it was a really destructive -- it will kill the image of obama in israel. he was a rock star before that. people looked at him as another michael jordan, if you will. freedom to saye what they said, but there was not a big disagreement. but the fact is a sense than -- it can find a way, but it does not want to, to heal this kind of feeling. i believed that -- what was said regarding obama -- obama is not playing by political rules regarding israel. before he was elected, he played

by the rules. after of the elections, as you know, he did not visit israel. he has not done what could be so -- he never approached the israeli public in a way which can really change the way -- he gave an interview to one of our tv channels, very nice interview. no drama, nothing. and it will remain like this along a very dangerous path because iran is the issue, palestinians are the issue and president obama would like to have the kind of -- and 50% of

the israelis will not have it. in israel radical list -- he is the savior. not the mainstream of israel is regarding his motives. >> obama and israel -- first, i grew up in a wing of the jewish community in new york, the phrase was think yiddish, act british, which means we do not tell each other we love each other, we are not touchy-feely. and obama is like that. you sit with him at lunch, he does not touch you. clinton tax issue, bush touches you. he does not want to do the cheesy and gesture. that is impairedrabin -- that is him. rabin was not easy, either. most obama policies come down to confidence. most politicians tended extremely confident.

he sets the new standard -- i believe in 80 years obama will win the new standard for confidence. and the people are around him. that is the second thing. the third thing to know about him is every white house i covered is more centralized than the last. this wasn't -- was a little further. the mistake he made with a parallel -- he does not rely on a whole bunch of people in the state department or someone else and say, i would not say that. he did it himself. that is the problem with centralization. fundamentally not a problem of alliance, a fellow feeling toward israel. if wikileaks shows anything it shows the administration is pretty tough on iran and other issues. i think it is not a substantive fundamental problem. i think the substantive difference between him and was on the big issues is less.

>> i think we have to get past the question of his personality because i think there are deep strategic realities that need to be addressed that he represents, whether or not he recognizes them. and i think there are certain ideas. for example, after 9/11, what osama bin laden succeeded in doing was drawing the united states in to unprecedented central engagement with the muslim world. that was going to happen. after week invaded afghanistan and iraq, with united states having hundreds of thousands of troops and muslim countries it was inevitable the american president would turn not just to know focus but no relationship to this thing called the muslim world and we know it does not exist -- but we will use the phrase. most american jewish supporters of the war of -- in iraq and supporters of israel was under the illusion when bush overthrow saddam hussein, that it was all

some beautiful harmonic convergence of the interest of israel and the issue -- interests of the united states. in fact, what it meant was the israeli-palestinian conflict would become more of a liability to the united states in the region than it ever was before, and not only in the region but around the world. for example, when obama goes to jakarta and "the times" reports some parliamentarians, people on the street, when they're asked what is the main problem they say palestine. we know that palestine has no impact on the price of eggs in jakarta, but the fact that in jakarta they think that -- so, i think that israelis have to understand that america has begun a long period of deep engagement and immersion in muslim society and muslim states and that this is going to complicate the american-israeli friendship. it is simply strategically

inevitable. having said that, the question is how has obama chosen to make this engagement. i think one way to describe this is i think his foreign-policy is really the first american foreign policy after multiculturalism. what i mean by that is that obama decided that in order to correct the negative image that bush gave of the united to states, and we all know, blah, blah -- but we know more grandly -- gramley a more positive form of the engagement to muslim society and states. the problem with that -- and we saw this in the cairo speech -- this kind of acceptance is, a, not the seeds in various arab societies as anything but affirmation of the societies as they currently exist. for example, when obama goes out of its wit -- his way to invoke the koran -- all of this is

fine at some humane moral level but in fact, what the world needs to hear from the american president is a secular message, is a secular message. the muslim world does not need the american president to address them on a religious terrain. and the second consequence of obama's kind of engagement, consequence of strategic reality, is it turns out engagement usually means -- he thinks he is accepting society. what he is really accepting is regimes. what he is really accepting and rick -- is regimes. you see that in dissidents in human rights policy -- descendants in human rights policy, and secretary clinton -- anyway, you see this in the war in which they speak of these regimes, confusion as a consequence of this warmer --

the problem is that obama believes that he is a man from of the future. he does not like the 20th century. he is the man from the 21st century. he stands for new thinking. and our political classes are all now in frenzies of new thinking. everything is different -- partly because of the internet, partly globalization, for all kinds of reasons. in fact, everything is not different. and the real strategic question now -- not just for obama but the israelis, is what are the continuities and water the dis- continuities. it cannot be that everything is new. but obama discovered in the israel-palestine conflict it is that this incredibly 20th- century conflict is incredibly stubborn. the 20th century in some ways will live in to the 21st century. >> this has been great. we want to take a few questions from the floor before we break for dinner. let's keep our questions and answers tight so we can get as

many people in. >> and question -- you stated israel needs to treat the minority -- i assume you refer to the arab minority -- with equality and respect. implying that israel doesn't. two facts. israeli arabs vote and they have representatives in the contested -- knesset. every time there is a controversy, they raise hamas and palestinian state flags. i question for you is this -- if israel were to build more roads and schools, what did they raise is really flags? -- israeli flags? >> this is a very important question.

>> tough question, i am sorry. >> yes -- it is important to raise. there is only one israeli prime minister who took seriously the treatment of the arab minority as a genuine equal partner. prime minister rabin's in his second term. the rest, not so. i mean by that -- i do not mean formal equality of voting, which is a great thing actually and very and marble. i do not know what other democracies will do given the complexity. but this is not enough, formal rights. we are talking about equality vis a vis resources, housing. one new arab town or village. since 1948.

there was great demographic growth. now, you asked me, if israel would grant this to the arabs -- by the way, these are our citizens. would they change? some of them -- some of them. when read been changed his policy -- barqak -- barak got a huge number of arab-israeli boats for his election to prime minister. i see the six ways and as the following. -- situation as the following. political leadership of arabs and israelis are playing a dangerous game. they are not representing

themselves anymore as a discrimination that minority but a minority under occupation. it is a dangerous game. and their political aim is to dismantle the nature of israel as kind of a nation state. you know, this is not capturing the whole of arab-israeli sentiment. many arab-israelis want to be israeli citizens and, by the way, it will be difficult to expect them to raise a flag -- it is fine. a few want to crush the symbol you will create a cultural war. -- if you want to crush the symbol. they have to abide by the law. after the loyal citizens of the country, first of all. and i would say the following.

the leadership is failing by integrating this new rhetoric that will actually isolate their community from the rest of israel. we are failing by not genuinely embracing them as an equal citizen. and the ones reaping the fruits of that is -- that is what i would say. i would say the following digging this is a very delicate fabric, very delicate. and if you push, then you will create a self fulfilling policy that then will create a reaction that would justify more pushing. we have seen that in history. we are strong enough to embrace them as equal citizens and we are strong enough not to allow

-- not to allow their political leadership anything that has to do with actually va when disloyalty on a legal basis. that is what i think. >> i think his question also raises an important larger issue, that it is also relevant to american foreign policy, what is the relationship of standard of living to identity? in other words -- if identity -- can you take a national grievance or a national sense of injury and kenya, by means of economic and social development, can you actually erase it? now, we are trying to do something similar in afghanistan. when you look at what counter insurgency -- a significant piece of it is basically a material analysis of political identity. you improve the group's life, modernize them, etcetera.

what worries me is, first, that identity is not only determined by material factors. in fact, it is usually determined not by material factors. and the most dramatic example, actually, is the zionist one, when you don delaware was proposed before the zionists, you will recall that the western european jews, the affluent ones in positions of material prosperity, were prepared to take the field. the russian jews, who live in miserable lives, when needed rescue and relief more urgently than any other, they preferred to wait for the holy land. for me, it always symbolizes the problem. the problem that you cannot use economic development to answer fully the question of -- who a people think it is and what people want.

the smart thing is, first, not to alienate them on symbolic matters, to respect their own sense of symbolism, to recognize the incredibly difficult position that the birth of palestinian nationalism after the 1967 war, the incredible difficult situation -- situation a place. the israeli-arab identity is a very inflamed the thing now because there is israel to the one side and palestine to the other. right now i think that the attempt -- a cultural war should not be provoked. that is the first thing. >> you grow that. and i do not recognize you. [laughter] you have to wear a name tag. >> i do have a comment. i know a little bit about -- i have just released a poll, as

you know, and you have some of the information there. part of it is on actually identity. a poll among arab citizens of israel and jewish citizens of israel. there are two things that are clear. what was said about economics is right -- it does not seem to matter how much money you make or your level of education on your identity. not much of a major factor. it does show on one thing. the vast majority of arabs and his robe and not want their -- to be included in a palestinian state when there is a pally in state and week -- when asked them why, the number one is economics. so there is an economic factor. but when you break up all the demographics to figure out what explains the attitudes -- huge differences. by far the most important variable that explains the

division among them is something completely different, is whether or not they have relatives who became refugees in 1948. and in that segment, they are broken and almost half -- almost half of them have relatives and half don't. and if you differentiate those two groups you would be astonished to see the differences in attitudes and almost every single issue including identity. that leads me to believe it is impossible to address that before you have a solution that incorporates the state of palestine as a refugee issue. it is just impossible to address that -- no matter what you do internally. >> david? >> thanks for an excellent panel. it has been very illuminating. i want to get to the issue of the orthodox. you touched on generally of a rabinate -- is there an unholy alliance develop like the

opinion of the panelists. in the old maid's you have people like rabbi goran in the 1970's, when he went to integrate but russian jews, he mass converted them and he just did it like a bulldozer and nobody seems to remember, he just did it. now the chief rabin it seems to be hijacked by the altar of the box. unholy alliance seems to be between the ultraorthodox on one side, secular jews on the other, lieberman who seems to just play on the altar of orthodox to start the grievances of his russian constituencies, and therefore the middle has been decimated. people who actually saw the chief rabinate as a way to integrate israel is and alleviate the hostility of the past and now seems to be exacerbating them from within and israel and the diaspora. i am just wondering if you agree

with that analysis and if you see any hope of taking us back from the ultra-orthodox -- to save the israel-diaspora the list above further exacerbate internal tensions? >> i believe the question of conversion is mainly between israel and the jewish community abroad. it mainly in the united states. it is a real major problem. i believe israel of friends or insults' a very important -- offends or unsold a very important group in the jewish community treating their conversion process as inferior to -- or illegal, even, in the terms of the israeli orthodoxy. regarding israel, look, one can look at it as a miracle.

more than 300,000 russian jews who immigrated to israel -- and they are not jewish according to jiging -- and you do not have any scandals about their marriages and their jewishness? in a why? it does not matter. in israel and practical life it matters very little. you can go to -- for a week, get married there. a lot of israel is completely 100% juice according to them prefer not to see a rabbi and they go through the same cycles and arrange berries and it -- marriages and a few hours. to the surprise of everybody, the sheer fact that the former soviet -- the immigrants from the former soviet union are big

enough, the community is big enough to swallow this kind of different, so you do not have a lot of scandal. at the same time, it is crazy because you have people who are considered by themselves and by everybody else as jewish -- they did not go to churches on sundays. like other secular jews in israel. no different. but still it is written on their identity card that they have no religion or something like that, which is an insult. >> i am going to let everybody pursue all of these questions individually but the four panelists -- it is denigrate panel. thank you very much. [applause] >> let me just add my thanks to you, tom, for doing a marvelous job.

will shakespeare would have been proud of all of you and thank you for an extremely rich intellectual diet. if you are still hungry, dinner awaits in the shakespeare library. thank you all very much for a great session.

>> a federal judge to this afternoon declared the obama administration's health care reform law unconstitutional. he is the first judge that world against the law that was upheld by two others in virginia and michigan. virginia attorney general arguing the federal government does not have the constitutional authority to require people to buy health insurance. of the lawsuits are pending, including those filed by 20 states in a florida court. coming up this afternoon, c- span2 will live coverage of the discussion on recent efforts to regulate financial markets. it will cover the franc-dodd act, proposals from g-20 and other international groups and other ideas. the senate cavils and at 2:00

p.m. eastern, resuming debate on a continuing the bush era tax cut and long-term jobless benefits and business tax credits. a vote to bring -- move it forward begins at 2:00 p.m. eastern. the house meets for legislative work tomorrow. their wedding for senate to complete action on federal spending and tax cuts before they have final votes on those bills. white house coverage on c-span. >> tonight, federal trade commission chairman on ftc recommendations on how to handle online privacy and potential do not track technology. on c-span2 on 8:00 p.m. eastern. >> supreme court justice elena kagan says she is facing a steep learning curve in her first

months on the bench. she is drafting her first opinions and try to acclimate to life as a judge. in her first interview since joining the court in august she talked about her impressions of chief justice john roberts. here is a look. >> talking about argument and listening to some of the recordings of last year's cases, it is interesting to hear her colloquies, i guess the right word, of the cheap. i am wondering about your intellectual relationship with chief justice roberts because often your questions and answers were very rapid fire and i am wondering what you think of intellectual relationship between the two of you. >> i have extraordinary respect for him. he was a great supreme court advocate of his time before he became a judge. so, i always felt as though he could do better -- what all of us as lawyers were trying to do. he did it as well as anybody has

ever done it, to be at that podium and make an argument to the supreme court. that is a little bit intimidating to know that the person questioning you has also stood in your shoes and has really done the job better than anybody else has. i listened to the cheeks arguments and i talked to a lot of people lose all of his arguments and he was fabulous. he is also a great, great questioner off on the bench and he really challenges you, as he should. and doesn't let you get away with anything. if there is something that you want to hide in your argument, he is probably pretty certain to find it. i tremendously enjoyed arguing in front of him because you had to be at the top of your game, and you should be -- have to be at the top of your game. a little bit of a story, is when i walked in for my swearing-in,

this was in the summer, before my big, grand, public investiture -- this was the swearing in in order for me to start working in the summer to the the work of the court, and i was met by the chief justice antigay me a little bit of a tour -- and he gave me a little bit of a tour of the rooms -- the conference rooms the justices meet income of the robing room, and the dining room upstairs. on the tour he showed me the robing room, and there were these wooden lockers, and it goes from chief justice and then it said justice stevens and carried on down. and the last locker was just as the sotomayor. then we walked around the building a little bit and he showed me some other rooms and maybe we took 15 minutes and we

ended up back in the robing room again, and in that 15-minute time, what happened is the justice stevens' name plate came off and -- name plate went over one and then there was justice kagan, and he showed me the new locker with the name plate. and it was a very effective way to say to me, well, you are here now, you are part of the community, part of the institution. it was a very powerful thing to see. >> just-in-time for the holiday season, the supreme court, c- span's latest book a big offer directly from our publisher to c-span viewers at a special price, just $5, plus shipping

and handling, a discount of more than 75% of the original price. this handsome hardcover is the first book that tells the story of the supreme court through the eyes of the justices themselves. 10 our original c-span interviews with current and retired justices, including chief justice john roberts, stephen breyer, did they o'connor and sonia sotomayor. a personal and compelling view, rich with history and tradition, with 60 pages of photographs detailing the architecture and history of the court's landmark building. a handsome addition to the bookshelf of any non-fiction reader. to order copies of the publisher is very special price of $5 go to c-span.org/e-books and click on the supreme court book and be sure to use the promo code c- span at checkout. place the order by december 15 to receive your copies in time for holiday gift-giving. >> but the u.s. unemployment rate just under 10% urban

institute host a panel discussion looking at the u.s. job market and and it's as that might help lure what that number. speakers include an official by national league of cities and national association of independent business. this is about an hour and half. >> i am vice-president of research and i am happy you joined us whether here in person or on our webcast, to discuss the challenges of job creation in today's very slow economic recovery. in this great recession that we are at least theoretically emerging from, the total level of job losses far exceeded that of downturns in recent memory. and as a result, the ranks of

the unemployed really exploded over a very short number of years. and even more people are in voluntarily working less than full time or are just too discouraged to even be counted among those looking for work today. another really alarming piece of evidence has is that the share of the unemployed who have been unemployed for -- out of work for six months or more is at an all-time high. most experts expect the economic recovery to be very slow and for job growth to be anemic for years to come. this is really a disturbing forecast because persistently high unemployment rates combined with this problem of very long- lasting unemployment for many pose serious threats to the well-being of individuals,

families, and communities. and most of the policies and programs that exist in our policy tool kit to address these problems were designed in a really different times and just are not up to this current challenge. the urban institute has launched a program of a rigorous research to inform the policy debates and to inform policy development on this set of unemployment challenges. and today is a discussion is the first in a series of forums on the new unemployment and what to do about it that we are the ones building as part of the initiative. so, just a preview a couple of upcoming informs -- tuesday the 25th we will look at the challenges, barriers, concerns of two particular groups facing unemployment challenges.

