget forecasting, home elt care providers and the dakota pipeline. this is shy of a half hour. welcome to prairie public and aarp's coverage of the 2016 election. i'm dave thompson. we are going to meet the candidates for governor. good evening. thank you for joining us. our guests tonight, democrat marvin nelson. libertarian marty riske. republican doug burgum. thank you all for being here.

our opening statement comes first from marty riske. >> hello, i'm from north dakota originally. my dad, henry, sold john deere and my mom worked at the walsh county record most of their lives. they were hard working people. my dad remembered the depression and he was a strong saver. my mom had strong intuition when my little sister was born and i was 2 years old. she saw the furrows in my brow when breast-feeding my sister and invited me on her lap at the same time. she tells me it gave me great comfort. i thank her for that. i have two exciting ideas for north dakota. one is a way to balance the budget and cut spending of north dakota to meet the income so families don't have to be taxed more. i have exciting opportunities in agriculture i look forward to

sharing with you. thank you. >> our second candidate to talk will be republican doug burgum. >> thanks, dave. i'm grateful to have the opportunity to be on the ballot representing the republican party in the governor's race on november 8th. i grew up in north dakota, town of 352 people on the west edge of the red river valley. my dad ran the grain elevator business there and had a great life growing up. understanding hard work, agriculture, caring teachers, good coaches and loving parents. when i was a freshman in high school, my dad passed away after a two-year battle with cancer. i learned more important lessons as i saw my mom return to the work force as a single mother and raise three kids. after going to north dakota state and graduate school, i discovered the power of personal computers and software and bought 160 acres i received from my dad for the capital far start-up company here in north

dakota. we grew that from ten people in 1983 to over 1,000 people in 2001 when we were acquired by microsoft. i'm excited about what we can do in north dakota going forward. >> kay. thank you. now, our democratic candidate, marvin nelson. >> thank you, dave. we face a difficult time in north dakota. our income dropped precipitously as a state. we went from $12 billion of tax money in the general fund and the oil tax to seven. a $5 billion drop. we have to make adjustments and we have to do them properly. we have to continue serving the poor, the elderly, the people who cannot take care of themselves. at the same time, we don't want to make the mistake of the '80s where we shove all the responsibility and the funding back to the local property tax. we need to have the state step up and take care of the state

responsibilities. we need day care for children across the state so people can afford to work and it needs to be quality, safe day care. thank you. >> thank you very much, all three of you. let's start with the questioning. we start with doug burgum. everybody talked about the budget. north dakota is facing challenges in its budget. doug burgum, what would you have done differently if you had been governor? >> i haven't been governor. coming in as an outsider, to discuss what i would have done differently, i would like to talk about what to do going forward. it's important to match spending with revenues. we had a presip douse drop with revenue and we have to reduce the spending the state is doing. at the same time, we have to get better at forecasting, a better job of risk management and managing revenues. we have to do a better job of

making sure we fund priorities through zero based funding. where does the first dollar go, not just the last dollar to make sure the limited resources go to the priorities the state is facing. >> marvin nelson, same question to you. what would you have done differently or would wha would dwrou different at governor? >> the major difference is the governor should listen to the people. we have five ballot measures coming up this time. whatever the people decide, that's the law of the land. the people a few years ago voted not to cut income tax and yet the leaders of the majority party continuely cut income tax. the people instituted an oil tax, then the majority party put in a trigger and as an excuse to get rid of the trigger, they cut that tax. we need the leadership of the state to be willing to listen to the people of the state. >> to marty riske, what would

ewe do different? >> one of my corner stones in my candidacy is to initiate the tradition of an independent audit of state government that rolls through state government on an occasional basis every five years or every year in some cases. this is how we identify how to cut the budget precisely instead of the across the board cuts we have been doing. we need to look at the duplication and higher education. one of the first areas -- i'm coming out with a study on that tomorrow. one of the things we are going to be recommending is looking at -- this is one example out of many. and looking at the two engineering departments. >> okay. i wanted to follow up on that because doug burgum talked about zero based budgeting.

