it is not just the base funding of about $450 million a year. it is a question of what the government's role should be in broadcasting. if you read the new york times story about the bbc last sunday, you saw this debate about 3.6 billion pounds at risk at the bbc having them rally on a grassroots basis to let congress know how important this is made a difference. there were 500,000 letters and email sent to congress. uncountable numbers of phone calls. but p at referred to the community leaders who seem to have more clout. these are people that know the cell phone numbers of their congressman and senator, who can

make the call, get hurteard, ani think that is our next challenge is to get those people who support their congress people, their senators, but also strongly supports public broadcasting to make the connection and to move forward, not just to defend $450 million. the public radio corporation has not caught up by any real dollars since 1980. so the role that federal funding is playing at a time when media is changing dramatically. when they have gone from being radio to public media, when we are disturbing content in so many other ways. and when all of our colleagues, as you heard jim lehrer say, and tom rosenstiel, are beginning to weaken in terms of doing

original journalism, we need to step up and do more. you cannot do more with an appropriations staying static. looking forward, trying to determine what the right amount is and making that case that you can't really be trust with your government if you are not well informed. the famous jeffersonian quote. >> joyce, how does federal funding affect npr and the member public radio stations? is it similar it similar paula was reporting or is it a slightly different situation because of the way the funding is the structure? >> npr gets very little federal funding. but funding we do get is not general budget supported for specific grants that have the libedeliverable attached.

it's about 10% of its funding from the federal government. it is important funding. for public television, it is most important for smaller, rural communities that are underserved or unserved by any other source of journalism. and that the central funding is critical and supporting -- in supporting local journalism. that is an amazing resources for the american people i have mentioned a couple of times a story that i heard about martha, texas. and jim lehrer and i may be the only two people who know where that is. it is a small town in west texas. and the small public radio station was critical in the

wildfires, in informing people were roads were closed, giving them evacuation notices. there were often out ahead of the texas department of transportation and letting people know where they could stay or travel. those of the kinds of stations that would be in dire straights without federal funding. it is an investment that the stations leverage for the last of -- the rest of their funding. >> you get $60 to $70 million a year from stations. that money comes from grants, from the corporation for public broadcasting that are set aside, national programming grants, that only can be used to buy initial programming cost to buy programming from the

american public media, public radio international, from national public radio. and if the money does not come to the station, the station's ability to pass $60 million on to npr will change dramatically. it will affect new york city. it will affect our largest stations just as much as the small ones. and it will affect npr in a much bigger way than the impression people have . >> you are at one of the local stations. what does federal funding mean to you and how have you reacted, how has your station reacted to the potential loss of federal funding. >> the major stations will be impacted as well. our revenue pie is 5%. our public broadcasting grant is

$1 million per year. even as large as we are, our average individual gift is about $135. the loss of federal grants, we would have to instantly acquired 7400 brand new, never before contributors to supplant that money and hold on to them. our retention rate is 66%. so 7400 brad new contributors off the bat, increasing, getting about 2500 new contributors annually after that just to supplant the federal money, let alone trying to fuel the programmatic aspirations that the station has in its other the general operating pursuits. it is quite critical. my concern about this latest legislative challenge is quite different from what we have experienced before. i have been on a public radio since 1982. the sustained nature of the

attack is different. there was aears, threat to public funding almost every year. sometimes there are peaks -- there was and 1994-1995. this is sustained attack where we have to battle random bills that came out, the fight for the continuing resolution. now the battle for the 2012 budget. there is an issue that is going to come up about removing the tax deduction, federal tax deduction for nonprofits. so that will definitely impact us. and there is a challenge with keeping our constituency mobilized over a long period of time, rather than during up for one battle. i spent 10 hours on capitol hill talking to friend and foe alike. they all commented about the support, callsf

in the thousands. that made an impact. the wolf is at the door for some a times for so long. my concern is about keeping our constituencies energized, informed. we have information on our website about federal funding. we have to strike that balance between not state -- saying too much work people become inured to it and do not want to hear any more and keeping them energized so that they will mobilize when we need them. that is my concern. >> anything else? pat? >> one more thing. notaren's point, what we do want to do is to be perpetually in the position where we are gasping for air and this is the perils of pauline situation on a constant basis with congress. the cure to that is making sure that they understand, as some do not know, the essential nature of what it is we do in public

broadcasting and the fact that americans in their millions value what it is that we do. i think there is no reason why we should not have a broad, bipartisan consensus on federal funding of public broadcasting. it is 100th of 1% of the federal budget. it is not a lot of money. as jim lehrer and tom and bill have been saying, it is essential to the objective of having a well educated, well informed citizenship, which is up to the task of self- government in a very difficult world. if that is not essential, i do not know what is in a country like ours. and it is our responsibility as leaders of these organizations and as the station managers who do this work day-to-day like karen does so well to make sure

that people understand that what it is we do is essential, that we do it well, that we do it and an unbiased way, we cover the waterfront in and terms of opinion, geography, culture of background, in terms of anything you want to say -- a generational. that we are truly public and will represent the public and reflect the public. and when we can do that and show our friends are and a congress that that is what we do, i think the broad bipartisan consensus that i am looking for will be there. >> i would like to add on a moment to what pat just said. i think one of the challenges we have a head is for this debate, we did hear from some on the hill that expressed interest in helping us by helping us become commercial. and that that was viewed as a way of getting us off the cyclical challenge with federal funding. and on the television side,

there are many examples of cable channels that started out with the aspiration of being a commercial version of public broadcasters. and when you look at how those channels -- arts and entertainment, bravo, history channel -- have evolves, they are focus shifts -- their focus shifts when the mission or the final of cup is based on shareholders'. a &e is now csi-type programs. bravo was maintained its position as a cable channel that is focused on the arts, went down its own panel. the history channel where their number one from this "pawn stars." i say that carefully.

it is different. if you're a true purpose, if your shareholders are main street and not wall street, it takes you down a very different path. when you look it news. do see theu consequences and pressures that tom reference of what happens to news organizations that are suddenly responsible for a bottom line. and they are still doing news, but it is a different focus again the kind of work that we tried to do on a day-to-day basis when we are constantly challenging ourselves. and on our best days it is choosing the work that no one else is doing. we were created to fulfil in pasrt, to fulfil what is in the public interest. helping us to become more commercial is not going to take us down a path that will serve

the country well. >> thank you. i want to shift the subject slightly now. tom address to the question of bias, which is one of the rigid we essentially heard to arguments. one is that we are in a fiscal crisis and we cannot afford this anymore. even the president's deficit commission came out for zeroing out public broadcasting. the other argument was that public broadcasting is biased and as tom said, the bias is in the eye of the beholder. bill, i want to ask you to start us off on this. how'd you affect the perception of the public broadcasting is biased? >> i don't think i have to do much about it. i think we were granted quite well by the last debate in congress that public broadcasting is liberal.

what we discovered, and it is the same thing that mark thompson, the director-general of the bbc said six months ago, he said, if you look at individual stories, the stores are well done and they tend to be straightforwrd. ard. if you look at story selection, it is a different question. what storage should be covered? news is about change. . >> the issue is a governmence. where si the mcgoverns of the

corporation for public broadcasting? -- were is the governance of the corporation for public broadcasting? what are the measurements, how are you determining whether the product is a product that should be supported or not? the boards of our production companies, the ones i know best in radio, national public radio and the american public media -- are they talking about this? are they looking at and determining whether they are straightforward or not? bias can be as simple as an anchor interviewing somebody and saying, hmm or hmm or hmm. it is this like chinese. just change the tonality and to change the bias in the word. what is the intention? what kind of people are being hired?

what is the management like? you can write and down to stations. 60% of our stations have no community governments on radio. they are large reports of other institutions that have a board of regents, but rarely meet anybody that has anything to do with the public broadcaster, public media company. so the importance of that governments and the importance of having a community-based board that is made up of people who will demand these kinds of standards, to me, it is the key. before finish this, i would like to come back to the question of where we go rather than just sending the status quo -- rather than just defending the status quo . >> i think we will get to that, i promise. paula, one of the contradictions in attaining

government funding is that it compromising as the independence, especially of the journalism being performed. jeff jarvis, who is a media critic suggested that npr should just give up a federal funding because to have government funding creates the appearance of political strings and pressure. how do you respond to that? is federal funding going to automatically create timid journalism? >> no. i think a few things. let me speak specifically about television. and i would be interested and karen's comments as well. she wrestles with the same issues as well. on the television side, 15% of

our funding comes from the federal government. the largest percentage of money that comes into our station comes from individual philanthropy. a lot of contributions from smaller contributions. i think the fact that we are very anchored in communities. ties is to our committees. on the tv side, we have slightly different governments. i came for my station in new york. we talked a lot about issues of coverage, and they were tremendously helpful to us. at pbs we spend a lot of time looking at editorial issues. we just went through the process of concluding review of our editorial standards and practices, which we review every

five years. this has been a particularly interesting time to look at those standards with the change and howedia, you reconcile issues at the same time of trying to encourage the connections to local communities. i think social media offers. i rarely talk to him. nice to see you there, michael. >> you're not speaking. >> there are many times i read his material and think, wow. he got it right. he is our connection to the viewers and the uses of our contact. they have a vehicle through him where they can express their opinion, and he expresses his own. it is helpful. all farm producers looked at his material. i think the fed is -- all of our producers look at his material.

the lion's share of our funding comes from individual philanthropy. if we get that wrong, the thing that is the most valued assets that we have is our brand and the fact that we are trusted and if we violate that, then i think everything else on rebels. from my perspective on the tv side, i do not spend time worrying about government influence affecting our journalism. our journalists are fiercely independent, both our colleagues at "the newshour" and certainly our colleagues at "frontline," which is our significant investment in investigative journalism. have tackled subjects that make people uncomfortable. that is what they believe it is their mission. >> one thing. mike pence, who is the former chairman of the house republican policy committee, conference, actually, has worked with me over the last five years on trying to pass a federal shield

law to protect the confidentiality of sources. mike's one of the most conservative member of congress but he believes quite deeply and passionately that the news media are the only real check on government power in real time. that is his phrase, not mine. and he believes that the work that we do as well as the work that the "the washington post" and others do is essential to the proper functioning of this democracy, to the accountability of office holders. it is an interesting question about whether government funding will tend to compromise independence, but in fact, we have more than 40 years of experience now. i think we have built a very good record of independence, accountability, of balance and fairness and so forth that is there for anyone to see. i sit -- so i think this is not

a theoretical issue. this is 40 years of experience we have had that has worked out pretty well. >> joyce, we know npr has certainly been particularly singled out for some of the criticism about liberal tendencies and bias in coverage and so on. and npr's gone through a lot of turmoil in the last six months, beginning with the juan williams episode and going to the departure of the president. how is npr doing now, and how are you coping with the aftermath of all this? >> well, npr is doing great. and all you have to do to know that is to turn on and hear nbs,

c, listen to wamu and the npr reporting. our journalism has not missed a beat. we have learned from what we have gone through. i think we are of little bit more disciplined about our process seeses now. most importantly, we have put our journalism back in the limelight. there is a team of people that sacrificed their easter weekend to produce "the incredibles," on guantanamo detainees yesterday. "up from prostitution." when you see what we have in north africa and in japan.

