at all? and i am talking k-12 and higher education. oops lost one there. sorry. governor, you got somewhat of a better economic situation than your fellow governors. but what is the secret? >> well, the secret is we prioritized education. now they didn't get as much as they wanted. but we particularly, k-12 funding has increased significantly. and higher education has gone up 2% but compared to 10% reductions that other states have taken is a challenge. . .

>> the budget in new york state was originally projected for 2009-2010 at $5 billion. it has quadrupled in nine months. it is arguably the largest escalation experienced by a

state in the history of the united states. what happened in both of the years i have been governor is we have budget deficits. you really cannot cut education in the middle of the school year. when i became governor, education spending had increased in 47%. there became a point where the resources were so depleted having cut $21 billion during that period of time that inevitably we had even hit the sacred area of education. we ended up cutting $1.4 billion on top of it because we wanted to protect ourselves from and how your gap. it is a bit of a competition between education and health care advocates. we cut health-care $5.5 billion.

over the 2.5 years i have been governor, we have cut $42 billion from the state's economy. combined with california, that is $100 billion in those two states along. >> we will get to health care in just a minute, but i am sure you all face the same problem. education is a huge trunk of your budget. you have to deal with the fiscal realities. who else wants to take this on? gov. o'malley? >> we and barred six years ago on a more equitable funding of education. part of the problem they had an increase in education but there was still revenue stream to support it. early on we had to address the $1.7 billion deficit left behind by our predecessor.

we call the special session and did a number of difficult things including raising the 47 lowest sales tax in the country by one penny. for the last few years, they have named are schools the best in america and thanks to congress and president obama we are able to make record investments this year even with cost containment and not being able to do as much as we might hope to. it nevertheless has been an investment that i believe is paying off. we have never had higher achievement levels and this is something i believe the people of our state is tied to our economy. is part of the reason why we have had three months in a row positive job growth. >> you raised taxes, not a lot, but you raise them in part to pay for education. you are where the people in this room for reelection. >> we embrace our own

vulnerability. we all work for the people. the st. -- >> how many of you have made it to the last two years in dealing with your fiscal situation without having to raise taxes? let's not play semantics here. let's take a broad definition of taxes. a show of hands. i see you raise your hand, but my understanding was you were proposing a task on farms. >> we did, but then they got an offset in tax reductions. there was a reallocation of revenues. it will increase revenues but his four years out. it is more public policy statement with regards to local governments. >> we can go back to the environmental in a minute, but is taxing windmill's the right way and for our energy future?

>> if you when a fully diversified energy portfolio, then yes because in our state all the other forms of energy are fairly heavily taxed. wind is the least attacks in the region. they do not kick in for a while. >> i saw your hand going up on and no tax increases. part of the way to not have tax increases was to cut education. >> with a 10% cut across the board last fall. as a result of that we have a 5 $40 billion surplus, the aaa bond rating, and one of the fastest-growing economies in the country. >> so it was the right trade- off? >> we were able to back fell 5% of the 10% cut in part because been made the tough decision and our economy is picking up a

lot of steam. >> to us once in on this? >> we reduced taxes and cut taxes on capital gains on the state. we have not reduced education spending. >> you increased spending for the university's. >> we increase to higher education because we are one of the lowest per-capita in the nation. in k-12 we could probably cut budgets in there and some. >> where is the money coming from? >> farming taxes. with the second highest property tax burden in america which is a real problem. >> may i piggyback on governor

douglas. one of the problem -- one of the things we were able to do, i mentioned the 42nd lowest sales taut we were able to reduce taxes for 85%. we've gone four years without a penny increase for college tuition. we have had to cut our operations budget because of it. >> part of the way you did that was by dipping into your capital funds? right? >> no game plan, no borrowing from the future? >> know. we actually diversified our transportation. we have not dipped into that. we are one of eight still has a aaa bond rating.

we did this with tough choices and huge cuts, 54 $6 million. we were the first administration to submit a budget with state spending lower than it was four years ago. >> there are a lot of states that are either barring from pension funds, dipping into rainy day funds, doing things that may help for one year that will not help if the downturn will be as expected as some people think. >> you are correct. in south dakota we have a requirement that we cannot borrow money. we have to balance our budget. we have the same in our reserve accounts. we maintain our status as having the lowest taxes for capital in the nation. but it is not easy to do it. we took about $9 billion from education. part of that will be offset because they can raise tuition. tuition for our state-supported schools will go up about 4.6%. >> yes, sir?

>> in the last two years we did not raise taxes to balance the budget but we did have to change the administration of education because we were putting more money into it and we needed to consolidate school administrative districts. we went from 180 -- 150 to 80. it has been a political context of wills. it was taken into a referendum. we hope it will pay dividends over time but we do not have a printing press and we have to be more efficient with our resources. we took on that challenge. it is still a work in progress. >> i think probably most of us in the midst of the worst recession have taken off a blended approach.

>> you did everything. >> we cut $4.5 billion of the budget. we reduced the number of physicians by nearly 3000. we got concessions from public employee unions. >> not all of them. >> they are not happy because they were cut. >> you have made everyone angry. >> we have had to. it is about shared sacrifice. we have raised our sales tax from 5% to 6.25%. it is a big jump in the minds of our people. we had a big rainy day fund and we have drawn down on that because it has been rainy. the stimulus funds have also helped. the blended approach, like some of my colleagues here, we are reaffirmed by the independent agencies because of the blended approach. i wanted to suggest another part of the story which i think is incredibly important. one of the things a crisis

presents is opportunity. thinking about the big questions about what we want government to do and not do and what are these markers ways to do that. and the massachusetts, that has enabled us to move some reforms that i think under normal circumstances would be hard. one example is in transportation. >> go ahead. what have you decided not to do? >> first of all, in terms of the reforms, one thing we decided not to do is to be the only state in the nation that used police details on every single construction site. i respect the police and their concerns for public safety. i have concerns about public safety, but we now use civilian flyers -- civilian of flanders. i think that was the right thing to do. when we took six different

transportation agencies and collapsed them into one to make the focus on the traveler instead of on the bureaucracy and saved $250 million, that was the right thing to do. it made people might -- it made people mad. there are examples of that everywhere. people have been seizing on this, things that we knew that our right to do that would be harder to do if the

circumstances were different. >> we definitely want to spend some time this afternoon talk about that. i want to get you in on this. i gather you have had a situation not unlike governor patrick. you said you were not going to raise taxes and had to do a little bit of that. can you talk about your experience? >> we had to cover a $12 million shortfall. it is aimed challenge. we did a little bit of everything. the first year was $9 billion. the second year, last year, was just over to $20 billion. we raised some discretionary taxes to the tune of about $2 billion. we have used our rainy day fund because we considered it was pouring down rain. we had swept the towns that had more money. we have raised college tuition.

interesting aspect for us is we are constitutionally protected so you cannot cut it. i did not raise my hand because the people past two initiatives with no funding associated the. one was teacher pay and another on class size. they were suspended. that is by virtue of initiatives with unfunded demands on the state. the rest is constitutionally pereira -- constitutionally protected. we found that we have some of the lows to version in the country compared at different universities. we authorize them to raise their tuition to make up for the cuts. i cannot think of anything other than shutting down boards and commissions, collapsing environmental agencies. >> health care? >> we have cut health care, yes. i had to put out an all cut the budget in december last year. it was going to take a huge toll on health care and that is what drove everyone to raise revenues. >> health-care i know is a tricky one. it is hard to describe it as a grave problem. we are in for no a's flood. it is not going away anytime soon. we have a little help from the federal government. some of you are asking for more help. is that the right way to deal with the health-care problem? who thinks it is? they do not have the money. >> i think health care is a

fundamental right i think no one should be left out. i walked across our state all the way on behalf of decent health care for everyone. i do not think you take a holiday from decent health, particularly of public health. the best way to have a productive economy is to have healthy, educated workers. i think it is a large part of our economy. the federal government and the state government had a partnership, medicaid, and we need more help from washington to protect against job cuts and health care cuts. and as almost all the governors are for enhancing the medicaid match for a couple more years. we do not do that -- if we do not, we're falling herbert hoover economics. that is not the people back to work. >> do you agree? more money from the federal government even though they do not have the money to send to you?

>> i do not agree. it is going to take the exhortations of the public. so far, this is how we have a script and adjusted to meet the public's expectations about funding. now in the other option on the table which is this going to the federal government to get money to meet the expectations whether it is health care, roads, or anything else. as states, we are dealing with a historical pattern that each state's are deciding how they're going to fund things. to me, it seems that we are rewarding the raise a question which is, each of us have to figure out how to pare back public expectation of what government will pay for or we continue to come as you said, suite funds somewhere. >> where do you do that? we already have 40 million people to run health care. who are you going to tell. -- medicaid? >> i think we will have to trim back what medicaid provides. >> in many people pay more themselves? >> it is all that stuff your mother told you about.

it is about being responsible for yourself. we are not in danger of doing that. >> did you know my mother? >> a delightful woman. [laughter] it seems to me this discussion, and i have been through a lot of these, they always come down to how we deal with the supply side of services? whenever talk about how we will be with the demand side. we is in the expectation is there and it is our obligation to meet it. i do not think you can survive that. >> use a health care is a right, how much the individual pays for his or her own of -- his or her own health care for a bird is a flexible figure. presented results of a lot of money by having a more efficient system with less money business by big insurance companies and the hmos.

i supported the president's health care reform. our state had more health insurance revisions than california. what is a decision? some little a year-old girl gets raises and it is not on the former new apply for insurance. when she gets pregnant years later, they knocked off the coverage. the have passed a law to protect against this kind of insurance of years. i think is important to protect the health care of people who work and live paycheck to paycheck. which -- >> they safety lead is in the federal government's hands without changes and cost growth that you're looking at a few decades down the road the

federal ban government will grow from 20% of gdp to 30% of gdp of -- 30% of gdp. is there anything you can do as governors dealing with just one state to fundamentally change the health-care cost equation? to things they can? >> i think there are things we can do. this is the single most complicated public policy issue we face. it as as important as education and transportation. healthcare is the most complicated. certainly we can focus on well as intervention. it is incredibly important. we can focus on the administrative costs which people recognize as somewhere

between 25% and 30%. at the end of the day, it seems to me that until we figure out a replacement for this fee-for- service model where the entire health-care system is compensated based on more procedures and the like. >> can you do that at a state level? >> i do not know. we have had conversations and i think it is certainly something we need to at least try and figure of. there are some pilots that has seen some success. we need to figure out how to scale this up. >> we reduced our medicaid costs at least two under $50 million. for my colleagues from that is a lot of money. we ask the federal government successfully for a waiver to give us flexibility on how we

administer the medicaid program. my complaint about medicaid historically is that it is not a health care program is a sick care program. it takes care of things after the fact. we wanted to use the dollars for preventive care to make an incentive payments to physicians to provide high- quality care. as a result, we are seeing some real savings. it can be done. the government needs to give us more flexibility. in addition for a few additional quarters, we have asked for a relaxation of the maintenance of effort so states can have flexibility to design the programs in a way that works for them. >> which is more important, money or flexibility? >> give us one or the other. it is a short-term request but two quarters. >> money now and flexibility later? >> correct. >> gov. herbert. >> is one of the new governors on the block, i look at this as an opportunity for states that should have been on the table and the beginning of this

discussion and taken the lead. my dismay was that we were the last ones brought into the discussion. i think states have a responsibility and an opportunity to lead the way on health care reform whenever the definition of health care is. it means different things to different people. for people in utah, it is lower costs. for others it is universal access. there are a lot of different definitions out there that are being wrestled with. we come out to washington, d.c., with a one-size-fits-all approach where as i would rather see 50 states out there with the laboratories of democracy trying to find their own ways to solve their own health care reform issues.

in your job, we have when the health-care exchange windows that is having some success in bringing competition in the private sector setting as opposed to a defined benefits for employers so employees can match their needs with what is available in the marketplace with a defined contribution. i think it is a step down the right road. i think will give us competition in the private sector setting. i think it will help us to keep costs down and help give us access to health care. my dismay is that the states have not been from the very beginning of the front of this discussion helping to lead the charge with goals and objectives set out of washington. >> at the risk of redundancy, i want to tack on. i truly believe that the single

most significant thing that has not been done on a wholesale basis, although as governor douglas points up, it has been successful in some areas, is the systemic change in the way we pay for this stuff. the most basic systemic change most basic to a long-term resolution to some of these spiraling and escalating health-care costs is changing the way we pay for it and changing the whole fee-for- service model. it is absolutely fundamental for both getting a handle on the cost, but i think it is also helpful for quality. >> you think states can do that? >> i think they can. i think it is much like other things. the federal government can lead, follow, or get other the way. i think this is where you are seeing more governors ago. we have requirements and that is the reason why you are hearing some people say, and i know dave believes this, but we need to get a handle on costs and we cannot be a hypocrite and ask them to bail us out of everything. you can be to have a credible or you can be hypocritical. . and then governor douglas's point was a very short term fix for a very short period of time to help the thrift problem that the states did not create to begin was with regards to

increase access and increased demand on our medicaid budgets. it is a short-term solution. the longer-term solution is the systemic change that has been talked about. i think states can do it. alternately i think states will do it. that requires a little flexibility than gov. douglas was talking about. . i agree. -- >> i agree. every time we tried to refashion medicaid, they take away $3 for every $1. we did not get the benefit of the savings. there is no incentive. establishing a partnership in terms of reworking it, the flexibility and maintenance of effort, if we did have not, i am sure we could compensate for the lack of revenues we're looking for if it were phasedown so we would be able to be in a better position. >> to the casual listener, the message here on the outside is more about give us the money than give us the flexibility. >> we cut because of shortfalls

but we had cut $300 million to get $100 million in state savings. we damaged more of the economy because of what we had done and there's no savings with the federal government said there is no incentive. that is the flexibility of manages we're talking about. >> at this meeting we had the ceo of ibm, health care economists and they all said the same thing. the data was crucial so they give pass legislation which we have done in the colorado which requires a database. you go into the did it and see what feebler bank where the government comes in again is that is no good if you have no access to their information around medicare.