can i infer you do not believe in the idea of cost to konconti? >> i think the cost to continue is a concept if we have done funding in the past, there is funding that is required to keep that funding going. one of the things that i think, as a fallacy, is for us to talk about one-time spending because it doesn't matter what it is, if you build a building on a university, you have to heat it and staff it and provide janitorial services and plow the snow. there isn't such a thing as one-time spending or free puppies and buy a house and it's one-time spending. look carefully at reducing the one-time spending to make sure we are appropriately considering all the cost and expense that goes forward after the one-time expense. >> i would like to get marvin nelson's reaction to that. should there be a zero based budget? >> i think it's a good way to do a budget. every way you do has advantages

and disadvantages. certainly for what we call the continuing spending is a good way. the one-time spending, we build a building, i don't think it needs to show up as being in the budget the next time. that is an appropriate way and would be fine as a way to do budget. >> and to marty riske. >> we are going to look at vacating buildings because we don't want those ongoing expenses. the independent audit would reveal what that would amount to. could we consolidate real estate. >> one more to go with budget. i'm very interested in this. there's been a lot of complaint from legislatures on the republican side about the forecast. so, again to doug, you mentioned that there has to be better forecast. >> yeah, in forecasting is a challenging thing when we are so dependent on commodity prices. we are a state where tax revenue is driven by agriculture or

energy sector and they have commodity prices we can't control. like any business in the commodity business, like my family, the grain elevator business is fourth generation run by a family member. if we buy grain from a farmer, we hedge it that night. we don't take risk on the revenues even for 24 hours. in the same way the state owns mineral acres, the state drives a lot of revenue directly from oil production, not just taxes but oil revenue. how do you do a better job of risk management? there are new methodologies many with fancy names. we could give the legislature a range of forecast versus a single number. it's dangerous to offer a single number. >> okay. marv marvin, what is your thought about the forecasting? >> the forecasting really is an

impossibility when we are so dependent on the commodities. the disappointment in the model was there seemed to not be a strong enough relationship between the commodity prices and income tax and sales tax and stuff. realize, there's no place we can go on the market and pick up a model of the north dakota economy to use. we keep what we got. we keep tweaking it. it's always going to be somewhat frustrating. it's the best we have. >> to marty riske. >> we have discussions about bringing forecasting into the state government and becoming good enough to do forecasting for other state that are agriculture with the same problems we have, the commodity based economies. it's sort of unique to the rest of the united states and also, i think, to take off on doug's idea, i think it would be helpful, too, if we could get farmers and oil producers to tell us how much hedging is

going on in the industry so we could take comfort from that. >> okay. i'm going to move on to another subject that's been in the news quite a bit over the last two months at least. that's the dakota access lifeline. start with marvin nelson. how do you feel the governor handled this? how do you feel the law enforcement handled this? what would dwryou do with the pipeline? >> the problems came not from the governor's office, but the process of citing it that wasn't well done. we need to change the public service commission. at the point it gets to the governor's office, we are talking security. but, i have been really disappointed that there hasn't been a serious effort to get the different people in to talk to each other. everything is just done through innuendo and the media. that's a way it creates people are scared, people are hating each other.

they are working at stereotypes instead of sitting down and becoming human with each other and talking face-to-face. no one is actually seeing if there is a solution to this that is mutually acceptable. >> the same question to marty riske. >> if i was governor and this happened again, i would get the negotiation table down to the site as quickly as i could before national influences come in. president obama did a troublesome thing when he came behind the federal judge and broke the rule of law and said, no, it's not going to proceed anyway. he took the ball into his hands and kind of took that away from us. if we do negotiate a good deal, will he come in and turn that around against us again? we rely on diesel from the farm to the shelves in the grocery store and gasoline going to the store to get that loaf of bread and so we absolutely need to have this until solar is

powerful enough for energy. secondly, this is having a huge effect on our employee benefits pension fund on 401(k)s, savings of people with iras and so forth. pipelines are an important part of investment when it comes to retirement because it's reliable income. now, with the disruption of this pipeline, that comes into question as having a lot of pressure on that segment of the investment arena. so, i think we need to move forward with this project and i think we need to make a deal with the natives that we will address their concerns and other waterways and improve something that is 50 years old and under the water they are concerned with. >> to doug burgum. >> i agree with marvin, there's opportunity for enhanced dialogue here among the people that are citizens of north dakota. you know, the reality, where we

