where seniors who have seen the things you have described our sources of information. thank you for that. host: marilyn tavenner, thank you for talking to our cars this morning. we are out of time. we will be back tomorrow morning on "washington journal" with more of your phone calls. enjoy the rest of your day. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> you are watching c-span, created by the nation's cable companies, provided as a public service. lots of live a vent for you starting in one hour with mitch

mcconnell, the kentucky republican. he will be at the heritage foundation talking about the midterm election results. one hour later, the focus shifts to the american enterprise institute. we will look at the future of congress. also today, robert gibbs will brief reporters. that is scheduled for 2:15 eastern. finally, the woodrow wilson international center for scholars is hosting an event with the chief palestinian negotiator. >> changes need to occur in congress. it will only occur if the people of our country really become involved in the political system and run for congress and make the changes that are necessary. >> whether it was john boehner in 1978, or more recently, he

can learn more about the new presumptive speaker of the house that they c-span speaker -- video library. >> it is harmless if one is making a star out of brittany spears, or cher, but when one person takes this notion of stardom into the national security arena, there is more at stake. the american people get wise to the fact that they may not be what they are cracked out to be. in that amount of time, chaos and mayhem can come to rain. >> foreign-policy leaders critiqued by author direct leebaert. speech by the head of the british intelligence sir john saw worse. s.

this is the first public address the official in a few years. this is just over 30 minutes. >> thank you for the warmth and corruption and making this possible. "times" published a letter earlier this year that read, is it not bizarre that mi5 and mi6, otherwise known as the secret services, currently stand as being accused as secretive? i might be biased, but i think that a reader was on to something important. most government work today is

done by conventional and transparent processes, but not all. british intelligence effort was first organized in 1909 when the secret service intelligence agency was formed. we just published an official history of our first 40 years. the first chief used to pay the salaries of sas officials out of his private income. even after the chancellor's statement last week, i am not in the same position. existence was only brought forward until 1934. i believe this is the first speech of the sitting chief by the british intelligence service. why now? intelligence speeches prominently in the national security strategy and defense review published last week.

often appear in the news. our popular name michigan, is a popular draw. -- mi6, is a popular draw. is notate on sas' role well defined. in today's society, no government institution is given the benefit of the doubt all the time. there are new expectations of public and legal accountability that have developed. in short, in 2010, the context of the u.k. secret intelligence work is different from 1994. i am not going to use today to tantalize use with hints of a sensitive operations, intelligence successes, but instead, i want to answer two questions. what value do we get from a secret overseas intelligence effort in the modern era, and how can the public have faith

that their work is lawful, ethical, and in their interest? first, how do we all fit in? at mi6, we operate abroad gathering intelligence from in the human sources. the security service mi5 works fromhe homeland protecting th a terrorist attack. these three specialized services form the u.k. intelligence community. we operate in what the foreign secretary calls a networked world. technology plays an ever growing part in our world. the boundary line between home and abroad is increasingly blurred. so the three agencies work increasingly closely together. in the next five years, we beseech them intensify that operation to improve impact and

save money. yes, even intelligence needs to make savings. what is secret intelligence? secret intelligence is important information that others wish you not to know. it is intermission that deepens our understanding of a foreign country or grouping, or reveal their true intentions, information that gives us new opportunities for actions. we obtain our intelligence through secret agents. these are people, nearly all foreign nationals, who of all -- access to secret information and choose to work with us. our agents are the true heroes of our work. they have their own motivations and hopes. many of them showed extraordinary courage and idealism, striving in their own countries for the freedom that we in britain take for granted. our agents are working in some of the most dangerous and exposed places. we owe a debt to tell us more

whose services over. agents take serious risk and make sacrifices to help our country. in return, we give them a solemn pledge that we shall keep their role secret. the information we get from agents is put into an intelligence report. the source is described in general terms. it tells us something new for corporates what we suspect. it reports that leave can be overplayed if it tells us what we want to hear, or it can be underplayed if it contains welcome news. it is a part of the picture and may not be wholly accurate, even if the agent who gave it to us is sure that it is. sources of intelligence have to be rigorously evaluated, and reports have to be honestly weighed alongside other information. those who produce it, those who want to use it, have to put

intelligence in a wider context. the joint intelligence committee plays a crucial role. the butler review following iraq is a clear reminder that both agencies and government, politicians alike, of how intelligence should be handled. we recently reviewed how our recommendations to make sure that we have implemented them fully in spirit as well as substance. i am confident they have been. we will look at the wider issues again once the inquiry reports are done. so why do we need to intelligence? let's start with the terrorist problem. most people go about their daily work not worrying about the risk of a terrorist attack, that a bomb may have been planted on the roof, or hostages may be seized. i am glad they do not worry about those sorts of things.

part of our job is to make people feel safe, but those threats exist, as we are seeing now with the 7-7 in quest. on any given day, the chances of a terrorist attack happening on our streets feel small enough to be ignored by the public. you, and millions like you, go about your business in our cities and towns, free of fear because the british government works tirelessly out of the public by to stop terrorists and would-be terrorists, in their tracks. the most draining aspect of my job is reading every day intelligence reports describing the plotting of terrorists who are bent on murdering people in this country. it is an enormous tribute to the men and women of our intelligence and security agencies, and to our corporation with proper services around the world. so few of these plots develop

into real tax. some of these terrorists are british citizens, trained in how to use weapons, make bombs. others are for nationals who want to attack us to undermine our support. many of the reports i read describe the workings of the al qaeda network, rooted in a nihilistic version of islam. al qaeda has ambitious goals, weakening the power of the west, toppling a moderate islamic regimes, seizing the holy places of islam to give moral authority, take control of the arab world's oil reserves. they are unlikely to achieve these goals, but they are set on trying and are ready to use extreme violence. the head of mi5 recently described how the threat is intensifying, precisely because we are having some success in closing down the success of terrorist recruitment in the uk.

extremists are increasingly preparing their attacks for the british abroad. and it is not just from the areas of pakistan and afghanistan. andliate's from yemen, other african countries, planned terrorist attacks. our intelligence effort needs to go where the threat is. one of the advantages of the way that we work is we are highly adaptable and flexible. we do not get pinned in one place. there is no single reason for the terrorist phenomenon. some blame political issues like palestine, kashmir, iraq, others cite economic disadvantage, male supremacy, the lack of checks and balances. i have worked a lot in the islamic world. i agree with those who say we need to be steady and then by

our friends. over time, moving to a more open system of government in these countries, one more responsive to people's grievances, will help. but if we ignore the cost to pluralism that we in the west enjoy, we may miss our chance. whatever the cause of so-called islamic terrorism, there is little prospect of it fading away soon. fis deals with the realities, the threats as they are. we work to minimize the threats. our closest partners include many in the muslim world who are concerned, the threat that al- qaeda and the like poses to muslim itself. mi5 had lead our counter- terrorism efforts. ss start with the priority that the security service sets. it is not enough to intercept terrorists here at the last minute.

in need to be identified and stopped well before then, which means action far beyond our own borders. this is where sis comes in. over one-third of our resources are directed against international terrorism. it is the largest single area of our work. we get inside terrorist organizations to see where the threats are coming from. we were to disrupt terrorists plots from the u.k. and our allies. what we do is not seen. you know about terrorist attacks we helped stop. working to tackle terrorism overseas is complex and often dangerous. our staff often risks their lives. much intelligence is partial, fragmentary. we have to build a picture, it is like a jigsaw with keep this is -- key pieces missing.

say an agent warns us of a planned attack. we may need to eat -- meet that aging fast and securely to understand his intelligence more closely so that we can work with officials to act on that intelligence, here in the uk. ministers and lawyers need to be briefed on the steps. we need barbara agencies abroad to pool information, to monitor individuals, or detain them when there are specific concerns. details have to be cut right. it all has to be tackled fast and securely. there is little margin for error. all this goes on 24 hours a day every day of the year, and it keeps us far safer than we would be without it.

terrorism is difficult enough, and despite our collective efforts, an attack may well get through. the human costs would be huge but our democratic system will not be brought down by typical terrorist attacks. the dangers of proliferation of nuclear weapons and chemical and biological weapons are more far- reaching. it can alter the whole balance of power in a region. states seeking to build nuclear weapons against their international legal obligations are obsessively secretive about it. is to find out what the states are planning and find out ways to slow down their access to buy the materials and technology. the revelations around iran's secret enrichment site where an intelligence success. the lead to diplomatic pressure on iran intensifying with tough for you and and you sanctions which are beginning to bite.

the iranian regime must think hard about where it's best interest lies. the risk of failure in this area are grim. stopping nuclear proliferation cannot be addressed purely by conventional diplomacy. we need intelligent that-be-led opportunities. the longer international efforts to lie iran's acquisition of nuclear-weapons technology, the more time we create for political solutions to be found. in national security strategy, which the prime minister published last week, sets out the strategic plan for security and foreign policy for the years ahead. intelligence is a part of that strategy. sis has a responsibility to get a long-range strategic intelligence, to track military power in other countries and see what they are going to do with it. we try to see inside the minds of potential policy at the

series and try to predict their behavior. we have expertise on states operate openly and without public accountability. we provide warnings of weapon systems or changes in policy. the surprise is the essential factor in victory. a lot of our work is making sure the british government does not face unwelcome surprises. and that some of our adversaries do. my colleague at gchq recently described the modern era that we face in our world. the tax on companies are happening all the time. electric grids, banking system, anything controlled by computers could be vulnerable. for some, cyber is becoming an instrument of policy, just as much as diplomacy or military force. there is no purely technological solution, however. we need to invest in technology

to defend ourself, and the garden has allocated funds for that reason. will be gathering intelligence on individual states launching attacks against us to find out how they organize themselves and to develop ways to counter them. it is a big test for the future. where the military are involved in the conflict, you will find sis and gchq alongside them. in afghanistan, we provide tactical intelligence that saves lives. our strategic intelligence helps to map the way forward. capacity building is not limited to afghanistan. we offer training and support for partner services around the world.