the had that of as many access to. the state has to be willing to go in and do the hard work of gathering the data. your first question was about the short term. 30 -- in the states to balance their budgets using the extension to sell this over time. if you look back in 1992, nothing has increased as rapidly in the budgets as medicaid. it is important to get our arms around. we will not do it without cost containment. adding states have absolute responsibility to see were cost containment can come from without impacting. >> i want to be clear. states knew that the money probably were not wearing a calm >> i do not know if that is accurate. the speaker of the house, the

majority leader, the administration including secretary ofsib -- secretary sibelius. there is a reason to hope there would be an extension. it was one or two votes shy in e senate of getting there. i do not know if that is correct. >> one of the reasons you are hearing a lot of discussion about health care is because it is such a huge part of our budget. if he lived on education was, in south dakota is 40% of my budget. medicaid is about 36%, but it did not used to be that high. most of us still have revenues at the 2008 or less level but budgets are going up. last year may budget went up in one area only and that was medicaid by $50 million. >> governor christie, you talk

about public employee benefits and the need to wrestle with that problem. does that ring on the same level with health care? is that one of the things you can do? is it something that inevitably the by republican governors from democratic governors? why is that so important? >> in our state, with the second-highest average taxes in america. that's why he thinks me, because we have the highest. -- that is why he thinks me. there's a finite amount of money which is getting smaller and smaller that will be raised by taxes because of the economy. they do not care to college and

come, property, sales tax. -- they do not care whether you call its income tax, property tax, sales tax. the idea that there has been one sector of our population that has been completely and totally shielded from the recession is, in my view, international standard. >> that sector is? >> unions. >> teachers, firefighters? >> across the board. with 0% inflation we have an average increase in teacher salaries for new jersey between four% and 5%. we have an overwhelming majority of teachers in new jersey to pay nothing towards their health care, zero coming from the day they hired into the day they die. we had the highest paid police officers in america and the highest paid firefighters. there and sellers continues to increase. -- of their salaries continue

to increase. i do not think it is a republican-democrat divide, but it is a divide between public sector unions and private sector. fifth in my state, you have 35% to 50% of private-sector unions. >> anyone disagree with that? >> let me just say that this is not a partisan issue because i think all of us have dealt, in one way or another, with public employee pension benefits, health care benefits. in kentucky, we passed pension reform that affected the pension benefits of every new hire. we have a constitutional issue affecting the benefits of current employees, but we reduce the benefits of all new hires. we negotiate every year and a health-care contract and we do not have public employee unions in kentucky.

we worked through with the amount of money we have with the benefits will be in the amount of money this year will be much less than it was in previous years. we will sit down and work of the best plans we can get. the entire conversation has been focused on cuts. >> everyone here has been the last couple of years cutting. in delaware, we have had to reduce the number people work for the state. we have had to negotiate leases. all employers to pay cut last year.

there has been cut, cut, cut. we will constantly be in the mode of being more cost- efficient. we will not be in a position to cut our way to a prosperous future. we will not be able to tax our way to a prosperous future. in the end, we need to create better and more jobs. >> let's talk about that. gov. patrick made the same challenge. a crisis is also an opportunity. it may be hard to do when you are shrinking your budget, but you do not have a choice. i like to get you to tell me be one thing, not a list, but the one thing you have done as governor that you feel has done the most to get your stay were you think it will be even 5-10 years from now for the kind of economic climate you foresee in the future. >> the single most important thing is what jack was talking about here. that is to create jobs.

that is how we will grow our way out of the recession. last year, we totally revised all of our economic incentive packages and legislation that allows us to do that. before that, we do a lot of things to attract new business to kentucky, but once you were there we said think you and we go on to the next one. because of the changes, we can work with existing businesses to help them expand and grow and provide incentives for that. during his last 15 months, it is created more economic activity in the kentucky that -- then we have had since the start of this recession. >> are you saying your economic incentives is not about trying to grab jobs away or plant locations where from another state, or not as much about that, but try to encourage. >> we are trying to grow and keep what we have.

during this recession, it is just as important to keep the jobs as it is to grow them. we are now doing both. how do you make that change -- >> hardy make that change? >> we legislatively revised our packages of economic development cabinet can sit down with the existing businesses and out of some businesses and work with them both. >> i think it is more than one issue. one issue is that four years ago we put together a 10. plan for economic prosperity for the state of utah which includes tax reform, tourism investments, research and development, education enhancement with an emphasis on math, science and technology. we also cut taxes from 7% to 5%. we have created an atmosphere for the entrepreneur can be successful.

we tried to grow from within. you did not have to and said five people. you have further afield for any entrepreneur to plan their seeds and expect to grow a crop. in utah, we made it so we have not had quite the crash landing that some have had because of that. again, one key is to create a fertile at this year for businesses to prosper. >> let me let governor sanford in here. >> i want to go back for one second to the larger notion of how do you create a fertile environment. i go back to the spending issue. i know we are trying to leave

that, but as the state's we're just scratching the tip of the surface on the standing issue. i say that because in south carolina and we have seen a fall in of the appropriate budget from $7 billion to $5 billion which is the budget everyone talks about. that is one part of the pie. the other two-thirds of the pipe are fees. -- the other two-thirds of the pie are fees and federal transfers. i guess it was a quote from churchill that the beauty of the american political system is a they have always done the right thing, after they have exhausted all other possible remedy. the same holds true for reform, restructuring, cuts. none of us want that. we squeal and scream and tried to make noise legitimately because they are stakeholders in that which they have invested you are really going to see a seismic shift. i think that next year may be an

amazing year with regard to states moving towards some of the of titian's these -- some of the efficiencies. >> you are talking about challenges that lie ahead. i was trying to get people to answer the question of what you have done that has had the most effect on creating the kind of environment that you want to create down the road. >> on employment security, commission reform, workers' comp reform. all of those things occurred to the benefit of companies looking to relocate to south carolina. they are fundamental conditions for the businesses in our state. >> one thing is energy. in our state, we are the most oil-dependent state in the country. 80% of our needs are imported.

gone to -- we have gone to wind. we have a foundation for energy efficiency, renewal but energy, domestic efficiency did we think it is a national policy that could help with jobs. >> you are not going to tax those? >> i was very disinterested in what he was saying. >> one thing that we have done -- our comparative advantage is the export entity. we have concentrated on the power lines and investment with the private sector in natural gas pipelines and railroads, simply because as an energy- exports day, those are the underlying for infrastructure, more so than highways. the private sector is willing to make the investment. that has manifested itself in our current fiscal circumstance. we have more than doubled the capacity to move natural gas, which has a revenue implications for us, which is a reason that we're in good shape.

>> you ask for one thing. one thing that we identified -- where is our economic future as the most trade-dependent state in the nation? we also identified energy. we have invested in research and development. we set the goal for energy jobs totaling 25,000 by the year 2020. we did an energy portfolio. we did tax incentives. we're the fourth largest producer of wind power. we're the largest-growing in terms of solar energy, biomass, and so on. the goal is 25,000 jobs by 2020. we surveyed last year and we are at almost 100,000. that is not only giving us jobs, but it is allowing us to do som exports that we have heretofore not done.

we have identified it as a single industry where we can get four more jobs than in any other single sector in the state of washington. >> in 2003, we did what we call the 2010 business initiative that was designed to be a business plan like a private business. the goal was to become a recognized leader in civic areas of research and development. we created tens as a big research centers. we created 23 new ph.d. programs -- and a specific -- ten specific research centers. we created 23 new ph.d. programs. it is changing landscape. >> do you see the change? >> we do. we're keeping the children here. we have record enrollment at our universities.

but yes, sir. >> two -- yes, sir. >> there was a signatory reduction in the amount of time it takes us to respond to inquiries -- a significant reduction in the amount of time it takes us to respond to inquiries. it is a very fast time frame from the department transportation and the department of natural resources. they're not putting the people of delaware to work if they are filling out forms. that is critically important. again on -- you cannot overstate the importance of education. the race to the top composition was huge. the economic development committee meeting after this will focus on these issues. that is an advertisement. >> governor ritter? >> we really staked their future on 21st century sustainable industries. -- staked our future on 21st- century sustainable industries. biomass, aerospace, energy.

we have signed 56 laws in two years that deal specifically with clean energy. we joined all of our major resource institute's -- research institutes would the -- with a collaboration on clean energy that has attracted private-sector research and development which will help build this global institute for alternative and renewable fuels in colorado, along with big manufacturing jobs coming as well. that is just the north american plants. there are 2500 jobs. it is when the first places outside of germany where these have been built. they are manufacturing. they're about innovation. we think that is the way forward for us as a country, and certainly as a state. >> governor o'malley?

>> we believe the most important thing we can do for our economy today and the future is to invest in the innovative capacity of our people. last year, we led all states in terms of job growth in our tax sector. we move from fourth to second place in terms of biotech. was it in the corridor of science and technological innovation -- we are in the quarter science and technological innovation. -- we are in the area of science and technological innovation. we have invested in the education of our people. we have made college more

affordable. we are connecting innovation to the entrepreneurs were creating new opportunities and new jobs which will allow us to have a rate of job growth twice that of the nation's. >> governor paterson, one thing? >> one thing that happened in new york that may be a little bit different is that, obviously, legislators are very queasy, particularly in election years, about making some tough decisions and cuts. in new york, apparently, we did not have to wait for a session to have that problem. our budgets for late 25 out of the last 30 years. in that time, what the state had done for a while was far from its own general fund to keep the state functioning until the budget was passed. then we passed a law about emergency appropriations to keep the garment running from week to week. what we did this year -- the government running from week to week. what we did this year -- our budget was passed in april, the only one in the country passed at the time. we started putting got into the emergency appropriations themselves. -- but cuts into the emergency appropriations themselves. inevitably, it took the

legislators off the hook from making the decisions and placed it squarely on the executive branch. we were able, in a series of weeks of doing this, to basically pass a budget. it changed the culture. we have found a way to address the issue of reductions without making people from both partners -- parties as politically vulnerable as they would have been. >> and we have a number of policies over the years. from a physical standpoint, the way we're able to balance the budget without additional medicaid money, without cutting taxes, is this something we call challenges for change. the legislature of vermont is of the other political party. we realize we have defined a bipartisan solution. we have worked with the legislature to pass a law that reduced the main -- the remaining budget gap of 3% without knowing exactly how we do it.

it is a leap of faith. we have to fundamentally restructure how we provide services the government. we have inserted a performance- based contract in system. we created a chartered units, where we say to one agency, you do not have to follow the strict rules of personnel and purchasing and other kinds of things in state government. here is your preparation. do it your way. we're reducing our inmate population through attrition -- through transitional housing and other means, which increased -- which reduce costs. we're going through this. >> i will change the question of a little bit in a minute. >> what i'm about to say is much more macro. >> not just one thing? >> it infiltrates the microbe that everyone is talking about.

for us, in particular, and some of these folks may take it for granted, but we do not. we have been viewed a mindset and attitude -- imbued a mind that an attitude that links the economy and education to the point that everybody thinks of it, just like they think of it like they do with breakfast now. i hope you will appreciate this. governor o'malley brags about maryland being first in the education rankings. he should be proud. it is something that he should not take for granted. we're 10th. who would have believed, a few years ago, arkansas would be tent in those rankings? what it has done is change to

both inside and outside our state the image and the view and the relationship -- it is from high tech, and hewlett-packard, verizon, all of those jobs, to the manufacturing sector, where we have created over 25,000 jobs -- new jobs. with increased what we -- we have increased what we already have an attractive new business. it is all the micra things everyone is talking about. -- micro things that everyone is talking about. you keep people in your state. you educate them. you provide good jobs. yet is all of the individual things that everybody is talk -- is all of the individual things that everybody is talking about. -- it is all of the individual things that everybody is talking about. education is key to economic development -- cradle to grave. pre-k, workforce training, retraining.

if you have one single thing to point to as a state, where you will be this country out of the malaise is in, it is the understanding by your people that the relationship between education of every type and economic opportunity for tomorrow are inextricably linked. >> we're back to education. yes, of governor bertrand -- gov. fortuna? number one on the list, number 10 on the list -- we know those. those of you who were numbers two through nine, i do not want to leave you out. >> massachusetts has a top- performing student achievement for the nation for three years in a row. >> i have started something now. anybody else? >> we wanted to create the best business climate in the country. we did a number of things. our process was out of what. we cut by 2/3 the permiting

that you need to put together a business. we understood that we would not have the funds needed for infrastructure development. we approved and are implementing -- are implementing the largest and most ambitious public-private partnership program in the country. it is not just a couple of projects. it is an entire program with every single. you can think of. i agree with some of my colleagues that energy is key. our economy is 45% manufacturing. the cost of energy is important. we live on an island. it is very tough to produce cost-effective energy.

we're moving that direction with portfolios. because of all the tough decisions we made last year, cutting taxes across the board. >> i want to change the question all little bit. governor camacho, go ahead. >> we're so distant and remote. we are very much a microcosm. our mainstays have been tourism and the department of defense with military installations. i try to implement changes by investing in infrastructure, building schools, investing in our community college or university, are seaboard -- our seaport, airport, landfills. these have all provided jobs. we invest in foundational investments that allow for growth in the future. we also try to do with as many longstanding issues -- lawsuits, entitlements, unfunded

federal mandates -- things that have haunted us for decades. it was mostly foundational. that is the approach of taken to try to build for the future. >> governor brewer i want to get -- governor brewer, i want to get you in here. tell me one thing. we have heard several things. i give up. tell me as many things as you want to tell me. >> thank you. i have been governor just over 500 days. we were facing the largest deficit that the state of arizona had ever faced in history. we began by trying to get our budget balanced.

which is very important for the business community. we need to stabilize government. we have a structural deficit going into next year. certainly, we did a yeoman's job, considering the fact that we had about $8.2 billion revenue stream with a $10.3 billion cost for budgeting. we did get the budget balanced. we went out for a temporary sales tax, which the voters responded overwhelmingly to for that 1 cent sales tax increase over three years. it has helped us get through these hard times. >> you did it to pay for? >> education. it was very important. we understand that it is at the top of the issues in regards to jobs. it is very important. we have addressed everything in those 500 days that you bought talked about.

we have been on it, we have been successful. i am very proud. the bottom line is that the business needs to know the government is stable, they have a well-educated work force, and then, they need to -- in needs to be easier for them to do their work in arizona. that meant putting a moratorium on rules and regulations and helping people who are looking to come to arizona get through the red tape and the green tape. i wanted to reach out and help businesses to stabilize. we have been successful. we have brought in over $1 billion of capital assets. we have brought in thousands of jobs. we're proud of that. we accomplished a lot in 500 days. >> has this immigration mess been a distraction from that agenda? [laughter] >> i am multitasker.

