virginia and maryland. then you have democrats that face tougher calls. chett edwards faces a tough race. these are members represent conservative districts. this may not be the year for them to save their seats. host: what will be the game plan for the white house to save the majority in the house? guest: to be very cold-blooded in their a look and where they need to invest in these races. decide where their money can make a difference. host: will the president b campaigning for individual candidates? will he stay clear and fund- raiser for them instead? what will he do? guest: i think you'll see president obama heading up the new york checkbox pretty soon. he will head up the los angeles checkbox. -- checkbooks.

many of the conservative democrats -- and democrats in conservative districts, do not want to have the present campaign for them. the individualize their races. the distance themselves from the national party. host: the first lady is going to spend some of her political capital and carefully stepped into the campan season. where do you expect to see her? guest: we have not seen a lot yet as to wre exactly michelle obama plans to weigh in. we know she is very popular. what we also know is that she is anning on increasing visibility and a final two months of this year. host: will see mostly talk about issues or on the campaign trail? when you talk about raising her profile. guest: she will be very active with her get healthy platform she has been running out there. we also know that she will be making appearances with laura bush next week in pennsylvania to commemorate 9/11.

we are expecting to see more for. it is not clear how active she will be on the campaign trail. if you read the reports, they indicate that she may be weary of waiting too deep in the political waters. a lot of the republicans do not want to be too close to the nation party, either. a lot of them are taking the anti-washington banner themselves. we are seeing someone like dick armey coming out. some of these candidates are taking in a tea party leaders. i do not think you'll see that many republicans running close to washington. host: what influence will sarah palin have? guest: she has bn active in endorsing candidates across the country. how active issue will be remains to be seen. it will very district by district.

host: we are talking with alex isenstadtf politico about this year's campaign season and what to expect. ads, money, you will see it happening in the months to come. little rock, arkansas. paul, republican line. go ahead. caller: good morning. i think the republican party will gain control of both houses of congress. i think they should because we need to get back to a common sense agenda for america. host: all right. let's talk about american crossroads a bit more. i thought when i read, this is karl rove's group, when they first came out there would be paying a lot of attention to state legislatures and

governors, because they were looking more towards the future of the republican party and of trying for re-diricting to make sure there was a strong influence on the state level. have they had to re-focus? or have they planned all along to be focused on these house- senate races? guest: there is a big portion of both parties right now that are focused on the state legislature and re-disk testing right now -- re-districting right now. if you look at american crossroads, they are taking a advantage of what is a great opportunity for republicans across the country, to take over the house and possibly even the senate. if you are a republican now, you know where your dollars need to be going. host: american crosshairs is out with a new advertisement, going after michael bennett, to replace now interior secretary ken salazar.

take a look at this ad. >> coloradans are in debt to washington. it spenders like michael bennett are spending $2.5 billion per day, wasting billions on failed stimulus programs. the result? over 100,000 jobs lost. bankruptcy's reaching an all- time high. it might be we have nothing to show for it. call. tell bennett to stop spending. host: that was american crossroads gps. ed gillespie's and karl rov'ee's group. >> for 100 years, we the people have picked our senators. but ken buck wanted to r

ewrite the constitution. he proposed ending our right to vote for our own senators. rewriting the constitution, ending our right to vote? ken but is too extreme for colorado. the democratic senatorial campaign is responsible for the content of this advertisement. host: what is going on here? guest: what is going on is that you have republicans trying to portrayed michael bennett as connected to the national party, as someone who is weak on spending issues. then you have democrats tried to cast ken buck, the republican nominee, as someone who is of step with colorado voters. who is far too conservative. host: charlie cook wrote that it seemed a mathematical possible -- in possibility that republicans could score at 10

seats. but he is saying that it is not out of the realm of possibility now. guest: it is not out o the realm of possibility, but it is still unlikely. republicans would have to win in states they have not typically one. states like washington, a state by california or wisconsin, where russ feingold is running for reelection. democrats have a fire wall that republicans will need to barge through to take control of the senate. host: why is russ feingold in trouble? the president is going there tomorr. will the senator be with him? guest: they have a better opportunity because they have a self-funded candidates, who is spending a lot of money. he is going on the airwaves

heavily. he will be difficult to defeat. polls show the race very close. host: los angeles. our independent line. good morning. what is your question or comment? caller: i am listening to this about economic stimulus, and i think our whole system is antiquated. what they expect to gain from new technology is even surpassing their own intelligence. i think our senate, our government, ourresident, i think that is beyond their scope. i think we need to get people more educated, in the sense they understand what they are doing and what we are transitioning to. you cannot transition to an economy with a new product and shut everythinglse down and expect to create jobs. host: let me bring this back to campaign 2010. are you saying that the candidates out there do not have the economic background,

education to bring us out of our economic situation? caller: i think they are depending on the very secretive way of turning around our economy with the new technology that they expect to have. no one has really talked about extly what that is. host: how are you going to vote? carly fiorina in the senate race foreg whitman running governor. caller: i will vote for fiorina. i won't vote for whitman. on top of being educated, you have to have a human conscience. the: let's talk about senate race in california. barbara boxer versus carly fiorina. he will vote as an independent

for carly fiorina. guest: a very democratic state. if republicans win california, they could take over the senate. that is exactly how bad a year it is. a tough race. a tough battle looms. she raised a lot of moeny ney. she is pressuring fiorina as too far right for voters. host: go to our website if you want to watch the exchange in their debate. lexington, ky. al on the democratic line. caller: i was calling to comment on the bush legacy and his legacy as what has got us into

this quagmire. taking care of the rich folks where the trickle down has never gone to pour people. it is what he has done over the st eight years that got us into this dilemma. host: is that sentiment enough to get you ought to vote for democrats? caller: absolutely. we cannot put tea partiers in like rand paul, will not do anything for blacks and minorities. he will go back to years of the reminders of slavery and those types of things. all these people have the same ideas thatbus bush had. host: al, do you tnk your democratic friends are is motivated as you are? do you have any concerns?

caller: if we can get the economy stimulated, and the w a bring middle class folks in, and quit the republican party -- the party of no. host: we got your point. let me have alex isenstadt handicap the kentucky senate race. . .

>> for democrats, it is all about that. host: next phone call, jim on the republican line. good morning. i think that when we get the right republicans in office, we can eliminate social security. we can eliminate medicare. we can eliminate the department of education. we can eliminate fema. we need to get rid of all of the big public programs. host: jim, who are you voting for in the senate race? host: not charlie crist? caller: i like him, b he isn't conservative enough. host: how about the govnors's

race. caller: whoever the republican is. host: all right. two vital job plans are fuzzy on details. republican rick scott and democratic alex sink are duking it out in a hostile race to be governor. they agree that more jobs are needed. columbia, south carolina, george, independent line. good morning. caller: good morning. you got a good point, the guy that called before had a good point. america has got to wake up. the republicans don't care about you, the democrats don't care about you. you got to care about yourself. you can't vote for a party. c-span, you got three lines, independent, democrats and republicans, splitting t country up. you all are splitting the country up. the politicians pitting the

republicans against the democrats, vice versa. it's not going to work. all of them are crooked. host: all right. are republicans looking at these favorable numbers they've seen coming out of gallup saying they can take back the house with a wide margin in those numrs? any concern that the sentiment that the caller stated, neither party cares about the constituencies, and the caller before that talking about president bush. guest: there is anger at about the parties. voters polls sho voters are taking out anger at democrats. republicans fare wl in these races.