it wins their corporation. improves the quality of their work. it builds respect for human rights. our government expects sis to maintain a global reach, collecting intelligence in all areas of major british interest to reduce the risk of unpleasant surprises. we have a network of partners which provides us with a discrete channels of communication to other governments on the most sensitive issues. so we are a very special part of government. sis exists to give the u.k. advantage. we are a sovereign national asset, the secret front line of our national security. it is important that the public has faith and our work. let me explain how it all works in practice. sis does not choose what it does. the 1994 intelligence act sets the legal framework.

within that, ministers tell us what they want to know, what they want us to achieve. we take our direction from the national security council. i am responsible for operations. i answer directly to the foreign secretary. when operations require legal authorization or entail political risk, i seek the foreign secretary's the proof -- approval in advance. in the end, the foreign secretary decides what to do. submissions for operations goes to the foreign secretary all the time. he approves most, but not all, and those which he does not approve do not happen. it is as simple as that. there is oversight and scrutiny by parliamentarians and judges. the intelligence committee holds many senior former ministers and they control our activity.

two government agencies have full access to our files. amateur our procedures are proper and lawful. these processes are controlled and accountability is as robust as you will find anywhere. sis wants to enjoy public confidence. we do not operate on our own. intelligence is a team game. if we need to track a british terrorist in another country, we will stop shipments of components for a secret nuclear program, we need to work services abroad. we work with over 200 for services around the world with hugely constructive results. our intelligence partnership with the united states is an especially powerful contributor to u.k. security. no intelligence service risks compromises sources, so we have a rule called control principle. the service first obtained the relevance has the right to control how it is used, who it

can be shared with, what action can be taken. it is rule number one of intelligence sharing. we insist with it with our partners, and they insist on it with us. any time intelligence is revealed, others tried to hunt down the source. agents can be identified, arrested, tortured, or killed, by the vera organization to are working against us. if this control is not respected, the intelligence drives up. that is why we have been concerned about the potential release of intelligence material in recent cases. we cannot do our job if we only befriend democracies pierre dangerous threats usually come from dangerous people in dangerous places. we have to deal with the world as it is. supposedly received incredible -- credible intelligence that may save lives. we have a professional and moral duty to act on it. we will normally share it with those who can save.

also have a duty to ensure that the park service will protect human rights. that is not always straightforward. but if we hold back and do not parse that intelligence, with concern that a suspect could be better treated, lives could be lost. these are not a question for philosophy glasses or editorials. these are real, constant operational dilemmas. some time there is no clear way forward. a more finely balanced judgments have to be made by ministers themselves. i welcome the publication of the consolidated guidance on detainee issues. it reflects the guidance issued to our staff in the field and the training we give them. torture is illegal and at ports under any circumstances, and we have nothing whatsoever to do with it. if we no action by us will lead to torture taking place, we are required by u.k. and international law to avoid that

action, and we do, even though that allows the terrorist activity to go ahead. some may question this, but we are clear is the right thing to do. it makes us strive all the harder to find different ways, consistent to human rights, to get the outcome we want. other countries respect our report on these issues. even where we find the differences of culture and tradition, we can make progress, slowly but surely, by seeking assurances and providing skilled training. i also welcome the prime minister's initiative to set up an inquiry into the detainee issue. if there are more lessons to be learned, we want to learn them. after 9/11, the terrorist threat was immediate and paramount. we were accused by some people of not committing torture ourselves, but of being too close to to keep british safe. sis is a service that reflects

our country. integrity is the first of the services values. i am confident in their efforts to keep britain safe, all sis staff acted with the utmost integrity and a close eye on basic decency and more principles. so back to that letter in "the times." the recent debate about frequency -- secrecy reflects two concerns. first, national security and the need for security agencies to work in secret to protect british interests and our way of life from those who threaten it. second, the need for justice, the rights of citizens to raise complaints against the government and get a fair hearing. as a public servant and as a citizen, i devoutly won both objectives upheld and not have one undermine the other. the judges have to determine what constitutes a fair trial. we in the intelligence and security agencies have to make sure our secrets do not become

available to those threatening our country, and we have to protect our partners secrets. as the prime minister said, at present, we are unable to use the material in court unless we are confident about it. part of sustaining public confidence in the intelligence services is debate about the principles and values of intelligence work and the processes today is to explain what we in sis do and why we do it, why our work is important, and why we cannot work in the open. a lot is at stake. secret organizations need secrets, even though we present an occasional public face. if our operation become public, they will not work. agencies take risks. it will not work unless they can

trust us not to expose them. our foreign partners to have certainty but what they tell us will remain secret, not just most of the time, but always. without the trust of agents, the anonymity of our staff, confidence of partners, we would not get the intelligence. the lives of everyone living here would be less safe. the united kingdom would be more vulnerable to the unexpected, vicious, and extreme. secrecy is not a dirty word. secrecy is not there as a cover- up. secrecy plays a crucial part in keeping britain safe and secure. without secrecy, there would be no intelligence service or other national assets, like our special forces. our nation would be more exposed as a result. without secrecy, we cannot tackle threats at the source. we will be forced to tackle the threat on our goal line. it is clear that the terrorists

are not impressed by international borders. the men and women who make up the staff of sis are amongst the most loyal, dedicated, and innovative. exceptional people doing extraordinary things for their country. our people cannot and do not talk about what they do. the receiver conditions for their achievements only within the confines of the service. you do not know them but i do. it is an honor to be here. thank you very much. [applause] >> you are watching c-span, created by the nation's cable companies, provided as a public service. live against starting for you today starting in half an hour.

mitch mcconnell will be at the heritage foundation talking about the midterm election results. one hour later, the focus shifts to the american enterprise institute to look at the future of congress. that will be at noon eastern. also today, white house spokesperson robert gibbs will be addressing reporters. finally, the woodrow wilson international center for scholars holding an event with the chief palestinian negotiator. that will be at 5:00. >> this weekend on a "in depth" -- election results, conservative movement, and the next wave of leaders on the right. join our three-hour conversation sunday at noon eastern. >> one of our topic this morning

on "washington journal" was the federal reserve's new plan to pump billions of dollars into the u.s. financial system. we will show you as much of this as we can as we wait for the event at the heritage foundation to get under way. "washington from" continues. host: we showed this headline before the break, the fed fires a $600 billion stimulus shot. why? guest: the fed says the reason why it is acting is because unemployment right now is at 9.6%, and the economy is just stuck in this slow-growth rut. it is growing too slowly to bring down the unemployment rate. so when the fed looks ahead, it sees the unemployment rate around 9%, stretching into next year. so, unemployment is way too high and that will be a drag on the economy if people are worried

about jobs and they are not going to get the pay raises from there and lawyers because the job market is so weak, they are not going to be spending. that means the economy is going to continue to be stopped in this slow growth abroad. so the fed is jumping in with this bold program and they are hoping cheaper loans will spur people to get out there and spend. host: how does this quantitative easing, as it is called, bring down unemployment? guest: ok, here is the hope. the hope is that, if the fed goes in and buys the treasury bonds, that will push down rates -- host: what are treasury bonds? guest: of the treasury department each week conduct these auctions and it says we need some money to run the government. if you will loan us your money, so china goes and and if they buy a bond, it is and i

know you. so china and other investors if uncle sam's money, and an uncle sam will have to pay an interest rate later on. so it is a loan, and the government does this to finance its deficits and debt and keep the government ruling. so the federal reserve is going to go in and buy bonds, $600 billion worth of treasury bonds of different dections. the hope is this, that buying those bonds will lower rates on mortgages and corporate debt that is tied to the bonds that the fed is buying. so you ask, how is this affecting unemployment? the hope is that if people take out loans and say i'm going to go now and buy a car because i can get cheaper financing, i will buy a house because i can

get cheaper financing, or appliances or what not, that this will spur more sales for businesses. and if businesses see their sales rise and improve and they start seeing economic activity throughout the economy gets stronger, they are going to s, well, maybe i feel more comfortable hiring workers. perhaps i feel more comfortable going out and expanding operations. you know, at expanding factories or warehouses or whatnot, or building up inventories if the stockpiles look good. all that activity could mean that t companies will hire, and if they do so, the unemployment rate would slowly go down. host: so is the fed printing money to do this? guest: in fac the fed has what is called its balance sheet, and its balance sheet is $2.30 trillion right now, and that is

all the securities that it has on its books. so the fed can -- it is all the electronics that says we are going to buy these bonds host: 7 $5 billion about, a month? guest: correct. so that balance sheet will expand. it is at $2.30 trillion right now. so it will be roughly $2.9 trillion by the middle of next year by the time they complete this program. so that is where the money comes from. that is also a concern, that by putting all this money in the economy later on, it can create inflation. that is one of the concerns. host: there's also concern that a weaker dollar will come up. why is that a concern? guest: that is a concern because

when the fed is pumping all this money in, it is basically diluting the value of the dollar. but now that could be a good thing because a cheer dollar does help u.s. exports. it makes them more attractive to foreign buyers. it pushes down the price. that is good for jobs in the united states. jobs that are tied to the making of exports. that is a big business in the united states, so that is good for jobs. here is the fear -- that if the dollar starts to just plunge in value, you could have almost a , and otherensue countries will be trying to devalue their currencies because it helps their exports on foreign markets. you have a currency war, you have chaos, and when things get

out of control, that is not good for anyone. it is not good for the average american, it is not good for local investors. host: we are talking to jeannine aversa of the associated press about this decision by the fed to purchase $600 billion in assets, called quantitative easing. we want to get to your phone calls, get your thougs and opinions on this. what does it mean for you? what is the impact on the consumer? democratic one, columbia, maryland. caller: hi. i am calling because i'm very upset about what is going on as far as the fact that we are not building any thing, and i do not undersnd. there are so many projects tt need to be done, and i am just wondering, when is somebody going to say let's just do this? let's start building things. when are we going to get back

where we were? host: isn't that what the fed is doing, that this spurs invested by corporations, and manufacturers, to start building things? guest: that is right. your right. the fed is trying to get at this problem. right now companies are sitting on a near record of $1.8 trillion in cash, and they are not ung that money to hire a lot of people or to really build things. so what will break this? companies need to feel more confident in the economy and where the economy is heading, and they need to feel more confident in the american consumer, people like you, that you are going to go out and spend some money and buy things. and it's hard because ordinary people are feeling nervous as well.