we have a careful editorial process. from the beginning, people challenge each other and challenge their own thinking, strive for accuracy and fairness and balance at all times, but it is definitely courageous reporting going on. >> and npr has undertaken an examination of its standards and stillo on, correct? >> yes. we will have a draft of our code of ethics to present to our board for their final approval. as paula does, we also have an ombudsman that speaks -- works with our public. she's here. there you are. hi. i don't ge ttt talk to her a lo. she is fiercely independent as well. we are considering a standards

and practices editor position. we worked very hard to ensure that our coverage is accurate and balanced, but our journalists are incredibly courageous in the reporting that they do. >> karen, from the stations. 's point of view, how did the npr situation affect you? how did your listeners respond? in the station's own considerations in dealing with the city where there is a lot going on? >> interestingly, it caused a rallying of support. when you take the temperature of the country, a lot of stations are having record fund raisers. that is testimony to what joyce is saying about the quality of journalism that remains on a question. people value that and support.

station managers were just concerned about what was going on it at the top. the sense of instability, but i think npr recovered quite quickly. we are powering forward. we have a number of clever projects, major gang, technology, web, and other digital distribution platforms. all that is moving forward. i think the practical, day to day work relationship between member stations and npr are moving ahead fine. >> i am going to add something to that. it has had a trickle down effect in the minnesota legislature where we have a number of stations. there is a caucus that is holding back or cutting funding significantly for arts and

cultural programming because of what they claim to be the juan williams affair. the story has not gotten out clearly, despite the efforts that many of us have made to talk about the importance of looking at journalism for the sake of journalism, or look at arts and cultural broadcasting for what they can be. the board of directors of minnesota public television spent an hour of their board meeting examining the question of bias, and is there any basis in which to think that the news leaders of the organization who are part of the discussion are missing something, that they are not examining the store's selection or the possible ways reep in? can cee

the board left awfully satisfied and good that that discussion had occurred. stations around the country are beginning to look much more carefully to make sure that any charges that could be made are not accurate. but there is an overhang. there probably will be for some time. i think we got a bad brand in terms of all the coverage, as did planned parenthood, all of the coverage off npr and public radio. >> we have about another 7 or 8 minutes before we go to questions from our audience. i hope it will be thinking of those questions. i would like to turn out to the subject of digital media and competition. you referred to this.

people will say there is so much choice out there. there is so much that's available. why do we need public broadcasting? you started to address that, but continue to talk about some of the things that you are doing to extend the brand of public television? . >> it is nice we are shifting to this part. were it not for the money come of this be the most fascinating public media, because the opportunities are so great. really looking at the opportunities of social media to bring viewers into a more proactive role in information is

important, but also professional journalism is important. i think the to operate side-by- side -- i think that two operate side by side. we have spent a fair amount of time thinking about and experimenting and doing work in this space. on the news side, he is probably doing some of the most interesting work in public media. he taught me everything i know about twitter. i'm trying hard. it is fascinating for a lot of people there is the feeling a social meeting is somehow frivolous. it is about where i had lunch yesterday. if you really look at some of the work, even outside of the journalistic space, people who have worked with us on series,

he uses social media as a way to try to get a handle on subjects and topics and really engage discussion before he stands in front of a group to give a speech. if you talk to him about how it has changed the way he interacts with his audiences, that he interacts with the people that he is trying to connect with around science information. it is quite profound. i think the opportunities for us in public media are huge because we are such an interesting organization both nationally and local. we have stations in every part of the country. and we have the ability to achieve scale to our national organizations. so the real challenge for us and what we have spent a fair amount of time thinking about is how you link the ticwo pieces together? so you have true local connection with and communities. at the same time we use the

national work as a way to connect together. on-line, we have just spent, after building out the architecture for video online, both as a national distribution, but also at a site where every station, no matter whether you are in a big or small market, can connect your own work there. we are spending a fair amount of time thinking about how we can help our stations built up local journalism. and there are things you can do, scalable, particularly in the architecture of that that will enable stations to put more of their resources into the actual journalism rather than creating the platforms themselves. so i think this is an interesting time. as we have been talking about, but to the related to the journalistic standards, we did a fair amount of work this year.

five years from now as we look back, this will just continue to accelerate and evolve as we look for ways to think about professional journal some and engaged citizenry and really tried to bring them together to truly meet the informational needs of communities. >> things are changing so fast, you may be have to do it more often than every five years. i am going to quote from the vivian schuller who i think -- it's agreed that she did a marvelous job epoch npr -- at npr of bringing it into digital innovations. last week, she was speaking at harvard and she had this message for public radio. she said, "you are now competing i nn the big leagues. you must become your own destructors. if you do not aggressively reach out to new audiences, someone else will. there is no such thing as asting media loyallytuy,y,

especially and this age of media promiscuity." . bill, i suspect you may agree with that. >> in part. you will win on the basis of brand. if that brand represents quality. you will have bits and pieces of reformation floating around on every platform. but how do know we can trust and you cannot. what jim lehrer in his opening remarks talked about, derivative reporting. it is talking about what somebody else reported that somebody else reported. it is not a pulitzer prize- winning reporter doing direct journalism. if you've got that kind of quality, we have something that linda will talk about later called public inside journalism that draws from expertise of the

audience in a the database of 100,000 experts around the country and makes journalists more efficient and helps them get there and start -- their stories to be more accurate. that helps the quality of what we are producing and that improves the brand. but you have to be able to know what to trust. you have to be able to have somebody doing a quality original journalism rather than everybody writing about what everybody else thinks everybody else reported. >> karen, the same question but applied to a media market like washington, which is very rich and news sources. you have these papers, very aggressive television operations. one of 31 all news radio stations, which is i believe the number one station in . the market the market.

so you have a lot of competition. what is your role in this media ecosystem? >> that number one commercial news and talk station that shall remain nameless -- [laughter] wamu beats them in every quarter hour audience and the 18-34- year-old audience in morning drive. the content, the quality. we have a different mantra. we carry a different mantle then our comfort -- commercial colleagues do. information dissemination is one thing, but knowledge building is completely different. we are about helping you understand from your backyard to the globe. i tell my staff, i want wamu 88.5 at the kitchen table level of helping people figure things out and navigate the world, whether it is a new budget plan,

a health plan. we have got our great local education reporter cardoza doing a five part series on childhood obesity. when you go to wamu.org, there is the story. there is and the graphic -- interactive widgets. things can put things on their plate and see how the calories and up and what kind of activity there would have to do to bring that off. community engagement really, really is key. another telling figure -- twice a year we get an aggregate audience report that shows all of our platforms -- podcasting, all of that. we are at 770,000 people consuming all of our contents on a weekly basis. 165,000 is on platforms other

than channel one. it will ramp up for individual stations to figure out a way to be on every emerging platform. you do not know who your last nikola -- your next listener is coming from. >> pat. before pat answers, can we get ready? we will have hand-held lights. think of your questions. i will turn for questions -- we will have hand-held mikes. >> karen and bill said this exactly right. at my previous incarnation at the washington post company for 20 years, which created washington post.com. and i see a lot of fellow "post" alumni and the audience. the mission was to create some world class journalism that people around the world could actually enjoy through this new, called theugatform

inditernet. we now have 12 or 13 million viewers on washington post.com. more people are reading than ever before. the same thing can happen with public broadcasting, public television, because of the trust factor we have been talking about here. and there is the quality that i think will be very useful to us as time goes on, "the washington post" has not spend a dime outside of the washington area to promote washington post.com. these millions of people have come from around the country because of their faith in this franchise. the same thing can happen, i think will happen across a lot of platforms that are going to be available to us in this new century for the public broadcasting people who are at the national and local level. >> will be hearing a lot more about these digital platforms

and the new experiments and the national-local partnership is one that i am particularly interested in. now we are ready for some questions. when the microphone reaches you, please identify yourself. there is a question there. wait for the -- >> hello. housee host of "white chronicle," which appears on public access stations. i am one of the tired old comedies of british journalism. [laughter] i wanted to thank the organizers for bringing together the high priests of public broadcasting, because if you work and produce as an independent producer, we

get no money. we do not even get a postcard christmas. we have been on the air for 15 years. we talk among ourselves as to why we do not exist. we can watch our programs on varying public television stations, but we get no recognition from the larger public television. and we never asked for any input. we get -- we actually pay to get on the satellite. so our situation is an orphan of television. and i wonder why we are treated as orphans if our programming is a sufficiently valuable to be aired. thank you. >> i guess that would be my question. >> yes, paul, please add will to your christmas card list. >> i will. the thing about public television that i think most

people do not understand is that we are not a network. in fact, we are the network model that is upside down. the decisions that are made by the public broadcasting are made at the local level. we do aggregated schedule. we do other things at scale for stations. we do put together scheduled programs. we maintain the satellite interconnection. we have done as a dividend of lot of work on pbs.org. there is a significant amount of programming that the stations purchased. and that is the situation with your programming. and that enables stations to really think about what will work for them in their local markets. we have limited funds of what we are able to distribute. and so we put our resources at pbs around a smaller amount of programming that we distribute at all the stations.

if you travel from market to market, you see that when you visit a public television station, they look very different. as i mentioned earlier, part of the strength of what makes us so different is that we are the ultimate, local organization. >> next question. we have a hand here. >> ok. thank you. i'm a correspondent for a japanese public broadcasting station. coming from the country where the public broadcasting is doing a major role in journalism, i am kind of surprised to see this conversation that npr and pbs and tells the public -- [unintelligible] my question is, is there any way that pbs and npr could combined together and build a new,

stronger public broadcasting in this country. that is my dream. >> what a good question. the question is, why do we have a a separate public radio and public television system? and why can't we all get along? >> we do get along. [laughter] i would say that they are very different business models, one from the other. the reason for them being separate are historical. but we are more and more collaborating on projects and combining forces and doing some really exciting things. and i anticipate that will continue. i think combining the two organizations as businesses would be hugely complicated. i do not know that it would necessarily create a stronger

combined organization, but i do know that we are, we are really interested in working together to best serve our public. >> we have done a lot, particularly over the last few years together, both in areas you do not see. we worked together on corporate underwriting and trying to bring those resources. on the business side, we are working together. we have been working together on some of the architecture for the work that we are doing online. but more apparent to the viewer is the work that we have been engaged in in journalism. and "the newshour" and npr have come together on projects. with other organizations. and so npr has very deep reporting capabilities that we do not have on the public television side. it makes no sense for us to try

to construct a system like that. it makes more sense for us to work together and to try to leverage the assets of both organizations. of course, online everything does come together. that is where a lot of the partnerships have taken place. but i think that, again, the way that we are a little different -- and i want to commend nhk for doing such extraordinary coverage both in japan and to the rest of the world over what has happened in your country over the course of the last month. it makes as proud to be a partner of yours. -- makes us proud to be a partner of yours. we are doing partnerships with you. there are great opportunities. "frontline" did a piece a month ago about the medical, corner system in this country. -- the coroner system in this

country. reporting that was done results and a week of journalism at for all things considered, a very powerful broadcasting event, as well as a lot of material that is available on-line. so i think those kinds of march -- models a partnership are clearly what we will be doing together. i think it is no a coincidence. 1/3 of taken more than1/ all peabodies awarded. >> bill, did you want to? this will be our last comment. >> it might be like trying to merge the nhk and the bbc. think about that. is thing i'm concerned about the challenges that have come up this year give us an opportunity to really rethink and re-look at

how we're structured, what we are funding. and look at what could public broadcasting be. public broadcasting is going to be probably the last person standing in terms of journalism. newspapers -- i love newspapers. i am carrying one with me, but they are weakening and they may or may not make it through the digital transmission. some of them made. lots of them may not. radio, television, cable -- increasingly polarized. you make much more money being polarized than any other way. and if that -- if that is what is and forming our country, then who is going to provide the accurate information, everything from health care to social security two wars in -- to wars in the middle east.