host: next caller, florida. caller: the job issue is important to me and my adult children. i'll be joining many workers that will be at the msnbc rally in washington, d.c. october 2. i support meeks and gray son here in orlando. i believe that as republicans rule again, we'll go back to a corporate rule like we had under bush. bush's tax cuts back in 2001 was supposed to give corporations ins septemberive to say reinvest in the workplace, but they didn't, they did not upgrade machinery or proce more jobs. instead, like my corporaon i work for, they made one worker do the work of two or three, stopped giving raises on bonuses, and buss secretary of labor chow cut back on how much overtime you can make.

i think many americans rember this. host: ok. let's talk about those two races she mentioned, the senate race in flori, and the house race with grayson. grayson. guest: florida, you have three very serious candidates running, governor charlie crist running as an independent, mark rubio and congressman meek. charlie crist has tried to peel away voters in order to advance. rubio is picking up republicans. charlie crist is trying to win more centrist vots. how much success crist has in doing that could well determine the outcome of this race. the alan grayson race, fascinating playing out in

orlando. gayson has been very visible an msnbc and liberal talk shows. he has raised a lot of money, not apologized for his support of the republican agenda. can he win in a democratic orlando city is the question. host: how are you going to vote this november? i'll vote republican. i'll go to reasons here. i thi all our job situations created with the lack of proper care of incoming goulds in this country. those tariffs are to be used to give tax breaks. tax breaks create balance of trade, give our companies a good footing here in this country to compete. world trade is good. it's a good thing, but it's got to be fair and balanced.

that's where the job situation has gone downhill in this country. concerning unions, if folks are concerned, they'll be asking where do all the millions of dollars go that they pay in union dues. this money should be put away for their pensions, put in safe funds. now they're talking about another bailout for the u.a.w.? i don't think so. it's time we put a stop to that. host: ok, do you want to take the first part of his comments. guest: to the question of bailouts, there is a lot of anger at bailouts, has a lot of discontent across the country. a lot of democrats are running against the bailouts. they voted against that. republicans, too, have also seen some trouble with that. publicans who in primaries supported the bailouts, some of

whom have lost their seats in primaries. host: what about the tough three or five issues that the voters are motor concerned about, economy, jobs, jobs, jobs, number one. what else are people talking about? guest: spending is the other issue right now, and to a ceain extent, health care has been an issue that volares are angry about. we have a story on our site today talking about how you only see democrats running against health care at this point, something that the white house and democrats, the message on that issue never gelled. host: democrats are running against health care? guest: absolutely. certain districts are spotlighting their opposition to health care and their vote against that bill. host: what are republicans doing on the issue of health care? guest: you're seeing republicans across the country slam the national democratic leadership forushing health care and the

ambitious agenda on cap and trade and spending. that's why we're seeing it come up in so many raises. host: tim, independent line. caller: with two pieces of background, obama's approval rating being low, but popularity being high, and the way that congress has stalled, legislation gets through, but it can't get through the house or the senate. i realize that all politics are local, is there any thought, have you heard anything about more nationalized campaign where obama, almost a national campaign where obama really talks to the people and says look, everything is stalling because of filibuster in the senate, and we have to stop that or nothing is going to happen? and i'll step down now and hear your answer. host: tim, how are you going to

vote this november? caller: absolutely going to vote democratic for one big reason, that tax break at the very top, that 4.5%, that costs so much money, and does so little, and the c.b.o. has over and over said every dollar to goes to that top%, and i'm in that top 2%. only a dollar or two gets back into the economy, where everybody below, $1.60 goes back not economy. host: tim, have you ever voted for a republican. caller: yeah, i worked on reagan's campaign back in the day. host: did you vote for president bush? caller: absolutely not.

guest: if you're democratic, here's the problem. there's very little time for democratic to say change the narrative, change the conversation that people are talking about. from national point of view, the cake is baked. there is little president obama can do between now and the election. it's up to democrats in local races running for the house across the country, for them to define the race on their own terms. they are going to have to go negative against their republican opponents. there is up to the democrats in these individuals races right now. host: jack, democratic line from tennessee. good morning, jack, you're on the air. caller: on this race and stuff, it's going on between the democrats and republicans right now about taxes. in the old west, when they had gold mines and went out to ghost towns, today, it's over jobs overseas is the gold and stuff.

we in the cut and run society, whereas e corporate world is not under the american flag. in the bible, about god and satan, it's all about the rich man. god got rid of him, because he didn't care for the people. host: jack let's talk about tennessee's eighth district race. what's happening in this race. why is this so competitive. caller: it's the race for january to knower in tennessee. i don't think democrats could have picked a much better candidate than roy haran. he is state senator, well known pickup to have wonder if democrats can really win. the republican is a good candidate. a lot of people like him a lot.

this could be a tough seat to hold on to. host: good morning, frank. caller: good morning. i'm a republican who is a capitalist who thinks the democratic party has let the country down because the don't have an industrial policy. health insurance is killing american industry. you cannot afford to compete. when various companies go to other countries with different divisions, they tell you what your health care costs, that you are saving millions. host: we are talking about campaign 1here. how are you going to vote in that senate race, pat toomey or sustak? caller: i think the lobbyists

control the republican party. they are not capitalist, they are paralyzed. host: david berger writes in his column this morning, "the stark choice in pennsylvania, that both of these candidates are trying to say they are moderate. do you believe that president toomey is a moderate republican? he brought in susan collins of maine for a fundraiser and told and interviewer that he would have confirmed justice sotomayor for the supreme court. caller: the republican party must help industry. if they do not, nobody will. the health care was doomed because it's not done in a way to protect. we have insurance companies last week, a guy retired with $133 million package.

these people are taking money that industry has to make up. host: frank, we got your point. host: toomey held the point that viewers can expect two months of ads arguing that the other guy is the extremist. alan, does that handicap that race? guest: toomey is a different candidate than we've seen run in the past. he was very conservative when he was in the house. when he ran against aurelian specter six years ago, he was known as being very conservative. enis running much nowhere moderate against joe sesak, congressman from pennsylvania.

the question is is that can democrats written in pennsylvania, which is a battleground state in a very tough year. it could be an uphill battle for them, i think. host: joseph from pennsylvania, independent line. you're on the air. caller: good morning. host: good morning. caller: i'm an independent. i could never support republican. republican doesn't support unemployment or health care. they are always voting no on everything. i don't see any reason why anybody would volt forum. host: we'll go on to try, democratic line in greensboro, north carolina. go ahead, troy. caller: people are talking about job loss in the country. the biggest thing about the job loss is the and is the nafta t. it has hurt the jobs in middle class and manufacturing.

host: nafta was put into place by bill clinton given what you just said, what does that mean for how you will volt this november? caller: i will volt for democratic. bill clinton did shine bill, but that wrong don't make right. we need to change it, make revisions to the nafta treaty. i want to comment on what people were saying earlier is that the unns are the reason jobs left the country. host: we are talking about campaign 2010. miller's campaign promise in alaska. he is saying less. alaska gets a lot of federal support. jill miller ran on getting less. if you're interested in this piece, it takes a look at who joe miller is. miller left the army to attend law schoo at yale, where a professor who new him well recalled a compassionate man who

chose to move to alaska for a long internship. he could have clerked on the east coast, done extremely well in kansas, instead, he's a real adventurer. he wanted to strike out and go to this frontier to make a name for himself. he lives on 20-acres with his wife outside of fairbanks. what is next in this senate race? guest: this was on no one's radar screen two weeks ago. democrats are taking a local look at this race. at t end of the day, it's hard to see national republicans invested in this race.