so the fed also s to break through the nervousness, the caution that ordinary americans feel as well as corporate executives. host: ben bernanke writes about this today in "the washington post." chicago, independent lin david, your next four jeannine of versa. caller: i want to break up an issue on the other side of the coin, and that is whether we tighten up the supply and get people back to work, right now we are bringing in a lot -- 75,000, 100,000 foreign guest workers every month in the economy. this prevents american citizens from getting jobs, good-paying jobs, to have money in their pockets to spend and drive the consumer enomy, which is 70% of the gdp. i do not know why congress is

not tackling this. as a tech worker, but right now between 15% and 20% of the tech workers in this country are from foreign countries. it drives down wages and lessons dema. we have to look at the guest worker issue on the other side of the economy. guest: well, that is something that congress would have to deal with and review, and the administration as well. that is at the purview of the federal reserve. the federal reserve has letters that are aimed at affecting the overall economic-levers -- letters that are aimed at affectinghe overall american economy. cheaper loans cannot force a company to hire someone, which is one of the risks in this entire gambled that the fed is

making. host: and this is not the first time that the fed has tried quantitative easing. did it work the first time? guest: the first time, the quantitative easing worked according to the fed and lots of other experts all there. here is what was happening. the first quantitative easing program was much bigger. it was $1.7 trillion. the one we have now is at $600 billion. but at the time when the fed launched the $1.7 trillion program, the economy was in dire straits. it was during the height of the financial crisis, and the economy was in a deep recession. at that point, there were spikes in interest rates, so by thfed coming in, it really did drive down rates and bring relief across the board. the fed's program was really credited with helping the

crippled housing market, which is a key part of the economy, and its problems led us into the recessio so the issue now is that the fed has a smaller program, and the economy, even though it is week, it is in much better shape than it was during the financial crisis of the recession. so no one expects that this program is going to pack as much punch as the original. host: dayton, ohio, becky on the democratic line. caller: thank you for taking my call. i draw a pension from the v.a. my husband was in the military. last year they did not receive pay raise. they said that the cost of living had not gone up. so, i mean, if a person like me

on a fixed income -- and i am sure there are other people in the same situation -- you know, they are listening from -- living from paycheck to paycheck, month to month -- how are we supposed to put any kind of money back into the system if we do not have any extra money to spend to begin with? guest: that is a good question, and that is something that the fed understands. because by the fed taking this action and driving down rates for borrowers, it also realizes that means that rates for people like you -- savers, folks on fixed incomes -- you are going to get meager returns. if you are living paycheck to paycheck and you are not seeing your investment in come through savings products grow, you are kind of -- your budget is kind of in a bind or can be in a

bind. so that is one of the difficulties, and it is a trade- off. the fed has to weigh the pros and cons, and in thisase it feels like the way to go is to try to get the borrowers to come back to life and spend more, even if it means that sabres will be hurt in the process. host: an e-mail from a viewer who say "do you have a logical explanation as to why this government has to borrow money instead of printing its own? if the fed can do it, the government can do it, to." guest: every government across the world, or many of them, conducts auctions as the treasury department does, to raise money to cover its bills. so what the treasury department

does is not unusual compared to other countries. and what the fed does in its powers is not ultimately unusual compared to other central banks. host: how does the fed have the authority to do what it is doing? guest: the federal reserve was created by congress in the early part of the last century, and it was created in 1913 and started operations in 1914. one of the reasons that we started it out is that these bank panics were any number of economic shocks in the comic or causing banks to fail just reeked havoc -- just read havoc on the economy and individual pele.

the federal reserve is independent, it is not funded through taxpayer money. the fed operating budget comes fromostly interest income it makes of its big portfolio of treasury securities. host: let's go to moun royal, new jersey. richard on the republican line, go ahead. caller: i am curious to know why, from what i heard, it has been five yea with the trade deficit in china. i think it all ties together with the budget, with borrowing money. it seems to be like we're just digging a deeper hole to get a cheaper pce. i just do not think it is going to work the way it is going. why can't we forced china into playing by the rules?

guest: richard, that is one of the issues that the obama administration and past administrations have been actively engaged in, and congress as well. in so much of the united state'' relationship with china -- these are two global powerhouses -- there is an interconnection, a relationship between the two countries that are like a coke tendency -- a code dependency, but at the same time there is a competitive one -- trade. the united states government, the administration and congress, has been prodding china to basically let its currency rise in value. the administration and critics believe that china has been keeping its currency at an artificially low rate. what does that mean to you? what does it mean to americans?

thargument is that it means that it makes it harder for u.s. companies that sell goods to china to sell them because it puts our -- it makes our goods higher priced, more expensive to foreign buyers. so this whole issue that revolves around the currency levels is something that the administration is actively engaged in. host: we are talking about the fed pause purchase in $600 billion in assets. the front page of "the wall street journal" as well as "the financial times." stafford, virginia, independent ne. caller: i would just like to make some corrections in in the guest's comments relative to the creation of the fed. the fed was created when

congress was out of session, and many of the people in congress or not there to vote. it is not federally funded, and is controlled by the top 10 banks in the country, and it lends money to the federal government based on what rate is. relative to quantitati easing, i will reference george carlin and his comments about every time that you want to make something softer or not so hard to deal with, you add a syllable. quantitative easing i believe falls into that category. the american people need to understand why the fed has a knee-jerk reaction at every level and continues to not manage its affairs in the best interest of the american people. host: is that correct, how she explained the fed? guest: i believe we are both saying the same thing in that it

is an independent agency, not funded through taxpayer dollars. it is funded through operations, mostly the interest income off its investment that it makes on its portfolio, mostly treasury securities. yes, the federal reserve chairman is appointed by the president of the united states and must be concerned -- and must be confirmed by congress. the governors at the federal reserve in washington are also appointed by the president and must be confirmed by the sate. however, other members of the fed's policy-making team, which sets interest rates and makes decisions on quantitative easing, the size of the program for instance is the $600 billion program yesterday -- the group of people that are involved in that decision includes ben

bernanke, the fed chairman, the fed governors in washington, all of whom are appointed by the president and approved by the senate. but also you have president of federal reserve banks around the country that are picked not by the president of the united states and not confirmed by the senate, but rather by local business people in their areas. that is very important because that gives the fed representation of not just inside washington but also outside washington. host: madison, nebraska. steve on the republican line. go ahead. calleri am just wondering -- how is this supposed to instill confidence to business to start spending money? to me it seems like a last- ditch effort. what are the percentages of this

actually succeeding, and where do wgo from here if it does not succeed? host: steve, just at what you are saying, from "the new york times," the plan depends on banks first to loosen up purse strings. guest: steve, you are right, and this is why it is a gamble. just because this plan can make loans even cheaper does not mean that people are going to go out and take that. many people right now, many americans, are focusing on putting money into their savings accounts, trimming their debt, and watching their spending. that's because they have learned some lessons after having survived a very deep recession. with unemployment high, people are being a little cautious. by the same token, as you

mentioned, businesses are sitting on cash and they are not confident. how does this instill confidence? this is part of the problem. the fed on thene hand is saying we are here doing all we can tory to get this economy jolted back to a healthy growth path. at the sameoken, it realizes it cannot magically change people's feelings about where things stand. host: our next phone call comes from eugene, oregon. martin on the democratic line. martin, you probably know this -- the governor's race in that state has been called. john kitzhaber wins that race. caller: i think this is a long- term problem, starting with

former president george h. w. bush's new world order, where he wanted to level the playing field and we had the most to lose. our jobs are being exported out of the country. i just wonder what sort of hope we can find to bring jobs back. host: jeannine aversa, what is happening on capitol hill, or what cld be happening on capitol hill to address that issue? guest: that is a good question. the bush-era tax cuts that expire a the end of this year, decisions have to be made on that pier there is a feeling amongst some economists that if the bush-era tax cuts are not extended, the economy could be in trouble because tax rates tax bills for virtually everyone will go up and the economy could suffer as a result.