and it leaves us -- we are fortunate here, but nowhere near as developed as we need to be. what you work with at nhk is unbelievable in terms of what we work with here. somebody has to say, how important is this? when you are cutting things in the budget, does it make sense to cut public broadcasting's $450 million in order to cut back on the knowledge that people need to make the decisions on what the government should be cutting or what the government should be funding? cutting the voice of america, cutting out the mandarin service. chinese have now said that maybe they could have a pledge week and pay for it. it is so important. what is the role going to be? i do not see any other

alternative, other than the journalism that public broadcasting and maybe a few of the strongest newspapers can do. it's not $450 million. i am probably the only one that is saying that we should be tripling or quadrupling that amount of money. the issues that congress is trying to cook with are understood by the people that will have to vote and decide that. foolishlish, it's pound not to do that. >> ok. with that, i think we will have to bring this discussion to end an end. thank you so much to our wonderful panel. we will be back in 10 minutes to discount -- continue the discussion on daschle platforms. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> on a c-span this morning, virginia governor bob mcdonnell talks about the economy and state and federal budgets. that is followed by a look at global food supply and sustainable agriculture at the atlantic monthly magazine food summit. later, today's "washington journal." >> republican congressman ron paul said today he is forming an exploratory committee for the 2012 presidential election, a preliminary step to officially

declaring as a candidate. he has run for president twice before, in 1988, as a libertarian, and in 2008, as a republican. this is 20 minutes. [applause] >> thank you. today, i am announcing that i did fall for an exploratory committee to run for president on the republican ticket. also, today, i would like to announce there are three members of the republican central committee who will head up that organization here in iowa. they are here with me today, and i would like to have them say a few words, because they are going to beat busy in iowa

organizing. i would first like to call on drew ivers. [applause] you, ron. congratulations. i have a prepared statement. i would like to read some thought i have. and we have copies on the back. as an official of the republican party of by law, i am thrilled to support congressmen ron paul as a candidate for the republican nomination for president. why? why am i excited about this candidate? after 35 years of political activism, i have not seen another candidate with more integrity, character, intellect, and courage than ron paul. in the midst of our national financial crisis, i believe ron paul is destined to be america's

leader, providing solutions for these problems and hope for our people. having spoken on and lectured on this topic for over 30 years, he is clearly washington's conscience and of of guard. -- avant garde. in addition to this leadership, he represents the sole of the republican party's limited government tradition and the old cry -- that which governs least governs best is the model of conservatism and republicanism. and i believe it is embodied in the 22-year voting record of ron paul. of the many challenges we face in america today, the morality of spending money -- the immorality of spending money we do not have is the greatest

threat we face. ron paul has never voted for an unbalanced budget. he has never voted to raise taxes. he has never voted for government regulation of private enterprise. thus, he has never voted to spend money we do not have. it's the spending that is at the heart of our problems. on ron paul is washington's disputable champion with an unmatched record of fidelity and consistency on this issue. congressman ron paul alone has the credentials to claim leadership in this area of spending within our means, without borrowing and without printing. positiver. paul's message of personal responsibility and constitutional government is our founder's formula for success,

which leads to liberty and prosperity and peace. i believe his message of individual liberty, small government, sound money, free markets, and anon interventionist foreign policy will connect with the iowa republicans in the upcoming election. consequently, i believe we are able to build an organization and compete very well in this first in the nation caucus state. we look forward to the straw polli in in august. thank you, all, for coming out. [applause] distincty real pleasure to introduce a colleague of mine, also a member of the state center committee, david fisher. [applause]

>> hi, there. i'm david fisher. i'm humbled to have the honor of helping to lead ron paul's presidential exploratory committee. i'm a republican. i have watched my own party stray far from its principles . giving us ever bigger governments, more debt, more inflation, or invasion of privacy, more policing tyhhe world, and less freedom. i have stepped up to lead my party, to call the gop back to its roots, its constitutional rights of bringing us a constrained government that will deliver more freedom and more peace and prosperity. ron paul is a real republican. and as a grass-roots-elected iowa gop leader, it is a

proper for me to help and support him, because the principles he champions and the young people that follow him and the movement that he leads are the future of conservatism in america. it's our job as iowans to tell the rest of america which of these potential candidates has the message that america needs to hear. ron paul is the right republican with the right message at the right time. i'm proud to support him. something is going on in this country. and i want my fellow iowans to and m ee and ron paul be a part of it. we will have a lot of fun. >> next, i would like to introduce my friend, mr. a j spiker. >> thank you.

thank you, congressman paul fro or coming here. it is my pleasure to be part of the congressman's leadership team. i look forward to working with the congressman to restore the ideas that made america great, the ideas of individual liberty, constitutional government, sound money, free markets, and a pro-american foreign policy. thank you, all, for coming, and have a great depay. [applause] >> i am willing to take some questions. and i believe the members of the committee will also take questions as well. i want to thank drew and david and a.j. for those generous statements, and your willingness to the organizers.

without going into any opening statements, i think i will go ahead and take questions. >> what do think is change that would enable you to do better this time? >> the one reason why most people expected to be quite different is the country is quite different. i believe there are literally millions of more people now concerned about the very things i talked about four years ago. . . . and the national

harris -- national health care law. >> this morning we are delighted to be hosting our latest in a series of conversations for some of america's most influential lawmakers. this conversation with virginia governor bob mcdonnell. bob mcdonnell was sworn in as the 71st governor of the commonwealth of virginia on genuine 16th, 2010. in that campaign for office he received almost 60% of the come and the most votes than any candidate for governor in virginia's history.

and since taking the oath of office, governor mcdonnell has reduced state spending to the 2006 levels. is cut $6 billion out of two budgets, and he has defeated attempt to raise taxes by $2 billion. as february of 2010, the state unemployment rate has fallen from 7.2%, 6.5%, at the ninth lowest unemployment rate in the nation. the latest poll in virginia has his approval rating at 66%, even and maybe because of cutting spending to the 2006 levels. he has fought for pension reforms and many other things that we'll get into. bob mcdonnell is one of the country's most successful and for minded governors. we wanted to hear from him in the venue we chose to have a conversation with one of america's finest political reporters, byron york, the chief political correspondent and a twice weekly columnist with the "washington examiner." we will be having a conversation

for about 45 minutes. we will open it up to q&a from all of you, so without further ado i will turn over to you, by the. >> thank you very much, and thank you, governor, for being here. the election of bob mcdonnell in november 2009 was really the first ray of hope for republicans after the electoral disasters of 2006 and 2010, along with the election of governor chris christie in new jersey. your election in a state that barack obama had won in 2008 sent a signal that republicans might be recovering more quickly than thought, and that the for your democratic rain predicted i changed carver might not last that long. it was followed by the election of senator scott brown in massachusetts and then really smashing republican victory in the 2010 elections. now we are in a fight about the

budget in washington where we have a situation where last year the leaders of the house and the senate chose not to pass a budget at all. this year we had a government shutdown fight that was resolved literally at the 11th hour. and now we have to budget proposal that both almost come from different universes. you on the other hand in virginia close budget shortfalls by 1.8 going to invent 4.2 billion. you did without raising taxes and not blowing up the state. so what are the lessons of your experience for what we see now in the federal budget fight? >> that's a great place to start. first, pete, thanks for your work at e21 and happy to be here today at the manhattan institute, also sponsoring this.

i do appreciate it. i think not just what's happening in virginia but governors have been doing recently in many states, a pretty good example of how you can take the tough stance, govern like a campaign to govern on conservative principles, resist spending and actually have fiscal responsibility and prosperity in your state that the federal government can learn from. governors have a balanced budget amendment. we can do what happens in washington. we got to make sure revenues and expenses are equal every year. we don't have a big debt limit. in virginia, 5% self-imposed but we have on that for decades and decades. we can't pass continued resolution. the bottom line is we've got to make sure that balances are

equal every year. so to answer your question, what we did is said look, we've got to make the tough call. we cannot raise taxes. governor kaine left me with a 2 billion-dollar tax increase and expense cut to balance the $4.2 billion deficit we had in the 11 and 12 budget. the outgoing governor gets to introduce the budget and the new guy coming in in 2010 gets to inherited to see what we can do with it. we have a set that as a democrat majority in the house with republican majority whatever we did have to have a bipartisan agreement to get a budget. but i was very clear, we were not raising taxes so let's sit down and discuss where there is we can cut in a way that limits and sets priorities, and that's what we did. the lessons of the federal government, we made tough

decisions. governor kaine accepted 4 billion before i got elected, so we cut dramatically in k-12 education. in health care, many health care programs are we're trying hundreds of of dollars on a $40 billion annual budget, and then we did some one time reallocation, like most? there was an federal stainless money. we're able to do that without raising taxes. we'll back to the 2006 levels with the budget, and the good news, tried to come as you start to point out, unemployment is down five much act we do this cuts we ended up fiscal year with a 400, and $309 surplus. but i guess i'm here today that those things work. yes, there were a lot of short-term pain. yes, we got letters from teachers and from health care providers saying this is a disaster, this is tough, we can do this. but the reason it worked his when you reduce spending and you

ask your officials in your administration to set priorities and use the money of allocated the best way they can, they will manage will. it will rise up to the call, it will make a smart decision, and the priorities will be funded and those are not that are not parties will not be. i think that's what happened in virginia and i think that's what we've been fortunate to turn the corner faster than most states. we'll be looking at our second surplus at the end of june for the fiscal year. we are running well ahead of forecast, nine to 60% revenue growth over the last few years. as we cut spending we also invested in job creating measures, tax cuts to other things. and it's working. >> is the fundamental driver of balancing the budget simply the fact that you can't print money, you have to do in? >> absolutely. that's why i strongly support a balanced budget amendment, i introduced a resolution this session of the general assembly after talking to congressman goodlatte and senator cornyn,

both would support that it's the only way i can see after honestly decades of irresponsibility at the federal level with republicans and democrats overspending, overpromising and over borrowing. and the balanced budget amendment, 49 i think and 49 of the 52 governors, i'm counting the territories, is the only way i think put the lid on spending where federal officials will not continue what they have been doing. so it's clearly a motivation for both parties, to make sure that you don't do with the federal government did. >> even if obama's budget and it were to pass, the whole process takes you to happen. and we are facing i think our third year, trillion dollars deficit. no prospect of a real agreement on cutting that anytime soon.