california or pennsylvania, this is going to be a tough seat for democrats to win. it's more in play than it used to . host: it's a republican-leaning state, likely that joe mler wins? guest: absolutely. host: from new york, republican line, you're next. caller: i'd like to see term limits straight across the board. i think the problem is you get these career politicians elected, and they make all these promises when it comes to campaign andlection time, but seems as though election time is over, they go back to their elitist club and they're self-serving. they forget about what the forefathers started our government for, to serve the people. democrats and republicans, they both need to be limited as far as how long they can serve, and then once we get down to that,

maybe we can turn the country around. host: all right. we'll go on to massachusetts, maureen, independent line. good morning. caller: good morning, how are you? host: doing well. caller: good. i do have a comment. host: ok. caller: i follow this very closely, and i follow fox news very closely, as well as your station. i do feel very strongly that there needs to be a stimulus for the actual taxpayer. i think that if president obama would give money back to the taxpayer, you'll see the enomy get back. host: what do you think that would do for democratic's prospects in november, if he were to put forth an idea that woulgo right to the individual, an economic idea? caller: i think it would help them, because i'm not going to vote democratic. even though i'm an independent, i will volt as republican. host: what about a payroll tax holiday. caller: no, i don't think so, because independent contractors,

we don't get paid unless we sell. we cannot collect unemployment. he needs to put into this system a stimulus package for the taxpayer, and i mean money, i mean like $15,000 to $20,000 per taayer. he can do it. host: if he did, would you vote for democrats? caller: then i would vote for the democrats, because he's now helping the people. the unemployment is over 9.8% right now. there is no money for the person to go spend, and there is no money in the housing. we went a whole year with no sales. congress has spent money on things they should not have done. give us a a break, give the cash to us. then he will see the economy come back. he always says i feel sorry for the taxpayer. host: what about the politics of the economy and jobs. the president is likely to focus

on republican proposals, tax credits for businesses, a payroll tax holiday. does that sell to somebody like maureen? guest: you have to discredit the republican ideas at this point if you're a democratic. there's no realtime right now before novemb for a legislative fix. we know the house and senate are going to bin session for three weeks and go home and campaign. there is not time to get things done on capitol hill. it's u to democrats and president obama to discredit republican ideas as much as they can before the election. is president obama going to offer any solution himself? the problem for democrats is the cake is pretty much baked. you haven't seen the kind of economic recovery that they wanted to see over the summer. host: we wanted to let our viewers know about the outlook section of the washington post. chuck schumer writes a long

piece this morning about if democrats don't want to relive a disastrous 1994 year, that they should steal a page from the gop playbook from 1980 to. kentucky, democratic line, go ahead. caller: i want to make a comment, and i'll getff and listen. i think the answer to everything is what obama is wanting to do, and republicans won't leave him alone, but all he has to do is release that reserve oil we have and let it get outn the market at a fair rate, and that will bring gas down where us poor people can afford it, and that will start the economy rolling, and then we need to invest in the refining business, because we to have refine it for all these people in our countries, and that will straighten the whole works out.

host: raymond, are you going vote this november? caller: yes, ma'am, i'm going to vote democratic. host: why is that? caller: because i always have. we never got anything when we got republicans in charge. host: are you motivated to get out to the polls? caller: yes, ma'am, i never missed one. host: all right. we'll go to the republican line. dan in pasadena. do you plan to vote in november? caller: yes, i do. host: how will u vote? caller: republican. i just feel that i do believe the democrats are in for a major crash, because all the programs to are going on. i do feel that the republican incumbents are not safe at all, as well, because they've been in there way too long. i think we will take the senate. host: dan, before you go, let me ask you about republican

leadersh. you said repubcan incumbents have been in there too long. what do you think about the leadership or john boehner becoming speaker? caller: i think he will become a speaker. host: do you support that? caller: sometimes. i'm 50/50 on boehner. he is conservative, but he does have -- he ls his mouth get him in trouble. sometimes he doesn't think real clearly. i just believe that people should instead of counting on the government, if they want a hand to count on, it should be at the end of their own arm. host: let's talk about republican leadership. if republicans take control of the house, will we see a shakeup in the ranks? guest: you are going to see presumably if the republicans take control of the house, and

boehner becomes speaker, cantor of virginia moves up to majority leader, then it's a battle for whip. kevin mccarthy could be interested. you could see someone like mike pence of indiana, who is the current house chair interested. you could see a number of people interested in that position. then it shuffles down from there, who takes on the position of national republican chair, there would be seats up for grabs on the republican side. you don't see a big shift in democratic ranks if the republics take over. host: if democrats take control, would nancy pelosi lose the top job? guest: that would be the miion dollar question. everything would shuffleown from there and work itself out from that point on, but that would be a million dollar

tomorrow, terrace and clear from george washington university. brigadier-general jeffrey smith afghanistan assistant commanding general talks about operations for elections. and time magazine writer barbara talks about ownership and communities around the country. washington journal live at 7:00 a.m. eastern on c-span. >> next, a conversation with david then the annual afl and cio and u.s. chamber briefings. after that, q&a[applause] with meredith whitney. >> the span networks.

it is all available for you on television, online and on social median net working sites. we take c-span on the road with our digital bus and local content vehicle, bringing our resources to your community. it is washington your way, the c-span network. now in over 100 million homes. >> now, david westin, the president of abc news is interviewed about the news business. mr. westin has been with abc news for 13 years and talks about how it has changed and how he leaves the organization. this is just over an hour.

>> as david knows, and the interview with the journalists involved ground rules. many want to know in advance what the questions will be. david had no desire what i was going to ask him, and i had no desire to tell him. [laughter] this is going to be completely free wheeling from our end. i think there is nothing -- i think there could not be a more important time to be discussing this topic. i think the rise of the importance of ethical leadership comes to the forefront of the challenges we face. in the middle of the last century, when the challenge to western civilization's very survival was at stake, to have in leadership positions men like winston churchill and franklin roosevelt, who embodied i think, the three qualities of

leadership that i think we think of as most important, intellect, experience and instinct, was vital to the outcome of that challenge. you do not often get all three in our leaders. so i was curious about how you would rank -- we have had a president whose intellect was often questioned and mocked followed by a president whose instincts and emotions are often questioned and mocked. if we were to start with experience, and the fact that our current president like, harry truman, jack kennedy, had very little experience before coming into office, how big an issue dealing lot of experience is, and is it ever an advantage? -- big an issue do you think lack of experience is, and is it ever an advantage? >> per se of all, let me say

that it is an honor to be here. -- first of all, let me say that it is an honor to be here. i have the greatest respect for nancy. talking about experience, intelligence and the motion, i would one of three. they're all important. you want somebody who is intelligent enough to understand the institution they're leading, whether it is a company, a country, or the chautauqua. you want somebody with good instincts to give a visceral reflex. warren buffett once said that he looked for integrity, intelligence and ambition. if they did not have integrity,

he hoped they did not have intelligence or ambition. [laughter] to some extent, i feel the same way about leadership. if you have someone who is blindingly smart but does not have 11 of experience, i think you can go bad -- does not have the leaven of experience, i think you can go badly off the rails. however, experience does not always look like what you think it does. more important than having experienced at the job is having a person who can draw upon their experiences in any capacity and apply them to the task at hand. >> do you think the fact that

the president has never run anything is a valid concern? >> i have a bias as someone who has run something. i do think that there is no substitute for having actually run something, as opposed to advising, as opposed to being an academic. most recently it has struck me -- and i do not know enough to really criticize, but the oil spill disaster down in the gulf, the immediate reaction from the white house was not the one we would have expected from someone who had run a big organization. i cannot imagine the former head of g e appointing a commission. this is not the way somebody who has had line experience running a big, complex organization acts. they're much more hands-on, much more direct, much less trusting of the information's

coming in. once you have been burned a few times, even by having well- intentioned people giving you information that turned out to be hopelessly wrong, you turn very skeptical. the people of bp have a vested interest. they may be honest from their point of view, but they have a vested interest. if you have been through that a couple of times, then you have been burned, and you knew that you cannot rely on other people for their point of view. >> when you discover abc news -- when you took over abc news, you had no experience as a journalist. how did that work? [laughter] >> it was much worse than that. i had not been a journalist. i was a lawyer. and i came from a corporation. [laughter] i was starved later to the people of abc news -- i was darth vader to the people at abc news.