>> do you regret the fact that -- did you know it was going to be this big of a firestorm? >> i did not. i knew it would have a tremendous effect in the state of arizona. people throughout the country realize that what happens in arizona affects their state to do. it is an impossible system -- their state, too. it is an impossible situation. we feel that it is our responsibility to step up. >> if you had a duel over, would you put that one off? >> no. >> different question.

this time, i will hold you to one. tell me the one thing that you did not do that you really wish you had. many of you are leaving office this year or early next year. you will be succeeded by someone else, maybe the one thing that you wish you had done and you hope your successor does. some of you will be back for more punishment. it might be the one thing that you have not been able to do. the one thing that you have not done that you wish you had done to put your state in the position it needs to be for the next 5 to 10 years. >> one thing i wish i could have given more of was tax reform. that is really important. it is on my agenda. we will move forward with that. >> next? >> control property taxes. they are very high. it is tough for families where incomes are below the national average to find a decent place to live. we have the lowest vacancy rate in rental housing in the country.

we're very low for owner- occupied as well. we have seen a decline in our student population of 30 -- of 13% in the last decade. property-tax is and local school spending keep increasing. it needs to be addressed. >> governor sanford? >> we proposed limiting the income-tax in south carolina and we were unsuccessful. we were able to cut the marginal income-tax rate for the first time in our states history from 7% to 5% for limited liability corporations. you have to go to the root cause, which is income tax. >> get rid of it altogether. >> to what extent is that about your competitive position. -- your competitive position? we're discussing the situation of this country, the degree to which we have relied on consumers, the lack of large deficits imported from the rest of the world. if we turn that around in the

next 10 years, we have to export. it cannot be about moving the jobs around. >> we buy into thomas friedman's notion that if the world is flat. of 6.5 billion people scattered across the earth. capital is fluid. it will go across -- it will go to places where the natural order encourages it. we have looked at taxes. >> that is why lebron james went down there. >> i think it is. >> we need to empower and strengthen voters. i believe an initiative, referendum, recall -- i went like to see more opportunity for consumers and taxpayers to enact laws by direct petition and referendum. . . tv in topeka, kan. is hosting

the event. >> in 2011, kansas will be celebrating 150 years since entering the united states and becoming the 34th state in the union. kansas will also be getting a new u.s. senator with incumbent sam brownback running for governor. two canada's hope to get your vote on august 3.

congressman jerry moran has represented western kansas since 1990 sex. before that, he was a member of the kansas state senate from 1988 until 1996. congressman todd tiahrt has represented southeastern kansas since 1995. before that, he was a member of the kansas state senate from 1992 until 1994. both candidates have been reelected time and again from their own congressional districts, but now each wants to move to the u.s. senate and represent the entire state. both candidates have been running hard for the august 3 vote and now it is time for their first televised debate. 27 ksnt, kshb kansas city, the topeka capital journal and the macpherson sentinel present this

debate between congressman jerry moran and congressman todd tiahrt. >> good evening, kelli stegeman. >> i am dr. bob beattie. thank you for joining us on this special night. >> we would like to welcome you to the first televised debate between congress and todd tiahrt and congressman jerry moran. thank you for being here this evening. >> for the next hour, these two senate candidates will field questions from a variety of sources, including 27 news staff, 27 news viewers and co- sponsors of this debate. >> we will also be taking questions from you at home. if you have a question that pertains to both candidates, send your question to the address on your screen. >> in order to cover as much

ground as possible, we have asked each canada to keep their answers to 1.5 minutes with 30 seconds allowed for a bottle. with that, we will get to the first question. >> this question goes to congressman tiahrt. from both of your campaigns, there has been much discussion about who is the true conservative. there has also been quite a bit of back and forth about who has spent the most time in the state. also, amplify why it should matter to voters were you live. >> kelli, thank you very much. i want to thank channel 27 and the staff here and the co- sponsors for this opportunity. it is great to be with dr. baby and kelly. kansas is going to send a republican to the senate. the question is, what kind of a senator do you want? it is important in the challenges that we are facing.

we are in debt almost 13 trillion dollars and we have an economy that is flat. it is important that we send somebody who is a leader that can get things done and somebody who is not a compromiser like john mccain. we need someone strong like sarah palin. i have lived in kansas for 27 years. i have been in my house for 27 years. jerry brown and i spent the same amount of time -- jerry moran and i speak the same amount of time in washington. what is at issue is who has the best record on fighting taxes and getting things done for can chris -- for congress. who has a record of doing something. i think i have that record. we want people to have a chance to operate a business or get a good job. that is why i am asking for your

vote on august 3 to send me to washington to be a senator. >> for you, congressman iran? -- congressman moran. >> i would say that we take very seriously the kansas common sense and good judgment. people of our state have a lot to offer. conversations with them result in good decisions in washington d.c.. it is one of the reasons my family and i made the decision to remain where we live. we travel every week to washington d.c., but we return home every weekend. what that means his church on sunday, the grocery stores, the post office, we have conversations with everyday normal kansans i to the town hall every year. this gives me an opportunity to

make certain that i stay in touch with how kansans feel about issues. kansans want conservative views. i have taken that you from -- to washington d.c. from day one. we are conservative in our approach to fiscal issues that our country faces. our country is financially bankrupt and it means that we can no longer afford to do business as usual. it is absolutely essential that we have a conservative voice in our nation's capital for the future of our country. >> your 32nd response? >> it is important that our values are not pushed around. it is difficult for many members of congress to be loved by everybody. i know that i will not be loved by the government unions.

i will not be lulled by the environmentalists. i will not be lulled by the bureaucracy. i will fight for lower taxes, smaller government and more individual freedom. i will make kansas proud. >> in your conservative days and democrat days, i am one of 17 to have voted against every stimulus package and bailout. i voted against health care reform, all of the things that are ruining our government. when republicans were in charge and grew government in ways that we cannot afford, i am very consistent in my approach to government, whether it is republican spending or democrat spending, the answer has to be no. >> the point i want to drive home is that people have to be

secure in what we are doing as far as fighting for tax relief, regulatory reform and to get health care back in the private sector and become energy secure. that is how we will get our economy back on track from the ground up, not the government down. >> clearly, that is a direction that we must go. i have opposed the stimulus and bailout packages that are draining our country. we need to reform and stop spending in washington d.c.. congressman tiahrt and i disagree on this. >> a number of these issues we will be getting in in detail. let's go to question no. two.

this comes from the staff of the macpherson sentinel. earmarked seven-connotation with voters. they can provide much-needed funding for community projects such as the opera house, which has brought people and dollars to main street. what is your stance on earmarks, and if elected to the senate, will you continue securing earmarked for your constituents but we start with congressman iran -- congressman jerry moran. >> i support the moratorium came about in the house of representatives. we tried for two years to get republicans not to request your marks and i was one of 30 members of the house to ask republican leaders to have a conference meeting of republican house members to bring to a vote the idea of a year marked performed moratorium. -- and earmarked reform

moratorium. it should have been put in place years before. congressman tiahrt has voted to keep the earmark process in place. i think that change over time, our country is bankrupt and earmarks to do to that. -- contribute to that. i think we have to do something different than business as usual. there may be a reason for an earmark . members of congress are often told to go find a way to spend money. that is a terrible mistake. it originates with the appropriations committee, which talk has been a longtime member. we have clear differences with regard to this question of

earmarked. >> congressman tiahrt? >> when you look at congressman jerry moran, you would think that i am the only one that requests earmarks. just last year, congressman mor an requested more than $250 million in earmarked through the that is according to his website. i just take that for what it is worth. i have stood with senator roberts and senator brown back to make sure we support our communities. when the levies were failing in our area, and they cried out for 20 years for someone to build them, it was an earmark that started that process. also, senator roberts and i made sure that our national security is not out source. the pentagon has tried to outsource jobs. the only thing that we have been

able to do is use your marks -- earmarks. they have been misunderstood. i have an earmark reform bill. it will not only include the house and the senate, but also the white house. unlike today, when you would vote up or down on an earmark, if it were defeated, it would lower the debt. that is why i think the two- party express has endorsed me as though i sarah palin. >> congressman tiahrt talks about earmarks of that benefit kansas. this is led by congressman flake from arizona who has endorsed my candidacy. he brings these amendments to the house ofour. congressman tiahrt and i have

voted differently in removing earmarked. todd voted for the san francisco pelosi earmark relating to the bridge and for $400,000 for an indoor tennis court in wichita. >> the airport that congressman jerry moran is talking about is an area for apache helicopters. he supports constitutional rights for terrorists. it is part of his weak record for national security. here marks should go to the reform process so we can lower the costs and that is why i think that my bill is important. it includes your marks from the senate, the house -- includes their marks -- earmrks from the house, the senate and the white house. >> congressman tiahrt is said

that he wanted a moratorium on earmarks. he is coming to this conclusion when it happens to be a election year. >> as i recall, you were in that meeting and you supported my motion. you supported the very motion that your chastising me for on this. i think that my legislation is the best vehicle to do that. jerry moran agreed with what he is now criticizing me for. we have to make sure that we have transparency in the earmark process. we need to make sure it includes every facet of america today and make sure it reduces the american debt. >> this is a popular topic among several viewers. it has to do with the economy

and the stimulus and bailout packages. the question is, what would he should you have done instead of these programs with the economy? >> i think that the bailout and the stimulus have been a bad economic policy. you cannot buy and spend your way into prosperity. the government does not create wealth. when you borrow money like the obama administration has been doing, you put us further in debt and postpone the inevitable. of those of the problems we are going through today. we have 19 months since the democrats have taken over and we have lost hundreds of thousands of jobs since the democrats took over the house. if you were -- you need to lower taxes, return health care to the private sector, become energy independent and you have

litigation reform. i started the economic competitiveness caucus. my time at the boeing company where i had to account for every penny that the boeing company spent and assure a reasonable profit, that is a good economics background so that i understand what we need to do to get the economy going. this administration has been going in the exact opposite direction. that is what i think it is so important that we have someone that was not compromised themselves on taxes. congressman moran has tried to increase taxes. now is the time to do those five simple things to get the economy rolling again. >> i voted more than 200 tons for taxes -- 200 times for lower taxes.

having voted for -- those proposals are disastrous for the united states. we are very shortsighted. we are spending money that we cannot afford to spend. we cannot expect the next generation of americans to pick up the tab. every time i have voted no, that is the difference between todd and i. you cannot spend, as todd says, or borrow your way to prosperity. the direction we are going is terrible for today and tomorrow. i would say that it does the tax reform. there are certain taxes that will help us grow the economy. state tax rates are onerous.

this kitchen is the dynamic of our economy in a big way. i believe that it could create jobs. i also think that we have to have an energy policy and a health care policy that is developed by obama and pelosi, that increases taxes. it is a terrible scenario of events that have occurred over the past few months. >> a 32no second rebuttal? why did he have to vote against the bush tax cuts? why did he have to vote against eliminating the death tax? those things are very critical. the bush tax cuts were very significant. because congressman moran bill out on the tax cuts, we ended up with chipper tax cuts will --

which will expire. >> those are very disingenuous statements. i voted every time a tax cut will be for congress in 2003 and 2005 for those bush tax cuts. the only thread that congressman tiahrt uses to try to make this a true statement is that i voted against the resolution that created a budget in advance of those tax cuts. it included an increase in spending and i wrote an opinion piece in the newspaper that said that while cutting taxes is a good thing, republicans have to do a better job of slower in -- of slowing spending. >> i to get is important that every farmer and every small business over knows that he opposed a permanent reduction -- elimination of the death tax. my family lost their form because of the death tax. i will never miss and

opportunity to vote for the death tax. >> i never voted against bush tax cuts. in regard to a statement from the farm bureau, they have endorsed me, and the first speech i ever gave on the house floor was the important of eliminating the estate tax for the purpose of preserving ranches and farms. this is a fabrication. >> we are focusing on the massive federal deficit which now totals trillions of dollars. most economic experts contend that the only solution to america's debt problem is to deal with structural debt caused by social security and medicare and medicaid for changes in

policy involving possible reduction in benefits as long -- as well as increases in revenue. do you agree with steve and what is your solution to the u.s. debt problem? the first response comes from congressman jerry moran 3 >> this is one of the most serious issues our country faces. at this point in our country's economy, we cannot raise taxes. any increase in fica or withholding taxes on employers and employees is a terrible mistake. raising taxes is not an option. we're looking at long-term in criminal changes in the social security system that will provide benefits over a long trip of time. the truth is, if we are going to address our deficit issues is about changing our tax code, eliminating rules and regulations and allowing the

american people to go to work. -- poor and small businesses and men and women have an idea to bring to market and we have to get government out of the way. much of that has to do with the uncertainty of washington and what it is doing today. what person is going to grow the business when they are uncertain about what is known to happen with health care, tappan trade, and what is want to happen with financial regulation- what is going to happen with financial regulation. we have to put people back to work. congress has just passed legislation that makes that much less likely four kansas banks and financial institutions and it means that small businesses and entrepreneurs will have less of a likelihood to have access to capital. >> congressman tiahrt? >> this question is very important. these are entitlements. these are moneys that we are going to spend. it is important to find ways to

reduce the costs associated with them through the i co-sponsored a bill was a socially with him. i co-sponsored a bill that would lower costs by 10 percent for medicare and medicaid. that is exactly what we need to do. it addressed the cost of medicare to help reduce them. making sure that we can protect doctors and nurses from lawsuits, that could lower the defensive medical costs. they do this to protect themselves from lawsuits and are not required. we need to make sure that we have regulatory reform for health care. it takes 1.1 hours to do paperwork and for every hour of health care. it is difficult to get litigation reform in congress to deter itoday.

with litigation reform, we can law or medical malpractice costs and lower liability costs. if you couple that with regulatory reform, we can have a 10% reduction and that will help us reduce the debt that we have in this country for th. president obama talked about ending the health-care curve to reduce the cost of medicare and medicaid for the state in the federal government. it has now been restored by the agency that manages medicaid and medicare services and we are increasing the cost of medicare. a republican congress could not have added money to the deficit. >> as i recall, you sent the letter to the republican leadership asking for more

money to be in part de of medicare. i have that with me here today. to act like your conservative now, it seems a little bit in -- disingenuous. my plan is to lure -- to lower health-care costs. i wish you would join us by cosponsoring this legislation to help bring down the cost by 10%. if you joined on board, we could possibly get a hearing under a democratic house. >> again, the largest increase in entitlement spending occurred. this is something that i voted against after telling the leadership that if we need your vote, i ate said that this bill is so bad that it would be all the more reason to vote no.

i misled no one. this is an example of how republicans mismanaged our federal government'. congressman, you ask for more moneybe put into the bill. you told the leadership that you would vote for the bill. then you voted against it and left the floor. when you got back in kansas, you said that it did not do enough for seniors. to act like you are a fiscal conservative now and chastise me for doing something that you said you were going to do, i do not think it is going to cut it with the kansas voters di. we can get there, but we cannot by not holding to our word when it comes to vote. >> is now time for our first break. do not forget, we are taking questions from users viewers. send in a question that pertains

to both canada spiritous attuned. >> welcome back. >> if you have a question, please e-mail to the -- to a ksnt.com. many of the e-mail's express great frustration that elected officials have not been able to get together and do something about immigration. with the ability of the senate to filibuster, it does not seem possible that this issue is going to be resolved without some sort of compromise between democrats and republicans. explain your position on this issue and explain how there would be a chance to in this impasse between the parties to the first we will go to congressman tiahrt. >> certainly, immigration is a big challenge today. i read in the news that if we stop illegal immigration and

have everybody without legal status bill hall, calif. it could have balanced their state budget. it is clearly a problem. my solution is three words. bill defense. -- build the offensfence. . .