what do you see in the short run in the next four years in terms of the federal budget and the deficit problem? >> i think what i see is, unfortunately, is the greatest country in the world about to pass on to the next generation, the children of the baby boomers, a country that's potentially less secure and more in debt and more financially unstable than at any time in american history. and that is tough medicine. and it should be embarrassing really by all of us. i've got five children and they're going to be inheriting the decisions that all of us make. and i'm hearing some of these young people say that for the first time, great generation passed onto you baby boomers, a great country, and while yet made great advances in technology and energy and other things like that, but what you all collectively are doing at the federal level in particular

usually unsustainable and really immoral. 7 trillion going to 14 trillion under the presidents introduced budget, even with looking more than $20 trillion, which is tens of thousands of dollars of debt for every american. it's just not, it's not responsible. so i think we need a real wakeup call that is debt is just not something out there that some future government can deal with, but this is a clear and present danger to american security. internally and externally, and until we really are serious about this, we are on a very bad path. and it means cuts and virtually -- no area of the federal government ought to be off limits. into erasers discussion about entitlements, medicaid and medicare, we are really not serious about balancing the

budget. this last discussion about 38 billion versus 61 billion, everyone knows you're talking weeks on the interest. not talking about anything serious about balancing the budget. so of course as you well know, a big battle about the debt ceiling and now the ryan budget. >> you mentioned the ryan budget, and one of the key parts to the ryan budget, bringing in medicaid costs under control, is a block grant to states. doesn't that just throw the tough decisions on you at that point, is that something you want? >> yes, because i think governors can manage it much better than the federal government without the bureaucracy and not have worried baking for worries and all the other things that are locked into the medicaid law. mr. jefferson, the second governor of virginia, said that government passion he's

absolutely right. 535 people in washington probably are going to be over all less than touched with their citizens than the governor and his cabinet or her cabinet at the state level fading out what the citizens me. i really think that most governors would prefer the. i was one of 21 republican governors who sent a letter to the congress about a month ago to ask for block granting of medicaid. here's will happen. a couple of things. one, first of all, i find any authority for some of the programs the federal government is doing in article 1, section 8 of the constitution, there in lies is the real problem with where we are today. that's supposed to be the parameters or the fence around federal power. tenth amendment says everything is basically goes to the state and the people. well, we have dramatically undermined that compact of federalism that our framers

thought were key to american prosperity. we really haven't done the. i think part of the discussion about medicaid, how do we didn't get that deal back, the power back to the states in those areas where the founders thought that it should be but i think particularly these areas are exactly it. at least give you an idea of why i think it's important medicaid spending in virginia over the last 27 years has grown 1600%. if you get your hands around the, 1600% from about $220 million, 3.4 billion. far and away the fastest growing expense item of any government program in virginia. it's gone from 5% of our budget, to 21% of our budget. that's before obamacare. you lay on obamacare, we've estimate is going to be another $2 billion by 2022 which will drive us up to 27, 20% of the state budget. this is unsustainable.

we don't have that kind of money in our general fund to continue to put that much over a quarter of our entire budget into medicaid. many states are over that 21%. they are at 26, 27, 28%. every governor in the country knows medicaid expenses are a huge challenge. and so what we all believe are what most governors, if you all will give us the ability and take off the shackles about so many of the rules and regulations, give us the ability to innovate on what kind of program or incentive for self health care, and responsible for their own care, a series of incentives and disincentives and co-pays and some other things like that that we can put in place for medicaid, managed care and some of the other things we would like to do, we can save money. the federal government can block grant it and just have made a small cost of living increase that they provide every year

which will save them dramatically more than what they are paying now. and it will be a win-win. so that's the goal. i know that was a long answer to this is a very important issue and it's one of the government can start to get entitlement under control. >> is it a win-win to the recipients? doesn't mean diminished availability, quantity of care for the recipients? can you save all this money simply by cutting through bureaucracy or does it really mean less care for people who receive medicaid? >> i think that's up to how well each government does with that money that they get. there are innovative programs like indiana and louisiana, governors that agenda good job with that. states that have gotten a fair number of waivers am the token in the medicaid program have had the ability to do some creative things. there are companies like and their group that are doing managed care for some states that are dramatically dropping

the cost of medicaid within those states. so there are any number of ways, try to, to have a reasonable level of care. but again, medicaid is supposed to be a safety net. yes, it's an indictment now. people have to fight it but it is supposed to be a safety net that we as a compassionate society put in place so that those who don't have the ability, reportedly, to provide for the own health care that are either poor or aged or infirm in some way to get these things through the federal government. but that doesn't mean that we have to have a system were essentially everything is free and there's no accountability for the recipient. you all know what that means for a government program. if you get it free and it's the best that can be and some else is paying for it, you know what

human nature is, you want the best and you don't care who pays for it. that is a real disincentive that goes against the very ingrained human behavior. putting together some type of incentives into the system that maintain a good level of care but controls cost i think governors can do that. >> what do you think about medicare component of the ryan plan? >> i have had a chance honestly to look at that in a great deal of detail because that's only federal. medicaid is a 50/50 state federal match and so that's where governors have looked at. i've called the ryan budget a good start, but even with the ryan budget we're talking about decade before you balance the budget. >> the late 2030s. >> again, for a governor, it's still a four way of thinking. i've got to do that every year on time, no c.r., no excuses, no federal money. so even with that budget, it's really not come is a good start.

it's better than the deficit we've been running up with the obama budgets. but it's a small start. i think medicare, doing everything from looking at reducing certain benefits, changing eligibility and agents -- ages and things like that, i understand are contained in components of the ryan budget, are a start but i really think, if this goes to the heart of your first question, i think americans at this point in time already for straight talk and and ask conversation about what we are doing. for two reasons. one is most americans the last couple of years are doing it with their families and their business. they realize they can't keep spending the way they have been spending, whether it is with her credit card debt or somebody has lost a job in the family, whether it's because of business contracts and such so they've

had to make tough decisions about business. people have been doing it so that expect the government to do it too. and then secondly, because i think, i've been in office now, this is my 20th year. i think this is about the first time i have seen a newer and enlightened understanding by the citizenry about what deficits and debt mean to them. not an abstract sense for some future government to deal with, but what it means for them and their family at the front door. in other words, what they're going to have to pay, what they are living on their kids and their grandkids. what increase barred by the federal government means to them in terms of reduced access to capital and driving up inflation in the future. when voters understand what it means to them at the front door, they then start to react. i really do think now that there's a much more educated citizenry about debt and deficit that is what people are talking

up in washington which i think frankly is good for conservatives. we are not talking about health care or some other thing. we're talking about what is the fiscal plight of america. and that's good. we are talking about issues on our turf and that gives me some hope that we will solve it. >> this idea that given the deficits in the last years that we are kind of a different public mindset, paul ryan and republicans i think that you are right on that, and president obama and the democrats are betting you are wrong. and there are a number of polls that show people so they want to see the deficit come down. they would love to see the budget balanced, but they do not want cuts in medicare. they do not want cuts in social security. and those who receive medicaid do not want cuts in that either. there are a majority opposing cuts in all of those things. so, why do you think you're right on the? >> because it's a math problem. it just doesn't add up. you can't have both. you can't say on the one hand you want to fiscal

responsibility in america, at the same time not being willing to have reductions in entitlement spending. i just go back to my own experience, when we say we're going to have to make major cuts in k-12 education, i don't know if you remember that the teachers union said if we make these cuts we will lay off 30,000 teachers. there will be little kids that are not going to be able to be learning in a good public school building. and we heard all the -- guess what, it didn't happen. a year later those things, i think there were less than 1000 teachers that actually got laid off. that we have reassessed that most of them are back, and why? because we instructed people throughout the education system, our administrators, school board and others, make good decisions, set the priorities, teachers in the classroom. the priorities one. more bureaucracy and more

overhead and more middle level managers at the public administration building. they made the right decision with the limited resources. i've got some faith in people, that if you give them clear direction, and you give them more limited resources, they will rise to the highest and the welfare that's, i cannot say that's the virginia experience. say that with chris christie in which donald, scott walker and others that are doing a lot of the same thing. and yes, there some short-term pain, and yes, your poll numbers may go down a little bit. but do you know what? people i think willis, one, we've got to do it, so we are willing to see the government to do. i think tom coburn said it best to he said for us to get our country back on track we've got to have a generation of lawmakers that are not worried about getting reelected. i can say from what we're doing with redistricting now, and what

i know from 14 years and the legislature, every lawmaker is worried about getting reelected because they deeply their ideas important for the future and that's great about our system. but we are in a critical tipping point where after probably four years of overspending by republicans and democrats in congress that there is no more room to do that. president obama's own commissi commission, simpson-bowles commission, i think is alan simpson that said this as their issued their report, he said there's no more they can to bring home. the biggest day. i think is exactly right. -- the page is dead. when they see these numbers they see the stickers on fox and cnn about the interest payments, and just rolling by thousands of dollars a second, type of thing. we got to make some change. >> you mentioned scott walker. what is the situation in wisconsin mean to you? wisconsin, virginia, very

different states, but what does the experience we've been watching in wisconsin mean to you? >> it means that there really are big battles in the country between the left and the right. and for there to be significant results gained and restoring fiscal responsibility at both the state and federal level don't have to be some very tough battles. and there were two issues really in wisconsin. one was the walker budget to address the $3.7 billion deficit similar to what had in virginia, and i think largely the citizens were with him. they got it he was very clear. i'm reducing the budget without raising taxes. we'll find a way to get this done. the bigger battle obviously was the public sector collective bargaining. and all of you are well versed in what happened there. we did that 18 years ago in virginia before i got there.

actually governor wilder, democrat governor, signed that bill in virginia. so we have long had a prohibition against public sector collective bargaining in our state. we are one of the best managed state in the country. and in that i think is art of the. i think what you learn is that, number one, governors and leaders at every level are going to have to aggressively take on a fiscal plight of their state, address pension, unfunded pension liabilities you can't talk about it but i do $18 billion of unfunded liabilities in virginia. we did a little bit in virginia this year. not nearly enough to fix the problem. and number two, that governors starting with people like walker, are going to look for ways to be more competitive. and that means removing the

obstacles to auburn osha and capitalism and free enterprise. it means whether its unions or taxes or regulation or these other things that hurt the ability, the entrepreneur to start a business or grow a business. those things will have to be addressed because we are in a very tough global economic. i don't just worry about tennessee and west virginia and maryland and north carolina and florida and texas anymore. i'm concerned about china and india and singapore, taiwan and thailand and other countries that have really figured it out, either perfecting some of the things that have been good about western civilization, or flirting with capless and. i'm going to china next week. china, japan and korea and tell them the virginia store and try to get people to come and invest in virginia. ..

>> what he was trying to do was really big, you make the case over and over and over again. we've seen chris christie doing that in new jersey. and in this case he made this proposal, and it was kind of abrupt. when you're going to make a big change, you have to prepare the public for this in some way. >> yes. >> how do you do that? >> i think that's a good question. that's what we did as well with cutting the budget six billion in realignments. i talked a lot about that during the campaign, so i don't think anybody was surprised when we came in and killed that tax increase and were able to reduce

spending. people were, i guess, ready for us to be able to do that. and, brian, you really said it in your question itself. you've got to tell people what the problem is, tell 'em what the various courses of action are and then tell 'em why your preferred course of action in this case outlawing public sector bargaining, why that helps you to be more competitive and would create more jobs for wisconsin. i can only tell you that the flipside, though, is political capital is fleeting. as we probably, everybody that's been in and around elected office knows. and it, arguably, is as high as it's ever going to be when you first get elected. scott got elected by a pretty good margin. and so when you're taking on the budget, you might as well take on some other things that were budget related. at the end of the day, not only was it about competitiveness with the collective bargaining

issue, but also about the predictability of future increases for the employees. that's a huge part of the budget. virginia we have a huge part of our $40 billion budget. if i could predict better what mill benefit costs are going to be, it's a lot easier to budget in the future. so they really were wrapped in the budget. and he happens to be in a state that's the end -- epicenter of of the battle. you do have to explain the problem, tell 'em why your solution's best and then repeat it over and over and over. the old saying is, you know, when you get tired of saying it, that's when people are starting to listen. we're so close to it in public life that you do have to make your case repeatedly. eventually i think people will at least understand why you're doing something even if they don't agree with it. >> let me ask you about obamacare or the affordable care