i learned the job one mistake at the time. i have made my share of mistakes, but any leader is going to make their share of mistakes. the important thing is not making them twice, learning from each one as best as you can. this would be for others to say, but i do think, having been a lawyer in washington in private practice, and having been general counsel, and having them on the corporate side, i did have experience with some things -- one example. i had run outside investigations into corporations. when we got the election ron not once, but twice in the same night, which was a terrible experience, my immediate reaction was that we need to bring the outside lawyers then and i want a thorough review, rather than, let's explain ourselves and then why it is not our fault. >> was there a moment when you

felt like the courts -- the people answering to you came to accept your leadership? >> one of the problems i have had is that people accepted me sooner than i felt accepted. some of the mistakes i made or from a point of defensiveness, thinking people did not treat me credibly. this will sound very strange to say. i was somewhat fortunate the one of the very first big stories we had was a modicum

lewinsky scandal. there is a substantial legal element to that right from the very beginning. it is something that i knew how a grand jury worked and knew how the council works, and had some sense of the supreme court. i had a little bit of an accidental leg up. i knew more than my journalists did about a lot of what was going on in illegal proceedings. >> on the intellect question, i suspect in a community like this, an audience like this, where we are all may be disposed to over privileged academic credentials in learning and intellect, and yet i am struck by how often you get this

divide between the man of ideas and the man of action, and then knowing too much or thinking too much can actually in some ways make acting as a leader more difficult. do you believe that? have you seen that? >> i think that you can be too smart for some of these jobs if you do not watch out. >> what does that look like? >> it looks like over thinking things. leadership, at its most basic form, in my view, does having watched it within my own industry and having coverage nationally the leadership comes down to making choices, making tough choices, sometimes unpopular traces, but making them based on a the best information you can get and then implementing those changes. the enemy of good leadership this distraction. you do not have clear goals or

remember what they are, you cannot pursue them. sometimes people who are too smart or think about too many things at once lose track. therefore, their organization loses track. what are we trying to do here? what are we really trying to accomplish? you end up with that decision making -- bad decision making. >> is the inverse of that that the people who end up in leadership positions are people who tend to act as opposed to pause to reflect or have a second thought? and sometimes not acting is actually the better leadership decision? >> it may be in fact that there is a bias in this society to put action people into leadership positions, but often those

people become extinct. often the smartest thing to do is not to act, to have the courage not to act. often what one does as a leader is to not do things. >> give me an example. >> we have every day where i have people come and say we should report this and may delay because it is a huge story. i say, no -- we need to report this immediately because it is a huge story. i say, no we need to hold back. my reading of the history of the bay of pigs was that there had been planning going on and when kennedy came in he did not want to appear to be weak on the cuba. in fact he had run on being tougher on cuba van nixon was. -- than nixon was. kennedy acted because he felt he needed to act and be a man of action. he clearly came to regret it, as he said. >> wages have an election 90 months ago that was all about -- we just had an election 19

months ago that was all about leadership. ethics has come to play a larger role in elections. did you think of that mattered last time? >> you know more about this than i do, so i should turn it back to you. think about john mccain versus barack obama. i did not have a sense that we were choosing between what people thought of as one ethical, moral person and one who wasn't. there have been elections where that has been an issue. but also, ethics in leadership for me is not simply doing the moral thing. ethics in leadership is doing -- to be truly ethical as a leader, you owe it to the people of the organization that you lead to have a clear sense of where you are going, expressed clearly, and the state true to that. hypocrisy is one of the worst

qualities of leadership. coming back to mccain and obama, i think we did not really know much about president obama. we knew he was very smart, very articulate, very charismatic, and seemed, in my point of view, to be a thoroughly decent man. we knew john mccain to be a war hero and a politically courageous man. when the iraqi surge was decided, almost nobody in the media or washington thought it had a chance. he took a courageous stance. between the two, i do not perceive a difference in the ethics of their leadership. >> one of the reasons i am curious about our current gallery of leaders is because there is a saying that the scandal is what legal.

we have not watched financial institutions do credit defaults swaps that were perfectly legal but very wrong. almost at the risk of getting metaphysical, in this climate and what is right is what i can get away with. every poll in the last three or four years has shown a dramatic collapse in faith in leadership in art, business, the church, a government. i wonder if you think we are at the moment of crisis in ethical leadership? >> i am conservative with a small c so i do not always assume we're at the moment of crisis. on the political level, and even the national and global leadership level, as well as things like the financial

institutions, a failure of leaders to perceive, they owe their primary obligations to -- to perceive whom they owe their primary obligations to. these are experienced, knowledgeable people. i cannot believe they did not think there was a bubble in the real-estate market. but they were not thinking about that. they were thinking about their own interests, and putting them even above the institutions that they served. i worry on the political front

that too often we are seeing leaders who are worried about reelection and ancillary issues, rather than the public that they serve. it is very easy for a leader to say, i have to worry about reelection. i am a politician. it is easy for ceo's to say, i have to pay $40 million per year otherwise we cannot attract people to the business. but who are you serving? the public, or the shareholders? when you see a ceo getting paid enormous amounts of money, large enough amounts so that if everything blows up they will be just fine, as opposed to

being in line with the ramifications of their decisions, i think that shows a lack of ethics and leadership. [applause] >> you and i have talked a lot especially in the last couple of months about our current leaders unwillingness to be honest about what needs to be done right now, with this economy particularly, with our long-range vulnerability. can you talk about a little bit? >> i am very concerned about this. i think everybody here today knows that we are facing some major issues as a country and as a world. think about the country for a minute. you can go down the list, and probably most of us agree about what the problems are. we have huge issues of

unemployment. we have huge issues of leverage, borrowing on a global level. we have unfunded liabilities like social security and medicare. we have two wars. we have an environment in danger. there are fundamental big problems. some of those are very hard to sort out. some of them, i think any reasonable, intelligent person, a democrat or republican, would agree and the solutions, and yet our leaders appear to be unwilling or unable to look us in the eye and say, this is going to be hard. it is going to be painful. we can get through this. president back to obama. i have enormous respect for him. he is a really intelligent man,

a decent man. he understands these things. the fact the thus far he has not been able to look us in the in been entirely straight with us tells me that he must have made an assessment, given that his intelligence and his curiosity, he must have made an assessment that there is something in the political process that prevents him from doing that. go back to health care. what i heard as a citizen, forget about my job, what i basically heard from this administration about health care from the beginning was three things. one, we're going to give everybody health care, which sounds like a very good idea. two, you're not going to have to change your health care and all. 3, we're going to pay less for it.