find ourselves today, this has become a focal point. this is a federal, national, international battle going on that's much larger than the original issues of pipeline sitings. again, as marty said, the federal government, the overreach here is extreme. we are now in a spot where there was a rule thag ruled in favor of the pipeline to proceed with construction but we have, you know, army core of engineers, department of justice, department of interior, these federal agencies that are acting politically to stop infrastructure in america. i think, whether it's energy security, jobs in north dakota, whether it's union jobs, the union jobs building this. we have to create jobs and build infrastructure. we have to listen and understand and have a dialogue. there's a solution out there, but there's not a solution set if the federal government is

going to try to mettle in affairs we need to handle at a state level. >> to follow up, i'll start with marvin nelson. do they have a point? >> they do. the pipelines going through their water. as far as i can tell, they were never consulted about their water. there was about the heritage sites, but not the water. they do have a point. >> i agree. however, i did go to standing rock in cannon ball and talk to a few people down there. i did meet a real bright fella whose brother is in the pipeline business. he knew about it. he conceded that the new pipes are far better than the old pipes. they are extruded, better alloys. he had more confidence in the newer pipe. that leads me to think we could reach a deal with them and satisfy them. >> absolutely.

they have a point and, as all citizens do, they have the opportunity to have a voice in the due process that's gone on whether it's about clean water or siting. understand the site thag was approved through a thorough and lengthy process goes next to a 1982 pipeline that already exists in the site. we already have that. so, again, i think this is an opportunity for further dialogue. earlier in the campaign, i had a chance to go down to standing rock and met with the leadership there. last week, i had a phone call and spoke with the chairman. listening and understanding the concerns is important to what we have to do going forward. this isn't going to get resolved without the federal government taking a different position. this is not just about the governor, it's the federal delegation and the government up to the white house on weather

they are going to plit sides this or allow the rule of law to proceed. >> now to switch gears again, i would like to get to the issue of property taxes. property taxes is not something the state itself levees, but they are trying to lower property taxes. to marty riske, is this sustainable? >> that's a great question. that's something we are looking at closely as part of what's going to happen for north dakota in terms of where the biggest opportunities are. we compared the north dakota economy to south dakota's economy. south dakota is different in two important ways. one is they do not have an oil industry. the second thing is, they do not have income tax. their annual outlays this year are $1.9 billion and ours are over $4 billion. we are quite a ways away from where they are at and the two big identifiers were money flowing to the state and back to

the cities. which was huge. that was about $2.2 billion a year. the other, about 30% of that is infrastructure for the oil. so, the rest of it is for the rest of the cities. the other big area of opportunity was a half billion dollars in higher education. so, i think that we need to -- it doesn't seem right to send money to this place, then have it sent by them to this place because then you add administrative fees and all those things handling the money. we need to look at where the money is most efficient and where it's going. >> doug burgum, please. >> i agree with marty. the best decisions that are made are often made locally and keeping local decisions local is a way to make sure people have a voice in their government. it's a reason i chose the mayor as my running me inning mate. someone that understands the

impact on the community and i know from having the opportunity to campaign across every county. i have been to every county seat in every town in north dakota, over 1,000, a lot smaller than that. property taxes are different across the state. >> to marvin nelson. >> yeah. when people pledge no tax on the state level, what they are telling you is property taxes have to pick up the difference. any shortage, anything that goes on. that's a really big difference. i remember in the '70s and '80s, time after time, it got shoved on the local level. people say, oh, we won't raise taxes. when you have a responsibility, you have to pay for it. the question is, how are you going to pay for it? are you going to pay for it this way or that way? when people -- i have seen it in the legislature people say we did our job. we didn't raise taxes. the local people had to raise the taxes time after time after time. is it sustainable?

i don't know with the present legislature that we have that it is. i suspect that it actually isn't under the current circumstances, but it should be. the state should be picking up social services. this should not vary -- you shouldn't get different services or be charged a different amount based on where you live in the state. that's the situation today. we need to pick up those responsibilities like we used to. we could if we made a commitment to do that. >> okay. this question comes from our co-sponsor, aarp. a stud di- showed roughly 80% of family caregivers are providing nursing or health care tasks and almost 50% of them do it without instruction or training. what will you do to provide resources and training for caregivers in north dakota and would you support law that is call for hospitals to recognize and instruct family caregivers their loved ones are hospitalized? we'll start with doug burgum.