act. >> yes. >> the state of virginia wanted a fast track supreme court review of this to get this settled, and the supreme court has now said, no, they're not going to do it. it's going to have to go through the normal appeals process up to the supreme court. what does that mean? >> very disappointed. that was a decision handed down yesterday by the supreme court, and it was done in part because the justice department objected to our petition for a fast track. it's extremely disappointing. and every american ought to be disappointed because whether you're for obamacare or against it, what you should want is certainty and finality. and that is knowing now in your business, in your personal life if you're a health care provider or an insurer, you should want to know is it constitutional or not? because then you can start putting the things in place at the state or local level or in your business to know what you're going to have to do with your benefit plan as opposed to now maybe waiting a year or a year and a half or two years or

whenever the federal circuits finish their work. then they may wait in the supreme court to have them combined, the florida case, virginia case, other cases. and then the u.s. supreme court on a regular track makes a decision. i'm very disappointed with it because the sooner we got the answer, the sooner we'd know what we need to do. most governors now are tasked with a number of things they have to do by january of 2014 under the affordable care act. you've got to build health care exchanges, change insurance law, you've got to do a number of other things. and in good faith as a governor i've set things in place to try to be ready for 2014 because i don't know if it's going to have to be enforced or not. i hope it doesn't. but i've got to be prepared because if i'm not, then i've got other sanctions that are going to be visited upon virginia like other governors do. if we knew in a year from now, let's say, or six months because of the fast track from the supreme court, and they ruled it

was unconstitutional. we would save the taxpayers in virginia a lot of money by not having to do some of these things. so it's a disappointing result, and i think it is linked in part to the obama justice department being opposed to it. now, i don't know if they just didn't want an answer from are the u.s. supreme court before the election. that's not what they said. what they said is we need the circuits to rule on it and develop a body of law for the supreme court. i think that's nonsense. the supreme court is going to decide this matter. everyone knows that. and they could have done it without any advice from the circuits. they do that on other cases they think are important. in fact, they've taken other cases over the last 25 years that were arguably less important to the public than the constitutionality of the health care bill. so it's disappointing. we just got the ruling yesterday, but it is what it is. they've made their decision, so now the good news is we'll have a hearing within the next couple months, i think, within the fourth circuit. the fourth circuit has agreed to

an expedited hearing, so at least the virginia case will be advanced, hopefully the florida case, and at least we'll get it to the u.s. supreme court a little faster and create the certainty americans want. >> but you mentioned things that you're doing now to prepare for a 2014 rollout of obamacare. specifically, what kind of stuff are you doing? what does it cost, what's being done right now in. >> well, we've had to gear up staff in various areas to do the things that the obamacare law requires. as you know, many of the, many of the parts of the law have already gone into effect dealing with pre-existing conditions, kids on your dad's or mom's policy until '24 and some of -- 26 and some of those other things. so we've already had to make changes in the law. we've had to change insurance regulations already as well dealing with pre-existing conditions, some other things which means some additional

staff at the bureau of insurance to be able to deal with those laws. the big thing right now is setting up the health care exchanges. most of the experts believe it is about a three-year process to adequately set up these health care exchanges. we got a bill passed this year in the general assembly that forms the framework for health care exchanges, and other governors are doing the same thing. my secretary of health has been meeting with some of these other experts to talk about what is a good plan for setting up these exchanges in a way, frankly, that's least bureaucratic and least expensive to virginia and to, and to the state. it costs some money to do that in planning and in staff and some other things like that. so that's what we're doing right now because we've got the way the law reads is we've got to be ready by january 2014 to have exchanges in place, and if we don't, then the federal government will take over the exchanges and, frankly, that's the last thing i'd want. i'd rather have a state-managed exchange that we can control and

monitor ask and run the best -- and run the best way possible. so those are the major components. i think what they did is they front loaded the goodies, if you will, the popular parts of the obamacare plan like the issues with pre-existing conditions and having children on a plan extended from age 24 to 26, but the tougher stuff, the individual mandate's not effective until 2014 and, you know, we'll have to deal with that down the road. >> so you could see a situation in which you continue, a year from now you will be one year further into building this infrastructure. >> yes. >> at some point after that a supreme court decision comes down, you win -- >> right. >> -- and then it's stand down, you just don't do all that stuff, never mind? >> it depends on the ruling. now, the justice department in our suit has conceded that if individual mandate falls, then most of the insurance-related regulations also fallment -- fall. because they are so intertwined.

pieces can't exist independently. and, byron, if i might, the reason this whole case is so important is, yes, it's about health care, and it's about federalism. those are critically important. but it's also a fundamental decision about the united states constitution and the reach of federal power. because if federal government can make each of you buy a good or a service and if you don't to fine you, there are very few limits left on federal power, in my view. and this is a big deal. it's also a big deal in the jurisprudence on the tax and spend clause and the commerce clause as how far do those powers extend since virginians had a lot to do with those early documents, the constitution and the declaration. [laughter] we really take these issues very seriously. and, you know, i don't think that the founders would have

condoned that extent of federal power to mandate that you engage in commerce. and if you don't, we're going to take your property, your money. and so i think this is vitally important that the u.s. supreme court get this right. i certainly hope that they will, and they will invalidate it. and it's not about the underlying policies per se. there is broad agreement, i think, in the body politic that people do want, have a decent safety net. we are a compassionate people. we do want to have expanded access to health care. we do want to see costs driven down. but we don't want to do it in such a punitive way that we violate the spirit of the constitution and do it in a way that i think, ultimately, is going to drive up the costs of health care and not down. >> so you are operating on two tracks now. one, which is trying to stop obamacare in the courts and, two, implementing obamacare in the government. >> yeah. >> let me ask you, it seems like

spending fights are endless. you are on the cover of "the washington examiner" today. >> very good picture. >> inside, inside. virginia governor says no to dulles tunnel. so this is another one of these massive public works projects that the details of it are the washington metro is going to be extended to dulles airport, and the question is, does it go in an underground tunnel, or does it come in an aboveground station. and here again you're trying to say no to spending. >> yeah. the difference is it's going to cost anywhere from 250-330 million dollars of additional money. for virtually no material increase in the benefit. >> the underground is more expensive than the aboveground. >> absolutely. by that amount. i mean, the cost of the project already is 2.5 billion. with, that's the entire project. phase one is about on budget, phase two is threatened to be

vastly overbudget. perhaps the $2.5 billion project cost may now rise to as much as $3.5 billion. and that's just unacceptable. the other problem with it is the expense, the increase in expense is going to be borne by prince william county -- excuse me, louden county and fairfax county. and they have overwhelmingly just voted no to paying for that. the board that makes this decision is the metropolitan washington airports authority board made up of not just people from virginia, i've got five appointees. but also made up of people from district of columbia and maryland. they're on the authority. they're the mayor and the governor of maryland also have appointments. but they have no fiscal stake in this game which is sort of a structural issue. and i've made my thoughts known to mayor gray and also governor

o'malley to join me in this. this is not a responsible decision to spend $330 million to save maybe a two and a half minute walk. and you can, there's already a moving sidewalk, you can take a cab, we can build a shelter to keep people out of the rain, but we're talking about a tremendous amount of money that'll be borne solely by the residents and a handful of counties in virginia for very limited additional benefit. so i've asked them to reconsider this decision and, frankly, to reverse this previous decision. it's just not a good use of taxpayer money. we don't have an endless supply of dollars, and in the age of cutting and fiscal responsibility it's not the right decision. >> now we're going to go to questions in a few minutes, but i'm going to change subjects a little bit, ask you about the 2012 republican field. as far as the governors' updates is concerned, we just saw haley barber say yesterday he's not going to run.

the governor of indiana, mitch daniels, is still a question mark. a number of republicans would love to see chris christie run although he has said flatly i am not ready. there's been talk of you as a possible vice presidential choice on a ticket. run down the 2012 field. what do you think about it? >> well, they're all my friends. and it's unusual. of course, we know who the democratic candidate's going to be, but we're nine, ten months out from the beginning of the primary season, and there's not only maybe not a clear front runner, but we don't know who the candidates are. this is not really a great decision. i think, to be in. i'll say a couple things, and i was surprised at the haley barbour decision. i really thought haley would be in. i'm a little bit biased, but i do think the best candidates for the republican will be a current or former governor because governors have to make tough

decisions with no excuses. the buck stops at your desk. you've had to deal with balanced budget amendments in your states, and you understand the need to have fiscal responsibility. the most critical thing we need for our country right now. so i think mitt romney, tim pawlenty, people like that are probably going to make the strongest candidates. now, obviously, there are others out there who are interesting and who are bright and, frankly, who are now focusing like a laser on jobs and the economy and taxes and spending. clearly, the republicans' playing field and clearly the issues we should talk about. clearly, what's on the very top of most voters' minds. what i talked about after my election, i think, clearly responsible for me winning. it's hard to handicap, i think, obviously, if you look at the polls, and it appears as though governor romney is the front runner, but he's the known quantity because he was there last time. i thought he acquitted himself well, especially on the issues of jobs and innovation.

and he's very tall lent inside that area. talented in that area. i think governor pawlenty is going to continue to gain traction. i spoke with him for a few minutes yesterday. he's a very talented and capable guy, did very well in a blue state for eight years. but there are people, other people that could get in the race that will, certainly, you know, make it very, very interesting. i don't know whether newt's definitely in or michele bachmann who's clearly so got se support from the tea party. donald trump has been a very entertaining candidate, obviously, so far. and there may be others. i do think at the end it's going to come down to a current or former governor who will gain the nomination. >> you called trump entertaining. do you think he's a serious factor in this race now? >> well, he's serious because he's doing something americans want, and that is he's straight talk. he is, whether you agree with what his solutions are, he's

very direct about where we are and what the problems are particularly on debts and deficit. now, he's had sort of an up and down business career, but he's certainly up now. plus he's a new virginia business owner. he just bought a winery and a golf course in virginia over the last year, so we like to see virginia business people in the fray, but he's been very direct on some of these things. i think americans are ready for that. it is refreshing to have that kind of -- whether people would elect donald trump, it's hard to say at this point. but he is at least getting some initial appeal with people that like that direct style. what people like about chris christie and others of us who say here's the problem, i'm not going to sugar coat it. if we don't make these cuts, we're going to be in bad shape down the road. that's the kind of leadership people are looking for. >> but the other side of the trump phenomenal illustrates

what people view as real traps which is talking about president obama's birth certificate and talking about him personally. what about that? >> i think that's a nonissue really. as far as i'm concerned, he's president, he's an american, a citizen. the problem with president obama is not where he was born, it's what his policies are now which are devastating for american business and for our future recovery. and really an inendty tuesday in foreign -- inendty tuesday in foreign policy. that's what we ought to focus on. i think these other things are really distractions that just aren't going to get us anywhere, and there's so much for us conservatives to be going after with the obama record. we now know what hope and change means, and it ain't good, for american recovery. and that's what we ought to be able to focus on. and i just think these other things just don't get us anywhere. they're not serious discussions about what ails the greatest country in the world, and if we're going to remain this

shining city on the hill, we ought to say this is what's wrong about the president's agenda, this is what a conservative solution is on taxes and foreign policy and spending and entrepreneurship, and if you vote for us, this is what we're going to do. we had that straight talk in '94 with the contract for america. look what happened. people trusted republicans to win, and we delivered. that's the next part. if you deliver, they'll reward you going forward. and i just think that's the formula for success. >> all right. i think we're going to go to some questions now. we have microphones, we have people with microphones around, so if you'll, please, wait until you get the microphone before you actually ask your question. and right here. >> charlie with d.c. international advisory. governor, thanks for your comments today. two quick questions. on the dulles tunnel issue, do you think virginia should get additional appointments on the metro washington airport authority? should there be additional transparency on that board as