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[captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] so you're providing more capital but sending a mixed message. this administration took the student lending program back from the banks, consolidated in the federal government. said basically we don't trust the banks to make student loans, but now they are taking those same banks, because it is the community banks that made

those student loans and said we're going to instruct you and give you to capital to make small business loans. student loans are easier loans to make than small business loans. there is a whole different loan project on that. they are saying we don't trust you to make student loans but we're going to enable you to make small business loans but then we're going to be looking over your shoulder so i don't think some of these programs are really going o have the bang for the buck that they otherwise would. right now we have a budget problem but it is a long-term budget problem. the nephew is its that we have seen in the last couple of years and that we're likely to see next year are to a great extent, the result of a very, very steep economic downturn. the budget problems that are truly problem attic for an economy such as ours is not

what happened this year and next year and the next year but what is going to happen in five years, 10 years, 20 years, and the problem is our current problems do not meet and so in the out years we see bigger and bigger and bigger deficits, and the deficits that we see are structural deficits. they are the result of a down cycle and occur as the economy recovers. structural deficits do not and the problem that we're seeing and the problem that will cause us concern down the road are structural deficits. i just want to end up with about five minutes on the labor market. that is where this relegislation settled in. we have unemployment that is 9.5% and has been stuck there and i believe it will actually rise before it comes down and

the reason why it will rise is when the workers that are not counted, stay start to look for work, they will suddenly be calculated as unemployed workers and show up in the statistics. when you look at some of the initial claims numbers, they were down but the four-week moving average is 480,000. at this stage of a recovery you would like to see that number a lot lower. the duration of unemployment is extraordinarily long. there have been some recent studies. robert barrow ro an oped recently about how employment

insurance may have created an incentive for people to remain unemployed longer and that may be part of the explanation for this. whether it is or not, there is no denying the fact that we are looking at an employment problem that is shifting from a cyclic alproblem to a structural problem. that is to say when people stay unemployed for two years, it is harder for them to reenter the workforce. there is some skill attrition and there is a great err problem matching up the problem of demand with supply in the workforce. all of this will plague us down the road if we don't begin to address them now. we have to get the economy growing faster and get hering back on track. -- hiring back on track. this chart shows you how steep it was relative to some of the past ones. when you look at how long it took to get back to a norm in

1991 and in 2001 and then look at where we are starting from today which is significantly below where we were in those economic downturns, it is even more imperative that the economy grow at a faster rate. we have a bigger hole to fill. i did some simple calculations and i'm going to slip to the -- a little bit to this one right here. we said suppose we started at the beginning of this year. how, if we wanted to get back to our level of unemployment or level of job growth that existed when the recession ended at the end of last summer this time a year ago, how many jobs would have to be created starting then in order for us to get back to where we are this five years? that's 60 months. now remember i said in 2001, it

was 39 months and 91 it took 24 months but back in 1982 and 1974 and 1975, it only took nine months in a year. how do we get back the five years? let's take a realistic target. the job growth that we have experienced since the end of last summer is well below the line that we would need. in fact, if you look at this particular -- if you look at this particular chart, this one says let's start at the beginning of this year. let's not worry about the end of last year when we were still losing jobs. let's look at when we started creating jobs at the beginning of this year. how how much do we have to grow? how fast? how many jobs do we have to create every month in order to get back to employing all the people who lost their jobs and all the new entrants into the

workforce? the new people and the people that actually lost their jobs, not looking at the margely attached workers -- marginally attached works. as you can see, we're still well below that line. we have to grow at 240,000 jobs a month in order to get back in five years and we're not anywhere near that. the first half of this year when we were seeing positive job growth it only average 95,000 a month. every month that you go 95 throo when you're supposed to go 240 means you to make up that shortfall and grow everyone faster in the out years. it is imperative that we get this economy growing more quickly rather than let it work on its own down the road.

when we look at what happened in wages and salaries and the like, because of the slack, they have suffered as well. by any measure of wage, when you look at the real average hourly earnings, they jumped up because of a big decline in inflation. the nominal wage really wasn't rising. when you look at real employees total compensation and pay per worker, these are broader concepts than earnings. they are virtually flat. that's not what you'll want to see either. real pay equates to real standard of living improvement. the way to get those numbers up is to create more tightness in the labor market. when the labor markets are operating with almost 10% slack, and almost 18% in trms of underemployment, you're not going to see pressures building

and incomes growing. to start this whole thing, incomes are the primary driver in con sungs. it is all -- in consumption. it is all circular. you to break into this and get the economy moving again. we look at what's happening in household incomes. they are down. we look at what's happening at the poverty level. it is up. a new that wee use to measure the skewness in the economy. are the rich getting richer and the poor getting poorer? if you go back and look at that interest 1992 until 2000 during the clinton era. it actually went up. that is to say with the clinton tax cuts we actually saw the inequality in the economy rise modestly. whereas with the bush tax cuts, the clinton tax increases actually led to more inequality. the bush tax cuts, the 2001 and

2003 tax cuts actually saw a period where the inequality stayed about the same. now this inequality trend as you can see goes all the way back to the 1980's and before. this suspect something that is policy-induced, but it is something that can be affected by policy. but the slam on the tax cuts is that they were tax cuts for the rich. if they were just tax cuts for the rich then you should have seen the income in equality rise dramatically and it didn't. it, in fact, was more level than it was during the era that was characterized by tax increases. finally, we look at this -- this just kind of shows the dispurgs of income and taxes -- dispersion of income and taxes. the rich pay more than their "fair share." they have about the top 1% --

the top 1% controls about the top 22% of income. we have a progressive tax system. we don't think making it more progressive is going to make it more conducive to spend. everybody says the poor have a higher propensity to spend more of what they make. that's true true. so even though interspending relatively less, they are spending huge amounts. you cannot drive a broad-based economy like the u.s. economy just on the spending of the middle and lower classes. so if you're trying to generate broad-based con sungs and you're trying to -- consumption

and trying the generate economic growth and get the economy improving at a greater rate and trying to get job creation going, you cannot, as it were, wipe out part of the population and say well, i'm not going to look at them. i'm just going to tax them. i'm just going to take more from them and then i'll give it to the other group and then i'll spend more. because you'll never come out whole on that one. you are not going to generate more growth that way. in addition, many of the people that would be hit by the tax increases of the 2001-2003 tax cuts were not extended. other people that create jobs and create growth -- so you're taxing -- the engine of economic growth, to people that spend and that policy in an environment where we are suffering the way we are, just doesn't seem to make good sense at this time. i'll stop there and i'll turn

it over to and arey. >> thanks, marty. i'm going to try to go through state of the union movement and the state of the american workforce a little bit and on issues we're seeing coming down in the traditional unemployment law area and immigration and then health care and hopefully i can do that in 12 minutes or a little bit less. traditionally, unfortunately with regard to labor day, we often see rhetoric coming out of the union movement and i've seen this over the last 10 years criticizing the community for never doing enough, using words like corporate trader, terrorist, eths. so i just want to -- etc. so i just want to point -- in a quick rebuttal toll that, we're still providing to employment-based health insurance over 170 million americans with health insurance, something like 88

million americans are contribution plans and many due to benefit pension plans. i think my point is that there is a lot of unfortunate stuff going on in a tough economy but employers are still trying to do the best they can by their workers and i think the statistics bear that out. now recently, just last week, gal up came out with a poll in august that 44% of workers were completely satisfied at work. that comes out to about 87% completely or somewhat satisfied at work and more interestingly enough only 8% were completely dissatisfied at the workplace. so when the unions characterize labor day as a day when we have

to reign in the employer community i think it is useful to keep these kinds of data in context. with regard to the labor union movement, i will let them speak for themselves but just a few comments but as you well know, the traditional trend has been through dropping in the private sector. the movement is down to 74 -- 7.4% from 7.6%. this year, we saw i think alarmingly now that half of the union membership in this country now works for the public sector, federal, state or local governments. why is that important? why do we care at the chamber? i think that brings to the floor the fact that the union movement is going to have a hard time moving away from the government. that in fact is the base of where the union membership is.