there are various pieces out there -- extending unemployment benefits that are due to expire for millions of americans at the end onovember. that is something that is out there. business tax credits are out there. whether the lame-duck congress, which convenes on november 15 can get anything done, i do not know. then there will be a new congress elected. that will convene in january. there are many issues before them, but whether there is the political will, divided between a house now that will be controlled by republicans, at a senate that will be controlled still by democrats, a white house where president obama is a democrat -- whether all of these bodies can get together and make things happen is one of the unknowns. host: questions why president obama retained the same people

at the treasury that got us into our current mess. that is a tweet. next call, good morning. caller: to think the american people and businesses have basically lost trust in the american federal government. why would they lose trust? well, they are upside-down in their mortgages or have lost equity in their house, and the congress wants them to believe this just happened. congress was complicit in creating the subprime mortgage problem. and they know that. until they establish trust back in the federal governmen we are not going to be able to move this thing forward. and businesses -- they are uncertain right now. what is the federal government going to do to them and their tax structure? i do not believe the fed through

this action is going to create that mind-set or correct that mind set. guest: those are ieresting points, and you are correct. i mean, the fed cannot waive some magic wand and make people take all their worries away. you are correct that businesses have lots of things on their minds. they have feelings of uncertainty that cause them to delay business decisions becse they want to have a better sense of how policy will play out in washington, or not, for that matter. so it just shows how complicated it is for the federal reserve, because not only is it taking this action, but it is also trying to break through these kinds of confidence issues that

americans and businesses have, and also realizing as well that in washington there are also questions about what a new congress will do or will not do, given that there is a sense that debt is very high and they do not want to add to it. host: a couple of more phone calls here for jeannine of versa. bob in petersburg, virginia. go ahead. caller: good morning. i would like to understand how pumping billio of more money into the economy will help blue- collar workers. there is no mey in blue-collar workers' pockets because the jobs have been shipped overseas. now that the republicans have taken back over, of course

everything has been shut up. they cannot even afford to buy the gas to look for jobs. whatever money they put into the system is just going to go back into the hands of the richest people in the country. i would like for people to explain to me how pumping money in is going to help. host: how does it hit consumers? guest: again, the hope is that people like you will go out and take advantage of cheaper loans and go out and buy something, and that if enough people do, that will help sales at companies around the country, and in companies will be more inclined to hire more workers at factories other companies there is also this hope as well that by having the value of the dollar decline in an orderly

fashion through the fed house action, that it will help sales of u.s. exports abroad, because it will make those products cheaper for foreign buyers. and th definitely, if that increase the appetite for foreign investors to buy our goods, these manufacturers are going to have to hire additional workers to work at factory floors. host: retweet -- "uncertainty creates uncertainty. companies do not trust the fed, the congress, and obama." you are on their. caller: good morning, and i appreciate c-span. i wanted to ask a question regarding -- i am curious about the decision by the fed to do

this quantitative easing. when not last week? host: is politics involved? guest: the question, david. the fed set out its meeting scheduled in advance, so last year we knew exactly which days the fed would be meeting. they are almost the same every year, so this meeting, the fed meets eight times a year for its regulay scheduled meetings, and this one was on the agenda. it was scheduled well in advance. so in terms of the timing, there is usually a meeting in november. there will be another one in dember. they are six or seven weeks a papart. it is already set in stone. in terms of the fed's action, why did it take action yesterday

versus waiting for the december meeting, or why did it notct at its last meeting in september? the way the economy is heading, it is getting weaker, losing momentum. we need to step up and do something. so he gave the signals and he had to get all of his people on board to do it, and they had to hammer out the details of what exactly they were going to do. so it took time, and part of that is why it happened yesterday at not in september. you might ask, why did the fed not wait until its next meeting in december? there is a feeling among policy makers that they realize that the economy is losing momentum and there are really no other options right now. congress will not step in and provide another major stimulus. there is not the political will

or appetite to do so, and the fed feels li >> tuesday was a big blind deal. it was -- >> live now, a discussion with mitch mcconnell at the heritage foundation. he will be talking about the recent midterm election and the gop agenda. this is the introduction. live coverage here run c-span. >> we moved to the arena of policy politics. that is what we are involved with here at the heritage foundation. at heritage, which are more than 700,000 members around the country, we worked every day to build an america where freedom, opportunity, prosperity, and

civil societies flourish. to every policy about, we fight alongside our allies on capitol hill for the success of our ideas. just yesterday, we released our top priorities in the form of a checklist, a checklist for washington that cuts spending, to repeal obamacare, to protect america, and to stop stifling regulation. senator mitch mcconnell and other legal -- and other beleaguered conservatives have successfully held the line against many initiatives that would have moved the country we believe is the wrong direction. senator mcconnell has led the good guys over health care, campaign finance, real tax reform, sensible foreign and defense policies, and so many

other policy issues. we are grateful and are excited to work with you and your reinforcements as they arrived in the capital over the next few weeks, and we look forward to the policy battles and the policy discussions in the months ahead. mitch mcconnell was first elected to the united states senate in 1984. he has been the republican leader of the united states senate since 2007. ladies and jump, it is my pleasure to welcome back to the project ladies and gentlemen, it is my pleasure to welcome back to the heritage foundation, mitch mcconnell. [applause] >> thank you very much, ed. but mr. by telling you again how grateful -- let me begin by telling you how grateful

conservatives are that you've found this organization and you have led so successfully over the years. [applause] i would be remiss if i did not congratulate you on your good judgment in having among your distinguished fellows the most conservative secretary of labor in american history, and the only cabinet member of the bush administration to serve from beginning to end part i am speaking about my roommate, elaine chao. [applause] all over the past two years, the american people looked at was going on in washington and they

became increasingly worried. democratic leaders were ignoring our nation's ongoing job crisis. the big government policies and out of control spending was causing some to wonder about the future of the american dream itself. americans word about the consequences of a $14 trillion debt, about a health care bill with two massive entitlement programs. they worry about all of the bailouts and about every other piece of legislation that seemed like it was designed to kill jobs rather than to create them. most of all the worry about what some have called the european and asian -- the europeanization , and that our children and

grandchildren could no longer expect to have the same opportunities that all of us have had. two days ago, those wars gave way to a new optimism. democratic lawmakers chose to ignore the american people. on tuesday, the american people chose new lawmakers. for the past, they held their elected representatives to account, and that is what the founding fathers had in mind with the midterm election. they demonstrated the constitutional conservatism is alive and well. there is no reason for republicans to gloat. it is a time to realize who is in charge -- the people. we can begin to turn this ship

around. tuesday was a referendum, not a choice. it was a report card on the administration in anyone who has supported that agenda, plain and simple. it does not take a room full of political scientist to figure that out. americans voted for change in the last two elections because of two long and difficult wars. they want the economy to be moving again. the people who were elected dismantled the free market, handed out political favors and demanded government and created more precarious -- a more precarious future for our children. democratic leaders use the crisis of the moment to advance an agenda of americans did not ask for and could not afford. then they ignored anyone who

dared speak out against them. the voters did not suddenly fall in love with republicans. they fell out of love with democrats. they may have voted to send more republicans to washington, they are sending them here with clear marching orders. very clear marching orders. stop the big government freight train. churchill once said courage is what it takes to stand up and speak. i cannot think of a better way to look at these elections than that. this morning i would like to talk a little bit more about how we got here and the task ahead. i wanted to do it at the heritage foundation because heritage has played a crucial

role in promoting and defending the principle of free enterprise, limited government, freedom, and a strong defense. the very principles the american people voted to uphold in tuesday's historic election. first, how we got here. lets cast ermines back to a early 2009. i think the cover of "newsweek" sums up the conventional wisdom in washington at that time. this was the headline. "we are all socialist now." i will note that "newsweek" was recently sold for less than a single price of the magazine. hopefully the democrats will not

bail them out, too. republicans were taking stock. we knew the principles that had made our party great with the same principles that had made america great. we would have to embrace and explain those principles, not discard or conceal them. week renewed our commitment to core principles, win, lose, or draw. the administration would never suffer the consequences for pushing policies americans opposed if we did not do this. and americans would not have a clear alternative. the single most important thing republic instead was to prepare this ground. by sticking together in principle opposition to policies

we viewed as harmful, we made it perfectly clear to the american people where we stood, and we give voters a real choice on election day. at the same time, we made it clear from the beginning that if president obama proposed policies that were consistent with our principles, we would work with him. i made a public offer at the national press club to accept the president's campaign promise of post parses it by proposing to work with him on a number of goals that he himself had suggested, such as reforming entitlements, reducing the debt, increasing our energy independence, and lowering taxes to create jobs. it turned out the white house had different plans. their strategy from the start was to govern hard left and use their big majorities to push through the most left-wing

agenda possible, squeezing on popular proposals through congress by the slimmest majorities and hoping americans would forget the details and the process over a period of time. their idea of consensus was for republicans to do whatever the us to do.tion wanted they plowed through with one piece of legislation after another, written by liberals, for liberals. they had given us ample opportunity to stand up for the principle of lower taxes and a strong defense. they called for the closing of guantanamo without any plan for housing the terrorists who were held there. they had their stimulus that would triple the national debt in 10 years. they bailed out automakers that

should have been allowed to reorganize or to fail. the only one that refused to bail out, ford, is the one doing the best today. as democrats government left, republicans stood time and time again, making the case for conservative alternatives. $3 trillion to the debt has been added. republicans would win races that have gone silent for democrats in states like democrats, new jersey, and massachusetts. the democratic agenda was not the change americans had hoped for. republicans are offering a clear alternative. that was the message for those races and that was the message on tuesday. the question now is whether

americans were wise to entrust republicans with the task of reversing the damage. republicans can be entrusted to because we have been at it for two years. we share the priorities of people -- that people have voiceprint we fought to defend them. now we're ready to give back to work on their behalf. this raises a practical question. what can americans expected from republicans now? let's start with the big picture. over the past week, some have said it was indelicate of me to suggest our top political priority should be to deny president obama a second term. the fact is, if our primary

legislative goals were to replace the health spending bill, to amend the bailouts, cut spending, and shrink the size and scope of government, the only way to do that is to put someone in the white house who will not veto any of these things. we can hope the president will start listening to the electorate, but we cannot plan on that. it would be foolish to expect that republicans will be able to reverse the damage democrats have done as long as a democrat holds veto pen. there is no getting around that. leaders of the republican revolution in 1994 think their greatest mistake was overlooking the power of the veto. they give the impression they were somehow in charge when they were not. president clinton the tote their bills, there were

seen as sellouts or failures. today, democrats have the white house and the senate, as well. we have to be realistic about and cannotn achieve. eve. we can and should propose an vote on straight repeal on health care. but we cannot expect the president to sign it. so we will have to work in the house on the nine funds for implementation and in the senate on votes against the most egregious provisions. we will need to continue educating the public about the ill effects of the bill on families young and old and small businesses. this is why oversight will play crucial role in republican efforts going forward.