>> the topic you bring up is a very important one and fits in this broad bucket of home health care. the most expensive way to take care of an aging population is to institutionalize them in long term care, you know, facilities in the most effective way to be safe and well cared for. most of us that cared for aging parents in our lives know they would rather be at home. so, then -- field of home health care that allows us to have people stay in their homes and be well cared for. i agree there are things we can do to train family members to care for family meks. the best care will come from those that love the person they are caring for. >> to marvin nelson, same question. >> it's strange you have to pass

a law. we have people providing care that haven't been shown how to provide the care and people are going back to the hospital on account of that. we need to make sure people are being properly coached before they go home. then, in the whole thing -- you know, this is one of the frustrations in government. these caregivers save the state money. when we come with a bill in the legislature to fund this, it looks like it costs the state money. so, we have things now like the state housekeeping service, 50%. this is going to cost us more than we are going to save with housekeeping services. the caregiver ones are the ones where we really need to know we are willing to fund them because it's going to save the state money, even when it looks like you are spending money. we have to do these things to stay within budget. we have to actually spend money to stay within budget. >> to marty riske, same question. >> this brings to mind the

importance of auditing our state activities so that we do not cut back on services to the vulnerable and the elderly. when we do these across the board cuts, then the human services element gets cut along with everybody else. that is something that i am vee mentally against. i want to look at state government and find the money elsewhere in the areas that are not as critical and not hurt people as much and bring that to bear on the services. i see a vastly expanded role for social services and cnas. >> at this point, we have come to the end of the debate. each candidate gets a one-minute summation. we start with marvin nelson. >> thank you for watching this and following us in the campaign. you have a very difficult decision as the people of north dakota. we are in such an important, critical time moving forward where we have to make some major

changes. i have spent the lifetime being involved in policy, following these issues, learning about the state government of north dakota. carson wentz is doing a great job as a quarterback of the philadelphia eagles. but he didn't show up and have his first time on the football field being the starting quarterback for the philadelphia eagles. he spent years of practice and learning the game. i have spent those years of practice and we need someone who knows what's going on in the state government today. we can't afford not to. >> not to marty riske. >> thank you. the thing that i'm concerned about most here, i guess, is the lower income levels for north dakota going forward and the others influences that are coming to bear that we are not paying attention to. for example, the state pension

and employment fund. with the zero policy of the fed, our income on bonds is going down and that's a significant component of the funds. also, i'm concerned about i'm c farmers who will be going out of business this year because the commodity prices are so low. at the same time, we have a record number of farmers who will enter retirement age who will turn that over. we need to release those soon, starting tomorrow and the next couple of weeks, i'll be coming up with specific proposals to put more income into the hands of young farmers. we need to diversify our most important segment of our economy, the agricultural economy. doug burgum? >> thank you. thanks to the aarp for hosting this debate. i want to say again, this is an important election. i've been making payroll every

two weeks since i was 26 years old and have the opportunity of creating thousands of great jobs in the state and i know that's part of what we need do. we need to diversify our economy to move away from pure economy-based sources, we need to add value to our ag product, diversify technology, all of the work done with the unmanned air vehicles at und and nesu. there are lots of opportunities for us to embrace the future. and i just again want to say that i'm grateful for thousands of supporters we've had across the state and believe in our message of diversifying the economy and balance the budget without raising taxes and revitalize our main streets to maintain our kids and grand kids to keep them here in north dakota and keep north dakota the place that it is. >> thank you. i'm dave thompson for aarp.

thanks for tuning in. ♪ ♪ president obama getting ready to host the final state dinner of its presidency. the guest of honor, the italian prime minister. we have complete coverage of the event tomorrow at 6:30 p.m. east enon our companion network, c-span. we got a chance to talk with the italian ambassador to the u.s. about the dinner.