somehow that spending going to be paid for? by higher taxes on private sector workers and private sector companies so yes, we do use that as an alarm. we'll put the federal government aside. recently we had here at the chamber a conference on underfunding and pension at the state and local pension and health care funding. we're all familiar with california. recent studies have come out which talk about a $1 twillon gap in funds, -- trillion gap, other studies put that up closer to about $3 trillion. there has been some attention paid to this but when people see now the close allegianceance between the government, we see another area where our members are going to be facing higher taxes and workers are not going to be

immuseum from this. so it is an area that is sort of been under the rug for so long and worked out between government officials and the unions and not a lot of attention has been paid to it and we're going to be following it closely at the chamber and try to ebt more and more people about this -- educate more and more people about this coming problem. the pension plan was underfunded by about $100 million. how do you deal with that? the city workers work out a deal with union leaders to sweeten the pension pot and increase the pension underfunding by another $100 million. instead of working out a deal because the taxpayers are going to be on the hook for it, it went the other way and when some of our union leaders here in washington say that we don't have an entitlement problem, we have a revenue problem meaning

the solution to some of our problems is that the federal government is not cuts, it is just revenue. i can we can see that it is going to be -- go to more taxes and employers let me say that marty indicated that the challenges that we all face, that employers face in growing the economy. it is particularly ironic, because in my 15 years of doing this which includes 10 years on capitol hill and watching labor issues for sometime, i've never seen a more aggressive, -- more aggressive movement to put more and more employers in the employment and labor area than i've ever seen before. and that's what this booklet is all about. now i'm not going to go through everything that is in there. it is split up between three parts. what is going on on capitol

hill. what is going on at the regulatory side and what is going on in a more sort of -- obscure area of the subregulatory level. the basic trends are one. there is legislation to help the unions organize and legislation to increase the level of damages under existing laws, for example our civil rights laws. most people don't know that an employer can be penalized per discriminatory allegation up to $300,000 plus lost back pay. that is a lot of money. let's improve protection over the so-called plant closing

laws. elision of employers to be able to use arbitration this these cases and below that we see sort of a stirring of the pot to encourage, i would say people to bring cases against employers rather with the department of labor, eeoc or in the court. that is that this book slet all about. i realize it is not an easy piece of reading but if you look at the introduction on this, i think it lays out the case. it is not that we disagree with everything that the administration is doing. in fact, the chamber is not always the chamber of noes. sometimes we're used to being the chamber of compromising because we do step back and work on deals when we can. we tried to work out a deal in the discrimination versus unemployment act. in my experience, i've never

seen such a level of regulatory burdens being directed at the regulatory community. a lot of our members reflected on my policies. if i hire an employee who knows what i'm going to be exposed to this terms of future lirbletes. i'm only going to talk about one bill. that is -- many of you are familiar with that. it has been around for a while. there is talk about still trying to bring it up in the lame duck. we are confident that we have the votes to defeat that but i think it is still at this juncture worthy of note that the linchpin of that is the elimination of the secret ballot. i just want to reath read again from a quote from a past union organizer when he talked about how the card check process can

be abused which is why we need to maintain secret ballot election. this is from a former union organizer. from the first moment contact was made with workers deceit began. visits to the home of employees was used to frustrate them and put them in fear of what might happen to them if they didn't agree with the union. they have more power over the unions. it can be awfully hard to dissent when the union knows how you voted. most workers felt powerless and refused to sign the card. the linchpin of the bill, again, has been testified against by many workers. again, we teal that we have the votes. the unions want to test our ability on that, we will look forward to that in the lame duck. health care, what can i say? we agree the majority of the

american public which has come out in very recent polls, and won't quote them all. i will say the majority of the american people has said they wish the law would be repealed and they it was basically a bad idea and they are concerned about the impact of job growth. we feel the same way at the chamber. we are heavily involved in the regulatory process, specific think graffering clause provisions. wrnk -- grandfathering clause provisions. i think from my viewpoint i testified twice on the hill on this issue. the white house speech writers never really knew what the legislation said on capitol hill and when the president was out there talking about how this would control costs. the bill would norv r never help control costs. it was unfortunate to me that the white house got caught in that and didn't deal with the issue of -- it is not about controlling costs. it is about providing health

care for the uninsured but they didn't. it is time to make clear that costs are going to go up under this legislation. we have many concerns with regard to how it is unfolding. we can come back to that. lastly on immigration and you'll notice on the pamphlet we have immigration. even we are working on immigration reform. we are in discussions about the scope of a temporary worker program. hopefully in the next three months we can come to an agreement on that and have something ready to submit to the applicable senators come january or february. there are a variety of areas -- one is called the new field memo. it basically redesigns -- it did not go through rule making. it redefines the definition of a employer-employee

relationship. long standing principles with regard for the purposes of concluding who was a qualified applicant. who is a qualified employer. who is the employer and who is not the employer? my point is that only that are a lot of our major members, companies that you would represent is not fly by night companies. a people they need for these positions are being held up in the bowels of d.h.s. and the department of labor. on capitol hill, there is one bill, for example, that would say if you're a company and you -- you lay off an employee in any part of your company, you are therefore prohibited from hiring a visa holder. if you need a person in san francisco but you laid someone off in maryland, you can't bring that person in. these are unfortunate pieces of legislation, which i think speak to perhaps the way the

immigration issue has been demagogued on capitol hill, on both sides in some cases and we in the chamber are very, very concerned about that trend. again, a lot of that material is discussed in the pamphlet. now, i do want to mention on health reform, and again, our time is short, but we do have a website up. it is called health reform impacts.com. i do want to take the liberty of just reading two quotes small businessmen who have gone public about concerns about the bill. the chamber has been accused of not representing our members and overstating the case. i can assure you that is not the case. small business that employees 28 workers who repair get arrest full time for my firm in the northeast. for several weeks i had a group health plan through the largest provider of such plan in new jersey. soon after the president passed

the legislation. as a result, my firm was dropped from this group policy and to date we cannot find any company that can cover my employees. whenever i or my h.r. manager asked why these rules have changed. we always get the same pons, they say to a person, it is that health care bill that has got everything scruped. we just got a health insurance quote from our current carrier. who has been satisfactory. our reiterates will go up 34%. obama care is supposed to reduce costs to small businesses? i recommend the website to you. if you have any doubt that we're pursuing these arguments for political purposes, this is what we're hearing from our members. we had a conference here a few weeks ago. a lot of small businessmen are concerned about the employer mandate and extra costs

particularly when these people work on very, very small margins. lastly back to the employment law area. as you're looking at this booklet, bear in mind the requirements employers already have to comply with under existing law and that fact, we have -- by the way, in your booklet there, these charts have been updated slightly so they are not quite the same as the ones in your booklet. capitol hill never seems to look -- they look at bills individually without looking at to tality of the circumstances that -- totaly of the circumstances. that leaves a tremendous amount of uncertainty as employers decide can i hire somebody new? what happens if i get sued by an employee under some new law so i'm just going to hold back before i decide to hire.

that's the state of where we are i think. we'll open it up with -- >> in health care, it appears -- i mean, it seems that a full appeal would be pretty much impossible, even if the republicans take both chambers in fall. what is your desired outcome resolution of the situation to get things to a situation that's more fitting for your constituents? >> well, i think you're right. and so we're realists. obviously right now we are heavily promoting a bill that would remove the so-called 1099 requirement which requires businesses to file a form at the i.r.s. if they have a transaction of more than $600 with anyone in this their business. wreeptly sent a letter up to the hill -- we recently sent a letter up to the hill signed by