young people trying to enter the job market and older people who might want to stay in it longer or who might have hoped they were exiting the job market at this point. later, february 23, the focus will be on how the safety net should be retools to operate more effectively and in times of high unemployment. but today what we will be discussing is why job creation has been so tempted -- tepid and this, recovery. what we know about cost- effective strategies for expanding jobs and what pump -- public policy can and should be doing to jump-start job creation, demand for workers. we have a really terrific panel here to tackle these questions. and i am hoping that the conversation is more on what we

know -- or think we know about tackling these problems rather than how discouraging the problems are. our panelists, and out of order, tim bartick from upjohn institute of employment research. his work focuses on state and local economic demint and on local labor markets. he is the author of "jobs for the poor: 10 labor demand policies help?" bought the leboyus is senior health care advisory at -- advisor of national association of independent business. he taught economics at university of richmond, was an analyst and economic education director for the federal reserve bank of richmond and a risk officer for sub-saharan africa at chase manhattan bank. cliff johnson is executive

director for the institute of youth education and families at the national league of cities. that institute score concerns include education, youth development, early childhood development, safety and family economic security. he is the co-author of two books on labor and social policy. bob luhrman is urban as the two fellow on labor and -- an economics professor at american university. he as an expert on not education, employment, and family structure where together to affect economic well-being. our moderator today is margaret simms, urban institute fellow and direct our low income working families project. previously she was vice president for government and economic analysis at the joint center for political and economic studies. i would like to thank everybody for joining us today. i invite you to come back on

january 25 and on february 23 for the next two sessions in this series. i will now handle the program over to margaret. >> thank you. as was indicated, this was not exactly unprecedented economic situation but certainly highly unusual. three years to the month, after the recession started, and a year-and-a-half after nber says it ended, we see very little acceleration in job growth. we also at the -- are at the end of the federal fiscal stimulus package, with just a few more months for many of the funds to be utilized. so the question is, what do we do now in order to jump-start job growth? we have panelists that will set forth a number of approaches, some of which might be used in

combination. so, we will go slightly out of alphabetical order with tim barik going first and then click johnson and then returned to an alphabetical order. >> thank you, margaret, and thank you to move the urban institute for most in this forum on this very important topic of job creation. my focus today is going to be on how the u.s. can immediately create jobs on and large scale and cost-effective way through a well-designed job creation tax credit. we need more cost-effective job creation policies because we are assured over 10 million jobs compared to -- if we wanted to get back to the employment population ratio we had at the beginning of the recession. as the hamilton practic documented, even if we have unusually rapid job growth in would take us at least five years to close this job gap. in this job that has significant long run economic cost, not just

social cost because research suggests about one-fifth of the environment -- and voluntary long one unemployment becomes chronic, which lowers productive capacity of our economy. a conventional set -- fiscal stimulus is very costly per job created. a fiscal stimulus only indirectly increases jobs by increasing demand for output. cost per job created of fiscal stimulus is at least 100,000 jobs -- $100,000 per job created because that is the average ratio u.s. output to jobs. the most recent tax-cut deal between the president and congressional republicans has estimated cost of $858 billion and according to the center for american progress the job creation of facts of the deal will be 3.1 million job years over the next two years. if you do the math, the path of -- cost per job year is about

$275,000. job creation estimates are conservative and i should note the recent tax cut bill have benefits other than job creation. still, cost per job created is high. more cost-effective strategies require that we directly target job creation. one approach is public service jobs which cliff johnson talked about and i favor. but i will focus on a job creation tax credit which john bishop of proposed in a paper and a fault -- the fall of 2009. the obama administration proposed a similar tax credit in our early 2010. however, this proposal was not enacted. instead, congress and march of 2010 adopted a proposal by senator schumer and hatch later called the hire act which, i will explain in a minute, is much less effective. and that provided tax credits for hiring the long-term unemployed.

in my opinion we should start over and adopt a true job creation tax credit. if enacted today, our proposed job creation tax credit could work as follows -- the credit would provide any employer, whether for-profit or nonprofit, with a 15% tax credit for net real payroll expansions in the year 2011 and 10% in the year 2012 compared to a base year of 2010. now, the fact you use net payroll expansion means the credit would not be received by any employer if they simply hired to fill a vacancy created either by quitting or firing. the employer actually has to expand payrolls. the fact that the credit is not paid on all payroll, only on payroll expansions, reduces costs enormously compared to

payroll tax holiday and affect the credit is not paid on filling and a job vacancy but only new jobs reduces the cost compared to a hiring tax credits such as the hire act. it would be payable quarterly, which helps cash flow which is important for small business. it is refundable. it does not require the business to be profitable or even be a for-profit business. it makes the credit much more relevant to more employers. the credit could be claimed as businesses file their normal quarterly withholding of payroll and income taxes so it has relatively little additional administrative burden. i note again credit goes to any employment expansion. it does not require hiring any particular target group. whereas in contrast, the recent hire act requires hiring unemployed -- those unemployed for a certain time. likely to lower the take up rate and reduce the effectiveness.

targeted -- better done through public service jobs program. we estimate the credit would add 2.8 million jobs to the economy in the first year and 2.3 million jobs in the second year. the gross cost per job created are about $30,000 per job. less than one-third of the cost per job created of even the best conventional fiscal stimulus. after we account for feedback affects -- boosting employment, gdp, increasing tax revenues, and reduces safety net expenditures, net cost per job created is only $5,000. let me address common questions and we received about the job creation tax credit. first, what is the evidence it will work? first, there are several studies of very similar new jobs tax credit in the 1970's and the all suggest cost effectiveness of about $30,000 per job created. second, if you look at empirical lead -- literature and labor

demand similar cost per job created and recent surveys from employers suggest similar cost effectiveness. second, why would anybody expect a modest 15% credit would all of the sutton called exploiters to expand? no one is arguing that 15% tax credit will cause and we're not thinking about expanding to expand, rather, it it causes employers who were thinking about expanding in the next three or four years to speed up their plans and, in fact, surveys we have done on employers suggest that is exactly how woodworks, speeds up the expansion plans which of course what we want right now. what about deadweight loss -- that it would go to employers who would have expanded anyway? certainly true. but any tax credit has some dead weight loss. this tax credit is about $7,000 for the average job. you only need one out of four of the subsidized jobs to be induced jobs for cost for in

this job less than 30,000. do not need a i hit rate. -- high history. deadweight loss is much greater for tax credits that cover all payroll lag payroll tax holiday and much greater for tax credits that cover all hiring such as the hire act. white card business is more enthusiastic about this proposal? -- why aren't businesses more enthusiastic? businesses prefer tax credits on all business without conditions. but the reality the credit doesn't have to be popular for every business to be effected. a survey of employers, i found most employers did not like the proposal -- and when we allowed them to make comments to me quite vitriolic comments. most said they would not respond to the credit. but, the one-quarter of employers who said they would respond were sufficient to make the proposal cost-effective.

in sum, job creation tax credit could create 2 million to 3 million jobs in the next two years, going along rate toward accelerating employment recovery and do it in short run deficit caused of $14 billion a year. thank you. >> thank you. >> thank you. good morning. there's another city leaders part of the national league of cities and institute for use education and family is accustomed to anticipating and planning to like it -- for likely threats to their communities. probably most evident in the emergency preparedness area where mares may have no idea when the next hurricane is going to strike, the next tornado comes through, and next blood through their streets, or when the next flu epidemic will be on the doorstep but they know with a pretty high degree of certainty it will happen at some point so they have an

infrastructure in place for thinking about it and i strategy for responding when it happens. a prudent approach to recessions would parallel that. you have no idea and a course of the business cycle when the next recession is going to hit, but we have almost 100% certainty that there will be a time when we will see the big spike in unemployment. of course, we have been through a historic rise in joblessness in this context over the last couple of years, and we were caught completely unprepared. there was a point in the 1960's and 1970's when we had something that came closer to an infrastructure that would allow us to be prepared for that eventuality. we made considerable progress, culminating in the vein public service employment program of

the late 1970's which provided jobs for more than 700,000 disadvantaged adults at its peak in 1978. between 80% side and 90% of those expenditures could be traced directly to a net job creation. then, in 1981, we completely dismantled that infrastructure for public job creation which, in some sense, represented an act of unilateral disarmament and the face of a near certainty of a future recessions, business cycles. public service employment was eliminated in 1981 and we put a complete prohibition against public job creation into our work force development programs that persisted there for decades. i don't want to dwell on the history. a key point i want to make is this was not the product of deep

social science research, careful examination for the effectiveness for public service employment in the 19th that -- 1970's. actually, the value which is that were done -- and there were quite a number, or pretty good and encouraging enough to suggest that we should have continued down the path. it also is not an obvious case of the inability to administer what is clearly a large and complex social enterprise. public service employment reached an impressive scale relatively quickly in the scheme of things. and there was but a late 1970's a pretty extensive national and the structure to support implementation what happened here was something quite different. i think a public job creation

being caught in the political crossfire of one of many periodic sites we have in this nation about the role of government and size of government, late 1970's, companies and energy crises and sharp spikes in inflation, etc., caused a backlash against government and public service employment the and the poster child for that effort and the primary victim of the backlash. the conventional wisdom now is that public job creation is politically unsupportable. there were discussions earlier in this recession about it. i think the administration reached that conclusion, at least to some extent. i think we have some reason to question whether that is the case, and particularly now as the recession has persisted

with a such severity and depth and i guess scant evidence i would offer in support of that contention is the bottom up effort will have had through the emergency contingency funds, where communities, counties, states, really on their own devices using funds through that program have created at a very significant scale a public job creation project that has been interesting, and some of them quite innovative, and certainly encouraging. and we have seen very little, if any, public concern or backlash about that but it is perceived as largely a humanitarian response to put jobless individuals back to work. so, what can we do going forward? i think in the short term the federal government can provide resources to cities, counties, states, and to some extent, gets out of the way in the short term to allow that continuation of a

bottom-of grassroots approach. certainly the extension, expansion, building upon what is going on in the emergency contingency fund program would allow local and state initiatives to continue along those lines. i think one step beyond that, we could focus on providing additional federal dollars to local communities, probably under an existing federal formula, probably a modified version of the community development block grants for new already in place to get dollars out quickly. and in that context i think it would be produced -- straight forward to establish what i think of as a fast-track mechanism that would allow local communities to immediately proceed with public jobs creation projects, focused on a

pretty narrow list of pre- approved activities or projects. i have my own thoughts about what may be on that fast track list. for me it would include projects like repairing schools, community centers, libraries, cleaning up abandoned and vacant properties to alleviate blight and the stress and foreclosure, expanding emergency food programs to increase of region and enhance staffing levels to reduce hunger and promote family stability, augmenting staffing and head start, child care, other childhood education programs, to promote school readiness and early literacy, and renovated a -- renovating and enhancing parks, playgrounds, and other public spaces. it does not matter exactly what is on the list but the point is to think of things where the great majority of the american people will knock their heads and say, yes, that is a good thing to do, a worthwhile thing

to do, and a good way to get jobless americans who need work and opportunity to be read engaged. -- re-engaged. i think we absolutely need, new jersey -- conjunction with anything we do quickly and immediately, we need a larger vision among public job creation. it will not be the longest recession. when it at longer-term view and strategy for recession and widespread unemployment. something that mirrors the kind of structure that we have to prepare for emergencies and natural disasters. the national league of cities joined with three other national organizations -- center for community change, economic policy institute and service employees and national union, to develop and endorse a more comprehensive long-term public job creation proposal. the proposal addressed many of

the issues that would have to be addressed in a permanent public job creation strategy, things like allocation and distribution of funds, allowable uses of those funds, individual eligibility and targeting provisions, which, as tim pointed out, much easier to do and much more suited to do within the structure of a public job creation program and through other strategies, and very importantly, protections to minimize the substitution and displacement of regular employees. so, you will find the details of that proposal in a paper that i wrote to with amy -- anne melissa yen from national transitional job network on that urban institute web site if you are interested in more details of what a full-blown proposal would look like. but it has to be creating some sort of permanent capacity or infrastructure to support public

job creation, one that can be readily expanded at the onset of the front end of a recession and then gradually contracted as the labor market recovers. i would close with just a thought of why i think it is possible now, why we are in a better position to do that now than brats we have ever been. that is because i think we have made a lot of progress over the last decade on public job creation strategy is -- creative uses of publicly-funded jobs. ironically, they have not been -- it has not been progress that we made on countercyclical job creation. it has not been progress related to responding to recessions. it has been a counter-structural approach to what is commonly called transitional jobs programs, where publicly funded jobs are created to help employ individuals and make their way back to the labor market. but, the combination of counter- cyclical job strategies at times

of recession and a transitional jobs in structure for better labor market has times starts to create a path forward in terms of having a permanent infrastructure for the creative use of publicly funded jobs and one that would allow us to be much more prepared for the next recession. thank you. >> thank you. bob? >> good morning. almost two years since the stimulus act was passed, and at the outset a sizable number of economists and other analysts who were convinced this was going to do great things in a sparring jobs, and by and large i did those people are convinced they will. at the same time there were a substantial number of economists and other analysts, including a, but thought it will not do very much, if anything, and by and large i think those people are convinced it did not do very much or anything.

you may take a lesson of the purpose of economic strain is to formalize your obstinacy, but in fact, there different ways -- economist guard their secrets jealously. we will have honest disagreements over the is sort of proposals being discussed today. for instance, the job creation credit. it may work, it may not. when i look at it, i think of a firm that is going to say, well, i'm going to downsize the so that i can increase his employment and take the credit and we will split the difference. certainly there will be games -- gamesmanship, he mentioned dead weight loss, and that is an example. whether on balance it will work for not. however, for may, the problem is that these ids -- for me, these ideas, they are going to be

submerged between -- beneath much larger problems in the united states and world economies today. if you ask me why there is such slow job growth, i think there are three factors at work. first of all -- and i resent small businesses, and they produce about 65% of the new jobs in the country and they are simply not hiring now and what our members tell us -- and i think they are quite representative of small business in general -- first of all, it is the housing crunch. isn't it -- substantial percentage of small businesses finance expansion by means of their private home, their office, their investment properties. that is typically how, when they're going to grow, they are going to borrow on those mortgages. unfortunately, a huge percentage of those mortgages are now under water with no relief for the

foreseeable future. so they do not have the collateral necessary to expand, and there's nothing on the horizon that seems to be changing that. secondly, there is a great deal of tax uncertainty. we are now approximately three weeks from the end of the year, and none of us in this room has an idea what marginal income tax rates are going to be, whether the estate tax will be 0% or 35% and who is going to hit and it is not going to hit. these are problems that could have been dealt with over the last two years but were not. there is a sense that congress is staying up all night for their exam tomorrow. business has a hard time operating in an environment like that. they cannot make decisions -- how those rates finally fallout will be the difference between profit and failure for many of these companies. they cannot make decisions on

hiring and so they know where these rates will be. so they have lost two years because of uncertainty over tax rates. the third one is the one that i worked on. i am a health care adviser. the biggest of all questioned that small businesses have faced for the last 25 years and they still face today and for the foreseeable future is, what is the cost of health insurance or health care going to be for me and for my workers, and how my going to handle it? unfortunately -- let me preface it. we needed to be sending about health care. we still need to do something. it has been killing small business for over two decades. but what emerged from a two-year process, first of all, was pushing these other items, the tax rates and the housing crisis, off of the agenda, in favor of pursuing an extremely large health-care law that i think, in the end, is going to cause a tremendous number

problems for businesses over the next couple of years. for water were good is going to do, it will bring a mountain of costs and red tape and extreme uncertainty. the centers for medicare and medicaid services have more or less ended the argument that the law is going to cut costs for business or for the country, or that it is going to cut the deficit. some businesses have to live under the knowledge that there is this very large law that will have a lot of different implications for business. as i travel around the country, i get questions -- how am i going to handle the paperwork burdens? what are they going to be? we have to say that we do not know. there will be about 10 years of regulation writing, and each year you will have to spend a lot of time trying to figure out what they're going to be. as an example, again, it has a feedback loops on the taxes, for instance. in the new law, if the owner of

a small company happens to report his business income, as most do, on their 1040, his wife gets a salary increase at her job, or husband, there will be a .9% payroll tax at and on top of her income that will essentially hit his business income. they sell their beach house with 3.8% tax on profit, if these taxes cause them acid reflux, there'll be a new tax on the drugs. if that gives some high blood pressure, there will be an extra tax on the pressure meter. his pressure will probably go higher when he finds that he is paying a tax on his insurance policy that the guy who works for big business next door does not have to pay and the union guy on the other side does not have to pay. for firms with over 50

employees, huge uncertainty over the extent of penalties. to figure out what kind of penalties, and we're talking tens of thousands of dollars a year depending on how big the company is. the entrepreneur would have to know what his employees household incomes are, and what the husband and wife earns are what the kids learn. how many people live in the house gives rise to some that have been calling the employee's spouse's uncle tax. it the elderly uncle moves in, a good trip the wire in cost thousands more. it depends on the situation. companies have a very difficult time operating in an environment like this. the other thing is that because this law is going to have to be fixed, we have seen the 1099 problem, ultimately, i feel

confident it will be fixed. we do not know when and how, but it will burn precious time that it needs to use on things like tax rates in the business crisis. they need to solve those things. the question, how do we get business and jobs growing again? how do we get everyone back on the ball on job growth? those are great questions. unfortunately, we have hardly begun asking those questions. i am a skeptic that the sort of well-intended and maybe even successful plans that colleagues on this panel are proposing will be able to be anything but a ripple on the top of these larger trends. but we will see. >> thank you. well, i am going to propose two ideas, neither of which are

highly costly in federal dollar terms, the both make sense, both in the short run and the long run. so the first one is to create at least 1 million homeownership vouchers patterned after the rent a voucher program that we already have. the second one is to provide of $5,000 per worker subsidy for expansion of registered apprenticing up training, along with an increase in marketing budgets for the office of apprenticeships. let's start with the housing idea. this comes from the notion that a big part of our job losses have been in the construction sector. between mid-2007 and 2010, u.s. jobs are down about 6%, but construction jobs are down about 30% overall.