>> ambassador, how did this dinner come about with the italian prime minister? >> it is a sign of a special relationship between the united states and also have to say as a special relationship between president obama and prime minister. >> how did italy get selected for what could be the president's last state diner? >> there is is long standing relationship between united states, we are partners, allies. we have very strong community here in the states. our leader shared the same view of many international topics that they do consider that democracies have to stand together and both the united states and italy have a special relation and special

responsibility. >> why do you think now? why now? it's been eight years. why now, italy? >> italy will be a member of united nations security council. next year in march will be celebrating 60 years of the eu. it is important that italy is a prominent member of the eu and borders of european integration. so i think that also the framework on the priorities of discussions between president obama and prime minister. >> describe our relationship, u.s.-italian relationship, where are we working together? >> on many fields. we have military work and standing side by side in many theaters. we share responsibility and our common endeavor to fight terrorism. we wanted to tackle the global

issues, ranking from climate change to migration. these are issues where countries of a great tradition like italy and it has shared the same interest and shared the same approach. >> what's going on at the embassy as you prepare for the state diner? >> as you can see here, it is rather active and lively. there is a great sense of excitement. we are excited by this event. we have many, many things to care about. but i think that myself and my staff are very particularly excited. >> and the prime minister, what kind of leader is he? what should the american people know about him? >> very talented heard. very dynamic. youngest prime minister ever in italy. and he brings this sense of enthusiasm. this sense of italian personality.

and i'm sure that the americans will come to know and love a young guy and will be here with his spouse. >> americans will see him with his wife. they will have upon arrival at the white house and pageantry that goes into the type of visit like this, what's the cord nation like between the prime minister's office, embassy here, and our government? >> it runs very smoothly. we have excellent cooperation with our friends and the white house and at the secret service. there are so many details to take care of. but as you said, this is a happy event. celebration. and we are happy we can share with our friend and colleagues at this moment. >> any special protocol for the italian prime minister? >> when it comes to state visits, we will try to follow the different procedures with

the jolly spirit and i think that what really matters is that we consider this as a celebration, of friendship, long standing friendship. but also it is important for us to draw a common agenda for the future. >> and what is that future agenda looking like? what's the common ground? you talk about the common leadership and what will you talk about? >> we talk about the many challenges and sharing the same approach and we do consider that fwloeblization requires on the part of leaders great care. we had to harness this process. but we rest convinced that there are many opportunities ahead of us. >> does the prime minister have any concerns though that will talk to the president about what he has his meetings with him

behind closed doors. >> yes. the two leaders knew each other very well. they had many meetings. in different, recently at the summit. so they know each other very well. i don't think that what the prime minister would bring here is this, i don't say concern. but understanding of that in order to tackle these challenges and that our countries, our democracies, have to build bridge answers stay connected because integration is the only one to harness this process. >> what do you think the italian people are hoping to get out of this visit for their country, for their leader to come here? will they be watching? >> for sure. italians are excited. i'm sure that when president obama and first lady together with the prime minister and his

spouse will be seen together at white house. i think this will be a great image. giving the sign of a strong bond and our italians will love it. >> mr. ambassador, thank you for your time, appreciate it. >> thank you. >> again, watch the state dinner for the italian prime minister tomorrow starting at 6:30 eastern on our companion network, c-span. >> watch c-span's live coverage of the third debate between hillary clinton and donald trump on wednesday night. our live debate preview from university of nevada las vegas starts at 7:30 eastern. the debate is at 8:30 eastern and the dipper at 9:00 p.m. eastern. stay tuned for your reaction

including live tweets or facebook postings. listen to live coverage of the debate on your phone with the free c-span radio app. download it from the app store or google play. >> tonight on c-span 3, look at the transitional process and president obama talks about education policy and some of the achievements of the administration and later we will hear from the ambassador to the u.s. to end the 50-year-old kol conflict between the rebel government known as farq. now what challenges await the next administration? speakers include a former adviser to president bill clinton and chief of staff to first lady laura bush. this is 1 hour 15 minutes.