women not be able to bring about a straight repeal and the next few -- we may not be able to bring about a straight repeal. we should have bipartisan support for some of those efforts. we can compel administration officials to defend health spending bill and the stimulus and financial reform. we need groups like heritage to continue studying the bill affects of the health care bills and show how the implementation is hurting families and seniors, making us less competitive and limiting choices. we welcome any help we can get in reversing the damage this bill has done. we'll keep a spotlight on the paris agency administration 1 now use -- potential back doors show imposing a new national energy tax through the epa, now

that cap and trade is dead. a car check for the national labor relations board, and some form of immigration form. good oversight can make more accountable all the policy czars the administration has installed. the other obstacle is the temptation to over read our task. it is my view that americans are no more interested in a republican plan for using government to reengineer -- then there were in the democrats' plan to do so. government has limits. thank heavens. and voters want us to respect them. we will focus on doing a few things and do them well.

we'll stop the liberal onslaught. we'll make the case for repeal of the health spending bill even as we vote to eliminate its worst parts. we will vote to cut discretionary spending. we will fight to make sure any spending bill is amendable, so members can vote for the cuts americans are asking for. on the economy, we will ensure democrats did not raise taxes on anybody, especially in the middle of a recession. we will oppose future stimulus bills that only stimulate the deficit and fight any further job-killing regulations. we will fight tooth and nail on behalf of americans to create jobs. when it comes to educating the public, we will fill our duty to oversee the executive branch

through smart, aggressive oversight. we will scrutinize democrat legislation and forced them to defend it,. while it may benefit some, it exposes everyone to calamity down the road. if we do these things well over the next two years, the voters will be pleased with what they did on tuesday. republicans will be in a better position to reverse the worst excesses' over the past two years and to the crown work for the kind of change we want or need. the kind of change we want is not only possible but also effective. in cutting waste and showing that governments can work for the people, not against them. think tanks will foremost with

ideas like this week's check list for getting america back to work. tea party activists will can see to energize our party. none of this is to say that republicans have given up cooperating with the president. we work for the american people and we owe it to them to work together to find solutions to present troubles and to help guide our nation to better days. there is a choice. they can change course, or they can double down on a vision of government that the american people have rejected. if they choose the former, they will find a partner in republicans. if they do not, there will be disagreements ahead. the formula is simple.

when the administration agrees with the american people, we will agree with the administration. when it disagrees with the american people, we will not. this has been our posture from the beginning, and we intend to stick with it. if the administration want corp., there will have to move in our direction. there is no reason we cannot move together to prevent a tax hike on small businesses. cutting spending increasing american exports by completing free-trade agreements. we cannot give out -- we can give our armed forces whatever they need to accomplish their mission. so this morning i extend an offer that has been on the table for two years, to corporate i

shared goals. all to become this is not about an election. it's about doing what is best for our country. the american people want us to put aside the left wing wish list and help to create jobs and restore the economy to health and prosperity. there is no reason the pardus cannot work together on achieving these goals -- there is no reason the parties cannot work together on achieving these goals. republicans have a plan on following through on the wishes of the american people. it starts with gratitude and a certain humility for the task we have been handed. it means sticking ever more closely to the conservative principles that got us here. it means learning the lessons of history. it means listening to the people who sent us here. if we all do this, we will

finish the job. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> thank you. that was wonderful. questions. please keep the questions short and no speeches from the floor, police. >> please state your name and affiliation. >> i am with cns.com. the fed will buy $6 billion in federal debt.

will republicans tried to pass some legislation to restrict the treasury from selling its debt to the fed rather than on the open market? >> you were asking about spending and debt. pieces of the puzzle. >> no, i just wanted to know if you'll try to prevent or stop the treasury from selling -- >> i do not have an opinion on this at this point. >> senator? i am curious if the tax reform is an issue that you can work together with the democrats. >> tax reform. >> the first thing we have to do is make sure taxes do not go up.

we have a tax credit that has been in place for almost a decade -- we have a tax rate that has been in place for almost a decade. this is a recession. before the end of the year, we have a serious question about whether we will prevent a tax increase on anybody or anything at the first of the year. that needs to be resolved first. tax reform is a huge, complicated issue. i'm always interested in tackling that. in the short term, we have to make sure that taxes don't go up on anybody. there is bipartisan opposition to raising taxes on anybody. 40 democrats said we agree with the republicans and we should not be raising taxes on anybody.

they have shelled that argument back in september and punted to the lame-duck. you heard the president say this is a tax increase on the rich. when you define what that means, a tax increase two on increase two rates would affect 750,000 small businesses in this country that pay taxes individually. it would affect 50% of small business income. this is a serious tax increase in the middle of a recession. this is a bad idea. we hope current tax policy will be extended forever one. >> what do you think right now is the top priority for people out there? what do you think the people who voted this wave of conservatives want done first?

>> i think people are registered in spending, debt, and private -- they have taken a look at the affect of borrowing money from foreigners that will have to be paid back by our children and grandchildren and what kind of impact that will have on job creation. i think most americans think we should be to stimulate job growth in the private sector. those are the things i think americans are significant upset about and goes to the root of the electoral success that my party had last tuesday. >> i am with voice of america to be. he said the election give you a mandate to be something like the backside of a mule. can you explain what you meant by that?

i did not remember saying that. it sounds pretty good. [laughter] >> can you explain the mandate? >> look, the nisei again that tuesday's election was about the democrats. they got a report card. they got an f. we are not going to miss read the mandate. you did not say john boehner or myself spike the ball in the end zone. acting like this was about us. it was about them and everybody knows that. so the mandate, if you will come out for change is directed at the other guys. we are right where we have been. the wonderful thing about that

is that we know for sure the american people agree with the policy arguments two over arguments two years. it was clear that republicans in the house and senate did not think it was the right course to take. and so that is the message i take from it. we will find out whether the president takes the same message. i expect his consultant are telling can probably that this was about you. he was pretty much agreed to the yesterday in a press conference pert we'll see how they want to change direction. i have said that i did not want the president to fail. i want him to change. we were not sent here to do nothing. if he wants to address that, he will find a willing partner in senate and house republicans.

>> president obama indicated he would work with republicans with an earmark moratorium. we support that? >> every president would love to have a blank check from cars to do whatever he chose to do on every single issue. we will be discussing the appropriate of giving the president that kind of blank check in the coming weeks. that is what that issue is about. you could eliminate every congressional earmarked and it would save no money. it is an argument about discretion. we decide how much we will spend. that topline determines what gets spend. beneath the top line, their arguments going back to andrew jackson between the executive branch and the legislative branch, and that has been a

much-discussed issue on the campaign trail. i am sure the president would love to have a legislative blank check. >> a number of prominent members of your party, trent lott, lindsey gramm, have expressed dismay by pushing tea party- backed candidates. it was a missed opportunity in the sense that you guys did not win the senate. you guys could have won the senate. >> we had a good day. we went from 41 to 47, at least part we will see what happens in washington state. there are no precincts in washington state. everybody votes by mail and it goes on and on. we'll have at least 47 per i think that is a pretty good day.

you cannot go back in second guest about whether you could have had a better candidate here or there. we are pretty happy with the outcome. there are 23 democrats and a 0.9 republicans and bob in the next cycle. we have it realistic shot at getting into the majority in the near future. >> hello. in my question follows up on the question that was just asked. in pushing a conservative agenda for next year, how d.c. moderate in your caucus -- how do you see the moderate your caucus, and do think it could cost them in primaries? >> the most interesting thing to watch is how many democrats start voting with us. you know? we saw on the tax debate back in september that there was

bipartisan opposition to raising taxes. i think we're more like like to see a unified set of republicans and democrats peeling off to support our initiative. i think everyone of the 23 democrats up in the next cycle have a clear understanding of what happened tuesday. i think we have major opportunities for bipartisan coalitions to support what we want to do. we will see how that develops. there is a never ending cycle of politics. the president and 23 senate democrats are now in cycle. we're optimistic that maybe 23 senate democrats could take the same message from tuesday's election, that we may be able to make some gains. >> do you have any issue with

administration on foreign policy, particularly the policy toward china? china has been an important factor in american economic recovery. thank you. >> most republicans, pertly all republicans in the senate, have supported the president's approach which is the continuation of president bush's policies. it was signed by the previous administration. members of the senate republican converts have supported the surge in afghanistan. where i think we have some problems is over this whole issue that can best be expressed as american exceptional was

some america really is an exceptional country and what it is a good idea to go abroad and kind of suggest we have been wrong in a variety of different things. that is kind of a macro observation, a broad observation. with regard to china, i don't have any observation. >> i wanted to ask what specifically could you find common ground up in terms of energy independence. and if lisa murkowski is reelected, would she continued to be the top republican on energy resources? >> on energy, the president said he is for nuclear power. we are for nuclear power. the president is for clean coal

technology, and so are we. there is bipartisan enthusiasm for plug-in hybrid cars. those are areas of potential cooperation. with regard to alaska, it is clear we will have a republican senator from alaska. the process will unfold up their over the next weeks or months. we will font determine who won -- we will finally determined who won. we will be sorting the commission -- soaring the committee at issues out in the coming months. we will see the ratios and the size of committees and the ratios up committees. we go through a process in the senate where members of committees select the ranking

chairman and that is ratified by the full conference. all of that will be determined in the coming weeks. we will just have to wait and see what happens. yes. >> you mentioned repeal like health care reform. you did not call for a repeal of the dodd-frank bill. what parts of that do you want to change? >> i am sorry i left that out. i thought it was a horrible bill, too. i cannot find a banker in kentucky. it is -- it was a terrible piece of legislation. health care was the worst piece of legislation that was passed in my time. in the senate, the financial

services bill is somewhat close to that. we will be looking at it and trying to figure out how we can improve it. >> one more. >> thank you. i'm with voice of america. thank you, etc.. -- thank you, senator. how was the foreign policy in respect with the troops in afghanistan. military aid for the pakistan military, $2 billion, it will go through the congress. thank you. >> i think senate republicans are supportive of the policies both in afghanistan and pakistan. i did not anticipate the change in the composition of the senate or the house having an impact on

the current policy of this administration in both afghanistan and pakistan. all right. to buy very much, everyone. [applause] -- thank you very much, everyone. >> thanks very much, senator mcconnell, to be with us this morning. ladies and gentlemen, we are adjourned.