it is a very serious issue. the first thing we have to do is build the offenfence. >> the first up is to enforce our law and the most important law is at the border. we cannot have the board as we have in this country -- the prime responsibility of the federal government is to defend our country and that includes border security. i am a strong supporter of what the governor and legislature and arizona are doing i find it odd that congressman tiahrt lectures me you were on two

occasions he talked about amnesty for children for those who are here illegally. and he argued for driver's licenses for those who are here illegally in the united states. these are terrible mistakes, particularly when you look at their social security. 18 of the 19 terrorists had u.s. identities, and providing drivers licenses would be a national security risk. if congress is working its way through so-called immigration reform, nothing worked until we enforce our borders. if you do something about immigration today, all means is that more people will come to the united states because the border is so porous. those who should be returned to their home country, will all leave this to me back because there is the effort of border control. -- will only come back because there is the effort of border control. it was much more difficult to cross in canada. we have a terrible immigration system that demands law

enforcement. >> any response starts >> sometime ago, a long time ago, i thought it was compassionate and not punish the children for the parents sins. i've studied this issue and i have looked to the costs associated with the issue and looked at the crime that comes from illegal immigration and i've come to the conclusion that we must build a fence, say no to amnesty, do the things necessary to make sure people are only here on legal status. that is why it was so disappointing when it jerry supported sanctuary cities which protected illegals. no amnesty, build the fence. >> i voted numerous times in support of eliminating sanctuary cities. it is a terrible idea. it is wrong. i have opposed it numerous times. in fact, the leader of immigration issues, border security -- was a supporter of

mine. i do not think he would support me under the allegations of congressman tiahrt. this is not just about immigration by about national security and law enforcement. the greatest crime problem we face in kansas is about drugs. the problem is coming across the border. >> well, drugs have come across the border. i agree with the arizona law. it is important reinforced the laws of the land. what i saw in the lawsuit today was absolutely wrong. i joined with lamar smith and a letter sent to the president and attorney general to ask them to drop the charges. i sent a letter to our attorney general to have him join in to make sure that we do not do the same thing here in kansas. if we do not build a fence, we will not solve the problem. >> 37. >> i only would say that it is

important -- let me say it is a silly waste of money for the federal government to sue arizona. they need to use that money to improve border security. they need to use that money to enforce the law. what a silly use of taxpayer dollars to challenge arizona and their constitutionality of enforcing the law. all arizona is doing is to protect life and property of the citizens of the state. they should be applauded, not sued. >> next question. foreign policy. the chairman of the republican party michael steel recently said that president obama does not understand that the one thing you do not do is engage in a land war in afghanistan because everyone who has tried over 1000 years of history has failed. george will wrote that the american undertaking in afghanistan is a fool's errand and likened it to vietnam.

these are strong voices saying that afghanistan could be a quagmire. do you agree, and if you do not, please tell the voters what specifically our mission is in afghanistan and how and when it is attainable? >> i think our mission in afghanistan is similar to our mission in iraq and that is to stabilize the country, allow the development of a government that functions, help reduce the corruption that the roads that government, and the decision about whether or not we belong in afghanistan was made on the day that president bush decided to send troops to afghanistan. and once we make that commitment, it is my view that we work hard to succeed. and i think it is especially important in afghanistan. this is the site of where the terrorists trained before they came to the united states and killed thousands of americans. we need to recognize that can return. that is another goal of our military effort in afghanistan is to make sure it does not become a base for terrorist in

the future. finally, afghanistan is so important because of its neighboring pakistan. here the game changer is the fact that pakistan has nuclear weapons. our ability to make certain that those weapons do not fall in the hands of those who want to kill americans is in many ways determined by the stability of that area, including what happens in afghanistan. from my perspective, the decision was made. our military leaders believe that success can still occur. and i have faith in those military leaders, given the free rein and reduce the restrictions that the civilians place of our military leaders and the decisions they make about how to utilize forces, i think we can still achieve success. >> congressman tiahrt? >> we of a constitutional requirement to protect the people of this land. when we were attacked on september 11, 2001, we realize that we do not take the fight to the terraced they will bring home to us. our brave men and women who put

on the uniform have taken the fight to the terrorists. we have not had any attacks on our homeland since september 11, 2001. there are many naysayers' about the iraqi surge. joe biden spoke against it, the president spoke against it when it was a senator. given the right resources and the right emphasis, our troops can accomplish almost anything. they accomplished a significant amount in iraq by making it a safe country, by bringing in the terrorist and to control. in iraq, there is still a lot of work to be done. now we have naysayers are critics saying that afghanistan is going to be a quagmire. it could become a quagmire of our president fails to get our troops the resources they need. if he fails to give the general is the number of troops they need. i have been to afghanistan several times. i bet on the pakistan border. i was in kabul when the mortars

were launched into the compound. i visited pakistan as well. i know there is a possibility for us to do a similar effort that we did in iraq and get a functioning government where it will keep the taliban from operating in afghanistan and keep bases for training people and sending attackers against america. that is why we are there. god bless our troops. they are doing a great job and i fully support them. >> let me use this opportunity -- i do not think there is rebuttal here -- but let me use the opportunity to praise our soldiers and their families. i represent the area that surrounds four riley and recognize the sacrifice being made on behalf of our country and its future and praise them and support them in every effort. we need to make sure we make a commitment to the veterans and military retirees, keep the commitment that was made to those deserve our country. >> every person that goes to war

has some impact from the experience. it is important we give them an opportunity to test and make sure they get their new life back in america. when they are arrive in our country it is important that we check with them and make sure they are adapting well. after they have been here for six months, the best program for troops with ptsd resides in fort riley, kansas. we are proud of the italian and the work they are doing. let's take care of our troops. we're very proud of -- we are very proud of the battalion and the work they are doing. >> we have received the following questions regarding health care reform. both of your campaign to overturn the health care reform act. what would you keep from the health care reform act or would you abolish it all together? >> the health care reform or

obamacare will be a disaster. it will lead to expensive health care and rationing. we are seeing some doctors questioning whether they will stay in the business or retire early. it will be cheaper for employers to pay the 8% payroll fee and push their employees into medicaid. when they do that, it will drive up the cost for states like kansas which contribute a portion of that. it will drive of the cost for the federal government. the best thing that needs to happen is to move it back to the private sector. in addition, we have to employ h.r. 3400, a bill that addresses litigation costs, medical malpractice, regulatory reform, and more free market forces into health care. by doing that, we can lower costs. what i was on the floor, spent 11 hours on the floor fighting to try to stop the health care law. what i was hoping to do was hold a held accountable for its rules.

if i'd been successful in postponed the vote for two weeks, every member of congress would have returned home and had to face their constituents before they made that vote. if that had occurred, i believe we would have had a different outcome and would be considering the ways because lower health care costs instead of having the government taking over. i think it is very important that we let the free market forces bring down the price of health care. you have to start that would repeal in health care. >> congressman moran? >> i strongly oppose the health care reform bill and confine next to no merit included in it. there are many things we can do to improve access to affordable health care. i chaired a group of members of the house will try to make sure that rural america does not have forgotten. we keep our hospital doors open and keep physicians and our communities. this bill -- the obama-'s health care bill -- it is damaging to that cause. it increases taxes, a dramatic

increase in regulation and regulatory costs and increasing, ultimately, the cost of health care as i indicated earlier as scored by the congressional budget office. it is bad for the general economy. in fact, i talked to a business person in kansas and she told me they have outsourced their jobs at their company to another country so they could get below the 50 employee threshold. it is counterproductive to creating employment in this country. we have health care that is moving jobs outside the united states. this bill is also bad for my kansas-a long perspective. the home town doctor and hospital -- it is the on stated aspect of these health care bills -- hospital doors closing, less access to medicare for senior citizens and the ability to train and educate physicians. again, people will decide this is no longer a profession i want. i will not work for the federal government. there will be a reduction in

affordable health care because of this legislation. >> 30 second resonse. ponse. >> i said repeal healthcare. i meant repeal obamacare. when i was on the floor, congressman moran was outshooting a campaign video. you need to take the fight to the liberals, to the democrats there. i will use the amendment process in the appropriations committee to repeal and replace healthcare starting with the 16,000 irs agents that we do not need designed to audit every business in america. it is time to repeal obama care and put free markets back in control. >> crazy allegation. i spoke numerous times in opposition to health care. one of the things i spoke about on the house floor is my concern that this is a bill that once again send a message to the american people that somebody else is responsible for their

well-being. the more people who come to the conclusion that government will take care of them, the less likely we will ever be able to work our way out of that. it is why repeal -- replace it with something better -- and those common-sense reforms we know can work makes a lot of sense. this bill has to go away before too many people are dependent upon it for their health care and employment. >> in this bill is going to lead to rationing. it will lead to fewer opportunities in health care. there will be less of physicians. every nation in the world that tried this has it worse health care system them before they started. i favor repealing and replacing it with a free market system. i'm looking forward to congressman moran joining my efforts. >> 30 more seconds. >> i was the first member of the house to introduce legislation to brepeal. on monday morning, our bill was

introduced. it was not to thousand pages -- it was two sentences. i am a strong supporter of repealing. again, thinking there are many things we can do to improve health care and make it more affordable, but unfortunately, none of them are in this legislation. >> and we are back after this with viewers questions. welcome back. this is our last round of questions. we will have one minute answers and one round of 32nd rebuttals each -- 30 second rebuttals each. >> this question comes from mark and topeka. you differ greatly on losing the trade and travel embargo with cuba. please explain. >> i do believe that kansas farmers should not be penalized. ranchers should not be penalized

by policies be put in place more than 40 years ago in this country. sanctions do not generally work, but they certainly do not work where unilateral. i have worked hard to open up markets, not just in cuba, but and southto of beef korea. we should support the trade agreements with colombia and panama. trade matters. 4% of what we produce in kansas is exported. -- 40% of what we produce in kansas is exported. we are just taking money from cuba. we are not even trading. this is sales for cash up front. and unfortunately there were regulations put in place that made it more difficult that we are now trying to correct. this is an effort on behalf of trying to increase profitability and a success for kansas farmers. >> i am for free markets and free trade as well. when it comes to south korea,

open up their markets for beef. same with japan. it would be much more productive for the kansas farm bureau and americans to pursue a trade agreement with columbia. congressman moran wants to change the policy and trade with cuba. when clinton was president, we were shipping goods and hoping for payment from the cubans later on. you can only do business with one company when you import into cuba. that company is owned by fidel castro and his brother. then we found out they were not paying their bills. so president bush change the policy so we did not ship anything into were received payment first. that worked. we are the largest importer of agricultural goods into cuba today. now congressman moran wants to not only change that policy but open up trade and travel policy with cuba. it will only benefit the castro brothers. i do not think that we should give a credit card to fidel castro, because he does not pay his bills and that is why we changed the policy.

>> rebuttal? >> none of these sales were on credit. there were for cash up front. it worked well we sold $1.2 billion of agricultural products. i am a support of -- i am a supporter of freedom and liberty. i also believe that engagement -- ronald reagan spoke about this -- engagement with other countries increases the chances they will enjoy freedom and liberty. i have no supporter of fidel castro and communism, but we can effectuate change by changing our policy. >> congressman moran ought to read his bill. it is shipped first, pay later. that is a bad policy. you pay for those goods before you ship them because you have a poor credit rating. fidel castro's americans in the tens of billions of dollars. he still owes russia tens of billions of dollars. for us to change the policy so th we have a ship first and pay later policy is a mistake. i cannot support that. but i do support free trade.

i wanted to create kansas jobs. i want to export airplanes. that is the best way to pursue it. let's open up trade with columbia, not cuba appeared >> and not a day goes by we do not hear anything about the oil spill in the gulf. the you feel you have the same thoughts that accidents happen? -- do you feel that you of the same thoughts that accidents happen? >> thank you for the question. i think accidents do happen. that is a true statement. i think we need to hold bp accountable for this bill. it is the worst environmental disaster we have seen in the history of this country. we also must learn from their mistakes and make sure this never happens again. but did you ever ask the question of why did we drill and 5,000 feet of water? that is almost a mile deep. if we had been drilling in 50- 100 feet we would not have had this problem because he could have kept the well. the reason we pushed out there is because we have environmentalist that insist

that we drove way out into the ocean. we have government policies that force these rigs way out. we need to become energy independent. we have been drilling for oil in kansas city for over 100 years. i think we should learn from those mistakes. allow production of oil closer to our shores where it is more save and continue to move this country towards energy security. >> i do not think you write off bp and a circumstance we face under a gulf coast as accidents happen. i am disappointed that the company had no plans to respond to this kind of disaster. and i am terribly disappointed in the obama administration's failure to get the bureaucracy out of the way so that we could keep the oil from coming ashore in begin the process of cleaning up this disaster. and so, the government has been a handicap not help. ndp should of been better prepared than they were. in my opinion, they have to pay for the cost environmentally and economically. but it is a reminder that we

need an energy policy. when we talk about putting jobs in the u.s., one of the best things we could do is create jobs in the energy sector. it is why i supported a comprehensive energy plan. it is why i opposed cap and trite, one of the most damaging pieces of legislation when it comes to job creation and energy production. we should be using kansas wind, solar, nuclear power, clean coal, and we should be exploring closer to our shores in the united states. >> he is right about that. the thing that upsets me about the obama administration is that we could have had more help in the gulf but they would not waive the regulations that prohibit it from coming in. over 30 countries wanted to come in. my policy would be that until those oil skimmers are bumping into each other, we do not have enough. our administration has failed. the field to lead on this policy. as congress, we should hold them accountable -- they have failed to lead on this policy.

but alaska, the oil spill there, it was a terrible disaster. but this country needs to be energy secure. we have to hold not only bp accountable but this administration accountable. let's allow companies to produce energy closer to our shores so we do not face this type of environmental disaster in future. >> 32nd. >> what i would say is that captain trade has passed the house, damaging to farmers and agriculture. damaging to the consumers of our state. we cannot afford to let president obama use the disaster in the gulf of mexico to be his reason to champion cap and trade. we need to make certain the senate does not pass it. if we can get through this senate, it means it has to start over. i hope the american people will use the november elections to send a message that this is another failed policy of the obama administration. >> it is time for closing

statements. each candidate will get a minute and a half. we flipped a coin to determine the order. first is congressman moran. >> let me thank channel 27 news and thank our viewing audience to give us an hour t opportunity to explain what we are about. our country faces tremendous challenges. all my life i've heard about how this is the most important election of a lifetime. the reality is i never believed it. expression.the eds freshhat i think those were just words. what happens in 2010 and 2012 determines the future of our country. we need to be thinking long term. this congress and administration -- long-term to them is the next election, it is november. i think about my mother and dad in their 90's.