unemployment rate of construction workers is 19%. not 10%. 30% of all jobs lost in the private sector since early 2007 were in construction. this is a huge area. and we are seeing that the house price declines and construction unemployment kind of feed on each other. house prices declined mean it less construction. less jobs mean less housing demand. and there is a negative feedback loop. we are seeing that in the way these things are correlated across cities. now, normally, construction is a cyclical industry that comes back during recovery. but so far, not in this recovery. as it was recently pointed out in a "wall street journal" editorial, is set in both the depression and post-world war ii

era, recovery from recession has been regularly signaled by an increase in housing investment. the new housing construction expenditures remain stubbornly flat since the great recession was declared over. that was in 2009. housing and aggregate demand have not recovered, because nearly 15 million owners are estimated to owe about $770 billion on their homes, more than they are worth. and this of course adds to the continuing problems of balance sheets of big banks, and they have become very conservative in lending to people. in addition, we have what bob just mentioned about the problem of homeowner equity limiting bids -- limiting the expansion of small business and hiring because the small business people have very little collateral has a result of this

huge reduction in house prices. we have tried some plans. i will not go into it, but suffice it to say that we have tried ways of restructuring mortgages. we have tried the homeowner tax credit. these plants have generally been very poorly targeted. they do not make sense in the long run. the benefits are -- it is very unclear why certain groups are getting benefits and others are not. and i think, largely, they have been a failure, although they have spent large amounts of money. what about home ownership of vouchers? what is it, first of all? with the program would do is it would expand the current rent a voucher program, to provide low- income families with the amount necessary to cover the monthly carrying costs of buying a home. and the families would pay 30% of their income in return.

the maximum amount would be equal to either the torent voucher or the monthly -- either the local rent mounter the 25th percentile of all local home values. the cost would be assumed based on a 5% 30-year mortgage. participants would have to participate in a home ownership training program. that would also have to put some as grow in -- some as growth -- escrow in. that would have to weatherized these homes. there could be a recruitment plan. i will not go into details now. why does this make sense today? part of it is that rents have increased by about 11% since the house prices have dropped by about 20%. so we're at a point where the fair market rent, which is the

benchmark for subsidizing rent vouchers, that is more than enough to cover the carrying costs of homes in about 90% of communities. 90%. and in many cases, the amount is hundreds of dollars more per month than you would have with the housing vouchers. and i have done some calculations on this. some of it is in a packet here. where i have looked at nearly all metro areas. but for this package, i just looked at four communities. and we can see that by looking at that, the house of values -- the house values would be low enough such that the rent vouchers when more than cover it. and often by hundreds of dollars per month more. if we add into that the fact that people will be paying 30%

of their income, even very modest earnings, supplemented by the itc, when in the cost could be very low. i estimate that we could finance approximately 1 million housing vouchers for about $2 billion per year. i even have an offset. the offset is to lower the low- income housing tax credit, which is a supply-oriented subsidy, which is just the opposite of what we need today. we need more demand for owner- occupied housing, not subsidies to increase supply. so this program would not only explant demand for owner- occupied housing, but it would lead to significant increases in low-income housing affordability. it would reduce the waiting list for the current program. and it would increase sustainable ownership for a long

time. one of the things that people talked about is, well, what about -- haven't we tried that before? but in this case, there many reasons why low-income housing ownership would work. first of all, there would be very little risk. because if their income falls, the voucher value goes up. second, they would get some homeownership trading. and third, that would get a very good mortgage. so that is the first idea. the second idea, which i do not have too much time to talk about, probably about two minutes, is to expand apprenticeship training. this is a great way to both subsidized human capital, which we are trying to do but mainly through the schooling approach, and create jobs. other countries have very, very large sectors, segments of their workforce in apprenticeships,

and our apprenticeship system works word has tried, but we have very low budget amounts. the office of apprenticeship gets only about $22 billion to $24 billion a year, which is a drop in the bucket compared to the need. i was just in indiana yesterday, and it turns out that to cover all of india, the office of apprenticeships has two people. two. and this is a system that could work very, very well in the united states as it works elsewhere. it is a way of integrating education and training that is linked to careers, directly linked. no employer will provide an apprenticeship option unless they have a job to go along with it. therefore, you do not have the kind of mismatch that we have in a lot of our education system. you do not have any lost earnings while you are undergoing training, unlike the situation in community colleges

or four-year colleges. and the evidence shows that the gains from apprenticeships far exceed the gains, even for technical training in community colleges. so i think we could live in that direction. a could have a substantial impact on jobs but also be sensible for the long run. and i would want to reiterate that both of these plans are sensible from the long run standpoint. and i could go into details in the questions and answers. >> thank you. i think all the panelists for sticking to their time allotments, which gives us more time for questions. i get the first question. in some ways, i do not know where to begin. .ut i will start with htim you talked a little bit about the difference between your proposal in the one that is currently on the table.

could you elaborate a little bit on that and maybe speculate about whether they could work together or some modified version of it could work if this current package moves ahead? >> as i mentioned, the bill that was passed was not the obama administration proposal but one by senator schumer and senator hatch, which is called the high your act. one of the key things about this thing -- called the hire act. one of the reasons why i think it would be less effective is that is less money. in terms of creating jobs, this subsidy is considerably smaller. it is 6.2% for the wage subsidy, and it only runs to the end of 2010. so if someone is hiring right

now, you do not get very much subsidy. you then get a $1,000 bonus to be give the person for a year. the credit we were proposing -- the obama administration proposal was similar, and it was about $7,000 per job. it was a much bigger subsidy. the second thing is, the hire act applies to -- again, you have to be unemployed more than 60 days. there's a lot of research on tax credits that target the disadvantaged. there are many, many problems with this. one is that employers simply seem to not want to really deal with this. and really take this into account. it requires that they have to go investigate and make sure someone is eligible for the program. there are issues that stigma of facts, where they want to have someone identified as eligible. it creates a lot of complexity. most of the research indicates when a the result is lower

effectiveness. i think if you want to target disadvantaged, you essentially have the government play an intermediary role, and then you're talking about public service job programs. at least the government is involved. in the third aspect is the hire act applies to all virus -- hires. so it can go to someone who has been unemployed for more than 60 days by say a job agency. it takes away the dead weight loss program. for our proposal, during a normal year, new jobs created by new firm start ups and expansions normally are about 10% of employment in the u.s., even when we are in a recession. there are expansions and new jobs created by some firms. about 10% of total employment. in contrast, hires are about 40%

of employment during a normal year. when you decide you're going to subsidize hires, you'll end up subsidizing and most employers will just say, well, they will say at the end of the year, you figure out whether or not we can get any of this, but we're not going to take this into account or change hiring procedures to really do this. so you end up with this enormous debt weight-loss. in my opinion, if you want to target job creation, you target job creation. the hire act does not target job creation. it targets hires, and that is not the same as job creation. you have this whole problem and they have the different tax accounts that figure out what they are eligible for. it is not an effective way of doing things. if you look at the data, there have been reports by the treasury department on the hire act, and it is really hard to

see any impact of the hire act in terms of the data. the have looked at how many people that the eligible categories, and i cannot see any sign in the data that the quantity this year is any different from previous years. i have not seen a formal announcement, so maybe someone to richard at the data in that that it confessed and will find a modest effect. -- maybe some and tortures of the data and out that the confesses and we will find modest effect. >> thank you. bob lerman, you talked about two proposals, some of which might take a little time to get up and running. do you have a policy or strategy for boosting job demand in the short term? >> well, i liked tim's proposal. i do think in new jobs credit would be a good thing. i think that if we put in the

expansion, the apprenticeships expansions, those could boost employment. that would boost employment in a way that embodies a lot of human capital development. in south carolina, where they put together a tax credit along with four or five people, they have been able to create a new apprenticeship program per week. they have been able to double the number of apprentices in that state, from a low base, admittedly. i think you can move the apprenticeship program very quickly. on the housing side, you can move it pretty quickly. because there are communities that have experimented with it at a very small scale and the federal government got behind it. if that happened, i get would go quite quickly. house prices are very low now, relative to rents. even relatively low-income

people are paying more in rent and would be the cost of a home at a good mortgage. at a good mortgage, admittedly. so the costs might be very, very low, and it would have this multiplier effect on a sector that is a very, very down. >> thank you. bob graboyes, let's put aside the uncertainties. let's say that we could find a way of getting equity for expansion. what would you think about the proposal that tim has made in terms of the tax subsidies? do you think that small businesses would be responsive or are there other obstacles that would make this an attractive? >> right. i do not think they would be highly responsive.

obviously, some would take the credits, and some would benefit from it. my fear is, and i alluded to it a little bit, is that there would be a lot of gamesmanship. people who were already going to hire somebody would just cash in and other companies essentially would be subsidizing them for plans they already had. i mentioned the possibility of gamesmanship or one company downsizes and outsources to another that expands, so there is no new job creation. but the two of them together somehow walk away with a piece of the credit. the companies we talk to have a simple message to us, and part of it is that housing king, and we can -- that housing thing, and we can assume have of that goes away. if i cannot get credit and no one is buying my product, why would i want to hire someone? that is the reality that they face every day now. a couple thousand dollars in credit, while on the margin in

might spur if you to hire, i do not think it will make a big difference. and to return to your good hypothetical, made it come true, but i do not see anything on the horizon that suggests that it will. so is the reality that they really face. >> we do have to recognize, and i am sure tim would point this out, we have employment today, something like 140 million. so when he says there might be a stimulus of two million, that is on a base of 140 million. it is still a relatively small person, but a small person could be a big deal in today's economy. >> as i was mentioning, even in today's economy, during an average year, jobs are created by employers that start and expand. that is equal to about 10% of total employment. so there are jobs being created and people thinking about creating jobs.

this works on the margin. it does not take a business that does not see profits and sees no prospect of selling additional goods and services and convinces them that a 15% wage subsidy will change everything. it takes a business on the margin of thinking about this, that may he thinking about expanding in 2013, and say, ok, this is something that will enable me to expand more cheaply. during the initial period, there are a lot of investment costs in hiring employees. so the question is, would you rather hire new employees when you can have some of those investment costs in a new employees covered by this wage credit program? which you would get if you hire in 2011 or 2012 under this. or if you wait until later, you do not have those investment costs and new employees covered. so we're talking about changing

the margin. you do not have to change very many decisions to make a significant difference in the context of the current job market. >> thank you. cliff, you talk about the need for an ongoing infrastructure for a public-service jobs. what would be the nature of that infrastructure, and you have any idea of the approximate cost of doing that on an ongoing basis? >> so public job creation programs are complicated programs to run. there's no question about that. and part of the challenge and the bad policy cycle we have been in over the years is that we get into a deep recession, unemployment spikes, paying gets too high, and only at that point do we get serious about trying to put people back to work. and we tried to do it very, very quickly. it is a pattern that leaves the system vulnerable to problems in

terms of the implementation side. on infrastructure, you know, it probably would come from the work force development system. it would need to draw upon the strengths of the workforce to belem is system. but it also would be strongly connected to community, because a key part of a direct public job creation strategy is about doing useful work in communities, and there is an enormous amount of useful work to be done in our cities and towns across america. when i was at the center of budget and policy priorities in the late 1990's, i wrote an extensive paper on work to be done to try and more fully fleshed out the very long list -- flesh out the long list of projects that would have a public benefit as part of that process. there are lots of relationships that need to be built to run an

effective public job creation program. you know, they have to be built, particularly between units of local government and work force agencies and nonprofit organizations that would be critical partners in this, and that is going to get better over time. it is this sort of thing where you see these pay off, both in terms of efficiency and in terms of effectiveness, when you stick with it. i think what drives me crazy about the public job creation and debate is the tendency to focus on the administrative challenges, and they're quite significant. but the and to use them as an excuse to abandoning the other prize. we typically do not do that in areas that we care deeply about. i spoke earlier about disaster preparedness and responding to national disasters -- you think about the kitchen and experience in new orleans. it was terrible.

it was -- you think about the katrina experience in your lives. it was terrible. we did not walk away and decide we were going to scrap the whole system of disaster planning. we walked away from that and said, we have got serious problems that we have got to fix. local officials and state officials rolled up their sleeves to try to figure out how to make it better so the next katrina will not have the same experience. whether you think about the space program are about our military efforts are anything else, you know, adversity on the implementation side just redoubles the effort to solve the problems in figure it out. somehow, you know, the jobs arena, that has not been the dynamic. the dynamic has been to pick out the often isolated problems in implementation and then say, we cannot possibly do this, throw up our hands and walk away. >> i have a question on this point. i mean, i am curious -- if

tomorrow, so if people watching this and congress says this is a great idea and let's do this. it is enacted next week. physically, from your experience with these -- easily, from your experience, what skills you think would be reasonable to talk about for 2011 and then 2012 for public service jobs? >> the scale would obviously grow over time. the first thing i think you do is go back to the emergency contingency fund structure, where we just cut off large numbers of publicly funded jobs because those funds were exhausted. so you turn that spigot back on and allows states like illinois, cities like los angeles, to get back up and running with what they were already doing. then i think you could quickly

put out dollars through a community development block grant formula. you could get this in four to six months with up to half a million jobs in place. >> how many in 2012, 1 million? >> i think so. the peak in the context of public service employment was about three-quarters of a million. i think we could go well beyond that with a focused effort. >> one program that i like which is a wage subsidy hybrid it was from minnesota in the 1980's. within three to four months, they had a scale around half a million jobs nationally. so i do think that you can do a significant amount of things, and i am glad to hear that you agree. >> the two bobs over here may have additional information on that. so i will take them in order,

from my left. >> one thing that concerns me in the proposals that you are talking about is, whether you are fighting long ago wars -- i heard you citing data from the 1970's, the 1930's, on things that worked. i will not dispute whether or .ot they worked back then the question is whether we're in an economy that is undergoing massive structural change and that these programs are not recognizing it. the other bob noted that construction has typically been a cyclical industry, and that its return is a sign of a return to the economy. sometimes cyclical taurines turn structural. will the construction industry -- sometimes cyclical trends

turn structural. will the construction industry turnaround? i hope so. but this is an unusual situation. we have tremendous cities of sparkling new houses that are entirely empty. the question is, are we actually going to see a return of demand for construction when we had this huge overhang, overstock of housing in the country? i think it is a serious worry. look at detroit bowling over neighborhoods as a way to try to grapple with their problems. the other serious structural change in the u.s., and i do not think we factored into it, and it figures into the points i have been making and figures heavily into these proposals. it is something that has been written up here by your colleague, who has noted that for the first time in u.s. history, we have passed the point where -- to put it simply,

there is no discretionary spending left in the government accounts at this point. everything from day one of congress is fully spend from the moment the walk in the doors. and if you are creating programs that rely on the capacity of government to fund them over the long haul, are you luring people into a promise you cannot keep? and perhaps, luring them into an industry for which there will be no more demand once you cannot keep a promise? i do not know the answers, but those are the living questions for me. -- those are the looming questions for me. >> i will refrain from responding. someone mentioned the magic word, public-service jobs in the 1970's. >> i will get to that. but first, you know, bob talked about how to get out of the housing situation. we certainly will market out of the by subsidizing more supply

of housing, which is with the low-income housing tax credit does. we have to shift it to demand- oriented subsidies. vouchers are one thing, but we're now in a situation where rent levels are quite high compared to the carrying costs of homeownership. turning to the public service employment, you do have to remember that in the 1970's part of the backlash against the public service employment effort was that there was massive substitution. a lot of that has to do with the fact that the early stages of the public service employment programs allow for quite high wages. it allowed for people who were just unemployed, so it did not really matter what the criteria

was. and mayors and governors, especially mayors, they love to the program, because they could simply expand hiring in not that different way than they were firing anyway. so then we try, in the late 1970's, to have a more targeted program, a program that limited wages. you do want to limit wage rates because you only want people who cannot get other jobs to take those jobs, and you want to maximize the number of jobs. as a result, the mayors were not so happy about that, because they found that, well, we cannot use our normal workers for that. well, of course. we did not want them to do that. i think you have the same thing today. i noticed that cliff said nothing about wages. wages are critical. how you set the wages critical. for an efficient program, you need relatively low wages.

but politically, in a letter made -- and a lot of major cities, people will be screaming. they will say these are starvation wages and you cannot support a family on them. ignoring the fact that when you have a wage, you can also get the earned income credit, which is a 40% a subsidy to the wage. you have to look at that. finally, i think that one of the lessons of the late 1970's was that there are a lot of de centralized ways of creating jobs. canada had a program called the local initiatives program, in which individuals and small groups could just fill out a two-page proposal mentioning how many workers they needed, what outputs that would create, and you had a competition. it created a competition. you had far more proposals then you had funds for, which is good. then you choose the best ones. you have a strong monitoring

program. and you have this bottom-up system that builds on the entrepreneurship of local organizations, of just people in communities. and you could get things running more quickly, and they can relate to neighborhoods and relate to people. and if you cut them off, that is one of the great things about it -- if they're not doing what they promised, you can cut off a few projects without cutting off the whole city of chicago. so i think we want to look toward those approaches as well. >> i know that cliff would like to respond. but while he is responding, i can bring up people for questions. if you raise your hand, our microphone people -- we will start at the front and move our way back on this side. >> i am delighted to hear bob's

comments. he described these sort of learning curve that i think the country needs to go through to be successful. there were some missteps in the early part of public service employment. by 1979, you had very manageable substitution displacement effect going on. the studies showed the range between 10% and 20%. there is always going to be some amount. my second comment about this also goes to comments about gaming systems and whatever else, public service employment is under a great disadvantage. a local reporter can go and see and what ever -- every attempt to incentivize or subsidize employment is going to have what he tim referred to as a dead weight loss. i refer to it as leakage.