>> another live event coming up with more about this week's election results of the american enterprise institute. that is coming up in about 15 minutes here on c-span. until then, a porsche of this morning's"washington journal."'e of usa today." compromise or conflict. do you want your elected leaders to compromise or do you expect gridlock.

aboutsaid, we don't know house races that have not been called out there. you can follow along on our website come c-span.org. we still are aggregating the election results. we have a map you can go through and fighting out where it all stands. there are two independents that will likely continue caucusing with the democrats for it on the two as tennis and races in washington state, patty murray

has a slightly 30 ishee hold on, she would colchis with the democrats bring their majority to 53. in alaska, it is likely that the republicans would win that race whether it is a joke miller or lee said mark caskey. -- joe miller or lisa murkowski has the right and. in.e how are you doing? we know what happened when obama first took office. he had a, that was so bad from george bush.

[inaudible] we, as american people, have put that the republicans back in charge and you know what? we will get what we deserve. they are the ones who started this mess. they created this mess. although n say iso, no, no. we know what is going on in this society. we see what is happening. if the republicans have the money to create the jobs, they don't want to create jobs, they want obama to fail. that is sad. we are going to have some hard times in this economy. host: that was a democrat from san diego. republican from san diego, go ahead. caller: even a gridlock occurs,

i think that will be good because what was happening with the obama administration and the democratic dominance in congress is they were rubber-stamp anything that obama was shoving towards congress. what they were doing, the democrats and obama, is they were reacting out of desperation. dominance in congress or in the assembly is going to shut that engine down, and it will make them more introspective, more thoughtful about passing more legislation that requires more money and putting as more into debt. and i really don't care if gridlock occurs. i think we are just heading towards destruction, and i think they need to start thinking that you cannot recover this economy -- in all fairness to obama, not one politician, no one, can recover this economy because the damage is so severe.

it has been going on for so long, and it started actually with the clinton administration. but the key point is its politicians sound economic theory and research, only to make themselves look good in the eyes of the voter that caused this economic -- i am going to call it for what it is. it is another great depression. these people, our politicians, they need to stop trying to apply quick fixes, quantitative easing, stop listening to ben bernanke because i do not think he is the best adviser in this situation. and third, let the invisible hand of the market start taking control instead of having the politicians in control. >> coming up at 8:00 a.m. eastern time, we will be talking about what the federal reserve right now -- yesterday, $600 billion in asset purchases. quantitative easing is what is

called. we will talk about what they are trying to do to stimulate the economy, coming up then. you said that gridlock in government is not such a bad thing, but then you talked about the economic situation. are you ok with republicans and democrats coming together on some major piece of legislation to address the economy, both sides making some compromise? >> no, i am not, because both sides are the ones that drove us into it, and is the quantitative easing -- there is an economic strategy in which central banks have the power to create something out of nothing. meaning that the money they are buying the treasury bonds from the banks with in exchange -- and in exchange the central bank is giving the money. this money does not exist. it is just paper money. the politicians believe the banks will then start lending and stimulating the economy. the banks are not going to lend

this money because this money does not exist to land. this is just another fantasy created by politicians, fronted by economists like ben bernanke. >> we will talk more about it coming up at 8:00 a.m. eastern time. for the first hour this morning, we want to know what you expect this morning going forward from the election. the leaders of both parties were holding news conferences yesterday, talking about what they're thinking and how they are answering the call from the electorate on tuesday. house leader -- republican leader john boehner, who is expected to be the speaker of the house, yesterday held a news conference. here is what he had to say on the idea of compromising, working with the white house. >> last night the president was kind enough to call me. we discussed working together on the american people's priorities creating jobs. we hope that he will continue to be working with us on those

priorities. but, as i said last night of the new majority here in congress will be the voice of the american people, and i think we clearly expressed that last night. we are going to continue and renew our efforts for a smaller, less costly, and more accountable government here in washington, d.c. host: president obama at 1:00 yesterday responded to what happened on election day, and also talked about working with republicans. here is what he had to say. >> that is why i am eager to hear good ideas, wherever they come from, whoever proposes them. that is why i believe it is important to have an honest and civil debate about the choices that we face. that is why i want to engage both democrats and republicans in serious conversations about where we are going as a nation. with so much at stake, what the american people do not want from

us, especially here in washington, is to spend the next two years fighting the political battles of the last two. we just had a tough election, and we will have another in 2012. i'm not so naive to think that everybody will put politics aside until then, but i do hope to make progress on the very serious problems facing us right now. and that will require all of us, including me come to work harder at building consensus. host: president obama and presumably the next speaker of the house, john boehner, talking about working with each other. and mr. mcconnell yesterday said in "usa today," that he suggested the parties could work together on the $1.30 trillion budget deficit. a bipartisan commission is scheduled to release recommendations december 1 on possible spending tax -- spending cuts and tax increases

and changes to entitlement programs. by the way, mr. mcconnell will be speaking at the heritage foundation later today at 11:00 a.m. eastern time. according to the national journal, he will be delivering a speech and reiterating why making president obama at a one- term president is the gop's top priority. from prepared remarks, he said, "if our primary legislative goals are to repeal and replace the house spending bills, and the bailout, and cut the size of government, the only way to do all these things is to put someone in the white house who will not veto any of these things. we will be covering mr. macdonald -- mr. mcconnell's speech today live at 11:00 a.m. on c-span and c-span.org. to district heights, maryland. john, democratic line. go ahead. caller: it is amazing, after

listening to the president yesterday, and listening to john boehner and hearing senator orrin hatch -- it's amazing how they are continuing the same lies that they told before the election. the president stood there yesterday and said what the government did was not a policy, it was an emergency when it dealt with the banks and it dealt with the automobiles. all those things he had to deal with as far as spending the american taxpayers' money was not policy but emergencies. that is the only thing that kept this nation from really going down the drain. and here they are right back with these same lines again. but what i would like to expect, which we will not get, is accountability and integrity. because no one is speaking of how the country got to the condition that it is in and who is accountable for it. nobody wants to look back and bring somebody up front. i mean, so me, personally, when

i heard the leading republicans coming back with these same lines after the president made it very plain to the american people that the spending that he had to do was not policy but emergencies, and the republicans wanted to stop the extension of unemployment. it is amazing how these people have been misled to vote against their own best interests because of a certain element out there that just twists everything adlai's at about everything, and get them all emotionally -- and lies about everything, and gets them all the bush worked up. it is sad what is going to happen in the next two years. it is sad because when you have an ambition to stop the president, that means you are not going to try to do the people's business. that is what i'm looking for, absolutely nothing. host: more from "usa today," with specifics about what president obama said will be

compromised on -- earmarked and spending bills and the promotion of electric cars, tax cuts for the wealthy. he says compromise is possible in that area as well. newt gingrich, speaker of the house in 1994 when the republicans took over congress then, says obama is not in a position to dictate policy. arlington, virginia, michael on the independent line. caller: hi. good morning. what i expect going forward is, i hope republicans can come to the table with ideas, something other than tax cuts to stimulate the economy. i hope that they can eventually get to the point to working with the president, to come up with good ideas in the economy and other areas. to me, i'm pretty pessimistic on that notion because if you're number one goal is to make the president a one-term elected

president, then how committed are you to solving these problems? you are only committed to your political future. so that kind of rubs me the wrong way, and i just hope that the american people know what they have done by giving the republicans the house. host: michael, you are an independent, though. and you voted for republicans in the past? caller: in some cases i have, but my position now is that i want to see what is best for the economy, and i have not heard any single good idea come from the republican party in years. host: what about on continuing on with the bush tax cuts, giving them a two-year extension for those that are wealthy, or eight two-year extension across the board and then deal with it later? is there a compromise on that? caller: then what is going to happen after two years? will there be another extension?