their whole life has been how do we care for the next generation. now they are thinking about how do we care for the next generation, their grandkids? washington it, d.c. plays politics the day and day out. and the goal should not be anything but a better american. i think about the service than we paid tribute to earlier. i walk by the lincoln memorial, the vietnam wall, the korean war memorial, not a person there was more lust for their sacrifice but for anything other than -- was memorialized for their servers but for anything other than their service. we need to take common-sense proposals and fight for them in our nation's capital. >> i want to thank the sponsors for creating this opportunity to have a debate with congressman moran. i agree with what he said about the great challenges that this country faces. kansas has a decision to make. what type of a senator do you

want? we will send republican to washington, but will be sent a leader? will we send somebody who fights against taxes? will be sent somebody will take the needs of this country and this state and create a better opportunity for our kids and grandkids? there are differences between the congressman and myself. i do not vote for tax increases. he has voted for 12 tax increases. i oppose death taxes. he voted against a permanent elimination of the death tax. i think budgets matter. there are clear differences, not only in taxes but in policies related to whether or not you give citizens' rights to terrorists or not. there are policies on how we view democrat leadership in the house of representatives, whether it is a good or bad thing. but the real thing that needs to happen for our future is we have to do what is necessary to get this economy back on track. using my business experience, making sure we do the things

necessary to get the opportunity for our kids and grandkids is what we need to do now. i think i can provide that leadership and that is why i am asking for your support on august 3. i need your vote so we can take this fight to washington and create a better tomorrow, a better future for our kids. >> that is all the time we have for the 2010 republican senate primary debate for kansas. >> we would like to think the candidates for coming here this evening and for agreeing to debate and also for are co- sponsors for their support. thank you for wat history, and

nonfiction books, all as a public service, created by america's cable companies. >> next, president obama speaks at a fund-raiser for missouri senate democratic candidate robin carnahan. this event is about 40 minutes. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> thank you. thank you very much. you know, it is a gorgeous room.

and i like it so much that is kansas city. i want to thank all of you and so many of you are my dear friends for many, many years. and you have been there for may through the thick and thin, ups and downs, the campaign's, the wins and losses, all of it. i am so pleased you are here enthusiastically supporting the next united states senator from missouri, robin carnahan. [applause] and greeting the president of the united states at the same time. you cannot get any better than that. we are all here today because we understand the choices that missourians have in november. it is an important choice and it

is quite a contrast. candidate has had a leading role in the movie that is called "what is wrong with washington." and he has had that leading role for many, many years. one candidate was one of a handful of leaders in washington in that real small room of real power that made the decision to blow the surplus the last democratic president left the united states of america. to do what ever the oil companies wanted, to do what ever the pharmaceutical companies wanted, to do what ever at the lobbyists wanted -- that was their mission, as they led the united states over the

last decade. one canada knows the streets of georgetown much better than a beautiful backroads of missouri. one candidate is going to continue to be the darling of the lobbyists, bleeding and money raised from the legions of lobbyists -- leading in money raised from the legions of lobbyists he calls friends. then there is robin. strong, smart, independent, she does not need to put on a flannel shirt or by a pickup truck to convince missourians she knows what their lives are all about. [applause] she has been taking on the bad guys, the financial industry, right here in missouri, while the republican party watched as the regulators slept in washington and slept soundly.

she will not be doing the bidding of lobbyists in washington. she will be doing the bidding of you. informed by her heart of america common sense and her bedrock principles of fairness and hard work, she is going to be on your side. but she needs your help. this is going to be a ringtail tutor, even from missouri standards. this will be a tough race. one of the things i am most worried about, one of the things i am most worried about is passion and enthusiasm. it was a remarkable thing, the elections of 2008. we had a wildly successful year in missouri. while the president nearly lost to this day, i watched in amazement in st. louis as 100,000 people gathered on the

riverfront. my jaw dropped when i saw the crowds around the columns in columbia, the university i love so much. i could not believe the size of the crowds at liberty memorial on that wonderful evening that the president came to campaign here in kansas city and the closing hours of the campaign. and i never would have bet that we would have of tens upon thousands of people filled a high school football stadium in springfield the weekend before the election. [applause] it was an amazing time because people were inspired. it was amazing because people were caught up in the possibility of what america is supposed to be. we have got to realize that we

cannot win in states like missouri if we do not have that same kind of passion and enthusiasm. while we are very grateful to you for what you have done today, what you have to do from here on out is you have got to start shaking people by their shoulders and saying, wait up. because we have a real choice to make -- wake up. we can decide to move forward with governor nixon, a senator mccaskill, and senator carnahan -- [applause] or we can go back. the choice is really up to the people of this state and of the good people who know that the policies that robin carnahan embraces are what is best for working missourians, for people

who want a shot, for the opportunity we know america truly is. so, please, find that passion enthusiasm. a the next speaker shares that enthusiasm. the three of us know each other well and we will work for well together. it will be a very strong trio to lead this state. he has done a wonderful job of steering this state during very rocky times. he and i talked constantly, and i am so reassured that the strength of his leadership and his pragmatism and his complete and thorough knowledge of what missouri is and what it can be are going to continue to show missourians that we elect the kind of canada it's in our party that are strong leaders and that lookout for the future of our state and do not want to stay

wedded to many of the problems we have had in the past. he and i are both going to be working hard to elect democrats because we do want to move forward. i know you are proud of the job he has done and it is great to have a democrat and the governor's mansion. please welcome my friend and a great governor of the state of missouri, jay nixon. [applause] >> thank you. thank you, claire. i want to take just a second to talk about what a great job claire is doing. [applause] is not it nice to have somebody from missouri bring common sense

to washington? let me give you an example of why i am so proud. many of you already know this but under the arcane rules of the united states senate any single senator can place an anonymous hold on any single one of the president's nominees for almost any or no reason. the secret holds have impaired the executive branch under republican administrations and especially making it difficult for our president now. why is this allowed? well, because that is how they have always done it in washington. aren't we sick and tired of that answer? it took a common sense missouri democrat to stand up and say, this is wrong, and we must change it. so far more than 2/3 of the senate has agreed with claire to end the secret hold.

that is the progress and accountability are taxpayers expect. claire, on behalf of america and missouri, we are proud to have a harry truman democrat in the harry truman seat. i am also proud of the way we been able to make common sense reforms. since i took office, we have frozen tuition at every single public two-year and four-year institute in our state because we know that a skilled and educated work force is the lifeblood of our long-term economic success. we have eliminated the franchise tax for all small businesses and created a program to provide $25,000 of low-interest loans, creating jobs in cities across our state. we balanced the budget without

raising taxes. we maintained the aaa bond wr rating. we've expanded job-training programs and local community colleges and made investments to train health care professionals to meet a growing demand for nurses, nurses aides, and a therapist. last month, i signed landmark legislation to expand access to autism treatment and their fees for missouri families and ease the burden. nice to lead. bringing common-sense solutions to long standing washington problems is exactly why we need robin carnahan to join claire mccaskill in the united states senate. [applause] -- has been the solution to the

problems facing missouri families. her opponent? it is no secret at all. and part of the problem. -- time and time again. now, governor, i want to thank each and everyone of you for helping robb and fight this fight. as many of you know, she will not back down when the going is tough. personally, professionally, she has taken on every battle, whether it is unscrupulous financial problems -- she took them on. red tape in office, she cut it. washington problems, watch out. you are next on her list. we need to have -- a tandem of missouri and america's greatest women leaders' representing united states senate. we need and must have robin carnahan representing the state. that is possible with the help

you are providing today and the help he will continue to provide until we get this raised on the way we know we can, the way we know we must, and most importantly, the way we know we will. thank you very much for your help for robyn. -- for robin. [applause] >> thank you. all right. let's dig going here. -- let's get going here. well, thank you, mr. president

for being in kansas city today. we are thrilled to have you back in missouri. please, you all sit down. thanks to all of you for being here today and for your generous support to me and my family over the year. my mother and my husband are here someplace. they deserve special thanks for their patience and support and love. i want to give a shout out to my campaign team. they've been traffic in pulling this event together. we know that this year's senate race was offer a clear choice between somebody who has had a record of standing up for missouri families or someone who has a long record of standing up for corporate special interests, whether they are big banks on wall street or big oil companies in the gulf. mr. president, you are from a neighboring state so you will not be surprised to hear that missourians are completely fed up with these washington politicians who have been there so long and gotten so caught up in the culture of that place that they have forgotten who they were sent to work for.

now, many of you know that i still run the family cattle farm and it is always interesting. there are so many lessons to learn on the farm that apply and the rest of your life. one of them is that i noble when when i see it.l another one is that when something breaks, when you are on the farm, you fix it. he did not bicker and complain or blame someone else. you do not say it is too complicated. you fix it. those are some simple lessons that need to be learned in washington. i know the president shares are frustration with the stranglehold that these powerful special interests have on the place, but i also know he shares our commitment to doing everything he can to fix it. he is here today because he understands that the best way to begin fixing washington is to

elect people who are not caught up in the culture of washington. we all know that my likely opponent in this race, congressman blunt, has been in washington along time. he has gone so cozy with the powerful interest out there that he has forgotten about the folks here in missouri. to me, that shows the very worst of what is wrong in washington. if we're ever going to get our economy moving again in creating those good jobs we need in missouri, that has got to change. you know there are plenty of things that i am not shy about when it comes to congress and blunt and callable on things he says and does, like as wasteful -- calling bull on things he does -- but most importantly his willingness to stick the middle class with the bill. but there is one thing that takes the cake, and that is that he comes out here to missouri, puts on his pledge shirt, drives

around in a rented pick-up truck and says he will be looking out for us in washington. the trouble is he is the number one of top recipient of lobbyists campaign contributions in all of congress. no one in congress has taken more money from lobbyists then congressman roy blunt. i cannot call that a coincidence. i do not call that looking out for us. i call that bull. and i am tired of it, and you should be, too. so, this election is going to come down to choice. there'll be a clear choice between congressman blunt and me in his side we are on. in the senate, i will continue to do what i have always done in stand on the si of missouri families. you can count on that. now, i have often been inspired by the words of president kennedy, but especially at a

time when he reminded americans that a particularly dark arhour that the problems we face are man made. therefore, they can be solved by man. i think that is a useful reminder for all of us today. our president has taken the helm at a very challenging time for our country. i look forward to helping to meet those challenges with the common-sense lessons i learned right here. i know he shares my determination to fix what is broken in washington. i just hope, mr. president, that you will not be too surprised if you hear me call bull whenever and wherever i see it. so, thank you, again for being with us. welcome the president of the united states. [applause] >> thank you. thank you, everybody. thank you.

thank you so much. thank you. everybody have a seat. everybody have a seat. everybody enjoy themselves. how's lunch? all right, good. hello, kansas city. it is good to be back in the midwest, even better to be back in the midwest with robin carnahan. you all have had a long tradition of sending tough, independent, no-nonsense leaders to washington -- from harry truman, to my great friend claire mccaskill, to some wonderful missourians who go by the name of carnahan. nobody fits this mold better than robin. she's not going to washington to represent the oil industry or

the insurance industry or the banks on wall street. she's not even going there to represent every aspect of either party's agenda or my agenda. she's going to washington to represent one constituency, and that's you, the people of missouri. she's going to call them like she sees them, and she sees them the same way that most of you do, the same way that most of the people of missouri do. robin is a small business owner, still runs her family farm. that's why as your secretary of state, she cut red tape for small businesses and saved small business owners millions of dollars, so they can focus on growing their companies and creating jobs right here in this state. that's why she spent her time in office standing up for consumers -- got $10 billion back for missourians who were being taken advantage of by big institutions.

that's worth applauding -- $10 billion is real money. [applause] that's why she worked with democrats and republicans to pass one of the strictest laws in the nation protecting seniors from fraud. needs why missouri somebody like robin carnahan in washington, d.c. she is a fighter, she is a survivor, and she will never forget where she comes from or who she represents. and that's why i'm glad to see that all of you are here today, because you know that about robin. we need tough leaders like robin in washington because these are tough times for america -- i do not need to tell you that. eighteen months ago i took office after almost a decade of economic policies that gave us sluggish growth and falling or flat incomes and record deficits. they were the policies that

culminated in an economic crisis that was the worst since the great depression. three million americans lost their jobs in the last six months of 2008. the month i was sworn in, in january of 2009, more than 750,000 jobs were lost in that month alone. these aren't just numbers. most of you in this room were either touched by this or know somebody who was. the policies that led to this economic disaster were pretty straightforward -- you cut taxes for millionaires and billionaires who do not need the tax cuts, didn't even ask for them. you cut rules and regulations for the most powerful institutions -- whether it's big banks on wall street or big oil companies in the gulf, and you cut working people loose to fend for themselves.

you tell them, you're on your own. you put a fancy name on it. you call it the ownership society or whatever the new slogan is. but it's the same policy over and over again. i think everybody here would agree those policies were bad for the people of missouri. they were bad for workers. they were bad for responsible business owners. they were bad for america. different path when i got elected - so we could stop the freefall and rebuild our economy for the long run. straightforward. we cut taxes -- didn't raise them, we cut them -- for 95% of working families and small business owners, the people who need it the most and were most impacted by the recession. [applause] we're making sure that everybody -- the wall street banks, other

big corporations -- are playing by the same rules as small business owners and everybody else in america. we cannot have two sets of rules. and we're investing in our people, investing in them and their future - in the skills and education of our workforce, in the research and clean energy technologies that will create thousands of new jobs and new industries and make our country competitive in the 21st century. that's our vision for america. now, we knew from the very beginning that some of the steps that we had to take would be difficult and unpopular. i love sometimes -- the pundits will say, boy, obama is doing this stuff, it's not very popular. i've got pollsters, too. [laughter] [applause]

i know -- before we make decisions, we know initially how they're going to play. but our decision was not to worry about the next election. we decided to worry about the next generation. [applause] we knew it took years to dig the hole that we were in and it would take some time to dig out -- longer than anybody would like. but here's what i also know -- an economy that was shrinking, if we did what we needed to do, would be growing. and it has now been growing for the better part of a year. an economy that was once losing jobs -- [applause] -- an economy that was once losing jobs has now been adding private sector jobs for six consecutive months. during that time we have created nearly 600,000 jobs in the private sector -- not public

sector jobs, private sector jobs -- 600,000. now, that's not enough. not when there's still five folks out of work for every available job. not when there are still storefronts on main streets all across the country that are sitting there empty. it's frustrating and it's heartbreaking. and we've got plenty more work to do. but here's what you need to know -- we are headed in the right direction. and the last thing we should do is go back to the very ideas that got us into this mess in the first place. that's the choice that you're going to be facing in november. it's a choice between the policies that led us into this mess and the policies that are leading us out of this mess. it's a choice between falling backwards or moving forward. robin wants to move us forward. i want to move us forward. and i believe that you and the rest of america are ready to move forward, and that's why

you're going to send robin carnahan to washington d.c. some of the same folks in the other party whose policies gave us the economic crisis are now looking for another chance to lead. they spent nearly a decade driving the economy into the ditch, and now they're asking for the car keys back. [laughter] they cannot have them back. they do not know how to drive. do not know how to drive, drive in the wrong direction, get us stuck. and by the way, robin's opponent hasn't just been along for the ride -- as one of the republican leaders in the house of representatives, he had his hands on the wheel.