leakage is enormous, but it is invisible. you cannot go and find a person who just pocketed that money and did not do a dime or reject the tax credit. on the public service employment site, it is completely invisible. whether you think about it in terms of cost per job created or in terms of leakage rate, the public job creation strategy compares very favorably with other approaches. so i think that is terribly important as well. and i love bob's idea about competitive the centralized structures. -- competitive decentralized structures. the only thing about that is i think it takes quite a while for the government to get a program of and running. so you need a fast track option that allows local communities to immediately dive in and do useful things. then you can circle back around and start to supplement that with more creative, competitive

structures. >> ok. the microphone will come to you, and please give your name and affiliation and a very succinct question. >> mark from a news service. i have many questions, but i will stick with one. well, two short ones. first of all, these ideas are all very nice. what is actually going to be doable in this next congress? the second one is for all of you. the job question is a two-part question. part is quantity. the other is quality. how do you make sure you are creating jobs that are not all hamburger flippers and walmart cash years? >> ok, quickly, each person -- and walmart cashiers? >> ok, quickly, each person.

go ahead. >> what is doable? well, who knows, given that a few weeks ago, i do not think we would have thought this $900 billion tax cut package was doable. these proposals are quite a bit cheaper. the net cost of the proposal that i am is pushing as $14 million a year. compared to this $900 billion tax package, it is a around there. in terms of quality of jobs, the job creation tax credit would support the whole range of jobs we have in the u.s. economy, different wage rates and whatever. in the case of public service jobs, if i am understand them correctly, since you're targeting freely disadvantaged groups, some of the wages are low, but you're taking groups at that are having a very difficult time finding employment, and

you're finding something that will help build skills and build self-confidence and lead to something better later on. it may not be as high a quality job as some people would benefit from, but it will be something that will hopefully move people for work. since he cannot fully integrate these programs and to work force developed -- since hopefully you can integrate these programs into work force development programs, hopefully you can assess whether this will fit and move forward in their labor market goals. >> the cost of my proposals are quite low. i think that the homeowner should voucher proposal could cost only about $-- the homeowner should about her proposal could cost only about $2 billion per year. if i had an offset in got rid of the lower income tax credit, i would save money. even getting rid of about half

of it would finance the program. again, it seems crazy to subsidize supply when the real problem is in demand. on the apprenticeship side, again, it is relatively low budget costs, and it is a human capital initiative. it would cost a lot less to subsidize a print ships than what we're doing now in the community college area, were you at community colleges that are burgeoning, unable to deal with these huge enrollments, at a gross cost of approximately about $10,000 per student. so i think my proposals could generally save money. >> very quickly, because we have got more questions in the audience. any quick response? >> the political feasibility, it is about as good as forecasting the weather. beyond three days, i cannot do a thing. one thread runs through all

these proposals that does concern me, another one. you may have detected the theme here. that is, i think all of them are really aimed at getting someone opportunities in the locality where they are at the present time. when of the dark secrets of homeownership is that it is highly correlated with unemployment rates. once you have that home, it is very hard to pack up and moved to a place where there are better opportunities. i think you can find the same with public sector job creation and with the job expansion credit. we have to ask the question, are we locking people into places where the jobs are not going to be in the long run? >> ok, that opens another door that we will not go through. we have one question here. >> i am with the total family care coalition. i think my question is directed more to it cliff johnson with regard to the public sector. my concern is if we are looking at the numbers of displaced

employees who have skills sets that could take on a trainer role, and then we look to the underserved where we're also looking at life skills training, my question is, how are you going to sell the cost of the program to the general public at large in a fractured congress, where it would look at cost in the long run compared to the price of the program off the ground? in the next part is, if we're looking -- why don't we take existing agencies within the government and having them allocate a percentage of whatever that budget is specifically to programs targeted maybe in five sectors of the country as pilot programs would really stringent evaluation tools and measurements? >> i understand the first part of your question to be coming back to the political feasibility question.

how do you sell its and sustain the cost? i would say that i think we're in uncharted waters. we're at the brink potentially of a double-dip recession. we are so far into this recession now and we have seen another bump in the jobless rate. we're not creating enough private sector jobs, even to give the jobless rate where it is in terms of the natural growth in the job market. so i think that as we get deeper and deeper and as the pain in communities across the country gets harder, i think it is hard to predict what you can sell. my political judgment about it would be that you start with what the low hanging fruit is, and you try and get some things and move in the right direction going. i would not expect that those would be huge at the outset. it is unfortunate. i think that is a mistake, but i think that is where i would

start. i think there are other ways to think about tapping existing programs. i think they are challenging in a timing perspective, in terms of the established costs and the claims on that the dollars that are already there and getting federal agencies or existing departments to do things differently. so i think there are some medium and longer-term things you probably could explore. but it is really hard to see how that is a quick response to the current crisis. >> there was a question in the back over there. >> i am michael with the daily labor report. my question was for mr. bob lerman. i was hoping to get more detail about the apprenticeship proposal. is it just a matter of increasing the funding to the existing office? or are you talking about something new? >> thank you.

i did talk about combining the expansion of the office to help market the program with a tax credit that would stimulate interest. and that would be appropriate. because remember, a lot of this work that is taking place at the employer's side is funded by the employers. part of that funding is for training that is specific to an occupation. part of it is general course work as well. i think that just as we fund community colleges and four-year colleges with an education component, i think the education component of apprenticeship programs should be funded through governmental help, at least in some ways. in the south carolina experience, is show that the provision of the tax credit generates interest by employers. and then you take that interest

together with added staff to help market the program to show them that you can benchmark your skills to a very high level. and you begin to generate a kind of self-sustaining efforts. we have data on employers who use the program, that they're very satisfied with the skills that they generate. i think that for too long in our human capital discussions, we have emphasized only the academic approach and not the skills-training, occupational skills approach. >> there was a question over here. >> thank you. i am edward. i write reports to washington, d.c., of voters. i want to ask cliff johnson about his idea for public service employment. i do not think i heard you say that these jobs would be time- limited, like 12 months, 18 months, and 24 months.

did you mean that? >> yes, i think any program of this nature would have to have time limits on individuals and their employment in a particular spot. >> and those would be firm? >> i think they would have to beat. that is an equity issue. any program had any scale would only have a certain number of jobs lost -- >> we leave this program to take you to the white house for a live briefing with press secretary robert gibbs. >> all right. [laughter] >> all right, i will leave the crickets and wanted to go ahead.

>> two top expert on the health care ruling, -- two topics. on the health care ruling, it has expansion of congressional power -- [inaudible] we invite unbridled exercise -- [inaudible] doesn't this invalidate the central argument of skeptics? despite tensions, you can not require this? >> i think there are a couple of important things for perspective. obviously, the administration argued on the other side of this case and disagrees with the ruling. i do think it is important to keep some perspective about the fact that they're now 20 or so cases making their way through federal courts. this was the eastern district of virginia -- 115 miles away, the

western district court of virginia ruled november 30 to uphold the same provision that the eastern district and its judge had ruled against. i think the other court, the eastern district of michigan, on october 7, ruled in favor of the law as it was passed. again, we disagree with the ruling. obviously, the individual responsibility portions of the affordable care act are the basis and the foundation for examining and doing away with insurance company discrimination on behalf of pre- existing conditions. obviously, without an individual

responsibility portion in the law, you cannot find yourself dealing with pre-existing conditions, because the only people that would likely get involved in purchasing health care would be the very sick. and obviously, that would be enormously expensive. >> given that it is so fundamental to the whole law and you have these two court rulings, is it clear to you that this will go to the supreme court? >> i am not a legal scholar. but i think it is safe to say that because there are several other cases in the pipeline -- again, you have court rulings that are 115 miles away. the bill will continue to have its day in court. even this judge ruled that the bill continues to move forward in terms of its implementation. obviously, the individual

responsibility aspects of this legislation were not to go into effect until 2014. so there's time to work this through. >> it is the white house confident that ultimately it will prevail? >> i think -- i have not been a lawyer in terms of the legal arguments. i would say that challenges like this are nothing new in terms of laws that have come before the courts in the past, in which our position has prevailed. we are confident that it is constitutional. quite frankly, of the three courts that have rendered decisions on this question, two have ruled in our favor. >> i have a question on the tax deal. there is talk about targeting

the state tax provision and changing language. is the white house urging the democrats in the house to do that? >> obviously, the senate is -- have avote on a procedural vote later on this afternoon. i think the president is encouraged by what we hear in the senate and believes the legislation will pass that hurdle. it will be one important step closer to passage. i am not going to get involved in a sort of what the amendment process might be in the house at this time. i think you have seen, whether it was in here on friday with former president clinton or whether you have seen just this morning, that this is something that has broad bipartisan support in the public. it is an excellent agreement on

behalf of millions of americans who will not see their taxes go up. those that are impacted in having lost a job in this recession will had the security of knowing their unemployment benefits will not fall victim to politics. and the middle class will enjoy a significant tax cut in the payroll tax portions of this bill. so we are encouraged that we get closer each day to having this agreement become law. >> can you talk about the initial reaction to the health care ruling? were you surprised by it? how concerned are you? >> again, this is the third federal court that has rendered a decision on this portion of the affordable care act. and two of those courts have

upheld it. that thee're confident affordable care act will be upheld. >> what is the next step? >> well, the department of justice obviously will have to make some decisions about appealing this particular case. my sense is that that appeal decision is something they will likely make, but i would point you over to them. >> larry summers given a farewell speech today at a think tank. i am wondering how the decision making is going on his replacement. do you still love to do that before the end of the year? >> you know, look, i will say that -- i am not sure if that is going to get done by the end of the year. obviously, a whole host of legislative -- lots of legislative work around the lame duck with the budget, taxes,

don't ask don't tell, the dream act. a whole host of things have taken up a bunch of time. it is unclear whether that will get done before the end of the year. >> it appears that one of the main reasons why the judge ruled this way is because the word tax in terms of the penalty for those who do not have insurance -- was replaced by the word penalty. >> i have not had a chance to read that. folks in here are taking a look at that as well as the department of justice. i don't have a direct response to the judges -- some of the individual reasoning in the judge's decision because i have

had -- i have not had an opportunity to look at that. >i am not doubt in which you are reading. i have not had a chance to read it. i have not had a chance to talk to counsel here about how they take it. >> was a mistake in retrospect to change the terminology? maybe you can get back to me? >> i need some time to take a look at it. >> can you get back to me on that? >> i will see if they can, yes. >> you talk about the two other cases where the judge ruled otherwise parted it is my understanding that those were democratic-appointed judges and in this case the judge was appointed by republican area is politics playing into any of this? >> i don't know the answer to that. the judge is clearly make

different decisions based on different points of reasoning. our belief is that the health care act will go forward and it is constitutional, that it improves people's lives and particularly this is the basis, as i've said, the provision that allows us to finally address the lingering discrimination against those who have a pre-existing condition. it also, by the way, your health care, health care, everybody who has health care in this room pays cost for the uncompensated care when somebody does not have health insurance. they might get into a car accident, becomes sick, and they end up going to the doctor for the emergency room because of

the seriousness of their illness and not having regular checkups are primary care. that is paid for by you and me. we seek to address that in the affordable care act. that is why the progress we have made in offering tax credits for those to afford to be able to have a minimum set of health care -- a minimum standard of health care that allows us not to pay for their health care in that sense and to get the health care they need. >> do you know what the president's reaction was? >> i have not seen the president since the ruling came out. >> what about the signature item for the president and the white house, does this continue to be challenged, is that a problem? >> i can't speak to the boa

motives. quite themember coverage when both courts upheld below. the law. sometimes when planes land safely, there is not breaking news. the congress -- the house is about to take off in january. do you worry that this ruling politically will help provide momentum for either starvation of health care locked for lack of funding or stronger action? will this politically be

ammunition? >> i don't because i think the position of those who seek to repeal the law has been their position both when court ruled against their position and when courts rule in a way that holds their larger position. i think it is important to understand that when you roll these provisions back or repeal, the impact of that -- if you are someone who cannot get health care because of pre-existing conditions, the guarantee that when this is fully implemented that you can do that, that will wipe -- that gets wiped away in a ruling like this. that is important for everyone to understand. >> given the signals that henry hudson has had in previous writings on this back in october, which you have been

surprised had he done anything other than what he did? >> i don't think the decision today and how he decided it was a surprise to anybody. i didn't go to law school like you did. you are in the front row of the briefing room, that is why. [laughter] >> i'm the only one part ie. [laughter] >> the president is a legal scholar and you said you have not talked to him. has he been keeping up on this and talking to the attorneys? does he get personally involved? >> not that i am aware what -- aware of with justice. in our regular meetings with him, white house counsel bob

bower will update him on where different courts are. not long ago in terms of the western district of virginia, that was something we covered. i don't honestly remember and i can go back and ask and see whether he has read where the release went. >> does he put in his two cents? >> not that comes to my memory but let me go flesh that out with others who may know. >> where we stand on the start treaty? will the president stay here until it is done? >> yes, to the second question. it is probably one of the next couple of pieces of business that the senate will move to not long after the procedural vote.

obviously, it is unclear yet the number of hours of debate after the procedural vote today before the senate takes up for final passage of the tax agreement. fairly soon after, the senate will move to the debate and start ratification. our belief, as you see a number of republican senators come out , that this is a treaty that has the votes to pass the senate. i believe it will pass the senate before congress goes home for the holidays. >> [inaudible] takes thems what it off until new year's eve, if that's what it takes? >> i am think the president is hopeful to spend a little time

with family and friends in hawaii. if congress is here, the president will be here. >> sounds like any chance of getting out this weekend is this >> i think you have a few extra days to pull together those christmas presents you put of biting. there is a decent amount still left getting out of here friday or saturday. that is not the days i would pick. >> what about "don't ask, don't tell?" >> i think the president will be in washington and the white house for as long as congress is in session. >> and did you see the john boehner interview last night? >> i only saw some clubs. ips. i don't have anything on that. >> you don't want to go there? [laughter] >> does the administration

viewed the mandate for health insurance as a tax? >> i am not a lawyer. we look at this on the basis by which we can address important issues like the discrimination against those who have a pre- existing condition. we look at it as how you deal with uncompensated care as a result of people going to the emergency room and everyone's health insurance going up as a result. >> the legal argument against this ruling seems to go against the ability of congress to issue a tax. >> as i said, i have not had an opportunity to speak on the merits of some of what the judge ruled. >> ceo's are coming to meet with the president on wednesday. what will he accomplished in that meeting? >> the president over the last

course of the last couple of years has had fairly regular intervals of ceo's in four meetings and discussions and lunches. over the past few weeks, the president has met with what i think you would consider economists on left and the right. he has and will have an occasion to have similar meetings with labor and discuss a whole range of ideas that are out there in terms of continuing our fragile economic recovery. if you look at something like south korea, the free trade agreement, i think it is an issue. there are clearly issues that congress is going to deal with and the administration will deal with where we share the opinions

of those in business as to how to expand our economy and create jobs and how to keep things going. >> in an interview on friday, it was suggested that his relationship with the business community is improving. what is your reaction? there have been some tense times between the administration and the chamber of commerce. >> one of the biggest proponents of the south korea free trade agreement was the chamber of commerce. whether it is individuals at the chamber or members of the chamber or whether it is ceo's who are members of the change or -- chamber or belong to other member -- other

institutions, it is important to the business community. it is important to getting our economy moving again. those are issues that the president is eager to work on vario. >> the administration is taking a legal position that the individual mandate lies in the power to tax. is that inconsistent with state political argument that taxes will not be raised a middle- class tax ? >> would you presume that you a pat -- that you pay tax on your health care? would you consider the $1,000 you pay as part of your health care a tax because someone who does not have health care is paid for by you? >> by not paying to the government. >> you are paying to the insurance company. >> the administration states that the individual mandate and

a penalty constitutes a tax. >> you went to law school, not me. we think, based on the rulings of two other courts and they believe that this administration that all law will be upheld. >> you said that you did not know if politics motivated the judge's decisions. you said you were not surprised by the result parade can you clarify that? >> it was mentioned that there were earlier writings that led most people to believe and understand this would be the ruling that he would make. >> the democrats are not saying this is democratic activism by a bush appointee? >> i am not rendering on that. some of what we have heard about this case -- 150 miles away, a

different judge in a different district rendered a different ruling. there are a number of different viewpoints on this. our belief is that when all the legal wrangling is said and done, this is something that will be upheld. >> on the tax deal -- there was a poll this morning that there was support for the tax compromise fairly evenly distributed with democrats and republicans. >> i tried to make a point last week. >> does the white house believe that his is not reflective of how the country -- how democrats in the country feel about this?

>> we sent out a statement from a number of people across the country that represent democrats, republicans, and in the patients, mayors, governors, governors elect. you heard in this room former president bill clinton. i think the notion that the view of some in congress is monolithic to the viewpoint of every person in the party, i did not think that fan and i am not surprised by the polling that shows a vast majority of people don't want to see their taxes go up at the end of the year. >> the protest was pretty loud about the passage in the house. what is behind a vast? that? >> that is a question for them.