1099 businesses in support of legislation to repeal that part of the bill. frankly, i think most policy makers in the congress never knew that was in the legislation and were surprised to find out. i'm sure we will support senator hatch ice bill to re-- hatch's bill to refeel mandate. this whole health care bill is built on a deck of cards and once you start repeeling does the whole thing fall apart? we will work on various improvements and test the political waters. if that works we will look further into the legislation. >> i agree. i believe a repeal is not likely going to happen. >> question for marty. i know that the bush tax cuts extension is your number one priority but can you talk about the benefits of a payroll tax

holiday or any other -- can you talk a little bit more about some other possible policies that the chamber might support? >> there has been a lot of talk about a payroll tax holiday. it would depend on how that was structured, whether it is across the board payroll tax -- there has been some questions on a payroll tax holiday. it tepids on how it is structured. -- depends on how it is structured. there has been a lot of hype about the so-called hife act. giving a -- hire act. giving a tax rebate for hiring a worker that has been out of work for two months or more. the problem with that, that particular legislation, is that it -- one isn't focused at the margin. so if you hire anybody that

meets the minimum qualifications, you get a credit for it. so it is not like you have to hire more than you had laid off or anything else, just make a hire. well, businesses hire and let people go everyday. so every month you see in the statistics, a net figure that has a huge gross figure underneath it and providing an incentive for activity that would already take place gets to be very expensive and it doesn't generate marginal activity. not only that, when you -- i think they puts a two-month lag in there. you had to hire somebody that was out of work for two months in order to prevent people from gaming the system by firing somebody and hiring them right back again. in doing that, you play havoc with the system in productivity of the workers. when workers are laid off, you lay off your least productive

first and then your next and then your next and the last person you lay off is presumably the most productive person you have. you try to keep them the longest. then when you go to hire people back, if that person was laid off in the last two months you can't hire them back. you're talking about hiring people back that have more roted skillsettings that haven't been back in the work force as long as some other people. it is important to look at the long-term profitability of that worker and not just the short term tax gain. wheen the administration says 5 million people have been hired who qualify for credit, they have not said anything about how many of those people would have been hired anyway and how much then the cost of the program is versus the bang for the buck, so what is the cost for the marginal new worker? and when you look at the

overall statistics on job creation, it is hard to find where 5.5 million net new jobs have been created. so there is obviously a lot of paying for -- out of the policy for jobs that didn't, you know, that really would have been created anyway. >> that's different from the payroll tax holiday. can you comment on that? >> that is how that particular hire act is implemented. you get a credit against your payroll taxes. a broad-based pal roll tax holiday would be -- payroll tax holiday would be different. it would still suffer under that program. again, depending on how it is structured. we can't comment anymore on hypotheticals but it would depend on how it was structured

and how long it was there for. in the end, the only thing that is going to get businesses to hire in a permanent way is if we get the economy growing and they have to hire in order to meet demand. that's the bottom line. the bottom line is they will hire to meet demand. that's what they are in business for is to meet demand and make a reasonable profit. when we get to a situation where the demand picks up, and where the demand is driving shortfalls then i think we're going to start to see more hiring and the payroll tax credit would help in that regard but the payroll tax credit to the extent that it provides more disposable income should lead to more consumption as well as to more hiring. so you know, it really depends how broad it was and how long it was in for and that sort of thing.

>> martin, should they bring back the home buyer tax credit? >> well, we originally supported a home buyer tax credit that was broad-based and applied to everyone. and i think that at this particular juncture, you know, that's something that could be looked at. i don't think it has the same impact now as it would have before but by the same token, it really depends, the home buyer credit that was put into place was a home buyer credit for first time home buyers only and for first time home buyers in a certain income class and that wasn't a broad enough group to really boot strap the housing market. and so what you saw, was that as you approached the deadline for the home buyer credit, home

buying increased, but it appeared to be home buying that was shifted from a future time period into the current time period. shifting time periods doesn't really generate net growth in that area. if you can kind of rob from tomorrow and put it in today and jump-start the economy going so that you get some of the positivefects of the economy then there is some rational for that type of credit, but in this case, it was too small to too few individuals but all it did was take from tomorrow, move it into today and then when we get into tomorrow, we see big declines. that is exactly what we have seen. that was extended until the end of april. increasing sales numbers. there was some delay in terms of who qualified. we had the contract going and everything. then you could still qualify

for the credit and then as soop as that time pert -- soon as that time period ran out, we saw a decline in the home buying and housing sales and the like. i don't think the credit worked to jump start the economy. it worked to shift the expenditure timing, but it didn't jump-start overall expenditures. a broader credit, we felt, might have and i don't think anyone at this point is discussing, you know, a broad-based home buyer credit that would be out there for anybody that buys a home. whern you a huge over-- when you have a huge overhang in housing and you have a huge problem in housing that was in large part created because of the subprime lending market, people that got loans that never could service those loans, they bought them on the hope that the market would continue to improve and if you got to a point where you couldn't meet your mortgage payments you could always sell the house back into the market

very quickly at an appreciated price. that is a pretty good world to live in. we're not in that world nip. the people that had the where with alto -- wherewithal to buy homes are not in the market anymore. >> the problem with credits, if you go that route is picking the timing, just, you know, you have proposed a two-year credit. if you're going to pick a two-year credit, then what is going to happen with that type of credit, then many people will delay the purchase to see how things are going. i have two years to wait so i wait a little bit. then at the end of the two years you see a spurt of buying and then after that, you see a little bit of a trough. the only time those types of short-term credits structured in that way really seem to work is if you can really pick the

timing. in other words, if you can say ok, i really need to generate growth this year. the last time we saw a credit like that work was an investment credit that was extended under the 2001-2003 tax cuts where we told businesses, if you invest up to point x, you're going to get a credit. a tax credit back. and the reason it was put in there was because it was felt that if we could shift expenditure from the end of next year into this year we felt we could jump-start the economy going forward so it was robbing peter to pay paul. they felt if they could get paul spending it would generate the economy. there are people who criticized that program because they say the timing there wasn't right

as well. at the end, some businesses that didn't take advantage of it said gee, we ought to extend it again. everybody said there is a limit to these types of credits. i think the housing credit had a -- it has a benefit or there was a concept behind it at one point in time. i don't think it was executed quite well enough. it was too small a credit to too few people. at this point i don't think extending a credit like that would do any good. a broader based one, it really depends on you know, what a timing is and how much we know about the economy. >> talk a little bit about the discussions about temporary workers and what exactly does the chamber want in an ideal situation and would that be a scandal on a piece of legislation? >> well, no, it would not be a standard loan. it would be part of a

comprehensive package that would include the more controversial parts which would be legalizeation but tougher sanctions on employers and increased border security. we would prefer a market-based program in which if an employer goes through a fairly regular rouse process, not un-- rigorous proprocess, and cannot fill that job with a domestic worker, they would be allowed to fill that job from abroad. we recognize politically there still has to be a cap on that kind of a program. a market base would mean no cap. what would that cap be? typically we picked the proxy of the number of undocumented workers who have come across the border estimated between 400,000 and 500,000 people a year but that number is down due to the economy. where the debate is with the union typically is what would

be the cap and when you drill down to the details, what exactly an employer has to do to show that they have achieved prior recruitment. now the unions appear to be in a mode of we don't want any temporary worker program. we just want a commission to study the whole idea. that is unacceptable to us but that's what negotiations are all about and hopefully we can work through that. we certainly have with the past with the mccain-kennedy bill and prior versions of that. >> in the past it has been much higher and flubted. >> it has flubted to 65 d fluctuated to 65. the economy has been down and the cap has not been hit this year which adds to our argument that in fact employers do not use this category to just hire cheap workers. if they did, they would be

using it in a tough economy. they have not reached a cap because in a down economy they don't neat the workers so -- need the workers so they are not recruiting them. given the breadth of the membership, clearly 65,000, i don't know. i think in the past, when the economy was booming we were at the 98,000 level and those were all used up so i would estimate somewhere between 150-200. >> and arey, can you talk a little bit about what you see as your lobbying priorities with congress coming back and if you can pivot a little bit how that dove tails with your political program? >> well, our lobbying priorities right now would be to -- on the hill, putting aside the regulatory agencies, would be to ensure that the act is not enacted but we do have