the tax cuts for the wealthy -- i understand it is astronomical, so at this point i believe that is not feasible. what have the tax cuts done now? host: "the financial times" says this this morning on this issue. the lame duck session and how they address the bush tax cuts -- "the election results have made it likely that more democrats, some of whom were peeling away from the party line before the polls, will make the biggest concessions and negotiations. this means they could either agree to temporary extension of the tax cuts for the wealthy or to lifting the threshold to a higher figure. he pledged to craft a solution that first of all does no harm and prevents taxes from going up for middle-class americans. however, democrats still will

force two separate votes, one on tax cuts and another on extending relief for the wealthy. in a strategy dubbed the coupling, acted -- apt to be raised by republicans, which is more palatable to them, but apt to be resisted by republicans. republicans could still digging their heels and opposed it." charlotte on the republican line from georgia, go ahead. caller: are you there? my personal opinion about this whole thing is every election -- it took our country a long time to get in the condition that we are in. it was not an overnight thing, and people are yelling because obama has not done this -- he has only been in office for two years, for christ's sake give the man a chance. as far as the election goes, i

have not heard anything coming from either side. the need to quit blaming each other, quit trying to take power. both of these houses what the power. the power to do what? because neither one of them is doing anything upset fighting each other. let's take off the gloves, take off the knives, but the dow come and work together. this country needs those people in power to work together to solve what our problems are. host: so you do not think this was a referendum on president obama? caller: you know something, president obama, when he was first elected, there were a lot of people in the press that were disrespectful to the band. people were saying he is not a u.s. citizen and all this other kind of crap. and i do not hear too many reporters out there stating what a person has to do in order to become president, the hoops that they have to jump through in

order to prove who they are and that they have the right to run. host: that issue came up yesterday at the news conferences were both republicans and democrats talked about whether this was a referendum on the obama administration. haley barber talked about this issue. >> evened governors' races, this election was a referendum on obama's policies and the policies of the obama administration, pelosi-reid, and i would say a lot of democratic governors would agree with this -- going forward, governors believe that we can work with the congress to try to set things in a better direction. the voters yesterday voted against excessive spending, piling-up deficits, trillions of dollars of new debt being loaded

on our children and grandchildren. a huge tax increase right around the corner in january. and a government-run health care system. we governors, because olives -- almost all of us have to have a balanced budget, we have to cut spending. host: governor haley barbour yesterday talking, the chairman rda.he our d >> i am doing a whole lot of reflecting, and i think there are going to be areas of policy where we are going to have to do a better job. i think that over the last two years, we have had to make tough decisions, but decisions that were right in terms of moving the country forward in an emergency situation, where we had the risk of slipping into a second-grade depression.

but what is absolutely true is that with all that stuff coming at folks fast and furious, a recovery package, what we had to do with respect to the banks, what we had to do with respect to the auto companies, i think people started looking at all this, and it felt as if the government was getting much more intrusive into people's lives than they were accustomed to. maybe this is the agenda as opposed to the merit -- as opposed to an emergency. everybody understood the danger. we thought it was necessary, but i am sympathetic to folks who looked at it and said this is looking like potential over reach.

host: you have heard from president obama and republican leaders talking about what this election means, but we want to hear from you. what does this mean going forward? tim, independent line. caller: i have got to say that this is the best political show in the country. after saying that, i have an idea for congress and the president. 1960's,the 1950's and one of the political hot buttons was the american taxpayers paying for the security of europe and japan. and here we are, 60 years later, doing the same thing. here is my proposal. sell to the european union for $2 trillion. do the same thing for all those other countries until -- for $2 trillion. that is $6 trillion.

and then the money that we would save over 8 period of 10 years by doing that would be another $4 trillion. so there is $10 trillion we to say about our national debt . host: lin, a democrat -- to my land, republican, you're on. caller: the democrats do not get it. we want to stop the spending and have jobs. i heard yesterday said that republicans are the party of no. they are not the party of no. the democrats are the party of no because they're the ones who did the back room deals that would not let the republicans in. i get so sick and tired of the democrats calling in and

bashing republicans. don't they care that we have all this spending to lead on our children? why can't we take the money that has not been used from the stimulus and put it back where it belongs so that we do not have to pay? host: but on this issue of the deficit and leaving it to american children and grandchildren, people who have calculated these numbers say is not just spending, you are going to have to raise taxes in order to get a big enough bite out of the deficit. caller: >> you can watch "washington journal" every morning at 7:00. now to the american enterprise institute and what the midterm election means to congress going forward this is live coverage >> congratulations to my fellow panelists.

even though we are not in the prediction business, all on them did give us ideas of what they thought would happen on election day and all of them predicted substantial gains for the republicans in the house, the senate, and the governors and state legislatures overall. i would like to tip my hat to henry paulson who days before the election predicted that there would be a pickup of 64 republican seats and as for the congratulations, henry olson. [applause] we have a number of handouts for you and all of them will be available on the aei web site after this session. thanks to jennifer marcico we have taken a comprehensive look at the senate contest and included many interesting facts about those elections largely compiled from the almanac of american politics. we have also looked at how george w. bush is being reviewed

today buried his new book will hit the bookstores on november 9. we have included many new polls about how the public is viewing him. to mention one in a recent cnn opinion research corp. paul, 47% said that all at all, barack obama has been a better president than george w. was but 45% said that george w. which -- george w. bush was a better president in terms of the handouts, we have a chart that looks at how the the voter groups have voted in house races in every election since 1980. this is something that you won't find anywhere in washington are it will be invaluable for those of you who want to dig down and look at how particular groups have moved over that long period time. the order of our panelists today will be john fortier and henry olson talking about senate races and then we will look at the governor and state rises and

finally, we will look ahead to the new congress. those of you who have been a test during the sessions know that i moderate these sessions. i will talk about about some of the most interesting exit poll results to set the stage for the rest of the discussion. first, will be discussing the changes in the composition of the electorate that were quite striking. i will then touched on some of the most interesting findings in terms of what voters told the exit pollsters on tuesday. the partisan makeup of the electorate hardly changed on election day. independences 1 massively in the republican direction. this is the third election in a row where independents voted out the party in power, this time by 55-39%. in 2006, they voted for the democrats by roughly the same margin. speaking of the independents, in

florida, they supported marco rubio and not charlie crist the independent candidate. the ideological composition of the electorate changed substantially. self-identified conservatives on tuesday were 41% of the electorate, up nine percentage points from 2006 and they voted massively for republican candidate for the share of liberals and the electorate remains the same period women were more than half of the electorate as they have been in every election since 1980. we had a gender gap once again with women dividing their votes this time between democrats and republicans and manned voting for republicans by very substantial margins. what is significant about this election is that republicans did better with women than they have done in any house contest since 1980. despite the fact that there may be some room in congress for women, women went just as often as men at every level of our politics. in a pattern we have seen in the

past, women tend to vote for democratic, not republican women are in connecticut, california, and in nevada, women voted for democratic candidates courted voters in union households were 23% of the electorate in 2006. on tuesday, that dropped to 17%. the support for democratic candidates dropped 4%. 2/3 of hispanics back to democrats and 90% of black voters for the problem for democrats was that neither young people north african americans turned out as they had 1980. the percentage of young voters dropped by half from 2008. obama's average to rally failed nationwide so his efforts in nevada to rally hispanics appeared to have been successful. in this election, we had a bell- shaped education corporate people with less than a high-

school education or a small share of the electorate, 3% and they pulled the lever for democrats as well as those who have post-graduate started there were 20%. all of the education group in between voted for republicans. the three groups that i watched most closely because they have an almost perfect record of zero voting for winners delivered again varied independents i mentioned, white catholics, and people with some college education voted substantially for the gop aide. in 1988, 12% of voters had incomes above $100,000. today, 1/4 do. in 2006 and 2008, these people split their votes for it on tuesday, they voted massively for republicans by almost the same margin they had in 1988. republicans -- had their best showing among union households

since 1994. let's look at some of the attitudes. neither the gop are democrats were regarded favorably on election day. 43% rated the democratic party favorably, 41% of the republican party. what is significant about this is that in 1994 and 2006, voters had a net positive view of the incoming party. that was not the case on tuesday. the exit pollsters ask people to choose a new list of issues and pick the one that was most important to them. not surprisingly, the economy was the top issue. what is significant about what voters said on tuesday was that if you add up all the other issues and take them all together, still, almost twice as many voters said the economy and not health care, immigration, or afghanistan combined. just 14% of voters said their family financial situation was better than it had been two

years ago. that question is not always ask, it appears to be the most pessimistic reading on its 1984. three in 10 voters said someone in their household had lost a job in the past two years. when asked their opinions about government, 38% said the government should do more to solve the country's problems. 56% said it should do less. in only four of the 26 states for which we have data did a majority want government to do more. those states were connecticut, delaware, hawaii, and new york. speaking of immigration, 2/3 of arizona voters favored the immigration law in that state. they did not want to punish illegal immigrants already here. 55% said that most illegal immigrants should be offered legal status and 37% said most should be deported. 31% of voters that congress to expand the new health care

block and 16% said leave it as it is an 48% said to repeal. in the 26 states for which we have data, majorities in seven states supported repeal. finally, getting back to the president, 45% approved of the job he was doing and 54% disapproved and perhaps more worrying for the obama administration, 43% said that in the long run, his policies would help the country but 52% said they would hurt the country. i will turn to my colleague john fortier, thank you thank you. >> i will make four large points. to try to assess the size of republican gains, the size of the way the number of different ways. the simple answer is it was a big way. ve. it lapped over many swing districts and conservative

districts but stopped at a mildly democratic district. there are no very democratic districts in the house or moderately democratic districts held by republicans. finally, to look at what has changed since 2004, is it back to the future? have we transported ourselves back in time to after the 2004 election? in some ways, yes or the numbers will not be so different it a little more in the house for republicans and a little less in the senate. there is more polarization. more democrats representing democratic seats and more republicans representing republican seats. how big was this way? ve? i will focus on the house. after the 2004 election, republicans had 232 seats. they are likely to have a little bit more than what you see up there, two of the 39 seats because there are 11 undecided.

we have right the last 100 years of midterm election. michael will tell you about the 1922 and 1938 elections. none of us were there. i want to check your birth certificate. 2010 ranks very high. it is the largest gain for an out party in seats in the house and that number depends a little bit on these undecided races but is much higher than we have seen in a couple of generations. senate elections is where republicans did quite well but not as well as we might have anticipated. if there is one thing, one silver lining for democrats in what was generally a dark cloud, it is a couple of senate races in nevada and colorado which kept republican gains to probably six.