he was there giving those tax breaks to millionaires and billionaires and oil companies without paying for them, adding to our deficit, adding to our debt. he fought for fewer rules and less oversight for wall street, still fighting for them. that's how he makes his money. so we already know how this story ends. we do not have to guess how the other party will govern because we're still living with the results from the last time they governed. and in the 18 months since i've been president, they have been singing from the same hymnal. right after i took office, we passed an economic plan that cut taxes for over 2 million missouri families, a plan that provided more than 1,500 loans to missouri small businesses, a

plan that has extended unemployment benefits to 170,000 missourians who lost their jobs through no fault of their own. fifty-five thousand men and women in this state are working today because of this plan. i just met 50 of them at the smith electric vehicles plant in kansas city that i visited right before i came here. so our plan was to provide grants to companies like smith electric vehicles all across america - businesses that are investing in clean energy manufacturing and technology. smith electric is making the world's largest battery- electric-powered trucks. but there are also companies like siemens wind power in iowa that are making these wind turbines, delivering energy -- clean energy -- all across america. or celgard in north carolina, which is a battery technology company. or a biofuel refinery plant called poet right here in missouri. that's how we create jobs and

economic growth. that's how we ensure that america leads in the industries of the future. i'll give you an example. just a few years ago, america had the capacity to build only 2% of the world's advanced batteries for electric and hybrid cars and trucks. today, thanks to our policies, thanks to a new focus on clean energy and the work taking place at plants like smith electric, in five years we could have as much as 40% of the world's capacity to build these batteries -- 40%. that means jobs right here in missouri. it also means we're developing the expertise in a sector that is going to keep building and growing and innovating far into the future. that's what our economic plan is doing. robin carnahan supports that plan. her opponent doesn't. like almost every member of the other party in congress, he said no. if he had his way, there would

be a lot of missouri families and small businesses paying higher taxes today. there would be a lot of small business owners who wouldn't have received the loans they need to keep their doors open and make payroll. those jobs at smith electric, those clean energy jobs and businesses that our policies are supporting across america, a lot of them wouldn't be here today. these folks in the other party in washington want to take us backwards. but robin and i and claire mccaskill, jay nixon - we want to take america forward. and that's the choice in this election. you'd think that after this devastating financial crisis, we'd all agree that we believe in the free market system, we want a dynamic financial sector. but it makes sense to have a little better oversight on wall street to prevent something like this from happening again. . .

>> the republican leader said this was like using nuclear weapons to kill an ant. you can imagine a movie, the analysts that a our economy. -- the ants that ate our economy. they continue to defend the status quo that got us into this

mess, as it is that -- the system that lets the-- that does not make sense to you and does not make sense to me. it is not good for our country. it is not good for all the hardworking, honest people in the financial industry who are put at a competitive disadvantage because of the recklessness of view. let me tell you, when the senate returns, we are going to pass a reform that in this era of irresponsibility, reform that protect consumers against unfair practices, credit card companies, mortgage lenders, reform that makes sure taxpayers are never again on the hook for wall street's mistakes. it would be a lot easier to get a pass. it would have already been done if i have robin in there.

i need another road. it would be helpful. despite the growing burden on middle-class families, struggling to send their kids to college, robins opponent and almost all our friends in the other party voted against the law that provides billions of dollars that were going to financial institutions and now we are going to young people for scholarships. billions of dollars for student loans, paid for because we are eliminating subsidies that should not have been there in the first place. nearly a million more students from working families will have access to financial aid, access to college because of what we do. the other side said no. they said no to laws that we passed to stop insurance companies from denying coverage to people with pre-existing conditions.

they said no to requiring women to get equal pay for equal work. they said no to extended unemployment insurance for folks who desperately needed help. they said no to holding oil companies accountable when they bring on catastrophes. you may have read the top republican on the house energy committee, mr. barnes, publicly apologizing to bp we compel them to set aside $20 billion to pay the folks who suffered as consequence of the oil spill. does anybody here think bp should get an apology? mr. barton did. he called this a tragedy, this fund we had set up to compensate fishermen and small business owners on the gulf. that is not a tragedy. the tragedy is if they did not get compensated. this is the leadership we have got from martin and boehner and

bloount. sometimes i wonder if that no button is to stop in congress, so they cannot do what is right for the american people. this is not just about policies. a lot of it has to do with politics. i think they figure if they just keep saying no to everything and nothing gets done, they will get more votes in november. the theory is, if i lose, then they win. but that is the whole brand of politics. that is texas backwards. robin wants to move us forward. we want america to win -- that takes us backwards. we want america went, not just democrats to win. that is the choice in this election. all we are all going to pull in

a single direction together? the last point i am going to make. our friends in the other party like to talk of the game about fiscal responsibility and out of control spending. i will be honest with you. it is one of the things that keeps me up at night, thinking about all the debt and deficits that we inherited that have accumulated. often i hear clare mccaskill's voice in my head reminding me of that. [laughter] may be is just my voice mail. robin feels the same way. she is a small-business owner. she knows about making sure that she stays on budget. she is not spending more than she takes in. and families around the country have been tightening their belts for a few years now, so rightly, government did the same thing. that is why we proposed a three- year freeze on all government

spending outside the national did something that was never enacted in the previous administration. that is what we have gone for identified 120 programs for elimination. fiscal commission that is bringing the parties together to up with a long-term solution for our deficit. working with leaders like clare and robin, we will keep taking the steps we need to in the months and years ahead, steps that don't just make government leaner, but also smarter and more efficient and more accountable. that is what harry truman did when he bought to hold war profiteers the council. that is what clara are fighting for today. i have to say, when i hear the other party talking about fiscal responsibility, criticizing us for fiscal responsibility, when i had a $1.30 trillion deficit

wrapped in a big bowl waiting for me when i got to the white house, i have to scratch my head a little bit. you would think that as an attorney, turning a surplus in to a record that, i would be a little shy about this. on their watch, they neglected to pay for two wars, neglected to pay for two tax cuts for the wealthiest americans, did not control spending, set up a worthy but expensive prescription drug program, and did not pay for any of it. so it is a little on, getting lectures on sobriety from folks who spend like drunken sailors for the better part of the last decade. they want to take us backwards. robin ann claire and i want to take america forward. choice in this election. here is the bottom line. these are incredibly challenging times, there is no doubt about

it. as i said, every day during the campaign, change is hard. change takes time. the problems we face have been building up for decades. they are not going to go away overnight, not in one year, not in four years. no president, no politician has the power to snap their fingers and fix everything. a lot of folks will tell you that, the closer you get to election day, but you cannot believe it. here is what we can do. we can make choices about which direction we want to take this country. we can stop putting off the things that have been holding us back and going ahead and tackling them and fixing them. we can do what we have always done, whether it was on a farm or dealing with the crisis overseas. we shape our own destiny as a

nation. we decide what we are going to bequeath to our children and grandchildren. in the interest of the status quo, they will always have the most vocal defenders. there'll always be a lobbyist for powerful industries that do not want more regulation or would rather see tax breaks instead of more investments in education and infrastructure. let's face it, thepect of change is scary, even when we know that the status quo is not working. but there are no powerful interests on lobbying for the clinic the company that may start hiring folks -- for the clean energy company that may start hiring folks in a few years, or the research that may lead to a life-saving medical breakthrough, or the student who may not be able to afford a college education, but if they got that education, their dreams would not just carry them but carry other people with them.

it is our job as a nation to advocate on behalf of the america that we hope for, even when is not popular. even if we cannot always see benefits in the short term, because we know it will pay off in the long term. it is our job to fight not just for the next election, but for the next generation, for our children and our children's children. that is what i am trying to do every day as president. that is what robin carnahan will do when she is the next great senator from the state of missouri. i need all of you to join us on this journey. if you are willing to make that investment, a guarantee of better days are not behind us, they are in front of us. thank you everybody. god bless you. [applause] ♪ >> now our political coverage continues with republican senate

candidate, congressman roy blunt. he talked with local businessmen in lebanon, missouri at the durnham company, an electrical parts manufacturer. this is an hour and 15 minutes. >> thanks for letting me be here today. i have done a number of these around the state. this may be as many people as we have tried to put in a room at any given time. i want to be more on receive mode than on transmit mo. i learn more when i am listing and when i am talking. the number one issue in the country today is clearly, where are the private sector jobs, and what do we need to be doing to create those jobs? the no. 2 issue is, why is the government spending so much money? that huge increase in government spending, even if you want to concede that it was too high as four, is much higher now. it is another big obstacle.

we keep hearing about the lack of certainty about what your health care costs may be for the people you hire, what the utility bill might be in a state like this for capt. trade was almost double the utility bill in 10 years if it would happen, and of course the president drug that issue back to the front the other day, and the car check where union could be formed without an election and without the employer even necessarily knowing that was about to happen in having a chance to present the other side. everybody knows their taxes are going up next year, and frankly, finding the job creation message there is pretty hard to do, because there is not one. we are going to talk about jobs in this campaign, and hopefully be totally focused on jobs after the campaign is over as well. our former state treasurer is heading small businessmen and

women for blunt. she is helping put together a platform, our jobs plan that we will put out there in a few weeks now. a lot of that will be the result of listening. sarah, do you have anything you want to say as we start? >> if you all have suggestions, we want to hear about them. a lot of the suggestions are to get government out our live, reduce regulations, and that is what roy has been focused on. that is the way you create jobs, to let you all keep your own money and be able to invest and spend it the way you want to without the uncertainty of government possibly taking away from you, which is what we have heard all over the state. >> i have been to all 114 counties with more than 500 events and dozens of discussions like this. we have had maybe six dozen of

these roundtable discussions all across the state. the word we have heard the most often is uncertainty. we don't know enough about what the future has in store for us to know if we can make money by creating a job or not. clearly, that is the biggest problem right now, people continue to see things that they think probably don't work, but they don't know how bad that might be. this health care bill, my belief is that people will like it less the more they find out about it. the more the various government agencies began to look at it, the more they see that the cost to government and the cost to employers is higher than they thought, not lower than they thought. it is not going to work out quite the way they thought it was going to be. if you are in the government, that is one thing. if you are in the private sector and you push a bunch of money to the middle of the table, you need to have a pretty good sense of what is going to happen.

if i am going to be listening instead of talking, i have got to start doing that. i would like to start wherever you want to start. we can answer questions, or we can just have a discussion between us as we talk. there are too many people here to quite put around the room, so we are all not looking right at each other but we are all talking to each other. he wants to start? go right ahead. >> what is the biggest concern you are hearing from missouri ceo's? >> i think it would be uncertainty on a number of fronts, but a real concern that the government is spending way too much money. in the 60 years after world war ii, the government spent within a percentage point of right at 20% of what we could produce as a country every year for six decades. last year it was closer to 30%.

i was with one of our major employers in st. louis the other day, and he frankly said to me and 15 other people around the table, if i could move this company out of the united states, i would do it, because i could make more money anywhere else in the world doing what we are doing, and we are shipping all over the world. we all understood from that discussion he was not likely to do that, but his view was, if he could, he would. every signal here is regulation -- federal be now appears to be it would be impossible to have too much regulation. the right kind of regulation is exactly what we all want, but too much regulation is not what we want. spending all your effort complying with regulations instead of producing a competitive product. why is the government spending so much money? why is it in the last 16 months

we have lost a round 3 million private sector jobs and we have added almost 300,000 permit, -- permanent, apparently government jobs. use the laws of reaction to the other things the government is doing. i was in rockport the other day, which is about as close to iowa and nebraska as you can be and still be in missouri. a guide to tell me he had 47 employees and he really needs for more people. he said i have looked at the health care bill and my counts have looked at the health care bill. we are not going to get one) -- not one person closer to 50 that we have right now. he said i am going to pay overtime to the people we have got, but mostly i am going to figure out what we are doing that makes the least amount of money and try to quit doing that. i will get out of that part of what we are doing, and we are not hiring new people. i was in make an the other day,

-- i was in macon the other day and one guy said he has 60 employees. he said he may try to downsize a little bit to get back to where he is below that number of 50. so there are lots of obstacles right now to job creation. the story's just go on and on, just like those two, of why people are not doing anything. when you talk to our bankers, the regulators at the bank level seem to get the message from the washington folks who say they are trying to do everything they can to increase credit and availability of credit, but that does not appear to be the message that bankers are having to comply with at the front lines of credit. what else?