major problems with the paycheck fairness act that has passed the house and is pending in the senate and expand the equal pay act makes it markedly more difficult for an employer to defend his or her case and george miller has a bill, which is out of the house, on osha reform, which we have significant problems with because we think an unfair level of damages, personal liability for supervisors and criminal liability which they may not have think notice of. so when you say we always try and piratize those kind things are at the -- prioritize those kinds of things are always at the top level. we're in a defensive posture. ideally we're working with some to achieve introduction of a bill that would provide that

for small businesses that can prove their case that they are. , in fact, innocent when sued by an agency would get their costs reimbursed. the house has passed that before and it was a major battle with the unions. the purpose of the bill is to say if you're a small little guy and prove your case you get your costs paid for because otherwise these guys just get chewed up by well-staffed lawyers for their department of labor and they just get bludgeoned in a settlement. they have no hope of surviving a case. there are a lot of other things in there. regulatory side is very much concerned a concern to us because our only defense in that case is if the regulation comes out and we don't like it and go to court, it proves that the agency was arbitrary and capricious. we're going to have to pick our

battles very carefully in that area. right now we see in the next two years, the battles moving from capitol hill probably to the regulatory agencies. >> to get back to the bush tax cuts and the education operation possibilities, -- expireation possibilities. the obama administration saying they won't raise tax on the middle class. republicans, however, may find it in a sense politically expedient to let all of the tax cuts expire so they can point fingers at the democrats and win an election year. is it possible that maybe you want to accept that 250,000 level rather than risk that all the tax cuts would expire? >> well, i mean, our position

has always been pretty firm that we support an extension of all the 2001 and 2003 tax cuts. and we believe that in an economy that is as weak as the one that we're living in right now, that raising taxes on any individuals and certainly on individuals that spend significant amounts of money as well as businesses that are successful businesses and therefore in a greater position to hire and expand output, is not something that should be done. when it gets into well, which ones would we accept or wouldn't accept, i'm not going to sit here and negotiate with myself in public and say we'll open the bidding at -- and then see what comes back. congress is becoming more and more concerned with any

negative impacts that derive from increased taxation after the beginning of the year. and as a result, i think that they are debating more and more whether they ought to suspend this decision until such time as they can discuss tax reform in a broader context, which might be next year or beginning next year and going forward. certainly, the chamber, i think, would support a complete extension of the bush tax cuts and a debate down the road on more fundamental tax reform. i think there are better ways to tax the business community and to tax our society that need the due -- meet the duel need of generating revenue while still promoting economic growth. i think it is a debate that

should be entered into. it is not going to be a fun debate at all. we have had them before. i think what is interesting from the recent reports that the president's economic recovery group -- on tax options is they didn't come up with recommendations. they came up with options and slirge all of those option -- virtually all of those options had been -- there is very little new in this very. it is a question of recombining pieces of the old and what are things that worked and what are things that didn't? i think we look forward to at some time having a very open and honest discussion about that but in the current environment, kind of taking half a loaf i don't think is something that you know, we are prepared to do at this point. we want to see a full extension of the of the 2001 and 2003 tax cuts at least for some you know, realistic temporary

period. >> gridlock on all of this? >> i think there is a great potential for gridlock. i think we have seen, you know, that in a lot of areas. i will tell you one thing, that if you go back -- i had a chart up there. it is in your packets on what happens to the deficit during periods of gridlock and there has been a lot of talk about the clinton era and how we generated a budget surplus. we generated a surplus because of gridlock and economic growth. we had significant productivity growth in those years, which by the way is not due to any sperm policy. i don't know -- short-term policy that will give you a short-term policy to boost product itself growth. we know very little about it and it primarily is a long-term phenomenon. so we have big growth.

grew the tax base. and generated a lot of tax revenue. at the same time, if you look at the spending growth, it is slowed in the early part of the 1990's from 11% a year down about 4% in total. defense discretionary actually were negative for years if there and that's what got us. so is gridlock something you aspire to, you know, when you look at our political system? i don't think that is the case. i think you would aspire to have having an honest bipartisan debate and some good laws being passed but if the alternative is bad laws and laws that retard economic growth versus gridlock, i think most people, most unemployed americans would take a gridlock. >> i'm brian winfield with forbes. the question, i guess, is if businesses are not spending even if they are sitting on

cash, why should we assume that the wealthiest americans will start spending when we here a lot of these folks -- if there is so much uncertainty why would these folks spend if businesses are not spending? >> the flip side of that question, you're not talking about cutting taxes. you're talking about raising taxes. so if you raise taxes and businesses are not spending now because of the of the uncertainty and because of the underlying economic uncertainty, the lack of demand. they are not spending because they don't have to fulfill an increasing demand, ok? and if you were to put kind of relative weights on those, i would say it is probably 60-40rks70-30, even, i.e., the economic weakness is not creating demand that theeds to be met by increased -- -- needs to be met by increased hiring.

in that environment, do you want to take the risk of raising -- raising taxes? not keeping them the same. raising them, taking even more cash out of the businesses. now, if you're sitting there running a business and say i need this amount of cash and then you turn around and say the government taxes x amount of that away from me, what is your response to kind of throw up your shoulders and go oh, let's start spending or say gee, now have i to go back and make that up and that retards growth even more. the question is do you think that the response to a tax increase is going to be more spending and i don't. i think the response to a tax increase would be even less spending. that's why we oppose tax increases in this environment. less spending by business and individuals. >> will you address the criticism of the -- your

argument that the small business argument on the bush tax cuts that even if it is half of all small business incomes, these taxes might go up, these people in partnerships, scorps, law firms and other professional practices is not typical when people think of a anybody? >> sure. you're asking me to argue with myself and having graduated from a fine jesuit institution on the west coast, i think i do that well. the problem is winning those arguments. when you look at this whole issue of taxes and the like and you look at what's happening out there and what's likely to happen, the question becomes, you know, kind of two-fold. one is,down, let's look at the tear ethics. let's -- here the ethics. lets try to come up with a theoretic approach.

let's try to put that in the context of the current environment. as i said, it again and again is very, very weak demand. no momentum. uncertainty over that economic problem as well as uncertainty over the political. at this particular point in time, i think that it is -- it is important not to put more weight on an economy that is struggling and it is quite clear that it is struggling. earlier this year, at the end of last year, there were a lot of of people that said see, here we go. it is going to be a v-shaped recovery. we're going to come out of this. we're going to start really cooking. there were some like myself that saw the glass half empty and said we just don't see it continuing. we have had a debatable stimulus program. we supported the program even though we did not like its competition. we felt that things were dire

at the time and that it was important to do whatever was possible and to go along even with spinning we telt was not as efficient as -- felt was not as efficient as it could be but we felt it was necessary. we're in a position now where we're starting to grow again and we are saying what needs to be done going forward? one side of the aisle is debating whether there ought to be more stimulus and it is arguable whether that stimulus worked versus putting on an additional burden. on one hand you're arguing that we should pass an additional stimulus and pay with it with an additional burden. i can't see the logic of that. i think that one of the shortcomings and one of the major disagreements between the way we see the economy working and the way the administration sees the economy working has to do with the synergies in the economy. we have members that are big business and small business. we though that many small businesses sell it to big

businesses. that without the big business growth and demand, that would be no demand for small businesses to meet. so there is a basic synergy. in trying to rifle shot programs that will just stimulate this little piece, as the hire act did, instead of trying to stimulate and allow the market to generate broader demand, is an unachievable task. it is the wrong way to look at it. the economy is all interconnected and trying to just stimulate one little piece and paying for it with a tax on another piece isn't going to work. and so as a result going after just the hire -- higher income and just those businesses, we don't support it. >> all right, thanks, everyone

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