>> what is your analysis? >> i think people are frustrated that as a result of a whole series of things, we find ourselves having to make an agreement that contains things that the president finds less than satisfactory. that is the nature of how this place works. again, i did not think last week that it was the model of the report of every person in the party or even every person in the progressive wing of the party. >> is the administration inclines to seek an expedited supreme court ruling on the health care matter? >> i will leave that to the department of justice who will make legal -- legal decisions on that theme on tax cut, why is

the president doing this a media blitz this afternoon with 14 news stations? >> i think the president is looking for more ways and more opportunities to talk to the american people about what he thinks is important and what is good in this agreement. i said this a lot last week and i will say again that if you look at the individual components of this agreement, they make sense economically. we are, by preserving the rate for middle-class taxpayers, we are providing them certainty not having their taxes go up at the end of the year. we are taking the politics out of unemployment insurance for the 2 million people who would stand to lose those benefits this year and millions more next two year that could see those benefits threatened. the payroll tax cut is important for middle-class families. it is obviously a tax -- you pay

taxes on social security of to $106,000 of your income. by reducing the amount an employee has to pay into that, that is money will be in the pockets of those middle-class families. this makes sense for the economy great it contains things the president does not like. it contains a much more of what we think is necessary and what we like them there is to dislike. >> how did you choose the city's better get the interviews? >> i know you are not a lawyer >> i've gooddart 3 hour. thrower. >> we picked several cities around the country we have animated discussions with scheduling.

i would like to do 14, not four. it is a good opportunity to talk to the american people. >> [inaudible] >> this is an argument we had a scheduling. >> where their members who are undecided? >> i have really had discussions about that. they're not picked because of that. >> the afghan review was coming up this week. what is the outline? is there a fire nsd meeting? >> the president's regular monthly afpac review meeting will be tuesday, tomorrow morning at 11:00 a.m. as it is scheduled now and the situation room. -- in this situation room. the president will make a statement on thursday and there

will be a public release for the december review. that will happen on thursday. i think it is our hope that after that we will have in here, schedule permitting, secretary gates and secretary clinton and others to take some questions on the review. >> should we accept any broad changes? >> i don't want to get ahead of all the meetings. as you have heard the president say on his most recent trip to afghanistan, i think we are seeing some progress. we still have, and i think you know many of them, we have many challenges in both security and governance.

we have progress and we have challenges. that is something that he has talked much about what we go into these meetings and the situation room. there will be another meeting before the review is released so i don't want to get ahead of where we are on that. i think the president feels confident that we are on track on where we should be and that we can certainly meet our commitment to begin a conditions-based drawdown of our forces next july. >> [inaudible] >> there are different aspects and drafts of this which he has seen. tomorrow is the normal meeting that generally takes about an

hour and a half-two hours. some part of that will be based on the review and some of that he will go through in his briefing, some of what has been talked about it will be the review and the weekly. >> is that he gets from commanders and ambassadors. >> will there be a meeting just focused on the review? >> there have been a number of those and that will be covered in tomorrow's meeting. >> presidentkarzai was quoted as saying heavy had close ties to choose from, he would choose the taliban. >> i have not heard that. >> is the vice president and active part of the discussion? >> i think a number of people having discussions with members of congress, the president is discussing this with members of congress.

i think that the subset of people is likely involved as well. >> about the health care fight, when you have a full plate of things you want to accomplish in the next two years, much of a distraction is it to keep litigating the major fight the last two years at the same time? >> people challenging the constitutionality of different laws is nothing new and nothing bad is unexpected. -- nothing bad is unexpected. is on it tha nothingt -- nothing that is unexpected. >> how could you stay confident?

>> i think we have a good argument on health care. the merits of the case are strong. i think it is -- i think it's constitutionality will be upheld. >> the house democrats have said they cannot vote for the laggards as it stands. -- for the language as it stands. as the president brought some kind of change of language that might be proposed? >> again, the president talked with members and heard their concerns. i do not know of anything that would fit the requirement you just mentioned about the language being changed. >> is that being kicked around? >> the biggest changes that we have seen in the agreement is the addition of the energy

credits for production. that is the basis by which the legislation is written that will be voted on by the senate. >> on the senate vote this afternoon, what will you take from that? >> i think this will give you a sense of where people are in the overall agreement. i think there is broad bipartisan support in the senate for this. i think there is clearly broad bipartisan support throughout the country on this. i think and believe that will be reflected in vote voted that the senate makes. >> [inaudible] word is the dream and "adon't ask, don't tell stand?

>> there is not a list of things. there's a series of things the president believes are important and can be done this year. i think the senate is likely, not long after taxes, to the start ratification trade. ask, don't tell and the dream act and government funding are a vast bulk of issues that will likely come after that. there is judicial nominations. there is senate confirmations. this is not an exhaustive one. >> there is a considerable likelihood on the tax bill that speaker nancy pelosi will no.

that may be the first example of a major legislative initiative where the president and she had been at odds. >> i have not spoken to the president about that. i have not heard a lot about the vote counts in the house. the first procedural hurdle will be encountered this afternoon in the senate. that is where a decent amount of our energy has been directed. the president has reach out and talk to individual members of congress. each will have to evaluate what they feel or how they feel about the agreement and whether they think it is important for the economy. >> trying to convince her or vice versa? are there ongoing conversations? >> i don't know when the last time was . >> bernie sanders had a lengthy

filibuster on friday. there was a sense there would be personnel announcements for the administration prior to christmas or the end of the year. you say that is not likely to be announced? [no audio] >> most of the s will get pushed over -- most of this will get pushed over. what you said about bernie sanders, the president would be the first to agree that there are aspects of this that he does not like. he has said that before. our preferred method was to make permanent the middle-class tax cuts. the votes were not there in the senate to do that.

rather than threaten our economic recovery, the president believed that this bipartisan agreement was the best way to go. he respectfully understands the frustration of those who have a different viewpoint on the agreement. at the same time, he believes it is important for our economy, middle-class families, and important to get it done. >> well the president directs the senate to stay in session all longer on"don't ask, don't?" >> i think they will be in session longer anyway. based on the votes last week, it is clear that a majority of the senate supports the president's position of doing away with " don't ask, don't tell."

our hope is that the senate will take this up again and it will see this done by the time the year ends. >> the litigation in court challenging the constitutionality of "don't ask, don't tell," do they need to pursue liberal -- litigation to take this off the books? >> one of the two entities, either congress or the courts, will repeal or do a way with" don't ask, don't tell." the best way to do it would be to do it through congress. the house has passed that legislation and it is clear that will more than a majority, a little above the majority of u.s. senators believe that is the case as well.

i think we are closer than we have ever been to make a repeal a reality. >> the president is staying in town until the start treaty is done. will he stay and down for"don't ask, don't tell?" >> the president is not leaving. he will be here as long as the congress is here. >> he pledged that to stay in town until the start treaty was done. >> we envisioned that if the congress is here, the congress would be here. there is a whole host of important things beyond the tax agreement and starts ", don't ask, don't tell" being one of them that the president believes can be dealt with before congress least >> town. if the legislative effort fails, are there other options on the table?

>> i think it is a distinct possibility that "don't ask, don't"tell will be repealed by the end of the year. >> the american legion opposes legislation that would open up -- can you come back to me, robert? >> you can go ahead. >> thank you very much awho. >> ah! >> the american legion opposes legislation that would offer of 2.1 million illegal aliens amnesty by meeting educational or military requirements. well the president of by the legion on this or try some sort of compromise? >> i think the president understands the viewpoint of the american legion but is also

getting advice from military commanders and those in the department of defense that the legislation is important and believes it should be passed. >> what is the white house reaction to what was reported as a ralph nader statement -- "the president has no fixed principles. he is opportunistic. he is a con man. i have no use for him." what is your reaction to that? that was reported >>. we have had that discussion about what people report and what is true. >> are you saying it is not true? >> i don't know when the last time i talked to ralph nader was. i don't have a specific comment to that. the presidents of viewpoint is that we have to make decisions each and every day and he

makes decisions every day and was in the best interest of the american peop and of this country darien >. >> last week, during his special comments, keith olberman compared the tax agreement nazism. >> i doubt the president heard that. i have given a number of answers that would the note that we think it is a good agreement. i would say this to democrats or republicans -- whenever you compare anything to what the nazis did, if you ever get to that point in your speech, stop, because nothing does. hopefully, god willing, nothing ever will. >> over the weekend, sarah palin

visited haiti. she told reporters that she thought anyone who was considering giving aid to haiti should go down there first. >> let me look at what the statement is. obviously, our response to the earthquake in haiti was and has been the setting a disaster of that magnitude. our response has been of the forefront of all the international response. >> finally, [laughter] [inaudible] >> i don't have a reaction.

thanks, guys. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> you are watching c-span, bringing you politics and public affairs every morning "washington journal," a live call-in program connecting with elected officials, policy makers and journalists. during the week, watch the u.s. house and the transition to the u.s. congress prayed every night congressional hearings and policy forms and supreme court arguments for it on the weekend, you can see our signature interview programs. on saturday, the communicators, and sunday q &a.

you can watch our programming any time as c-span.org. cspan, washington your way, a public service created by america's cable companies. >> tonight, federal trade commission chairman john leibovitz on fcc recommendations on how to handle online privacy and potential do not track technology. that is at 8:00 eastern on c- span 2. this sunday at 6:3930, c-span will air supreme court justice elena kagan said the first interview since joining the corporate talks about how technology helps her manage her oral argument legal brief. the interview was conducted inside your temporary chambers here is a brief look. >> justice scalia as taken to putting his comments on an ipad. >> ki have adle that much -- a

have akidle -- a ki i have adle -- by havea kindle that my briefs are on. it is endless rating. in many of these cases, not only do the parties submit briefs, but there are many, many organizations and individuals and governments who are interested in the case and they will submit friend-of-the-court briefs. some of these cases, there will be 40, 50 briefs. there is a lot of reading. that is a big part of the job. if the kindel or ipad can make it easier, that is better. >> that was a portion of her

first interview since joining the nation's highest court. you could watch the entire interview on sunday 6: 30 or 9:30 here on cspan. >> just in time for the holiday season, the supreme court, cspan's latest book is being offered to viewers at a special prize, $5 plus shipping and handling. that is a discount of more than 75%. this hardcover edition is the first book to tell the story of the supreme court through the eyes of the justices themselves. 10 original cspan interviews with current and retired supreme court justices including john roberts, steven briar, sandra day o'connor, and sonia sotomayor. this gives readers a compelling view of the modern court rich with history and tradition with 16 pages of photographs detailing the architecture and history of the court's landmark buildings. a handsome addition to the bookshelf of any non-fiction reader. to order copies at this special

price of $5, a c-span.org go to/books and click on the sea is badbook. place your order by december 15 to receive your copy in time for holiday gift-giving. >> house majority leader senate -- steny hoyer says he expects this tax cut agreement ending in the senate to pass the house later this week despite opposition from house democrats. speaking at the national press club, he said he hopes congress will complete action on federal spending for the remainder of the budget year. he is introduced by the president of the national press club. this is about one hour. >> our founders made a

revolutionary choice. they created a government that was bound every two years to listen to the people's verdict. we should listen to the people all the time but the verdict we must listen to every two years. that accountability has been a great source of our strength. it has been also a source of our greatest test as a people. no form of government is more demanding than ours. that is why benjamin franklin calls our government a republic. if you can keep it. this makes the community into a nation. this tempers' partisan warfare and calls us to look forward into the future rather than just the next two years. our form of government demands

leaders who are fearful losing the next election and therefore, consent of the will of the people but are not consumed or immobilized by that fear. our politics may run on two year cycles but our problems do not. we want to get to full employment in two years. we won't get out of debt in two years. we will not get the middle class out of this historic hole of inequality and lost opportunity in two years. in two years, there will always be another election. there are easier ways to win than taking on the long-term structural problems that defy quick answers. it is easier to borrow and leave someone else with the bill. it is easier to rail against spending without cutting anything of substance. it is easier to stir up culture wars and cultural resentment.

all of those tactics have proved successful but they are also poisonous to our future. what a republic needs is leaders who are willing to look further even if it costs them. in 1993, congress voted for the clinton budget and it cost marjorie margolies per seat. that budget helped create 27 million new jobs and the biggest surplus in our history. history proved her correct. it cost her her seat. i believe that history will do the same for many of my colleagues in the 111th congress who made political sacrifices to what dick -- to do what they believe is right. our form of government also demands sacrifice from its citizens, not just in times of austerity, but in all times. it demands citizens to see

through politicians promising everything at once. it demands citizens to understand that contrived drama of the news cycle is trivial compared to the slower, more profound cycles that shape our future. the cycles of educating each new generation of children, invading technology that inspire new innovations in turn, or struggling to bring our nation's focus into balance. when we look at last month's elections, we see a great deal of anger and fear. much of it was warranted. that anger can be valuable, to push us to challenge america's deep challenges but not the pushes us into two more years of zero-sum warfare in washington. that anger must be tempered and i believe it can be. america is not convinced that either party has all the answers.

on november 2, i believe the voters called on us to find comm ground. on real solutions -- to find common ground on real solutions. problems like unemployment, economic growth, and deficit and debt reduction. we need to seek common ground. november 2 was not a victory for the democrats. republican senator elect marco rubio in florida was correct when he said that we make a great mistake if we believe that tonight these results are somehow an embrace of the republican party. they were results from a public that wanted us to share responsibility, to find common ground on our common problems, to put forward a domestic agenda that thinks in terms of decades, not election cycles or news cycles. i believe that the agenda must be founded on job creation, the strength of our economy, and are middle-class and real fiscal

responsibility. when it comes to jobs, i think there's a growing recognition on both sides that manufacturing must be a part of a return to long-term strength. both parties understand that manufacturing is one of the most important sources of well-paid middle class jobs. both parties understand that manufacturing has taken a severe head over the last three decades which sought a number of american manufacturing jobs cut nearly in half. both parties recognize that reversing that trend is a critical part of being the kind of nation we want to be. we want to be a nation of innovators and producers. in nation that compete and win and the global market and keep building so much of what makes the world run and happily, the world wants. those goals are behind, as you have heard me say in the past,

to make it in america agenda. a plan to rebuild america's manufacturing strength. the agenda has been an issue by democrats, is the agenda that appeals to the broad spectrum of americans who see themselves as principal the pragmatists looking for policies that work for themselves, their families, and their country. in the 111th congress, republicans and democrats were able to line up behind helping americans and investors get their products -- inventors get their products to market faster making it cheaper for american manufacturers to obtain the materials they need to produce goods, helping veterans find jobs in the growing clean energy sector, and more. labor unions and business alike joined to support our manufacturing agenda. they share an understanding that it is not enough for america to

innovate new technologies. we have to bring them to scale here in america. that is, it is no longer enough to simply invent and innovate and developed here and then watched our ideas roll off assembly lines in other countries. that pattern has cost jobs and hollowed out our communities across america. because innovation eventually follows manufacturing, it has set us back on a range of products that would be vital to the 21st century economy. everything from computer chips to precision optics to electric car batteries. the founder of intel said that if you continue to manufacture overseas, assuming your inventors and innovators will follow and go overseas. both parties have an interest in

changing that dynamic. i am hopeful that we can make progress on the manufacturing bills in the next congress. we want to strengthen job training partnership between workers, businesses, and educators. that will help match job training programs to the jobs that manufacture a boat -- most need filled. their bills to support american exporters. we want to hold china and others accountable for the unfair subsidy it gives its own companies through currency manipulation. the creation of an environment in which manufacturing job growth is both desirable and profitable should be a joint responsibility. job creation will still be the measure of success in the next congress. we will also need a congress committed to investment in the economic fundamentals and growing our middle-class. from that perspective, i think the outcome of the tax

negotiations between president obama and republicans is next. on the one hand, i think that extending unemployment insurance and cutting payroll taxes and keeping taxes low on people under $250,000 will grow the economy and help families in need and create jobs. i simply do not believe that the deep debt that comes from the republicans upper income is worth the minimal impact on job creation. those cuts, in my view, harm our long term prosperity with little short-term gain in return. they are found on the fiscal picture of the billions included where it will have a positive effect on job growth. that is why this deal is giving democrats some pause. having said that, i think action is necessary and compromise was inevitable. in the next congress, we have to move beyond emergency measures

of the recovery act. that helped stop a depression. it is now time to invest in the fundamentals of long-term self sustaining growth, growth that is not founded on debt. i think the investment manager, jerry grantham was right when he said growth depends on real factors. the quantity and quality of education, work ethic, population profile, the quality and quantity of the existing plant and equipment, business organization, the quality of public leadership, and the quality, not quantity, of existing regulations and the degree of enforcement. should beligence invested in real lasting growth will determine whether we made our goal of emerging from the recession as a stronger recession -- as a stronger country. there's another reason why a margin to measures are not

enough. the state of our middle-class -- even if our unemployment rate were instantaneously sent back to the 2007 levels, we would still be a country with a declining middle class. we would have levels of inequality we have not seen in nearly a century. that is an issue. about which all of us should be concerned. the middle class was struggling long before the crash hit. since 1980, in actual dollars, the average income of the bottom 90% of americans has not budged. over the same period, the wealthiest 1%, has controlled nearly all the income. the republicans are going to the mat for a high estate tax extension.