>> what do you think about epa trying to put a cap and trade in on their own? >> i was disappointed when the senate did not move to not let the epa do that. this is something that the congress ought to deal with. cap and trade is actually one of the most interesting issues of the last 14 months or so. you all may remember it was like last april, robin carnahan supporters began to attack me because i was opposed to cap and trade. they spend a million dollars on that particular ad. people would call our office and say, we saw this ad, and why is roy opposed to all these new green jobs, and why is he opposed to cap and trade? people on the phone would say we know the missouri utility companies have stated this, and the estimate is that the average bill would go up 80% in the first 10 years. then they would say, keep

fighting that thing. then in june of last year when congress finally marked up a bill to send the floor, and we almost defeated that bill on a bipartisan vote in the energy committee i am on, and it went to the for the next week. i think it was june 26. in that week, i really saw the social media work for the first time. people went from not knowing what cap and trade was to a high level of anxiety in about six days' time, understanding this is essentially a tax on coal base utilities. we are in the top six states in the country most dependent on coal for our electricity, and there was total change. every call in the office, more than we could answer, were suddenly, what ever you do, do not let that thing happened. congress could not tell the epa that we do not agree with the court and we are not going to

give you the money to do that job. sadly, it did not get the votes needed. we can revisit that issue next year, and my guess is there will be more votes. many of these issues are not partisan. the untold story about washington the last 16 months is the bipartisan vote has been the no vote. 34 democrats voted with all the republicans against the more government control of health care bill. over 40 democrats voted with all but eight of the republicans against cap and trade. if you take a map of the country from the middle of pennsylvania to the western edge of wyoming, 50% of all the electricity comes from coal. this is a big land mass of the country. i think lots of people are going to go back to washington from both parties saying we cannot let that thing move forward, because we are going to lose jobs and we will not lose them

to somewhere else in the united states. we will lose them to some other country that cares a lot less about what comes out of the smokestacks than we do. we cannot solve this problem by ourselves. but we actually can make it worse by ourselves, by driving our jobs to places that care less about what comes out of the smokestack and we do. we cannot solve it alone, but we can make it worse alone. that is exactly what nancy pelosi and harry reid and barack obama would do, given their choice. what else? >> i think everybody in this room agrees there isn't a reaction to the economic problems of 18 months ago, and now the pendulum has swung too far in the wrong direction of regulation. business people are having

challenging times getting money to be able to expand, even if they wanted to do that. the question is, how are going to be able to bring that pendulum back to center again so that businesses will have the confidence and the ability that banks will have the regulators off their backs so they can let go of the money that they have been given, and we can get the coming -- we can get the economy stimulated again. >> that is a good point, and some of you may want to weigh in on that because it is a critical point. we should be concerned, but over and over again, it seems to me that the current people in power in washington want to do exactly the wrong things. we ought to be sending the signal right now that we are going to continue the good tax policies that small business folks have had for 10 years, instead of changing the mall. 44% of all small business income

will be taxed at a higher level next year than this year. that is exactly the wrong signal to send. the other things about your health care costs, energy costs, the president looked at the environmental disaster in the gulf, which is exactly that, a disaster. it may be a big enough disaster that bp does not survive it. it looks like they ran three lots of yellow lights, because thousands of these wells have been safely drill, and they ran for lots of yellow lights. they may very well is the company over this. there is quite a bit of speculation in great britain that this company may not survive this. we ought to be focused on cleaning up this disaster, but we also should not use it as an opportunity to eliminate more american drops by saying we are not going to drill in the gulf for six months, which will easily turn into a lot more time than that. you cannot leave those rigs

sitting there and use for six months. once they move away, they are not coming back. somewhere between 20% and 30% of all our domestic oil comes from the gulf. and then we bring cap and trade up again. if the president spent more of his speech focused on capping the well rather than talking about this is what we need to put a big tax on the energy resources we have, that would have helped. and then on credit, i would love for bankers to weigh in a little bit. you can. access to long-term credit is really important. when you are making an investment, you often and with great certainty that that investment over 10 or 15 years is going to do exactly what you think is going to do. you do not know where it is going to be in 18 months or 36 months. as long as the kind of lending you have has that short a leash on it, you might take up loan, which it will not be quite as aggressive with that long as you

would be with a 10 year loan or a 15 year long, fixed or not. just so you know you have access to that credit for long enough for whatever you are doing to really work. we are not seen the kind of job creation we need and we do not have the kind of credit we need. i don't know of a single small banker, credit union, any other kind of lender on main street who thinks that the recent financial regulation bill makes it more likely to have more credit. they do not think it makes it likely. >> we are members of the american bankers association. there is no doubt at all that there was room for and need for some additional regulation in some areas, particularly wall street's, not traditional, mainsheet community banks. we did not make subprime loans. none of the other banks here in town did that kind of thing.

in the last couple of years we have had 50 regulations passed or additions to existing regulations that somebody in my 19-person shop has to understand every little part of and be examined every couple of years to make sure we are not tripping over something. every hour we spent trying to make sure we comply with the nitpicking regulations here or there that we cannot devote to looking for new business or approving new loans is counterproductive. this new law that they may be passing on of these days soon, projections out there are that that will add 5000 pages of additional regulations. if it gets passed and goes to the regulatory bodies to set up the loss, we may be looking at 5000 pages more of regulations just that will affect a small community bank like mine here in town. that is not talking about all the regulation that needs to be there for some of the mega banks

or wall street banks that are not involved in what we are doing every day. that is just killing us. we appreciate the support you have given in trying to make sure some of those things don't happen, but there is a lot out there because of the climate and trying to find somebody to blame, and the need to maybe have some regulation that is just way overreaching with the impact is going to end up having on banks that are trying to make loans to businesses like these there are represented here. >> sometimes you might have hit the wrong target, too. by the time they got to the end of that long debate on -- the bankers were fine. all those extra costs i assume have to go into the cost of banking, which either they go into the cost of the loan, or they go into the cost of people's checking -- how are you going to pass along some of these regulating costs? how do you deal with that?

>> exactly what bill just said. the cost of regulation, we have approximately 90 employees, and over half of those employees are not customer oriented employees. they are dealing with regulations, internal auditors, compliance people. . . interchange that's being cut, that's a way that we provide a service out there to our marchents. and it can look bad in the media saying the banks are charging the merchants but we're guaranteing those funds. and it's a source of income for that exchange.

when that's cut, sure we're going to make up for that difference. some bankers have toe they are not going to do no-cost checking any more. the state treasury -- you probably dealt with more bankers more often than anybody else in the room. what are you hearing on this credit? >> i hear the same thing. it is the community bankers of but then penalized and you are carrying the burden for the big banks who made all the bad loans. how much of your premiums gone up on fdic insurance? >> about 323%. >> i mean, that is ridiculous. i do not think this present administration understands basic economics. i really do not, because they definitely do not understand what the long-term debt does to interest rates and the long run, which is another reason why

small businesses are concerned about borrowing money. but they also did not understand that the way you create wealth in a country is through the banking system. and you loan out monday, and it turns over in the economy and you guys make money and create jobs, and then it keeps going. it does not come from carmen stimulus. government stimulus. i am very sympathetic. i know right, you have worked with the independent bankers to try to stop these ridiculous, additional regulations. >> in terms of basic economics, my sense of the philosophy of the administration is they do not get the risk-reward elements of capitalism. and people cannot take extraordinary risk unless they feel there is a reason for that -- for taking that risk. this administration does not seem to get that. it is like this theory you can talk every day about regulation, about higher health care costs

and utility bills, about higher taxes, and people will still push their money to the middle of the table to see if they can lose it or not. i saw a pretty interesting -- about two months ago, and it was in "the wall street journal", and it was a charge that when i glanced at it i thought it was the government's spending chart i talked about, where since world war ii, the government spent 20% of gdp. i looked at it and said that is something else. since world war ii, the government has never been able to collect more than 20% of gdp in taxes, no matter how high the rate rise. was. part of those years it was in the 60's and even 90's and people did not put their money at risk for 20%. they go into a more passive economy. the matter how high the tax rate was, the government has never been able to bring in more than 20% of gross domestic product, because the fire that rate gets, the less likely people are to

put their money -- because of higher that rate gets, the less likely people are to put their money at risk. >> i was just going to comment that the role we are dealing with on the higher price mortgages, where community banks are having to either escrow texas insurance -- taxes and insurance -- and we do a lot in a one-year balloon loans. residential lending has been a large part of our banks work. what we had to decide is were we going to go to the expense and effort to set up as growth, which is pretty complex, or we are restricted on the amount of interest we can charge on our home loans. what happens is we have a customer that comes in that we may have made a loan to in the past because maybe it was of high-loan to value or the credit

was not there, but we know this individual and we would have done it before but we felt like we had to get a certain amount of return for that. but now we are limited on what interest rate we can charge, and we are making the decision that we cannot get the types of returns we want to get on that for the risk we are taking. and so we are going to have to make that and get a lower return our our risk or not make it because we do not feel like we're being justified for the risk we are taking. and so that dictation of what we can charge on our loans is a big problem for our community bank. and that is what is penalizing the customer in not enabling them to get credit they may have gotten before. and so that is one thing. the other thing i want to comment on is many of the business is ideal with on a daily basis have seen their revenues drop. they had slowdowns because of the economy. they made it very difficult

decisions to put their shops in ly, r -- unfortunate they had to cut expenses and lay people off, but they managed through this. they made tough decisions to keep their cash flow going. i do not think it is too much to expect our government to do the same thing. >> right. >> these business people all across the country and many idea with are doing what is necessary to keep their businesses going, and it is disheartening to see our government spending more than they are taking in. and so, that is one comment i want to make. the last thing i wanted to say is really the housing issues in our community is really what is hurting us the most. our unemployment is high, but the lack of housing activity, sales, the amount of foreclosures, that is depressing our real a state market.

and the people that are trying to sell their houses may be one to buy another house but because the markets have been so depressed -- until those real- estate markets and real-estate values stabilize and maybe start to come but not fall any more, and that is going to stall economic activity. >> on houses, and lots of people that would have bought a house two years ago and sold their house two or three months later, they do not want to do that now. everything is contingent on somebody else doing something else. and on spending, the good thing about what is happening right now is there is a level of engagement on spending that i have not seen before. it is one of the best parts about the tea party movement. they are really focused on spending and fiscal responsibility. there are lots of mothers there. if you look at -- if you go to the rallies or see the video, there are a lot of mothers. and mothers care more about a lot of things that other people,

but they mostly care about the future of their kids more than anybody else does. there is the fortunate beginning of a sense of embarrassment here, that we are spending money we do not have for things we do not need. and we are expecting somebody else to pay the bill. and you have to stay engaged in that. i led the only fight in 10 years to cut the so-called mandatory spending. in late 2004, took 100 days from january ofcorrela to late 2006, and we got thousands of telephone calls, from the first thing in the morning until the telephone was still ringing a matter how late you left at night. we cut spending by $40 billion. which before barack obama became president was still a lot of money. that is basically twice the missouri state budget at the time. we cut the federal programs by that much. we did that much of a cut, and every single call for 100 days,

from the first thing in the morning till the last call you answer that night, and the telephones rang all the time, every call was, do not cut my program. and what hardworking, taxpaying americans have to figure out is that this fight is not and election day. even if 90% of the people that are on that side are willing to do it, no matter who calls, the other 10% need a few calls saying, thanks for trying to do the right thing here. >> just a question on the health care reform law. missouri is going through some incredible pressures right now. the high risk pools are supposed to kick in july 1. the exchange's kick in in 2014. where is the state getting the money it to fund these programs? >> you know, i have legislation to expand the high-risk pool concept. but it is not dependent on the rest of the insurance market --

they do not have to react to it in the same way it does under this plan. in fact, you can go to roy blunt.com. there are a dozen bills that i have sponsored and this congress, many of them i have worked for for years, that would make a difference in health care costs without the federal government doing anything except just trying to make the system work better and be more competitive. things like medical liability reform, associated health plans, buying across state lines, better use of the expanded high risk pulls so people that cannot get insurance because of pre- existing conditions have somewhere to go. in this first four years -- one of the grand deceptions is to collect money over 10 years but you do not spend any of it until you're five. and not much of it until you're seven. the only reason for that is to

hide the costs. it is so he can convince the american people that even $1 trillion is not of acceptable number, but that seemed to be acceptable to the other side. if we could keep it under $1 trillion, even though by the last three years you are billion every0 year. and that is that the current estimate. every time they look at this bill, the cost estimate goes up. in the first four years, they set aside a relatively small amount of money by terms of this bill to fund the new high risk pools in states. i talked to the person running the high-risk pool in missouri last week. we had a very effective high- risk pool. more people wanted to get in and can get in. has been will run. you pay about 135% of what the average guy pays. suddenly of a pre-existing condition. maybe you did not have insurance

because he thought he would take a chance or because he could not afford it or maybe you got left out. we need to get insurance work follows the person instead of as part of the job. that is one of the reforms we need to make. she told me the average cost, 100% for the individual, and you cannot get family coverage would be over $400 per month. and people are shocked because they have been led to believe that somehow this is going to be free to them if they can get in this pool. so the money may go a long way if nobody can afford to be part of even the subsidized pool. where the federal money comes in is writing down the real cost of that policy for somebody who has already got a health care problem to the average cost for everybody else. by the way, one of the other inequities here is if you are in the current high risk pool,

you're paying 135% of premium and do not qualify for the new house risk pool. and you cannot get out of this pool and get into that one. they do not have access to the less expensive new high risks pool. the greatest consequence of this health care bill would be the law of unintended consequences, all the things that will happen. i was at a hospital in missouri the other day. everybody can get insurance the day they wanted. we will just put the insurance forms and the ambulance. and, frankly, that pointed out the problem here about as well as i can. using a high risk pools more effectively to create access to people who could not get insurance would have been a better solution than telling everybody, you can get any insurance you want the day you want at whenever everybody else is paying. because that just will not work.

it did not work in massachusetts. >> i would like to ask if there is a single most important difference between you and your liberal opponent? >> the single most important difference is i am not for what nancy pelosi, harry reid, and the obama administration want to do and she is. this year alone would have been at a minimum of $3 trillion difference. i was suppose to the $800 stimulus package that clearly did not do with the president said it was going to do, did not provide long-term employment or do anything to stimulate the economy. it grew a bunch of government programs, but not the right direction to go. she said she was for that. she said she would have been for the senate bill on health care. i did everything i could to produce alternatives. by the way, when you're talking to your friends about that, why didn't they do these alternatives before?

it is hard to get things done in our system. we sent medical liability reform from the house to the senate seven times in 10 years. it never got to the floor once. it is the thing that saves the most money the quickest. there are lots of good alternatives. we just need to build a fire to see that the united states senate wants to sit -- bring those alternatives to the floor if they ever get a chance to do that again. there is $3 trillion. this health care bill will cost $2 trillion the first 10 years. i was against it. she was for it. and there are billions and hundreds of billions of trillions of more differences. but i believe that private sector jobs are what matter. and they pay the bill. government jobs, if you need them, are ok, but they do not pay the bill. they are the bill. private-sector jobs pay the bill. we have to get government spending under control. to do that i think virtually everything has to be on the

table. in fact, government is the last place left in america where you measure how much you care about something based on how much you spend on it rather than the results. every business person in this room today has had to spend a lot of time and the last 20 years trying to figure out how they could produce a better product, a better good, a better service next month, next year, five years from now than they are today and spend less money to do that. only the government is still focused on how much you are spending instead of the results you are getting. we can still provide a lot of services in a more effective way in the area the government should be working. we can get out of the areas government should not be involved in. we can get the burden of government down to the point where people can make the country work again. and this is really two different philosophies here. the current philosophy is that the government should be bigger than the people. my philosophy is, and the

missouri philosophy is that people should be bigger than government. and that is what this election is all about. we now know what the plan is. we know what the change is. and this election will be pushing that change back or reaching out and grabbing that change and saying, we want to be like everybody else. i have somebody in iron county who is a tree trimmer. he told me this story -- his boys all work with them in a tree trimming business. he said, when i leave somebody's yard i like it to look like nobody has been there but the trees look better. so we pick up every twig, ever leave, everything. and the boys are always saying, nobody else does it that way. he says, if you do not like everybody else does it, you are just everybody else. a lot of other countries in the world have decided they wanted to be a country where the government is bigger than the people. and we can decide that, too. we can decide we want to be just like everybody else.