decision making, things like that? second question on international investment, fdi to virginia. you mentioned you're going to china, japan and korea. >> yes. >> if you could give an overview of, you know, what you see as the international role in virginia, other countries you're looking at behind china and korea, sectors in those countries. >> yes. >> kind of an overview, thanks. >> yeah. thank you, charlie. i'm going to look a little bit at that structure. my predecessor transferred the control of that whole dulles core door and this -- corps do have from our direct control that's got multijurisdiction control, so virginia actually is the primary funder but the minority shareholder, if you will. [laughter] i mean, that's not a great deal for us. so i've got to look at that structure. i have good relationships with mayor gray and governor

o'malley. we've worked together on a number of things, for instance, metro funding and safety. we're all joined at the hip on that. we've all endorsed a new governance structure for metro through that board, and we're working together. this one i've let my views be known to both of them, i sent a letter on this exact same issue yesterday as well asking them to support our position, and i certainly hope that they, they will because this is a big project. $2.5 billion, and almost a billion of it's from the federal government, the rest from a variety of sources. to get rail to dulles from d.c. and really make significant more use of that airport and just getting people out to that area so they don't have to use 66 or the tollway and then they can go wherever from there, it's a very important transportation project. but i do feel like i don't -- i have a project sole ri in my state -- solely in my state, but

i can't fully control it. so we're going to look at what can we do to improve that. on the foreign investment area, i think everybody's thinking more globally. it really is a much more interconnected world because of the internet, because of the emergence of the pacific rim countries, any number of reasons. and so one of the things that i asked for last year in our economic development package was we were cutting the equivalent of about $4 billion out of the budget. we actually asked the general assembly to invest in job creation and economic development because long term we're not going to tax our way to prosperity, we're going to get people to invest and innovate and grow our way to prosperity. again, appreciate all your colleagues being here, but they give us about $16 million in new incentives to be able to use, tax cuts, credits, other things. i asked for the money to open up trade offices in england, china and india.

we're doing china next week, and i'll go to india in november. i mean, if i can get on the playing field, that's a third of the world's population right there. and looking these folks in the eye and saying you need to come to virginia. here's why. we're the most business-friendly state in america, we've got great tax policies, i want you in virginia. that's what we're going to do, and that'sbe the way ceos do deals around the country. i do think that foreign investment is very, is very helpful to us. if people are manufacturing goods, i'd just as soon having those chinese companies manufacturing in virginia. if they're going to sell to virginia customers anyway because we believe in free and fair trade, i'd rather have them make the products in this virginia with virginia jobs and virginia transportation companies shipping those goods. so that's why we're doing it. i think we've had a little bit of success in england, and hopefully we'll do the same in china and india. >> okay.

another question here. right here. if you'll just wait for the microphone for just a moment. >> wayne abernathy, american bankers' association. >> hi, wayne. >> appreciate you being here. a lot of people discount the ability of solving the budget problem because you have a president of one party, congress divided between two parties, a population that tends to like budget -- [inaudible] in theory but not in practice. house leadership -- [inaudible] >> well, that really is the big question. and it really is back to byron's question that there is greater understanding of the debts and deficits, greater concern about where we're headed, but asking people to front door and how do you feel about medicaid, medicare, social security cuts, they don't warm up to. [laughter] so there's a gap in the american mindset, and the only way to solve that is leadership. telling people why this shared

sacrifice is in the best interests of our country. the great wartime presidents have done it and others in peacetime in getting people to move towards a goal have been able to do it. and, again, that's what we tried to do in virginia last year with the help of the general assembly, and we did it. you know, back to 2006 levels at a $400 million surplus, greater jobs and dropped the unemployment rate to 6.3%. now people feel better about the tough decisions we made now because they see the fruit of it, and people are getting back to work, and they feel better about it. i have to say, there were some tough, tough times in the short run in education, health care going through. so i think you just have to be persistent to answer your question about scott walker, you lay out the vision, lay out the alternatives and then repeatedly say why this is the best course of action and what it means for you and your families in increased prosperity for the united states of america down the road. so it is going to take john

boehner, eric cantor, paul ryan, governors who are doing these things at the states because they have to with the balanced budget amendment to put pressure on the the congress, to pat the back of ryan and his colleagues to say we're behind ya in doing this because we know it's necessary for our country. and if you do it, you will create a better, a better and more safe and more secure america. look what we've done in the states. we made the tough calls. now we've got less unemployment and greater solvency, and if you do it, we'll have your back politically, and you'll get the good results too. i really do think that while people say they don't want to see these cuts, they know in their heart you've got to make 'em. there's no free lunch. there's no way to get anywhere near a balanced budget unless you make these tough calls. and it's the first time people have really gotten that in their

mind and understand what it means, what it means to them. so i think people are ready for that kind of leadership, and i hope that they'll get it out of the congress. >> okay. we've got one more. we have one all the way in the back here. >> governor, scott thomas from the progressive policy institute. >> hey, scott. >> i had a question about creating jobs and encouraging investment at a time of fiscal responsibility. one thing in the transportation bill you just signed created a state infrastructure bank. >> yes. >> which is an idea that's being talked about here in washington a little bit including a bipartisan bill from senator warner and kay bailey hutchison from texas. wondered if you could talk about how that idea really helps stretch public dollars, create investment, jobs at a time of fiscal responsibility and how that helps virginia make the right -- [inaudible] and at the same time keep budgets under control. >> yeah, good question, scott. i can't say it was an original idea. we listened to other states who were doing that.

my secretary of transportation -- [inaudible] came out and developed that idea, and i think it is novel. we've set the framework for $4 billion of new investment in transportation, those of you that live in northern virginia, you'll be complaining about construction, not congestion. so that's the good news for you. and we did it through a combination of advancing debt which is a great time to borrow. we've got aaa bond rating, great contracts, interest rates are tremendously low, so that was a big piece of it. but the infrastructure bank was the way to take, we took money from our surplus and from an audit that found about a billion four lying around we thought should be put to work building roads and put that in the infrastructure bank, initial capitalization of about 300 million, ultimately a billion, and it's a way to leverage the money better with loans, loan guarantees and grants. so with some of our money and maybe some matches from the local governments or because the loan guarantees we drive down

the interest rates at which local governments can borrow. that sometimes is the deal maker in order to get some of these projects done. and so what we're targeting is the local and regional projects that are either currently unfunded or underfunded and make them, make them go. and the local governments know what those are better than we do in washington. we really do believe local governments, the government closest to people does work best, especially when it comes to these kind of congestion relief and transportation projects. and because it's a revolving loan fund, it'll be the gift that keeps on giving. as they pay it back with interest, the corpus of the fund will get bigger, and we intend to put more surplus monies in the future, so it'll be a powerful engine if we can get it to that billion over the next three years. i've spoken with a couple members of congress about that, and i'm really glad to see that they're looking at that as a way to, as a way to create some creativity in funding. the other thing we're doing is a lot of public/private

partnerships as well. it's a great way to leverage scarce public resources. the normal deal is about 25% public money, 7 5% private money can get a deal done, and then you pay user fees, tolls. it's a lot more efficient to pay tolls over long rural stretches now than it used to be. with speedpass it's almost transparent, so we think we can leverage that money in a much better way now than we could a while back. so those two together, i think, are going to actually mean it's not just a $4 billion package in virginia, it's more like 9 billion because of the projects we're going to be able to get done. >> all right. i think we're actually about out of our time on c-span. governor, i want to thank you very much for coming and thanks to e21 for making this happen, and good luck to you in the future. >> thank you, byron. i appreciate all of you coming and thank e21 and the manhattan institute for their work here. >> thanks very much, everybody.

those are a direct consequence of our economic choices. and what sustainability addresses, if you cannot solve a problem like water consumption or topsoil consumption, and not solve problems down the road. one baby had many chemicals in her cord blood. they are not at carcinogenic levels, but this is a consequence. it is a reflection of modern-day living.

i am the business guy here, not the farmer, although i did my share of milking in the early days. but we support hundreds of thousands of acres, and obviously at the yogurt company, i bore more than know. i've by 150 commodities to be precise. -- i buy 150 commodities do purpose eyes. alths areerent he supported. we support a win-win system. not just modern agriculture, but commerce is almost about someone are somebody moving, particularly generations. just the ground is in business, let me tell you that aside from

the incredible ecological wins we have said, and i would give you an anecdote. we support 40,000 acres of tarp on a secured -- sugar cane production in brazil. people say that if you track sherbert harvesting, and you know that the first thing that you do when you go into harvest, you burn the deal. there is a lot of the synthesis and there is a lot of by a maz -- biomass relative to the cane. we see that as waste and so we burn it. the carbin release of the first order of magnitude. if you go into florida or louisiana, you are seeing this huge carbin release, but it is damaging because in the nutrition that was built up in

the topsoil is also turned into the atmospheric carbon the outside, and you have to replace it with something set the size. historically, that is what we have done. we're not the first civilization to have done that. mesopotamia, and american cultures have already found another place to go when we use up our topsoil. in the past for us, it was going for was. in the mediterranean cultures, it was expanding to other places. or natural gas, which we use for synthetic abilities. we recognize this as an inflationary system. they did not want to be part of that. they green the harvest. they spread the organic matter and put it on the topsoil, and there never exposed to the exposure -- the erosive effects of wind and water or even one second.

the dump trucks are taking away, they do not crush the topsoil. the net result is that they have had 90% reduction since they converted to organic. they had 312 species returning to this land. on again in dairy farms in the central valley of california, and the farmers there have taken their and non- organic farms where there is nothing flying around, because the insects under standard they are going to go where the action is. they certainly improve ground water quality. they have gone higher yields, to% higher than when they were non-organic, but in their conventional counterparts down the road, because they have built up the carbin matter. -- carbon matter.

we're not going to be more efficient by reducing. we have to start sequestering and taking carbon out of the atmosphere. they are building organic matter, an underlying these soils, it is almost equal, 97% to what the forest were when they first went in and harvested. this is the economic punch line of all this. they have not only to% increase of yields, but the organic sugar that i started buying in the mid-1990s as now increased by 100% more expensive. it is not exactly at parity with conventional. -- it is now exactly at parity with conventional. this is not just good ecology and the humanity, but it is

excellent commerce. in that i could say one last piece about the sustainable business, this is an aspect of all this. what i have learned, and i've willamette i did not know this when i set out in business, back in 1983, my gross margins from the very beginning, the margin left after the production of my yogurt, but my gross margins are 10 points worse than dance or you're playing -- dannon or yoplait, but when organic costs more, i could not hardly 100% more for my yogurt. my gross margins had been at a deficit. but down on the bottom line, i make more money. why is that? at conference run by all

wonderful magazine, i should not get into this too much. -- you are off the panel. >> i communicate everything that i just shared with you. i have yet to meet the consumer who wants yogurt with more synthetic growth hormones in it. i have yet to meet the consumer who wants more intrinsic toxics. you have to start with something delicious and it has to taste great. but fundamentally we have created a partnership with our retailers and our consumers and obviously our producers. the 1750 organic dairy farmers out there, they have earned a premium on average of between 40 and 60% more than they would get if they were conventional. my sugar farmers have become much more productive. we of subsidize that. everyone in my system is winning, including the consumers who now have -- if you are on an

organic dye it, you have six time less organic process made -- so the bottom line for me is about win, win, win. and that includes economics. >> thank you. if you all want to follow his model, you can buy his book. he is very transparent about this. there are so many things i know you think you have on the next picture. this is a perfect lead into minutes that are off, the president for the american association for the advancement of science, known to many of you as aaas. into nina fedoroff. she has, her vision of

sustainability is going to be in some regards similar to gary's. and then many points at, you just have some new leads in common, but a lot of differences in the details. let me turn it over to nina who has been listening very intently to gary. >> i accept everything that gary has to say. but let me tell you who i am. i'm a molecular biologist and i started working on plans that when people did not even think that plants had dna. i contributed to the development of the techniques that we have today for the properties of agriculture plans and other plants. i have watched over the years for the 1980's, 1990's, and the following decade, as the

techniques that we used to modify organisms are totally accepted in parts of the food industry, but not other parts, certainly in messes and -- what would we do today without recombinant insulin produced in microorganisms? and yet in agriculture, the world has gotten more and more set against the modification, using molecular techniques to improve plants, not knowing that in the 20th-century, and then the centuries before, we have completely transformed both plants and animals to serve a better to sources. -- to serve as better food sources. the principle of organic --

everything that organic chemistry -- not organic chemistry, but organic farming, it is absolutely true. we have to be more ecologically mindful, even as we pay attention to the bottom line. but there are many ways to do it, and increasingly in the future, we have to look at what we do to the land and what we do to the nutrient flows, part of what he is addressing what those techniques. there is less waste, what we do today is pulled nitrogen out of the air and turn it into forms that plants can use. we mine phosphorus and put it on the soil and most of it runs off. all that is extraordinarily wasteful. much of what needs to be done for sustainability is well within our grasp. we just have to do it.