that will benefit only 39,000 american families. we need to promote smart growth that lifts the middle class. whether we reach that goal depends on whether we have the discipline to make and sustain a long-term commitment to making things in america, make it in america and promotes science and education. if we have the discipline, we can find common ground investing in outstanding education and basic research. that is the kind that companies have little economic incentive to perform on their own but can turn a relatively small public commitment into the enormous dividends. as we remind ourselves, any time we use the internet, a computer now -- mouse or gps, all of which were substantially enhanced by government investment in basic research. this commitment should not be a

partisan one. even though the ones by this partisan -- even though the bipartisan act failed, i am hopeful that the equation can change now that republicans share responsibility for our growth. that is especially likely when republican business allies remind them of the dismal economic outlook for a country whose investment and research in developments is a fraction of the economy continues on a four- decade declined. . we are on pace to be overtaken by china and have fallen behind japan very we are a country whose cake tester of achievement -- continues to rank at the bottom of the developed world. 25 out of 34. that is simply unacceptable. it should be an especially loud

wake-up call. students in chinese school systems continually out this american students on that same assessment, scoring 20% higher in math and 15% higher in science. i am hopeful that the one of the 12th congress will see a stronger commitment to basic research and math and science education. i also believe we can find common ground on education reform that builds on the successful race to the top to bring more accountability and data-driven results to our classrooms while at the same time providing the necessary support to schools and teachers educate our most [inaudible] population. this commitment is the foundation of a stronger, more competitive middle-class. it also is the foundation of

real economic growth and of the new jobs we need. in fact, according to a study from the third way, if our economy grows by 2% instead of 3% per year over the next decade, that difference will translate to an unemployment rate seven percentage points higher. that is simply 1% difference in our gross domestic product. another area of common ground goes to the quality, not quantity, of existing regulations. congress needs to take a serious look at our international competitors regulatory policies and ask how they contribute to job creation. they need to look at the quality of our own regulations, to what extent of the regulations we have protecting the status quo and to what extent are they hindering innovation? are there places we can make it easier to start to do business

and easier to grow them by simplifying and streamlining the regulations we have? all of us have heard the cries for help from those who would add to our country's free enterprise but feel frustrated by the government hurdles that confront. democrats must stand ready to work with republicans and vague with us on research, education, reform, and streamlining regulations. there are some core principles on which we should not and will not compromise. expecting and ensuring that the help of all people and our environment is safer. and protecting our consumers from unfair practices that put them on knowingly at great economic risk. the rules we enacted for wall street were necessary to curb the irresponsible and unchecked actions that led to the financial crisis. these rules will protect jobs

from another devastating crash. they moved our economy away from the damaging cycle of bubble and burst, toward a pattern of more and consistent steady growth. for the same reason, we will protect americans control over their health care. it puts our companies on a more equal footing against international competitors who benefit from lower health-care costs. it frees potential enterprise to start businesses on their own without worrying about losing health care coverage and it brings more fairness to the lives of middle-class families who for years have paid more and more for less and less secure coverage. it is coverage that has often failed to be there when they needed it most. in both cases, democrats have worked to create rules for fair play that protect and promote economic growth. if democrats want to be the party of the middle-class

security, we must also be the party of growth. we have built a remarkable network to make american life more prosperous, more dignified, and yes, more secure. from social security to health care reform. if we want to keep that never in place, especially as our country ages, we cannot neglect or devalue the importance of strong economic growth which helped those progress and stay viable. along with opportunities, we must also recognize obligations. and limits. if we are to protect the american opportunities for the long run and maintain america's place in the world, we must find common ground to restore

that makes it harder to get a college education, to start a business, to buy a house, and to plan a future. no other issue also strongly for leaders to understand the importance of hard choices and hard truths. no other issue call so strongly for citizens who know what it takes to keep a republic. the wise sacrifice today that helps our children prosper tomorrow. i am heartened that the president's bipartisan fiscal commission put forward a provocative, challenging plan on debt, plan that needs to be at the center of our national conversation. the commission plan, along with plans released by the bipartisan policy center and the center for

american progress as well as others is a compelling summary to a realistic embrace of responsibility. reality tells us that we must address of spending and revenue. certainly, very very soon. we have to reform entitlements to keep them solvent for future generations. that should mean some combination of raising the retirement age an exemption for americans who cannot work as long do to physically demanding jobs, raising the social security income cap, making social security more progressive, and sticking to the cost-control provisions we passed in health care bill. medicare and medicaid, we have taken some actions but still require substantial intervention. we must review discretionary spending including defense. defense spending is now higher than in any year since world war

ii, and has exploded by more than two-thirds since 2001 without even counting the money spent in iraq and afghanistan. the secretary gates has said the pentagon's culture of endless money is not a grave threat to our military strength and national security. no discretionary expenditure show go untested for need and effectiveness in the future. finally, we are going to have to raise revenue, which can be accomplished as suggested both by the obama commission and the commission formed under president bush, by simplifying the tax code and reducing both rates and tax preferences. a simplified tax code can save families and businesses precious time, unleash economic growth, remain progressive, and help reduce the deficit. president obama has indicated he

has given tax reform serious consideration. i would urge him to do so, and to move in this congress on that issue. he has my support and i hope that is an area where we can make bipartisan progress in this congress. in the realm of fiscal discipline, more than any other, our economic future rests on our ability to find common ground. we have done so in the past. we need to do so in the future. if we continue to see the future in the two-year increments, however, each party can commit the demagogue of this congress until reject that crisis would make even more painful choices even more painful. the challenges are daunting. i have spoken to many americans, and not a single american believes they are beyond our ability to solve.

if we have the will and courage to do so. we have the toughness and ability to overcome far worse, and we still have those qualities in america. what i hear more and more, however, is the doubt that our politics are equal to or challenges. it is at base a doubt that we still know how to practice civic virtues, the self discipline that guides us through revolutions, civil wars, and depressions. in the face of almost 10% unemployment, staggering debt and a historically struggling middle-class. we spend the next two years -- if we spend the next two years in squabbling and positioning and in trivialities, we will have proven the doubters correct at a terrible cost to our children and to our country.

when ben franklin reflected on the difficulty of keeping republic, he was not indulging in bonn pessimism. he was challenging us. i still believe, and i think americans believe, that america has a people equal to the burden of self-government. in hard times, i believe the government was founded on exceptional principles, but i also know that our exceptional islam is not a birthright -- are exceptionalism is not a birthright, and has to be fought for and one in every generation. that fight is going to define the years ahead. not a fight between nations or between parties, but a fight to live up to the grave responsibility placed on everyone of us by our precious form of government. a free people, a democracy, no

matter who wins the next election, or the one after. that is the fight we must win or lose as one. thank you very much. [applause] >> and thank you very much for your time. we are now in the question and answer portion. if you could identify yourself and wait for the microphone to a arrived. we have mr. robert wiener. >> think so much for coming to the club. it's a real honor to have you. the president rammed it up and decided to be the host of the event.

>> he is the present president, right? >> that is true. you mentioned the fiscal commission's provocative report. they and many republicans and the media do not acknowledge that social security is solisolt and paid for 32037, and 25% short even at the most after that. it does not contribute a dime to the deficit, even on paper. it is not anything the deficit commission can take advantage of, other than taking money from it. how did social security become the symbol of saving the deficit and doing something, instead of the real cost of our iraq and afghanistan, tax breaks for the rich, and will democrats and the congress as a whole resist the

sound bite to save the budget by cutting social security? >> first of all, let me say that social security ought not to be look debt as a way to reduce the deficit. your point is well taken. however, at the same time we need to make sure that social security is not only solvent through 2037 but solvent for future generations. therefore we must address its solvency within its own construct. that is what many have said. there are many ways to do that. frankly, social security is much easier to deal with an medicare and medicaid, which as i pointed out is a much greater challenge in terms of cost. you mentioned as well the expenditures we have made without paying for. we have fought two wars and incur about one trillion dollars, none of which has been paid for. has all been borrowed money.

when i said the civic virtues of self discipline, we need to make sure that we pay for what we buy. therefore, we included in our budget and statutory pay-go. i think that was a return to what we did in the 1990's and discipline ourselves in terms of expenditures. i think we need to continue to do that. what i have said, in the short term, in an economic downturn, it cannot do that, because what you need to do is to give stimulus to the economy, and you cannot depressed it at the same time. therefore, you need to incur debt at times of economic stress. however, we incurred great deficits at the time of economic well-being. that has been a problem we confront today, but your point

that social security is clearly something that democrats are going to make sure is in place, is insolvent, is there for future generations, will not be privatized, and toby as generations have had it to rely on -- and will be as generations have headed to rely on in their internaretirement. >> i am with the campus radio for george washington university. the media has portrayed the new freshman class as being members of the tea party. you mentioned in your speech that you hope to reach across the aisle and work with the republicans and conservatives in congress to get things done. my question is, how would you plan to extend the democratic --

the way of making laws in the democratic process? how do you extend that to the tea party? >> there are a lot of discussions within the tea party -- it is not a party in the sense that we know it. what we need to do as republicans and democrats is come together and understand that these are pragmatic, difficult problems that confront us. not it logical problems, they are practical problems -- not ideological problems. it has been done before. ronald reagan sat down with tip o'neill and addressed social security ronald reagan and his people came together with rostenkowski in 1986 and passed

the tax program that lowered rates and reduced preferences. i think we can do that. the demands to do so are compelling and immediate, and i am hopeful that members of both parties will come together and do that. i certainly intend to work with john boehner and mr. kantor and mr. mccarthy, all of whom i have talked to about this effort. i do not know most of the new members to have come on the republican side. there are many more republicans, but let me say this. i have been in politics or a long time. in 1964, long before, maybe for your parents were born, or maybe not quite. in 1964, it was reported that republican party was on life-

support and may not survive. lyndon johnson had a huge victory. in 1968, the republicans won the presidency. in 1972, the democrats were assessed as being almost gone. we had one wondered used states and the district of columbia -- one or two states. the president one the 1970 elections and resigned in one of the biggest political crises that confront our country. it goes back and forth. in 1994, the republicans won a big victory in the house. in 2006, 12 years later, we won a victory and a large that victory in 2008. what is my point?

i point is that both parties ought to get the message that if you are not doing the right thing, we are going to change horses. i think the american people want us both to work together to solve problems. our real problems are not ideological left and right problems, but problems that they see in terms of their jobs and the debt that confronts the country. those are the two major -- issues in the election and we need to address both. >> what changes do you plan to make in the tax bill before bringing it to the floor, and do you expect ultimately that it will be passed and sent to the president to sign into law? >> the answer to the second question is yes. the answer to the first question is, i want to see what the senate passes first. they are going to pass something

and bring it up on the floor tonight, as you know. and perhaps pass a bill some time thereafter, either late tuesday or wednesday. we will address that bill, and as i said in my speech, i have real concerns that the suggested tax cap on the upper- income returning to 2000 levels only, where the economy during those times did very well. as a result of the republican tax program, they subsidize the tax cuts and that they will be reinstated in january. i think reinstating those for middle-income people would have an adverse effect on the economy and of not to be done. i do not think it would have an adverse effect on the upper income, nor do i think the

change in the estate tax that is recommended will add $700 billion, but actually more than that when you consider both. the cost of that will be justified by any increase in the economic stimulus. there is much consternation in the house about the estate tax. i expect there to be some consideration of that. last december we passed a $3.5 million, 45% rate which has sat in the senate for 12 months. i think that is unfortunate it has sat there, because my republican friends raised correctly the issue of certainty, whether it is estate tax, business taxes, or personal taxes. certainty is a stabilizing, productive facet of our tax system.

we will see what the house will do on that. it will go to the rules committee and the ways and means committee will have some input to that when the senate bill comes to the house. we will see what action they take. >> [unintelligible] mr. axelrod said he does not expect any significant changes in the house. >> the issue there is what is significant. we passed a $3.5 million estate tax at a 45% rate. of proposal is for a 35% rate. there certainly seems to be some room for a change, which may or may not be perceived as significant. it seems to me that the statement begs the question.

>> i have a follow-up question about the estate tax. he said it expects the tax-cut bill to be approved and sent to the president. are the house democrats willing to stop it, to go all the way to the wall over the estate tax issue? >> what i have said repeatedly and with the president and what president clinton said is that i think the president believes, and i believe, that increasing the tax load on working americans at this point in time, on january 1, would not be helpful to continue to grow the economy. as a result, we do not want to see that happen. in order not to see that happen, you need to get a bill through congress.

we are working on that. the legislative process is a process of give and take, and i think that is going to occur. >> i just want to be clear on what you are saying. you are saying you will bring whatever the senate passes to the house floor, but that you'll expect some sort of estate tax amendment? do you expect that to happen this week? my other question is, is this about letting your members vote against the estate tax provision as worked out between the president and senate republicans, or is this about actually wanting to change it and send it back to the senate where they would have to take it up again? >> i think the members believe there is a compromise available.

when and if the senate sends us a bill, which i expect will be hopefully earlier than later this week, i think it will be referred to the rules committee and others who will have an opportunity to suggest amendments to the senate bill, and then the rules committee way what -- may well report out that bill with an amendment. if they do so, we will have boats on those amendments. the process has not happened yet, as you know. you had another question, i think we will pass a bill. as opposed to simply not passing anything. >> i guess when you say that compromise was inevitable, what i am not getting is that it

sounds like a number of members in your caucus are going to have to take something, take a hit here. you say we have to see what the ways and means committee and the rules committee works out. at the end of the day, it sounds like somebody is really taking a hit here, and it sounds like the liberal wing of your caucus. >> i think the country may take a hit. i think that is our concern. the country is in deep debt. the american public is very concerned about that. this is no simple way to reduce that debt. it will take contributions from everybody, but certainly our caucus believes that the wealthiest in america need to help pay the bill, and they are helping pay the bill. they did that in the 1990's when we had a surplus. we do not think the proposal

dealing with upper income or the estate tax are useful in trying to get a handle on our debt. taking a hit -- everybody in the legislative process takes a hit. according to charles scott hammer, the republicans took a big hit. the legislative process is usually a process whereby says g., did not get everything i wanted. my experience in life, i have not gotten everything i wanted. that is life. that is the way we work with one another. when my wife was alive, i would want to go to this movie and she would want to go to that movie. sometimes we went to her movie and sometimes we went to my movie. that is the way life is. >> if as expected the senate

returns a strong vote in favor of the existing legislation, does that make it more difficult for house democrats to amend it, and will you and the speaker bring the bill to the floor even if it is apparent there is not a majority of house democrats in favor of it? >> i do not want to anticipate there will not be a majority of house democrats. they may not be for the senate bill as it comes over, but they will have an opportunity to give input and we will have to see what the rules committee reports out in considering the senate bill. the speaker and i have indicated that we want to make sure that middle income taxes on working americans do not go up on january 1. i do not think that is a positive effect on the economy. furthermore, speaking for myself

in terms of the stimulant effect, surly in the short term, of both payroll tax reduction and unemployment insurance, which every economist says is one of the biggest spurs to the economy that you can have are absolutely essential. unemployment insurance i think is a moral imperative. we have millions of americans who have lost their unemployment insurance through no fault of their own, simply because there are no jobs available. there are five people looking for every job that is available in our country and they simply cannot get jobs. we need to make sure they can sustain themselves during the time while we try to bring back the economy so there are jobs available for those folks. there are a lot of things in this bill that we want to see past picket we are obviously having an argument about some other aspects of the bill. that should surprise no one who

has grown up in any kind of family. the only time you do not have disagreement -- and i have disagreements with myself a lot of times. i think we are going to have a vote on the senate bill. and with possible changes. i want to make that clear so you don't have me -- we may have it with amendments. we will see what the process is. furthermore, we have not seen the senate bill yet, so it is hard to comment on exactly what we are going to do with it. >> you mentioned the fiscal outlook, including the idea of urging president obama to take up tax reform in the next congress. can you expand on that, and

where is the optimism for dealing with these issues coming from? one could argue that in 2006 you guys to the house because of social security reform and then in 2010, the republicans to the house because of health care reform. if entitlement reform means losing politically, where is the appetite? >> i don't know that i agree with your premise either on 2006 or 2008. what happened in 2006, the american public felt that the rick -- the policies of the republican party and george bush were not working, and they wanted a change. they voted for change. in 2008, they voted for change again. in 2010, i think what they voted gst.was out of great annexe

they did not believe the policies that had been put forward working. that also happened in 1994, as you recall, in policies from the public's standpoint that were not working. the idea explosion facilitated --i.t. explosion was facilitated with the economic policy of 1993. i do not accept your premise about the election turnout. as your specific question, i have long believed that tax reform was essential. the last time it -- the last time we reform taxes in a significant way, rather than simply raising rates, was 1986. we focused on trying to bring a

handle on preferences and reduce rates. i do not want to endorse proposals that were made, but i do endorse enthusiastically reducing of preferences so that people are making decisions based upon their business judgment, not on their tax judgment. i think that would be very helpful to our economy. and i think it would spur economic growth to reduce rates, which reducing preferences will allow you to do. both are essential if we are going to balance the budget in the next generation. it seems to me the only time you can really do that is when you

can get bipartisan participation. very difficult for one party or the other to take a stance that we are going to try to make the medicine go down easier than it otherwise would. these are tough decisions to make, subject easily to demagoguery. therefore, you need bipartisan participation. when ronald reagan and tip o'neill agreed on social security reform, and ronald reagan and dan rostenkowski agreed on tax reform, it was relatively easy. if you do not have bipartisan agreement -- i am hopeful that the chairman and to be ranking member can work on this effort. i hope that president obama and democrats and republicans in congress can work on this effort. americans are expanding an