i think americans want to be like the united states of america. i think they will send that message pretty strong this year, and hopefully, missourians will do. thank you for coming again. thank you for spending time today. good to see you again. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] i am going to salem, and several other places today. thanks

also today, the closing session of the national governor's session. today they'll focus on the federal budget deficit at 9:30 eastern here on c-span. today on "newsmakers," representative darrell icea talks about the justice department's suit challenging arizona's new be immigration law. at 10 a.m. and 6:00 p.m. eastern here at c-span. >> the national governors association is holding its annual summer meeting. next, a discussion on redesigning state government by stream lining public services,

moderating the discussion is the deputy managing editor of the "wall street journal." this is about an hour and 20 minutes h could everyone please find a seat so we can get underway.

the goal of this discussion is to talk about how governors across america are redesigning state government in their respective states, how we're making purchasing more efficient, redesigning prisons, finding better outputs while saving money at the same time. we may get into how states are redesigning the higher education system, for example, or elementary and secondary education. weaf lot to learn from each other in these challenging times and i look forward to hearing what's happening in the various states. we also need to think not only about what we're doing immediately to address the fiscal challenges but how we're positioning our states for success in the future. it's going to be important, i think, that we think about the long term and restructure, redesign state government so

that our successors and future generations can have more sustainable state government in their states. we are honored to have alan murray with us who is the deputy managing editor and online executive editor of the "wall street journal." he has become a trusted source of economic policy information throughout a long and distinguished career. he has been with the journal since 1983. his longevity a testament to the tremendous contribution that he has made to his readers. he was bureau chief in washington for a while and won an impressive total of three pule itser prizes during that time in a number of accolades. he has cohosted the capital report. the author of three best selling books. his career has taken him all over the world literally and we're delighted that he could be with us in boston today. let's all welcome alan murray. [applause]

>> thank you for having me. it's been an interesting arrival. i want to start by offering my condolences to all of you because all of you have picked a very unfortunate time to be governors. it is the worst fiscal crisis that we have seen since the great depression as all of you know better than i do. it looks like it's going to be very prolonged. you may be seeing some pickup in revenues but whatever you are seeing coming in in revenues is going the to get taken out by the federal government at the same time. job growth judging from the latest numbers, at least nationwide, is very, very slow.

it doesn't look like it's going to pick up for a long time. and of course, on top of that you have a health care funding crisis layrd on top of it. so i am sorry that gove nor mansion isn't here but it's easy to see why a governor might want to become a senator. you see why, there's no real responsibility. you know? [applause] you get to talk a lot. there are a lot of really nice perks and you don't have a budget constraint touf talk about. so i'm surprised there aren't more of you thinking about it. i appreciate the fact that you have tough jobs. i feel like governor douglas has given me an easy job here today because my job is essentially to get this shy, introverted group of people to talk.

so that's what we're going to do. we're going to talk about the decisions you've already made in dealing with the crisis, and then we want to look forward and think about how the decisions you have made, the decisions you should have made or the decisions that you may make in the future or your successors may make in the future that sets the states up for the kind of conditions they're going to be facing five years and ten years down the road. and i think we're getting a pretty good idea of what that world may look like in some ways, anyway. start with the education. because we all know that education is the future, we all know that education is critical to creating sustainable jobs, to long-term growth. simple question. how many of those of you sitting here right now have made it through this crisis without having to cut education spending at all? and i'm talking k-12 and higher

education. lots going there. sorry. governor, you've got a somewhat better economic situation than some of your fellow governors but what's the secret? >> well, the secret is we prioritized education. now, they didn't get as much as they wanted, but we've continued to, particularly k-12 funding has increased significantly. higher education maybe only gone up about 2%, but compared to 10% reductions other states have taken, it's ahallenge. how do we get there? i would share a little bit as you and i were talking beforehand. if you look over the laves three or four years, we modernized our incentive programs, lowered taxes. began to control our spending three years ago. slowed the growth. and the end result is we're in a fairly fortunate opportunity.

our unemployment rate is 4.9%. i'm still trying to catch up to governor rams over there. but the fact of the matter is we diversified our economy, that was the other key element. but again, we just said education and jobs go hand in hand. give our kids the best education we can and create jobs in the state to keep them there. >> but i think it's a fair best, i won't ask because i know the answer, that everybody sitting around the table prioritizes education. governor patterson, you prioritized education but you have been pushing for bigger cuts in education than the state legislature wants to give you. why is that? >> the budget in new york state was recently projected at 2009-2010 at $5 billion. it quadrupled in nine months, which is the largest escalation

of a budget deficit experienced by a state in the history of the united states. so what happened in both of the years that i've been governor is that you had three to four billion dollar outyear budget deficits. and in those periods of time, you really can't cut education in the middle of the school year. now, for the five years prior to when i became governor, education spending had increased by 47% over that period of time. so it came a point where our resources were so depleted having cut 21 billion dollars in that period of time that inevitably we hit even the sacred area of education. this year, we wound up cutting $1.4 billion on top of it because we wanted to protect ourselves from an outyear gap where we wouldn't be touching education. it's a little bit of a competition between the education advocates and the health care advocates. we've cut health care 5.75

billion since i've been governor. and over the two and a half years i've been governor we've now cut $43 billion. combind with california it's over $100 billion hit by those two states alone. >> we'll get to health care in just a minute. but i'll sure all of you face the same problem, education is a huge chunk, it's a high priority. but you have to deal with the fiscal realities. who else wants to take this on? >> in our state, we embarked about six years ago on a more equitable funding of public education. so when we came in, part of the disjunchingt there was that they had locked into this increased for education, which was a valuable and good thing but there was no revenue stream attached to it to support it. so early on we had to address the $1.7 billion deficit that was left behind by our predecessor. we called a special session.

we did a number of difficult things including the raising the 42nd lowest sales tax by a penny. but the last two years, newsweek magazine has named our schools the best schools in america. and thanks to congress and president obama we're able to make record investments this year even with the cost containment things and not being able to do as much as we might hoped to, it's nonetheless been an investment that i believe is paying off. we've never had higher achievement levels for our kids, and it's something that i do believe that the people of our state believe is tied to our economy, it is part of the reason why we've had three months in a row of positive job growth. >> so you raised taxes, not a lot but you raised taxes in part to pay for education. and you're one of the people sitting in this room who has to stand for reelection. >> sure am. >> you're comfortable with that. >> we all embrace our own vulnerability or we wouldn't be sitting around this table.

we all work for the people. >> so the same question about taxes. how many of you have made it through the last two years dealing with your fiscal situations without having to raise taxes? and let's not play sem ant 86 here. let's take a broad definition of taxes. a show of hands. now, i see governor, i see you raising your hand. but my understanding is you were proposing a tax on wind farms. >> we did. and then they got an offsetting tax reduction to sort of -- had more to do with reallocation of revenues. to the extent it's going to increase revenues it's probably four years out. it's more a public policy statement with regard to allocations to local government than with regard to tax policy. were we can get back to environmental issues in a minute. but is taxing wind mills the right way towards our energy future?

>> if you're commited to the notion that you want a level playing field, fully diversified energy portfolio, then, yes, it is. because in the sense that in our state all the other forms of energy are fairly heavily taxed, wind will be the least heavily taxed. and taxes don't kick in for a while. so we'll see what happens. >> governor i saw your hand go up on no tax increases. i don't think i saw your hand on no education cuts. so part of the way you handled that was to cut education, i assume. >> we had to do a 10% across-the-board cut last fall. but as a result of that, we have a $500 million surplus, aaa bond rating, and one of the best growing in the country. >> so a trade-off. >> and now we were able to back-fill 5% of that 10% cut

because we made the tough decision and our economy is picking up a lot of steam right now. >> in vermont we reduced taxes this year. we have not reduced our education spending, either. we have made other tough choices. >> you increased spending for the university. >> we increased higher education spending because we're among the lowest in the nation on a per capita basis. so it's always been a priority for me. and k-12 education, we're near the top of the nation. we have a declining student enrollment, and frankly that's an area where we probably could trim somewhat. but since budgets are set at the local level it doesn't happen. >> where does the money come from? >> from property taxes. we have the second highest tax burden. and that's a real problem for people struggling to get by. >> may i piggyback on governor douglas. one of the things we were able to do the last few years, we

also were able to reduce income taxes for 85% of marylanders who earn less than $150,000 a year. and we're the only state to go four years in a row without a penny's increase for college education. we've also had to cut $5.6 billion out of our operations. >> if i read the reports right, part of the way you did that was by dipping into your capital funds. right? >> no. >> no? no game playing, no borrowing from the future? . >> no. as a matter of fact, we actually divsified our transportation funding. we have not dipped into capital. we're along with governor cullber one of the eight that still has a aaa bond rating. so we did this with the tough choices and huge cuts. we're the first administration to submit a budget with state spending lore than it was four years previous. >> because there are a lot of

states that are either borrowing from pension funds, dipping into rainy day funds, doing thing that is may help for one year but aren't going to help two, three, if this downturn is going to be as extended as the nga things and some others think. >> you're correct. in south dakota we have a requirement that we can't bor of money so we have to balance our budget. we have the same amount in our reserve accounts as we did in 2003. we have maintained our status as having the lowest taxes collected per capita as any state in the nation. it's not easy to do it in some cases there's an offshoot. this year we took about $9 million away from higher education. part of that's going to be offset because they can raise tuition. so this year tuition in south dakota for our state-supported schools will go up about 4.6%. >> yes, sir. >> in the last two years we didn't raise taxes to balance the budget but we did have to

change the administration of education because we were pouring more money into it. we had to consolidate school administrative driction. we went from 152. the goal is to 80. this has been a political contest of wills but it was taken to a public referendum. we hope it will pay dividends over time. but we don't have a printing press and we have to be more efficient with our resources so we took on that challenge. but it's still a work in progress. >> let's -- >> i was just going to say, i think probably most of us in the midst of the worst recession and economy in living memory have taken a blended approach. >> you did everything. >> we did a little of everything. we cut $4.5 billion out of the budget. we reduced the number of positions by nearly 3,000. we got concessions from public employee unions. >> not all of them. >> who work with the state any

how. and they're not happy because they were cut, too. everybody has been. >> you have made everyone angry. >> we've had to. it's about shared sacrifice, frankly. we have raised our sales tax from 5 to 6.75%. still low but it's a big jump in the minds of our people here in the common weltteds. we would a big rainy day funds and we've drawn down on that because it's been raining. the stimulus funds have also helped. so that blended approach and like some of my colleagues here we've had our high bond rating reaffimmed by all the independent agencies because of that blended approach. but i wanted to suggest another part of this story, which i think is incredibly important. one of the things that a crisis presents is opportunity. >> yes. >> and so thinking about big questions about what it is we want government to do and not do. and not do.

and what are the smartest ways to do that? at least in massachusetts, enabled us to move some reforms that i think under normal circumstances would be hart to do. one example is in transportation. >> go ahead. so what have you decided not to do? >> well, first, just in terms of reforms. one thing we decided not to do is continue to be the only state in the nation that used police details on every single construction site. and i respect the police and i respect their concerns for public safety. i have concerns about public safety. but we now use civilian flaggers at state construction sites where public safety doesn't require a uniformed officer. i think that was the right thing to do. i also think that when we took six different transportation agencies and collapsed them into one, and made the focus on the travelers instead of on the bureaucracy and sade more than

a quarter billion dollars, that was the right thing to do. but it made a lot of people mad because change is like that. but i think there are examples of that probably everybody has been seizing on. thing that is we knew are right to do that would be harder to do if the circumstances were there. >> and we definitely want to spend some time this afternoon talking about that. governor, i want to get you in on this because i gather you've had a situation not unlike governor pat rirks you've had to do like you said you weren't going to raise taxes or revenues. you've had to do that. can you talk about your experience? >> well, we've had to cover a $12 billion shortfall in the last three years. it's been a challenge. so we did a little bit of everything. the first year with 9 billion we raised no taxes. second year this last year with just over $2.8, we did raise some discretionary taxes to the tune of about $600 million. but we have used our rainy day

fund because we considered it pouring down rain. we have swept accounts that had more money than what they ever needed to do what they had to do. we have raised college tuition. when it came to k-12, an interesting aspect for us is we're constitutionally protected so you can't cut it. so i didn't raise my hand because the people passed two initiatives with no funding associated with them. one, teacher pay, and two class size. so those were suspended. so that's why i didn't raise my hand. but again, that's by virtue of initiatives with unfunded demands on the state. but the rest is constitutionally protected. in our higher education institution, we found that we have some of the lowest tuition in the country of comparative universities. so we cut them. but authorized them to raise their tuition to make up for the cuts. but so i can't think of anything we haven't done to

include closing down institution, shutting down a third of our boards and commissions, collapsing environmental agencies. >> health care. >> yes. in fact, i have to put out an all-cuts budget in december this last year and it was going to take a huge toll on health care and that's what drove everyone to raise some revenues. >> health care is i'm sure a tricky one for all of you. it's hard to describe it as a rainy day problem because if it is a rainy day problem we're in for noa's flood because it's not going away any time soon. got a little bit of help from the federal governmenome of you asking for more help from the federal government. is that the right way to deal with the health care problem? who thinks it is? governor. i mean, they don't have the money. >> well, i think health care is a fundamental right. i think everybody is in and nobody should be left out. i walked across our state from the mississippi river all the way to lake michigan on behalf

of decent health care for everyone. i don't think you take a holiday from decent health, particularly public health. the best way to have a productive economy is to have healthy educated workers. and i think it is a large part of our economy. so the federal government and the state government have a partnership to medicate. we need more help from washington to protect against job cuts and health care cuts and that's why almost all the governors are for enhancing the medicaid match for a couple moff years. if we don't do that we're following herbert hoover comics, and herbert hoover economics doesn't put us back to work. >> do you all agree with that? more money from the federal government even though it doesn't have more money to send to you? >> i don't agree with it. i think that it's going to take modification of the expectations of the public of

what government does. and so far this discussion has been about how have we scraped and adjusted to maintain to meet the public's expectations about funding. now you put the other option on the table that states go to the federal government to find money to meet the expectations, whether it's health care, roads or anything else. and so what we have is as states in effect we're dealing with a historical pattern that each state developed with regard to what it was going to fund or what it was going to fund it. so to me it seems to me that we're avoiding the basic question, which is each of us have to figure out some way to pair back the public expectation of what government is going to pay for, or we continue this sort of, as you say, sweep funds, go to the federal government, we go summer. >> so where do you do that? so who -- i mean, we already have 40 million plus people who don't have health care in