frankly, all the sugar cane that your producers grow can be grown without imports pesticides and so forth. one of the biggest boosts have come from the development of herbicide soybeans. people straight when you say herbicide, because you equated with pesticide. pesticides at that in six. herbicides affect pathways that we do not have. they interrupt the passageways of aphids, which we do not have. we have only a couple of big commodity crops that are modified genetically. frankly, the bottom line is that we have done that to ourselves. we have erected such regulatory

-- that govern the use of the introduction into production of genetically modified crops, and one is a genetically modified crops, i mean modified them with these techniques, we have been using other techniques for a long time. these are acceptable and organic as well as what is now in called conventional farming. [unintelligible] i want to make a distinction. we now have genetically modified commodity products because those of those -- those are the ones that are big enough to support regulatory procedures, satisfying to regulatory requirements for entry into the market. it cost of the $15 million to bring a genetically modified crop to market. the tragedy is that we have

essentially put our traditional scientists in the agricultural sector, we have made it virtually impossible for them to use these techniques -- for example, to protect specialty crops which include all the fruits and vegetables that we like. from diseases. and pass. -- pest. these include universities in the usda. we have after all these years and despite that all the research that has been done on the safety of genetically modified crops comes to the conclusion that there are no greater dangers in this form of genetic modification than any of the previous and more widely used methods of modification, in

spite of the conclusion that there are not any great challenges, we have a situation in which is very expensive to bring a genetically modified keop to the farmer, much ligh other methods which are organic. those rules that formulated in the early 1990's, and the first version of the organic role included these genetically modified crops because it was clear already been that this was not the best there was not any danger in these of these techniques. >> why such a deafening silence is? that was one of the most controversial parts. >> it was indeed. so many people rode in and

protested that congress had to go back a maker of dissatisfied people. it is not making sense. is not scientifically defensible but this is what people believe. and they continue to believe that. to me, that is a terrible tragedy. these techniques allow us to do things in a more biologically sound way, and we have already with several commodity crops decrease the use of pesticides and decreased the use -- water runoff and waste. indeed. what are herbicide crops allow you to do is kill weeds only when the crop is already established. this means that farmers can adopt something called no-kill farming.

it's exactly the same objective that carried described. you do not take this off the land, you do not -- you turn it over, you do not stimulate the release of carbon dioxide into the air. there are other people in need to talk. the principal organic chemistry and -- farming is fantastically important to maintain, but i would throw away the rule book in use the most modern and up- to-date methods that we have. if we cannot use modern science to increase productivity, i think we are not going to make it. and what we will see is more environmental destruction and not less. making more of less with less damages the whole objective, and there are many ways of doing that which include all that you have heard today. >> thank you, nina.

i am going to ask molly to provide the impossible task of saying, why can we all get along? .ina's in view is very widely shared among a surprising group of people, and it finds a sweat on to "atlantic live -- it finds its way onto "atlantic live" quite often. these are two points of view they want to arrive at similar goals. they want to maintain resources for the future. they just have very different ways of going about it. now i am going as molly jahn, the dean of agriculture at the university of wisconsin at-

madison. she is now a speaker and consultant to the very same department. she says she is to do all the deans was that they were doing instead of administrating. she is also one of the country's leading spokespeople on sustainable agriculture which we are discovering is a very loaded term. could you talk about some of the views you have heard today in what they fit into what you think about sustainable agriculture customer >> clearly any discussion of sustainability requires us to do something we're not especially good at, and that is to think floored. there is a temple to mention to these conversations that is as important and as obvious as that importance is, we are not that good at. that is one critical element in these discussions. any definition of sustainability typically requires some consider

ation of the system in balance. one of the most important influences in my world of organic agriculture is articulate and a commitment toward a recognition of agriculture and our food production systems, our choice is with respect to land management, as a system. one of the most profound transformations in ag thinking at this time is a recognition that we need to move from local -- you've, you've, you've, mali, that is all you need to know. that is local maximum. to a much more complex balance to a system we understand to be inherently closed an accounting turns out to be an incredible

set up conversations with the sustainability, because the catchy phrase, internalizing our externality, turns out to be really transformative. we need to understand in detail and to manage all the inputs and all the outputs, not only those out what's we are used to focusing on, such as food, but all the others, carbin, water, air quality, and the social and political implications that apply in this century where we were phenomenally successful and maximizing productivity, agricultural productivity. we still have not achieved food security on the scale that is acceptable. in some cases, we have moved backwards. that is a productivity issue but is an issue of so much more. will party heard the role that

waste place. we can manage waste, some saying that we waste 40% of 60% of what we produce on this planet. but that is a lot of money has more body moves to the system. gary's emphasis on recognizing that we need to the un manage agriculture -- we need to view and manage agriculture is critically important. play it forward, balance the system, and a recognition of the complexity in a closed system. our planet is a closed system. we do not have many more frontiers,%. and we know that. we have had very specific amount of challenges before. we have one planet, it is

reasonably well designed boundaries, there is an emerging science focusing on defining those planetary boundaries. and they do not have names, necessarily, that correspond to the way the scientific apparatus of the 20th-century was built. but the planet. banner is -- that planetary boundaries become our targets. there are lots of different missing pieces in our understanding into turning them into targets on the ground with respect to water use and our management of niger and, for posture as, for the acidification of our oceans. and that it -- or and our management of phosphorus, and nitrogen, with the acidification of our oceans. it gained some significance traction. it requires structures we do not have right now.

we built them and it is time for us to make those investments in our government, both as a science, and in our private sector initiatives, focusing on reducing the planetary boundaries to the levels we must hit globally. >> two things i do not want to forget. i think you just let us through what you were in fermi 2 as an environmental balance sheet. -- what you referred to as an environmental balance sheet. and last thursday and friday, the unexpected gathering of very different types of producers. >> i had the privilege of sitting at many tables at one of the university science brought into the court the carbon dioxide initiative. the work that he has done in other broad groups, in defining

the term, which was extremely important, in setting tools that allow us to describe the progress we're making on the landscape, incredibly important, and recognizing ourselves and each component in the dow used chain as part of a system, incredibly important. all we know to understand is what the targets are to hit in order to stay within our planet's safe operating place, a critically important concepts for those of us in the scientific community. science is only part of that definition. but it is a critical part. their efforts at usda in building our set of targets for us to hit with agriculture. there is a recognition with the international commission of agricultural, sustainable agriculture, have the privilege

of serving on that. it recognizes the world -- the choices that we make with respect to our food supply not only increases security but brings the planet back into balance with respect to sequestering carbon. with respect to blue water use and many of the aspects that are most important. and after that full balance sheet become so critical, i always say it will be lively and those federal statistical agencies, where the important action is going to occur. >> you are talking about a group of producers they were small and large scale coming together and that you had never seen them come together before. why was that? >> as these efforts have matured, we've come to understand that your progress is going to require some changes all will not win at the same time or in the same way. i think this first generation of

chefs have occurred with win, win, win. we're now getting to a place where it is possible -- certainly it the cost of some of these benchmarking tolls and also reaping the opportunity with respect to the benefits at the supply chain. that is the definition of increased practices. we are seeing the producers community, the agricultural producer committed to coming coming together as they never have before. this last thursday and friday there was a meeting in chicago which really is a very traditional meeting between the american producers and a group of public sector agricultural scientist that supported. you heard kathleen and others

stress how we important local commitments in this area are. we understand that the agricultural producers in these countries are the decision makers. the choices that producer makes other critical choices with respect to water use, and ultimately. bear the cost in our current system. they are driving and producer focus in producer-let conversations toward sustainability. and part of their critical part of the conversation is the recognition that it is about continuous improvement. but we have real targets to hit on this planet to stay within that safe operating space. we have to hit those targets. and the critical parameter is that we know there is not a single right cancer or a one-

size-fits-all solution. we know every technology that intensify its production output and minimizes environmental burden is critical. we understand that economic transformation to relieve some of the burden we are now putting on our producer community to bear the costs of these improvements will be important. we all ways a success will be the things they give back to the environment cost more, and things that are good for the environment cost less. it will be an economic transformation and will add dimension to its consequences. >> that is remarkable. we saw one example in sugar of that balance finally coming into play. havet we're now dissonance. the businesses with the strongest commitment to sustainability will have to pay

a certain higher costs. but we will see some things that are critically important. >> i like to make the point there things developing that address all these issues. for example, urban agriculture. maintaining greenhouses on the roofs of buildings that have lots and lots of groups. it makes it possible for borrowers to get their produce to restaurants and immediately to consumers. that is a marvelous thing. but one of the things that we in this country have not paid enough attention to his increasing -- decrease in water use and increasing productivity on land that we currently consider and formal. -- unfarmable.

i think you'll see more sophisticated versions that minimize water use. there are some cutting edge greenhouse is being developed in various places to the north and in california. >> you have been to saudi arabia. >> i am starting and desert agriculture research center in saudi arabia. >> so water is just of the day. it is so much under everything we've been talking about. are there any questions, since i have been looking at the frantic green moved to the q&a portion for a while. >> if you got a call from the president and the speaker and majority leader of the senate and they invited you in, and they said, we understand that our regulation of technology is

all wrong. we want you to lead in policy development and know what are the three or four hallmarks' that you would ask for to reshape the policy? >> first would do it all together. we have three different agencies that are regulating. back in the old days, there was something called an advisory committee which oversaw the regulation in the very early days. it was an advisory committee and had the flexibility to sunset, to exempt categories when it became clear that we had accumulated enough evidence to feel good about it. today we have plenty of evidence but we do not have a regulatory system that can say, we do not need to regulate this anymore.

it would be the possibility of sun setting regulations, of unifying them under roofs, it can be an interagency group, but it needs to be together because right now part of the costs for the high cost is having to go to three different agencies. and it concelebrant finds what is being asked to muzzle the regulatory burden is proportional to the risk. we now have a big initiative to eliminate unnecessary regulation and this should be of very high target. those are the most important things. >> i was going to as scary if you wanted to be in the same room with you. he has not answered. >> i am glad that what nina is arguing for, we need a big toolbox. we have got a big problem.

if i were in that position, we need to level the playing field here. we are putting enormous resources into one solution to these problems. as we saw the would-water is the biggest issue but so are the other issues. so as topsoil loss and increased toxicity, and farm worker health. and my favorite philosopher of lily tomlin said, we are all in this alone. my admonition to heart policymakers would become a let's pause and take a look at 13 years. the use of these commodities, and what you will find is for example, and genetic engineering, i think her point

was dead on. many diabetics are alive because of the advances in genetic engineering. no one can deny that. you might solve some issues of long-term sustainability but we do not know that it is and we should not put all our eggs in this basket. this look at 13 years of experience. what we will see is that in this so long, increased herbicide uses have resulted from 92% of our soil out there, genetically modified. they pollinate very effectively. we will see that the farmers -- it is a national security issue. keeping farmers profitable should be of concern to us.

seed costs have increased by a factor of four. spending 4% to 6% on seed corn and now they are sending 60% -- 16%. we will get herbicide-tolerant weeds. this is an unforeseen consequence of developing the aggressive crop. i am not saying that this is a dead end for genetic areas. let's keep the playing field balance. let's put an equal amount of investment into traditional agriculture. it is proven farmer income and reducing in cuts and making us -- organized a 1.5% of the federal budget. will happen with these super

weeds? farmers are telling us that they need to do manual cropping, which they cannot afford, or they have to go fallow and put on the foliate. be a non-arid the fall in, -- vietnam-era defoliant. let's use the full two blocks. as put investments across the board. organic does not have the money. but we have excellent science, excellent yields, excellent win, win, win. our farmers and stakeholders are making more money and inputs are going down. it is a larger percentage of our research budget. >> i am hatching a devilish scheme that i will put to you at the end.