extraordinary amount of time and money and paying their taxes. it is not conducive to growing our economy, and we need to change the system up extraordinary complexity. we have exploded, even in the last decade, the number of pages of regulation in the tax code, which is not helpful. we need to simplify it and bring down rates and reduce preferences. i am hopeful this will be a major effort of the administration in the coming congress. >> we have time for two more questions. let's work from the center and left. >> i want all of you to know that i do not necessarily consider you of the right. [laughter] >> you said is there wednesday

you are looking at getting at the bill back. are you going to try to put something on the floor before the end of the week? >> in light of the fact that every member would hope to get home for christmas, including me although i relatively close by, the answer to the question is we are hopeful we can conclude our business in the house on the 17th, and if we have to come back because the senate still has to work, we might do that at some point in time. it is our hope that we get out on the 17th. as you know, the continuing resolution that is currently in force, under which the government is being funded, expires on saturday the 18th. i am hopeful that not only will the tax bill be considered within that timeframe, but we must also consider what i hope

to be from my perspective either a cr or an omnibus, which speaks more broadly to the funding priorities that the appropriations committee has already worked on. >> final question. >> i am a freshman at george washington university. the deficit commission did not get the required 14 votes for the speaker to bring it to the house floor. however, i did get 11 out of 18. that is above 60%. that would have passed congress. your colleague, madam speaker, and the future speaker, john boehner, would consider bringing that to the house floor to get voted on? >> as you know, what the commitment of the majority leader in the senate and the speaker of the house was that if

it got 14 out of 18, which was required under the president's executive order establishing the commission for a recommendation to move forward. the commitment of the speaker was, and she and i made the same commitment, was that if it got 14 out of 18, and if it passed the united states senate -- a very important premise that it would move through the senate first, then the house would put it on the floor. that has not happened. more importantly, however, i think the commission and others who have put forward plans have performed a useful, important function. they have not only describe the problem, the proximity of the

crisis, and suggested solutions. i would certainly hope that all of these commissions, but the work product would be taken into consideration by the ways and means committee, budget committee, and by the congress and the house and the senate in moving forward to address what i believe to be one of the most critical challenges confronting our country, and particularly challenging for your generation. we call the world war ii generation the greatest generation. if my generation leaves you and my children, who are older than you, but my grandchildren, one of whom is about your age, in deep debt, so that you in your time cannot respond if national security crisis, health crisis, natural disaster crisis, and you have no resources to respond to

those, you will not they -- you will not think our generation was very great at all. notwithstanding the fact that it did not get 14 out of 18 and will not move through the senate or the house as a package, as was contemplated if it did get 40 votes, i am hopeful and will be pressing that recommendations of all those bodies will be taken into very careful consideration as we move forward during what seems to be contradictory, but in the long term must be done. that is growing our economy -- if we did not grow the economy, we will not be allowed to bring the deficit down. we do not bring the deficit down over a longer term, then our economy will continue to struggle in the long term. thank you all very, very much. [applause] >> thank you for being here

today at the national press club. the meeting is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> lets get a picture of the group.

1, 2, 3. >> is from the associated press this afternoon, a federal judge in virginia has declared a key provision of the obama administration health care law unconstitutional. he is the first judge to rule against the law, which has been upheld by two others in virginia

and michigan. virginia attorney general argues that the federal government does not have the constitutional authority to require people to buy health insurance. other lawsuits are pending, including one filed by 20 states in a florida court. >> tonight, john lee witt on ftc regulations on how to handle online privacy and potential do not track technology. "the communicators" at 8:00 eastern on c-span2. >> the new supreme court justice, elena kagan on her adjustment to the court and her relation ship with chief justice john roberts. at 6:30 p.m. and 9:30 p.m. sunday on c-span. >> with theca thecam competition

one month away, staff or available to answer your questions on wednesday, december 15 between 8:00 a.m. and 8:00 p.m. eastern. c-span is video documentary is open to high school students. for more and permission, go to studentcam.org para >> a discussion now on campaign spending and political advertising during the 2010 midterm elections. you will hear from it -- directors to created some of the largest spending campaigns. from the national press club, this last about an hour and 15 minutes. >> i think we are ready. welcome, and thank you for

coming through snow and metrify errors and various emergencies. i am brooks jackson, director of factcheck.org. some of you may be familiar with our website, where we try to hold politicians accountable for the factual accuracy of their campaign ads and other statements, something we have been doing now for the past seven years. our conference this morning we are calling "cash attack 2010, political advertising in a post citizens united world." and explain what that means and what we hope to accomplish today. we had a special project that was made possible by a grant from the carnegie corporation of new york, a charitable foundation. we made a special effort to track the factual accuracy of ads paid for with corporate and

union money freed up by the citizens united decision. the word attack is there because in our experience, ads by outside groups tend to be ads attacking a fellow, not ads praising a friend. citizens united is the supreme court decision that lifted many of the legal restrictions on the use of money from business corporations and labour unions in federal elections. we will never know how much money might have been spent in the midterm elections of 2010, had that decision not been issued or how that money would have been spent, but here are some clues. according to the wesley in media project, spending on advertising and congressional and gubernatorial races on advertising alone topped $1 billion this year. a figure the project called

historic. in house races, at spending was 50% greater than it was in 2008, and in senate races, it nearly doubled. there was a surge in spending by groups that did not disclose the identities of their donors. according to our report issued just last week by the new york city office of public advocate, and outside groups that did not disclose their donors reported spending $132 million, including $85 million on senate races. several of these groups are represented here today. these groups are far more likely to run attack ads than to run positive ads, according to the advocate's office. that confirms our own casual an informal observations. what we saw in 2010, we can expect to see more of in 2012. yesterday the los angeles times reported that there is now a

financial arms race under way in washington with politicians raising to form a new, independent spending committees and to raise even larger sums of money for next time. lawmakers said they feared the and restricted independent spending is creating a congress even more indebted to special interests and prone to gridlock and unlikely to find compromise. will that turn out to be true? i don't know. i have learned over the years that sometimes predictions like that make good copy, but poor proper security is not given to us to be able to see the future, but we can try to examine the recent past and learn more about exactly what happened in the 2010 elections, which were the first to be held in a post citizens united world. how is all this corporate and union money used, and what did it accomplish? what was the strategy behind all those attack ads from the right

and from the left, and what did that spending and the unprecedented flood of political advertising accomplish? what is the evidence show ?uestio to explore those questions, we have assembled to make panels, one on the democrat or liberal side, one on the republican or conservative side. we have asked for presentation discussing their campaign strategy, the results they take credit for, and the evidence that leads them to believe those results were complice. i am happy to sell our panelists include representatives of three out of the 5 -- i am happy to say that our panelists include representatives of three out of the five groups reported spending the most, at least at the federal level, as reflected by reports to the federal election committee. some groups take the position

they do not have to report, even though their ads are quite obviously campaign ads. the liberal side, we will hear from representatives of the service employees international union. are represented has been delayed but assures us he is making his way here. that was the force -- fourth- spending group of all at the federal level. we will hear from a representative of moveon.org, which called for a boycott of target corp. after it was disclosed to have given money to minnesota group that advertised in support of a republican candidate for governor. we'll hear from the head of the california labor federation which but the republican tide with the successful outside campaign in support of the democratic candidate for governor, jerry brown. he faced a republican who's been $160 million of her own money.

that is more than any other self-funded candidate in american history. on the conservative side, later this morning we will hear from the political director of the biggest spending group of all, the american crossroads gps group. they reported spending nearly $39 million on ads, much of it from donors not identified. we'll hear from the president of the american action network, the third biggest out tied -- outside spender. and from a media consultant and advisor to the national republican congressional committee which claims credit for demoting nancy pelosi to minority leader status and elevating john boehner to be the next speaker of the house, as of next month. we have asked our panelists to keep their presentations tight and to give time for questions , theour moderator's audience, and from subscribers to have sent their questions by

e-mail. c-span is here in the conference is being carried live on c- span3. we are also recording the conference for our own purposes and will post it on our web site as soon after the conference as we can. we are producing a written transcript of the proceedings which will post on our side when it becomes available. i would like to introduce and dr. ken winnig who will introduce the first panel and moderate. >> or first panel is the democratic liberal panel, and our first speaker will be elise hoag. she is the director of political advocacy and she has worked for almost five years.

in the most recent election cycle, she focused on the debate about health care, policy, health care reform legislation in the financial reform bill. she will be telling us about her efforts in the 2010 midterm election. our next panelist will be here from the service employees international union. he is their strategic campaigns director and he will be talking about efforts in the midterm election,art pulaski is with the afl-cio. the federation represents 2.1 million members of 1200 manufacturing, transportation, construction, service and public sector unions. his union work hard for the

democratic candidates in the state like california elections. >> it is great to be here with you all today. it is a little odd to be the one to kick it off, because moveon is in a slightly different category. you will have to integrate everything you hear. we are a pac, which means we are solely field by our members who are all small donors. our average donation is $42. everybody over $200 is this closed by federal law. why this is important is because disclosure and the amount of individual contributions given in this

election cycle became incredibly contentious elements of the debate about our democracy moving forward. the other thing that makes us different than some of the group she will hear it in the republican panel, citizens united did not actually affect us. it broadened the playing field, and that did not affect us. what you'll see, and what is interesting about our experience in 2010 regarding -- because we take small donors and we were operating under the same set of rules as we had in the previous five elections, we had to think differently about how we spent our money, because we were going to get about the same amount of money since we are fuelled by small donors, and a larger context of an advertising arms race.

it is always really interesting when i hear people say representatives of the groups that spent in the top five. moveon.org spent about $1.3 million on advertising in this election cycle. compare that to some of the folks you were going to hear on the other side who spent $75 billion or $80 million. there is an enormous gap there, and that is part of what we want to talk about today. i want to give a little bit of context. i will not spend too much time on this because brooks covered a lot of it, but what was new about this election, citizens united allowed unprecedented levels of expenditures. it encouraged the formation of brand new groups that could appear and then disappear, as

opposed to moveon or others which are long standing groups that will be around before and after the election. , and thene group's fade back into the background. it is strictly for electoral purposes. republican coronation, i will let the guys on the other side talk about this. the reason i think it is interesting that people noted the difference of coordination on a message is what facilitates that level of coordination is a very small number of decision makers that come from a more concentrated number of donors. we have members bunning our ads -- funneling our ads.

we have individual donors to can director campaign strategy, and it facilitates much tighter coordination across the party. i encourage you guys to look at it more deeply. here are some things that have popped for me. with the citizens united decision, the line between advocacy and electoral adds has gotten very, very thin. when you see the final accounting of the outside spending, that does not actually include millions and millions of dollars spent by the chamber of commerce post the energy bill in 2009, for example. by law, that was advocacy advertising. what that means is that we are still facing a dominant national narrative that is set by large

corporations coming in and legislative fights. i see the last year accounting and it started right when president obama passed his budget, the outside ad money started coming in. a lot has been made about how democrats closed the gap at the end. if you look at the final numbers, in fact democrats by some accounting did better. that negates that the party committees are only able to raise toward the end of the cycle. when you have lots of large donors and corporate money with deep pockets, you can start spending at the very beginning of the cycle and set the narrative. then the other side is going to be on the defense. the impact of media trends, media is in disarray. everyone knows that.

print journalism is trying to figure out how to adapt. one could argue that television is in the race for the bottom to be more sensational. all of it is a desperate grab for advertising revenue because the model is changing so much. it has had an impact on our standards of accuracy. thank goodness we have people actually checking accuracy. is there is lessthi incentives for television stations to care about accuracy because they care about where their next legal decisions being made, they are discretionary decisions made by each television company. we did a poll right after the citizens united decision. people do not like it. i am happy to go in deeper debt

onhis but i do not want to spend too much time on it. the reason i put our poll results up here, we took this in march after the decision. what jumped out at us is the feeling that the supreme court -- that it was a drift toward defending core rights over ordinary american rights. this did not break down across partisan lines. republicans believe this as well as democrats. this gave us a sense that one of the things we might see this election cycle was skepticism toward corporate funding of ads that the citizens united decision allowed. our target campaign is what allowed us to take the citizens united frustration we were seeing from the intellectual to the action every critiques to the action oriented. minnesota state law still requires disclosure even though

federal law does not. it came to our attention that target corporation had given what was actually a modest amount of money to an outside group in minnesota in support of a right-wing cannot it for governor. -- candidate for governor. we started hearing about this from our minnesota members and we said we should test those and see what people are feeling about it. the response is overwhelming. this was the first test case of a public corporation that depends on a broad diversity of americans to shop in their stores being exposed as meddling in the political system. it is hard to separate peoples attitudes towards straight memling versus what they were meddling on behalf of. there were a lot of incendiary issues, a republican governor who had a long history of being anti-immigrant and anti-gay. all that combined means that we

saw an explosion of outrage. 500,000 people signed a petition to boycott target. in the next three days we saw 1200 protests at target stores around the country. we saw a lot of defense and backpedaling from the company itself, even though they did not ultimately end up taking back the money. it is often very hard to measure advocacy. protest is fleeting. what brand >> even in places where it is

mandatory. it made an impact and someone mentioned the new york city public advocate. after this came out, goldman committed to spend. i will show you -- it wno'won't show. >> target and other corporations are trying to buy elections. >> no way. we don't like that. >> we all work together, we can

stop this. boycott target. >> we showed this ad and we thought it was fun. we were going to spend a modest amount of money to get the word about the poor cop out. msnbc refused to run the ad. no one was debating the veracity. there's not much in there that was factual. promoting a boycott. they refuse. they said, we have a company prohibition against attacking corporations. that is interesting. you do not have it against corporations attacking politicians. we're in the debate. i wanted to show this because everybody went ballistic. move on is attacking target.

the for alarm fire at set off a stunning. there is two things to take the from this. this is where the vulnerability is. this is the basic principle we are fighting. if people knew their money was being spent to meddle in elections that promoted causes that were not consistent with values, they would choose to do something else and that is so scary they will fight this exposure to -- to the nail. this is another example of part of why i can only offer gas. through our conversations. targets been more with advertising and the constellation press associated with them. this was a disturbing element of this campaign.

if citizens have less avenues to make their voice heard, that is democracy -- dangerous for democracy. let's go back to the slide show. i put this up because this was the impact on accuracy. this is an ad from american action network you will hear my colleague talked about this ad. no one was saying this was fair or accurate. this is an ad that said people had voted in the house and senate to give viagra to sex offenders. you have to stretch the truth that this is a possibility.

no one agreed this was accurate. we had made a decision going into election cycle since we could not compete dollar for dollar, one of the things we were trying to do was mobilize against at like this -- ads like this. we were right to protest. we did a lot of that. this was in a lot of different places. we had thousands of people who called the station. these are discretionary decisions by the station managers. we did not get this that everyone agreed was inaccurate. completely damaging and taken down. the american action network spend 80 million and we were spending $1.1 million. it is something to think about as we move forward. this is what we did in august. i have three poll summaries.

when you get away from leadership, independents agreed with these attitudes that corporations have too much influence. the one i want to pull out, there were a couple that were critical. we were in a fight for our lives in the economy. the corporate money was very prominent. one of the things we saw in august was people were starting to say there was no way for to fix the corporate lobbyists. most americans, republican and democrats believed corporate spending and election, this was

the fight. was this free speech? most believed it is political bribery for a corporation to expend unlimited amounts in the elections. this is where we started to see the shift in the narrative. this is important. if people believe it is bribery , it is a fundamental principle. there is not the opportunity for an equal voice that democracy is not for sale. one of the things we did, we did 150 report releases and senate and house races that broke this down. we started to think money is pouring in. what we can do is make the connections for people that we know that people do not like this. we do these report releases that show in wisconsin in this case,

much money is coming from these groups. we can sway voters about whether or not they can trust the canada that is being supported by those outside groups. the report got an enormous amount of press. these got an enormous amount of press showing the pitch at which this issue is being debated. we did this one in october. this is when everyone was debating 23 of the 24-hour news cycle, whether anyone cares. we wanted to get to the bottom of that. 84% of people -- voters believe they have a right to know who was buying ads in their elections. a goes to motive and motive goes to who the candidates were responsible to after the

election. 56% or to vote for a candidate if they knew that at supporting them are paid for anonymous corporations. this was where we get into moving forward. if they know. we have groups with things like american action network or crossroads. they do not always know those are groups that were forming this election cycle. it was critical for us to make that connection. this is an example. a less try to make that correction. we spend $64,000 to get this message out. crossroads spent 4 million -- 4.4 million to win this race. rewarded corporations

to ship jobs overseas. where has the chamber been getting their money? from foreign corporations. the same companies that trend american jobs. it is time to connect the dots. who is he working for? it sure is not illinois. >> the reason i show this is we cannot just participate in the arms race. we're fueled by our members. many of whom are affected by the economic conditions. we spent over $1 million on ads. what we can do is spend our money at -- wisely. we took that knowledge from the polls and the trends and we put it together to make this ad which was with the intent to expose the facts. there was corporate money behind

his campaign. we did not win. i am going to wrap up. i showed this at the end because we came close. he was a virtual unknown who went into one of the most high- profile senate races. he got close to upsetting that race. i want to end by saying a couple of things. because the republicans took back the house, the -- i will admit, in many cases they won the domenik narrative. it is easy for an outside party to do. it is easy to say that people do not care about the arms race. people that i care that corporations and donors are hijacking our electoral process. that is a flawed conclusion to make. everything that we saw showed

two things. people care and it makes them angry. if we do a better job of connecting the dots for american voters, there will be a backlash. the second thing is scarier. as a group, that represents 5 million working class americans word wrap their jobs and homes, i am much less worried about a backlash than i am about everyday voters looking at the arms race, looking at the money and saying, i do not matter. i should not participate. i cannot be done because i cannot pay as much. i protested and i knocked on doors. the ground work did not matter. that is fundamentally dangerous for our democracy. we will continue to push forward. we will overturn citizens united. in the election, if we do not

get together and make these connections for voters, we will see a disenfranchised electorate. and a democracy that is increasingly for sale to the highest bidder and that is not american. >> thank you. i would hold questions until the end. our second panelist has arrived. we will put his presentation in. if there are questions from the floor, i will welcome them now.