we are counting the alaska race. there are a couple of outstanding governor's race by 10 seats is a very large gain. it is not as large as some of -- as 1994. it is bigger by a large matter than 2006. finally, a very stunning result in the state legislative elections and that number is actually likely to go up because there are still some outstanding seats that have not been counted republicans gained over 650, perhaps close to 700 seats in state legislatures across the country. that is substantially larger than the republican gains in 1994 and more than twice as many as democrats gained in 2006. republicans are likely, their high water mark since before fdr, they have gained significantly in this area. we took all four of those factors and put them together in a simple way of combining the ranks and how does a rank

historical? it is tied with 1994 for the third largest midterm election in the last 100 years. for a senate race or one of those close governor's races which could go the other way, it would be second. it depends on how you want to weigh these factors. in the house and state legislative seats, it is the most in recent years. it is less on the other side but still quite impressive. let's go back and remind ourselves of where we were in 2004 on the map. after a close bush-kerry collection we will look at seats the democrats and republicans have picked up before this election. in the 2006-two dozen elections and the special elections we have had. this is the territory which changed hands since the 2004 election before tuesday night. you will see democrats with very significant pickup, 56.

there are two republican pickups that were made in that time. that was and louisiana. you will note that both of them actually lost the other night. those seats were primarily in the democratic direction. let's look at where we stand after the election. changes from 2004 to today, you will see that many of those seats go back, 36 of those democratic seats that they picked up have gone back to republican hands. the only hold 20. republicans have picked up 24. i will note there are some projections made on the west coast that may make it slightly smaller. you get the idea. let's look now at the partisan composition of the changes. . going back to post-2004 -- how many seats or out of place?

how many republicans won in districts that john carey won in 2004? this was after the 2004 election and how many democrats won in districts that the bush had won in the 2004 election? you see in some ways a quite a small number, 65 out of the 4354 out of place the democrats had a much larger fraction of those changes. some republican seats are in the northeast and a few out in iowa and the west. what you will see in the next slide is what happens because of the big democratic waves of 2006 and 2008. almost all of those republicans were lost. they're just 5 including the two new ones that i mentioned before hanging on before this election where john kerry had one and republicans still held the seat and democrats picked up those numbers. they gained a number of republican-leaning states. 30 + seats that they did not

have before. before the election the other night, democrats were holding substantial republican territory. let's see what happened with the election. that number has gone down dramatically. going from 19 -- going from 85 districts that the democrats called, only 26 district now. if you look at where the blue disappears, lots of the south, lots of the plains and western states. republicans picked up a few democratic-leaning districts. some of those west coast ones or two of them are speculative. they are still being recounted. they might go the other way so it might be even fewer. you are looking at less than 40 seats out of the 435 are essentially out of place, less than 40 states where republicans called democratic-leaning seats than democrats hold republican-

leaning seats. more polarization. to illustrate this point to even further, these are seats before tuesday night's election that democrats held where george bush had won those districts by 60% or more. these are very republican seats. democrats held quite a few of them in the south, one in texas, in the plains states. where did that republicans wav e hit, what happened after the tuesday night results? one seat left. the other 12 seats all went to republicans. you go back a couple of seats that are pretty republican. these are not quite as republican.

this wave washed over republican seats, it washed over some swing district started at the edge of that wave is essentially if you want to look at the most democratic seats that republicans hold, there are four seats that john kerry one with 53% of the above. two are in pennsylvania,the joe sestak seat in suburban philadelphia, one in minnesota, and this seat in the chicago suburb. those of the four seats. that is the edge of wave. those are the most democratic seats that republicans won. the others are all held by democrats. >> thank you very much for that eliminating map. it said was very nicely into the commentary want to make on the house which is why we could have been a mild way it turned into

an historic tsunami. i discussed the long term intellectual forces at work on a piece i wrote a national view online call "day of the democratic dead" which appeared before the election. take a look at that you are interested. i want to focus on the nuts and bolts. there are two types of seats that swung back primarily. john has identified one step clearly and that is the republican seats that were picked up in the last two elections by democrats. many of them slipped back into the republican pattern. this time. the other seats are seats that are dominated by the group i have been talking about throughout this election and that is the white working-class area i want to focus on that and see what happens here. according to the exit poll, the white working-class voted for republicans in the house by 29%.

this was much stronger than any other groups. it was based on education and race. republicans carried a white with college degrees by 18 points, 58-40. that becomes more striking when you compare it to the two as an the 2008 poll.the it is a 12. ship on the margin between whites with a college degree but a 19-point shift margin on whites in the working-class brit let's see how those of whites voted in 2008 for the presidential election. you will really see here what was going on. the whites with a college degree only voted for john mccain by four. grid you had a phenomenon that you could say. -- that you could see.

the habit to a republican who voted for obama -- the white working class voted for john mccain by 18 points. there is a long-term historic trend we have seen throughout the modern political era which is that whites without a college degree are more likely to support republicans at the executive level than at the legislative level and particularly at the house level. what happened on election night was that the two groups among the white working class who have split their ballots for various reasons all decided to vote republican. the first group is southerners and others in rural southern- leaning district like the southern part of indiana, a lot of the southern ohio districts have strong southern heritage. these boys is traditionally voted republicans at the top of the ticket and democrats at the bottom. it persisted until last night. the key examples of those seats are the virginia 9, mississippi four, missouri four, which is

not necessarily a southern state but influenced by that heritage and particularly tennessee, the davis seat. i posted this morning that since 1832, the heart of the democratic party was white, rural southerners. even as recently as 1980, a majority of the seats were held by white rural southerners and today there are six. there are more republicans in new england and new york and white democrats who represent rural southern districts. that would only account for part of the games. you have natural republican seats. you would have or rural southerners no longer splitting their tickets. you also saw one of the very few times and legislative history northern democratic white working-class voters voting republican. you could see that in places

like minnesota 8, a seed that has not been carried by republicans -- a seat that has not been carried by republicans since 1946. not my living memory, but michael was alive and [laughter] pennsylvania 11, a working-class seat in the wilkes-barre region , and a start call money district variant democrats along the mississippi river, wisconsin 7, and then there are other places where bush narrowlnarrowy carried. these people who traditionally vote democratic at the top of the ascetic and democratic at the bottom of the ticket voted republican this time largely because of anger about the direction of the country that president obama is taking them.

is this unique? it seems unique in one sense because of the size of wave but this is the fifth time since the great depression that we have seen a massive republican gain and it has been founded among the white working. cla class. among the northern white working class, in 1946, rural southerners voted for democrats regardless. each of those times, 1946, 1966, 1980, 1994, and now this time -- in the four previous times, you saw natural swings toward republican because of anger at the same sort of issues we see today. it is anger and concern about massive rapid federal expansion of governmental power. does 2010 imply that the

republicans now have the majority? not quite. if we take a look at what republicans did with their previous examples, we can see this is not necessarily a sure thing. in 1946 republicans passed many things that were a success but politically it was a disaster. the white working class number seats that were primarily dominated by union members who took umbrage at the tet hartley act and swung massively back to the democrats. that's wingback prompted the turn to dwight eisenhower who expose of lead ran on a platform of moderate republicanism which was no new deal. we can make the argument that this political decision in 1946 set up the modern politics we have today in some direct

sanskrit in 1966, republicans took power but they took the presidency but they took power in a number of state legislatures across the country including in my home state of california. they have held a majority there for more than six months since 1958. they did not know what to do with imperiit. they did not think they could repeal many of the things they had run against what they did not have an alternative aside from continuing what went on with perhaps lure. funding.er the state legislative gains are lost quickly and we move back into the 1970's as working-class voters return home. 1994 with newt gingrich, we saw quickly with the government shut down that a move to quickly move to base republican concerns fizzled out to republicans lost seats. you very quickly saw again an eisenhower-like response.

george was grants specifically -- george w. bush ran specifically as not newt gingrich and not bill clinton. it was stuck between the cilla and the carbidus ofherb the welfare state. ronald reagan took the course of prudential reform. many criticized them. could we repeal the welfare state faster? it is the government's problem. why do we still have big government at the end of the ronald reagan era. he was wise in a way that his philosophical allies were not. he understood that at that time, his task was to plant the tree of liberty and the garden of roosevelt. he succeeded. he succeeded in a way that

everyone takes a look on the right and clams reagan as their intellectual godfather. on the left for 30 years, people have debated about how to react to the reagan legacy. that sort of principled prudential reform solidified conservatism and republicans support much stronger than either me of the too or old- line responses that characterize the republican response. some conservatives might claim that this policy even today is still selling out a want to give you a quote by man to my right who rode in the almanac of american policy in 1982 that ," politics at the national level and america's a mad. our personnel because of the central issue of the presidency. the ideas as a city with liberal have prevailed aired most americans did not believe the government had a responsibility to maintain a strong economy

with low unemployment and provide sustenance for those who could not find it for themselves. in 1980, most americans do." most americans believe that franklin roosevelt was a good president and nixon was a bad one. in the 30 years since, we can amend that and say that 1980 come most members of a working- class believe that government intervention could assure them a stable life. today, most members of the white working-class do not. 30 years ago, most americans did not necessarily believe that entrepreneurial capitalism with minimal government regulation could provide a growing economy. today i think most americans would. ronald reagan was able through his program of principle the pragmatic reform to change the attitude of americans over time in the same way that franklin roosevelt was able to do in the 1930's. my summation of what happened and where we are going -- the americans -- there is an

apocryphal story about the american constitution at the constitutional convention. ben franklin left and he was asked what government he gave us. . pied -- he replied republic if you can keep americans have given since the fifth time since the great depression the republicans a chance for a great majority and can they keep it? >> thank you very much, michael. >> it is daunting to begin a presentation after having had my words written 29 years ago flung at me a [laughter] >> approvingly. >> approvingly, i would argue that the 1994 republican surge resulted more policy success than you suggested. thank you bring? -- if you had omitted the name of the authoou [laughter] where did he get that garbages [laughter]

? ?