>> what amount of money do you perceive being spent on these ads? >> i think that is anyone's guess. they're not keeping up. what i perceive this starting now, no break from elections. what i perceive this we're seeing on the democratic side more of a push towards big money fundraising. there is one independent expenditure announced. this is a divergence.

president obama asked no outside groups run ads. the donors on our side have started to feel like unilateral disarmament may have been a mistake. we will see a lot more of everything. we will see are -- our side fighting for disclosure. fighting against -- way starter then adds that are inaccurate and taking that fight to this tv stations themselves. where voices can be equalized. we will see more money. i believe we will not raise as much money as the next panel. we just will not. the republicans have carried the water for corporations and legislations and wealthy individuals and legislation. there is not as much money. while we cannot compete dollar for dollar, we will see a lot more of everything in 2012.

it is all scary. rex this will be a last question and we will proceed. >> i was wondering, there has been a lot of conflict over the tax agreement that obama made. you have been fighting that hard. how much will you be working with democrats in the next two years and how much will you do what you want them to do rather than working to protect their campaigns? where is the balance against making sure republicans who you do not agree with but to those things? >> we fundamentally work for our members. we make strategic decisions all the time to the extent our members believe many of the

democratic campaigns are not representing them. in a genuine way. we -- saw that with the prairie in arkansas this year. we will see a lot more assertion, the fact that much of the democratic base does not believe the candidates are created equal. there is a pronounced concern. to the extent that you are asking specifically about the presidential campaign, our members are frustrated. they think the republicans are dominating too much of the debate. we will see how it plays out and it has to do with how -- who is running on the other side. president obama is doing more to help this country. we will see how that plays out. >> thank you.

i am pleased to introduce our next speaker. >> i am -- we had an issue this morning. i apologize for being late. i may first time that -- i am a first time dad. i wanted to give a brief description and an analysis. this is from our perspective. as well as how we look forward towards 2012 and look at what will work and did not work and lessons we have learned. i have dubbed this the good, bad, and the ugly.

what are the goals? it is not just about electing democrats. we of internal and external goals. we're trying to the doors and elects pro-worker candidates. -- endorse and elect pro-worker candidates. we want to engage our [unintelligible] those that helped elect the majorities. as well as president obama. we want to build the capacity of our members from their ability to talk about issues. we have members to run for offices. i wanted to engage in potable

discourse which we do every day. whether it is talking route legislative issues. internally, we wanted to strengthen and expand our infrastructure. we're talking about media events. we want to start brought messaging points and what we tried to get across. we think about elections, we wanted to frame this election in the sense that as a choice for those who voted for change in 2008. band continue that change going forward. we wanted to set up the contrast between those who are in the interest of the middle class, the uninsured, the non corporate interests.

in doing that, we wanted to show there was -- if you are thinking about some element of some of the tea party activists. there are interests that were backed by corporate money and shadowy groups like crossroads. if corporate interests take control of congress, we will see a return and you saw in the policies that were being pushed by republican members running for congress, in return to bush era tax policies that we are digging in a way out of. we worked hard on some reform. around health care and

accountability. there will be a push for policies that will continue the inequities that will hurt in come for job creation and the middle class. it would hurt seniors. the social pact remained with seniors that is a feeling that is in jeopardy if policies go forward. one of the ways, we want to show you how we communicated that message and highlight a few races. we are going to run back-to-back and point out a couple of things. first is sharron angle.

let's see if this works. >> her dangerous ideas will make our lives worse. her college loan ended. if she is looking for work, it is tough luck. at retirement, haute her social security phased out. everything will be worse for her and all of us. too dangerous to have real power for zero -- real power over real people. >> you will see that tagline on some of these. that is our pac. you hear lots of reports about unions spending their members dollars and they do not have a say.

our dollars are raised voluntarily for our members. they give on average $7 at of their paycheck. you think of a janitor in houston who is making $5.25 an hour. we tried to be judicious and a good steward of the money that our members of voluntarily give for election communication. the next ad. this is a radio ad. >> he is running for congress. how much do we know about him? we know he was sanctioned and sued repeatedly for illegal employment practices. he signed a pledge to support the republican agenda. what will that mean for ohio?

one vote against unemployment benefits. one more vote to protect tax breaks for companies to ship jobs overseas. one more vote to allow insurance companies to deny coverage to children with pre-existing streetons and allow moswall banks to take a advantage of americans. he will be one vote against middle class families. he is wrong for ohio. seiu.org. >> tom ganley ran unsuccessfully against shelley berkeley. i am trying to pick out races that were highlighted. tim burns ran in john murphy's

old seat. >> if he makes it to washington, who will he work for? he is the tax loophole to defer taxes. he said he would never ship jobs overseas. he took tens of thousands in campaign contributions for those who sent u.s. jobs overseas and support trade deals with mexico and special trade status for china. bad for us. >> finally, the big senate race in california. barbara boxer against carly fiorina. this is different in a sense that it is -- does not have seiu as a tag line. we have a side that talks to our

members and a side that -- they do not talk. i was on the coroneted side so i did not see this until it ran. i know the details of this ad in terms of where went and how big it was until it was disclosed to the general public. fiorina, we know who you really were. >> you shipped 9300 jobs overseas why you walked away with a golden parachute. carly fiorina is then to face

the music. >> a different kind of start. as well as something more light- hearted. we call them different things. we work with coalition partners and talk about the enormous amount of resources that were on the other side, forcing a lot of organizations to pool resources. we did not spend as much money as you saw from corporate interests and individuals we feel do not know. each word different. they showed a contrast between the cabinets on issues that were important to the middle class and women, independence and

swing voters. whether talking about the ad talking about voting to -- putting jobs overseas. that connection within the voters' minds. talking about shipping jobs overseas. talking about some unsavory employment practices. ohio being a tough state in tough economic times. also talking about unemployment insurance and giving blank checks to insurance companies. shipping jobs overseas and letting corporate interests run things. and the issue of the mass

layoffs that were here. 9300 shipping overseas and her walking away with a golden parachute. showing that the average joe and jane america are -- they are getting the shaft while those at the top were still living the high life. what are the results? i will show that from his perspective. the house and senate are important. equally important to unions are governors. we targeted, that is where we spend money. we engage members and they

walked out and volunteered. we knocked on doors and made phone calls. we had 19 races we indoors. we won 11 of those 19 races. le state up purp there, that is wyoming. we endorsed a republican governor. we had members who run for political office, we had to members who ran for state office in new hampshire. both rehoboth -- both republicans. we saw some major ones in california and new york and illinois. some tough losses in michigan and pencil penpennsylvania and .

on the senate side, focusing on where we spend money and where we indoors to. -- we endorsed. many years in the gun- control movement. we had an 85% endorsement. on a small level is where they spent money. again, some big wins. new york is purple here because we had two seats open. cynosure jill brand and senator

schumer were up. we had some big wins out there. colorado. we had some tough losses. illinois was a tough loss. wisconsin was a tough loss. amazing that the voters let go of an 18 term senator for someone who did not know enough about the issues to speak about them. it was a volatile electorate. in the house side, you have quoted the washington post the washington post. 50%.e was

you have on the district level where we know that districts have been cut, sometimes to protect incumbents and to create a swing district. we saw a lot of these that trend republican and democrat at times. a lot of seats democrats picked up, a lot of seeds that democrats held for a long time. long term incumbents were defeated. or the fact they were retiring. what worked for us, direct candidate engagement. candidateked as a spent a day in the life of one

of our workers. members were engaged. there is a good engagement of base voters. latinos were critical in california and nevada and the youth teams were ready in some places. what failed? we did not elect more per worker can events. i want to show an ad that we thought worked but the messenger did not. >> my daughter has special needs. she faces a lot of health problems. i worry about health insurance. up said thati am se

senator blanche lincoln voted to allow insurance companies to deny coverage for people with pre-existing conditions. we need a senator who will stand up for what the working people need. >> i thought it was run during her primary race. in retrospect, i do not think it was a race that we should have gone into. it was a race that we were the wrong messenger. a great message but the wrong messenger. we do not have a large member base. we were the wrong messenger. it allows lincoln to say that corporate interests are coming

in -- special interests were coming in and trying to take over this election. we always were here to represent what our members want to do. retention of this site control, there were key ballot issues that affected how elections are run. many things happen on the state level. we lost a lot of state legislators. some key races. we lost the messages around the economy. no clear national jobs program. a failure to take action. this is a debate we're having right now with the tax cuts.

we saw intense attack on our union members. the speaker of the house is publicly anti-union. redistricting battles are tough. on the governor's side, it can see this in pennsylvania. it is easier when a governor works that apparatus. some trends on some of the exit polling. although you see the union houses were 70% of its electorate. we saw decreases in terms of

unions. also what is happening with the labor movement. a bit of a shrinking and something we will address. i want to look toward 2012. it is easier to be right wing. people come to escape problems. my issue is different. no collective body. america was founded based on freedom. i see 2012 looking forward to what the democrats will be doing. you will see redefining and reasserting. you will see a reasserting of principles. kind of the opportunity and equality, many in the conservative side.

we're not going back. what i see is -- on the democratic side, you are seeing we're winning the battle. on afghan generational politics. this country is turning browner and it will be -- continue to. you are seeing the the young turning out against progressive politicians. it can to see that can be continued through their lives. this is a tough election and we knew we would see it. from the perspective roof the union, it is time to get back to work and reassert core values. supporting opportunity and equality.

>> thank you. we will return back to my format of all the questions until the end of the session. we would like to introduce art pulaski. i will help with his media. >> i appreciate the invitation. i want to thank the public policy center and inviting me to participate. i would like to say that even though the unions in california proles spent $30 million, it is

important that we believe big money is a bad thing for american politics. citizens united is a travesty in that it encourages more of that. what we see now is more shadow reorganizations with an unlimited amount of money and often with anonymous contributions. if there should or could be a lot, it should be that all politics must be grass-roots politics with no paid advertising and public expenditures. with youssurto share it some thoughts. we had several challenges as we faced the elections in california.

not the least of which the fact that we were dealing with meg whitman who had bragged she was going to spend $150 million of her money. she spent $170 million. more than any other candidate has spent on a statewide race in the history of america. as opposed to jerry brown who, if you walked into his office, you would find a sparse and small, almost abandoned warehouse, the center of which was a picnic table with wooden benches where they had their meetings. it was a dramatic difference if you compare the well funded army of campaign consultants for meg whitman as opposed to jerry brown had carry -- four people in his headquarters. our priority is our members.

how do we engage in our members -- engage our members in grass- roots politics? we did a campaign with them. voted for jerrye brown. we had to deal with the enormous imbalances in resources. we had to do much more this year than just engage our members and get them out to vote. we put together a blueprint that we shared with our unions in california. we had to have some way to represent the different independent expenditure in programs where were engaged in. to show the dimensions of our campaigns, we had this blueprint which showed the various sub campaigns that we were doing. the first was a member communications program. the second is the independent expenditure programs in a

unified and coordinated way. the third is what we called million more voters. and our earned media efforts. let me take you back to an important piece of this campaign in terms of timing. that was back in the spring. we needed to look back at the previous gubernatorial election and we had a number of similarities. the first was we had a well- founded campaign by arnold schwarzenegger. he did not have the resources to compete with schwarzenegger. hye led by four points. there were similarities in both

of those cases that were important to us. as soon as -- before the final vote was counted, arnold schwarzenegger engaged in a -- in advertising that knocked his feet.elides off there was no way he could recover. we were determined whether or not going to allow that to happen again. we needed to maintain during the summer a competitive bid bandage -- competitive advantage. so that he would not be knocked off his feet and therefore be unable to recover.

during the summer, meg whitman had 112 days of advertising without any response from the campaign. conserving resources until after labor day. to keep brown competitive during that time over the summer, we were stepped up in a number of ways. the biggest engagement we involved in was california working families for jerry brown. it was an independent expenditure campaign which launched a number of ads hitting meg whitman where we knew she was foldable. those ads were paid for primarily by many of our unions. especially by seiu and the state firefighters sprayed we had unions that were so --

supporting similar campaigns including the nurses union and a series of radio ads. that independent expenditure spent about $9 million. they asked me to spend about 2 million. we had $11 million or more spent during the summer in advertising. i want to show you one of those ads and if you can help me with this, we will show you an ad that we put forward. we can started again and pick up

the sound. >> for 28 years, she did not bother to vote. no government experience. she thought her time at ebay qualified her to be governor. her record was spending. huge losses from failed mergers. the new ceo cut spending and lower fees. california is in crisis. under meg whitman, it could crumble. >> in addition to the media, it is important for us to engage in grassroots activity. there were a couple of things simultaneous to that. we put together a program that was called wall street with men. -- whitman. our ad program on the internet

looked a lot like "the wall street journal". we engaged in some earned media and online media that supplemented the paid media. also there was a program put together by the california nurses association. there was a street theater thing. a woman was made to follow her and it was a program that was going on. we tried to do the most grass- roots stuff. the result was pretty profound. over the summer, voters began to question her. her negatives rose. the more money she spent, the

more her negatives at that point began to go up. in spite of the fact that over those 114 days, she was engaged in a nonstop saturation bombing, without any spent -- response from the campaign, that is why it was crucial for us to keep competitive. as we headed into labor day, the race was a dead heat. with theo dealing likelihood of a dampened turnout by democrats. and so we had to calculate how to engage in making sure not that we advanced persuasion, but also how we made sure we turned out voters. this was our next most important ie. we put together some

microtargeting efforts who helped us -- we were to find 1 million voters in the exurban voters of the state. there was a population growing of voters in the more conservative areas. we engaged in this process to find people who agreed with us on our issues but were not union members. in the more conservative areas of the state. we wanted to think of ways that we would reach out on a personal basis. as i said, the micro targeting

we engaged in, it became 2 million and it is growing. it is a significant population portion. i see this as the good versus evil. if you were to ask someone to bring mail pieces that meg whitman sent, you would find some competing. contradicting herself. that is the evil portion of micro-targeting. our purpose was to engage people of shared values, to give them a voice. let them know they're not alone. million more was engaged on that. we had targeting with swing

voters as well. the california school employees association had a program for education improvement. they trained 1,000 liters to recruit 10,000 activists. based on the technology would put together, what we have is an attempt to move this back down to the grassroots and the personal contact. giving them a voice in commonly shared issues. this is the exciting part of what we thought. not the tv ads. we had to engage in those as well. let me give you another example of how we use the targeting. this is with the asian-pacific

islander community. we found there was a high percentage of undecided voters. they were getting a little information. we did a targeting a communication of 200,000 folks. we found them from our universe. we then communicated with them in four languages. we found that by talking to those people around these issues, when they voted for years earlier, there was a 25 point margin in favor of arnold schwarzenegger. as a result with our communications, it turned around to a 17 point advantage for jerry brown.

we think the republicans took the api community for granted. the latino project was also very dramatic. seiu was important. there were a couple of others run by the local as well. the percentage of voters in the governor's race among latinos rose from 12%-22%. 22% of voters or latino voters and that is a growing thing. that was a crucial ie.

when we had the revelations about her housekeeper and how that affected latino voters. then it ws clear that hbrown was position. we've reached out to do voters through media and field and mail. we found that among those 2 million voters we had targeted through technology, 750,000 needed persuasion. 1.5 million needed to get out to vote. we ended a brief yet to people

not just by mail, not just by paid ads but by the community of volunteers we had developed over that six months. we probably knocked on the doors of voters in 1500 precincts and 800 precincts. 2200 precincts out of 30,000 in california. a significant amount. beyond what our normal membership would do in the grassroots political action of our union members. we do precinct operations as well. the result of this was the historic sweep of statewide candidates. for the first time ever. of a number of marginal districts, there were probably four or five marginal progress of districts we saw major money

coming from the conservatives, especially in the fresno area. another example was that we did research 10 days out in the candidate to see how they were positioned. our candid it was behind. we moved an extra million dollars and as a result, she won by the slimmest of margins. the technology applied to the race also in made the difference in the election in a clear way. labor spent $30 million on the expenditure programs. we hope someday we will not have to do that. we need public financing. for us it was through the research we had done.

we see that the way for for the future for us. two million plus african- americans and other groups, they comprise 75% of voters. we were onto something in terms of the communities of interest we are pulling together and the techniques we were using. it is not just the media on tv. thank you. >> thank you. we are a bit behind schedule, so i want to get the questions from the floor. if anybody has questions. pena thank you. -- >> thank you. you guys have your wits in large

anonymous contributions, and now you are