>> i promise i will now get down to the nitty gritty. but you need this. not dumb.re they will not spend more on see because they are not making more. >> you have some much more in common, and i am not joking. [laughter] this is my devilish scheme. we have time for one more question and then i will pose a. >> outlet to address some of the inaccuracies. there were some that need to be addressed. i wanted to address this question to molly and nina. in terms of a more systems approach to agricultural research and a more collaborative approach, it seems that there might need to be some rethinking about how science is conducted in this area to bring people together versus encouraging competition. what are the thoughts that you have about how to do that?

>> i totally agree with molly with a systems approach. it is larger than just forms. it is the whole system. he can be closed and sell sustained. -- and self sustained. we are getting rid of our own water resources in the southwest. i agree totally. bringing together food production design teams that are multi-disciplinary, that bring together hydrologist, meteorologist, as well as researchers to work on plants and animals and everything in bullet train, -- in between, it is the way of the future. and it has to be global. that is an area where we need a team work best at using science

and diplomacy in the agricultural areas, and we have gone away from that in the last 20 years. this is a really critical area worldwide. >> i would to say that in the last decade, it is brought a cultural shift in the ways science communities come together. we've seen over several decades, increasing private sector investment in areas that really are foundational. i would say the one of the most important things that is happening now is increasing clarity about what the competitive state is and so research investments, is a planetary boundaries, that is not as competitive that creates a competitive advantage. but one of the most important influences is that they are

shifting to recognize unintended consequences. and we're seeing many differences with what businesses do well, looking at the horizon in anticipating risk. we're seeing significant shifts in extreme climate. we know that we can model those with respect to their consequences on agriculture. and so we are finding teams come together that are completely different from those 10 years ago they were focusing on the global maximum, yield coming year -- yield, yield, yield. the framing in the 21st century is not just about food and food systems, it is really about the value of services that our landscape generates. and the management all told fleet of the services, whether food or carbon sequestration.

>> thank you and in view of balanced systems, here's my double the scheme. kerrey and nina are going to write a book together and they will come together and discover how much they have in common, though they have differences of information. they will reckon now -- reconcile. here is well they would do it, keystone. [laughter] molly would put off her economist at the university of wisconsin at their service. "atlantic live" will publish chapter by chapter updates. >> the book is already been written by sam ronald. >> i know that but but we need to carry and we need you to talk to.

we're glad to have had to start today and we're delighted to have everyone on this panel. thank you very much. i know that. yes, of course i am right. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> we will move into our third panel of the morning. a quick reminder as everyone gets settled, we would ask you to put your comments at # atlanticfood, and fill out your comment cards in front of you. i like to welcome to the stage

our third and final panel of the morning. bridges, consumer choice, nutrition, and policy, moderated by clive crut, senior editor of "atlantic," also a columnist for our national magazine, and an associate editor of "the financial times." before moving to the united states in 2005, clive or for 20 years at "the economist." for 10 years as deputy editor. he shaped the editorial line across the full range of interests, in business, politics, and international relations. he was educated at magdalene college, oxford. after leaving university, he was the unofficial of her majesty's treasury and the economic service. any worked as a consultant for the world bank and as a guest scholar at the brookings

institution. he warned me in advance the one question he will not is off-limg else is fair game. >> you had to bring that up. >> that is the topic du jour. >> i explained that i immigrated to the u.s. to get away from the royal family. and you guys are worse about than the brits. >> we turn it over to you, clive. >> this is an abrupt change of focus. we will talk about what many people call the obesity epidemic. and what to do about it. they have a terrific panel to discuss these issues. let me introduce them. on my immediate left is jennifer grossman, the senior vice president of the dole institute. previously at the cato institute, and a speech writer for the first president bush. zeke emanuel is the chair of the

department of clinical department of bioethics. it was oncologist and had doctorates in medicine and political philosophy from harvard university. he has been an advisor on health-care policy for 10 administrations, including the present one. among his many books is one called "health care guaranteed," which you know i constantly code as the best book written on the subject. i only wish the administration were paying closer attention to what zito said in that vote. that is another topic for another time. susan neely is president and ceo of the american beverage association. she's worked in legislative and executive branches of federal government in the state government on a range of policies. including especially health care. n, ininally, scott kaha

the weight management center. and at authority on nutrition and an author of many books on the subject and a member of many panels advising governments on health care policy. that is our group. i want to start, if i may, by asking scott to amplify a comment of his that i read in something he had written. this suggests that we are framing the issue, a striking way to think about the issue. i will read it out. he said, "the situation is nothing like the infectious disease outbreak in a community of an infected water supply. ultimately you must address the toxic environment in order to manage the disease." if you could amplify, what you

mean by a toxic environment, and why think about the problem like this? and i would ask the other members of the panel to respond. ank you for having me here. the most common causes for death used to be influenza and pneumonia. the reason for this is that we lived essentially in a cesspool. this largely shapes our behaviors and our environment. what we did a century ago in terms of the infectious disease epidemic was to come on the one hand, educate people about health the hygiene, but on the other hand, a number of interventions to address that toxic environment. access to healthy, safe water -- sanitation, increased crowding in cities, and so forth. today we live essentially in a cesspool of sorts with our

informant. in our society in general, the hon healthiest and high calorie foods are the cheapest, the most available nonassessable, the most heavily marketed foods, and in general, they are engineered to be the tastiest foods. none of these things independently are evil by any means, but put together, they largely shaped what are behaviors are and what our health outcomes are. on one income of when it comes to this epidemic, we need to educate people so that they can help themselves make healthy behaviors. but we have to give them half a chance. we need to address this toxic environment, so to speak, so that they can make healthy decisions without having to go to such extreme lengths to get around this environment.

>> susan, what you think of that? >> by training and as an environmental challenge, it is a large challenge. we agree that obesity is a serious epidemic. we agreed that a full court press is needed to resolve it. i that one of the country since we're making is an industry is to produce not just beverages with calories that tastes great, but lots of beverages with no calories or 0 calories. we've reduced the calories across our average portfolio by 20% because that is what consumers want. they taste great, they are affordable, they are ubiquitous, and they are marketed. if you think back to the cold cola war days, now

of the ads are around coke 0 or pepsi max. they are products of our innovation. the full-court press is needed. that is why we're so pleased to be supporting first lady michelle obama's initiative and they keep for shouting out our new labels. we're very transparent about how many calories are in that product. if you do not want 140 calories or 150 calories in a can of regular soda, then have one with 0 calories or had a beverage with 10 calories. i think the first lady has got it right. it is not one food, it is not just workplace, it is everything. that means everyone has to be

involved in creating the change that is necessary. >> i did think talk of the environment is helpful. and i want to pick up in the fallen since, we in the analysis of a tendency to look for a magic bullet. one thing they will switch bohol whole kit and caboodle. -- that will switch the whole kit and caboodle. there's not one single thing that we would change and they will be it. we do have an environment of food supply access which is counterproductive as well as exercised an activity, and i think we do have to change on that full-scale. the one they know it's a justice -- the one thing i would suggest is that a lot of this is not about choice in the classic sense, the maker reason choice

and they examine everything carefully. one commoners said that what we do is mindless eating. it is before us, it easiest, convenient, and if you look for people who shop, mothers take about six seconds. this is not a complex examination. putting too much emphasis -- we do have to provide information and calories on the fund is useful -- but we should not over-glamorize it. people do not take the time, and second of all, a lot of people cannot figure 150 calories, how many of my supposed to have? just having the 150 calories, while useful, is hardly going to solve this problem. we also have to think about the things like portion control, another wave for making it smaller, and 40 years ago, the

average size of a beverage was 6.5 ounces. the average now size has gone up to about 20 ounces. that is a big portion control issue. one of those shocking things. and one of the problems is that everybody does it. it is not just one beverage maker. we're all we calibrated to see 6.5 ounces as puny now, puny. if you do not have 20 else's, it doesn't seem enough. and that has its consequences. that is not as it were 140 calories, that is delivered 50 calories. we do -- that is 250 calories. we have to be clear that part of it is getting information, shrinking, making it easier to do the healthier thing for people. and that is going to -- one of the virtues of talking about the environment is that no magic bullet and we have to switch on

lots of different things. we do not have to have major switches on everything, but across the board we need change. >> and for the record, i completely agree with everything you just said, if we disagree later. >> now i will have to examine what i just said. >> i am going have to get you to disagree about something. what you think about this toxic environment? >> we also talked about that to the environment. -- pete through the environment. we are making it easier for people to make the wrong choices rather the right. it has to be of very broad and not a simple strategy. but we have to have everything on the table. labels are great but we need to consider whether or not we need to have higher taxes on some of these foods. the need to talk about making fruits and vegetables more

available. and more accessible. but we also have to have -- some of the conventional wisdom about why these prices are the way that they are, listening, maybe we should have a straight panel about inflation and oil and what of a large global factors and political factors driving the prices? in terms of a commodity like fruits and vegetables, if you adjusted for inflation, bananas have gone from 40 cents a pound in 1980, the more recently 26 cents a pound. it is a commodity-driven business, fiercely competitive. drive the others out of business, and we're all trying to get the walmart contract. all of us are making fruits and vegetables -- all of that is making fruits and vegetables

affordable as they can from market positions. let's talk about the other things that are involved, litigation, we have so many people running around dole who i love, but they are now working on making the cost of fruits and vegetables less-expensive, because they are defending this lawsuit and spending hours of these regulations. it's like a 40% tax rate. anything -- should we increase cost on some things? what can we do to lower cost of other things? and need ointments --the conventional wisdom, it is just too expensive. there's an interesting study with a stimulated a grocery store environment and they gave mom's a certain amount of money

to go out and buy the weekly grocery surprise for the family. and then they started tweaking the prices. the hon healthier prices more, the fruit and vegetables less. when the price of fruits and vegetables went down, conventional wisdom was that it would buy them. when they went down, they bought more junk food. and that total calorie consumption, they took the money saved on fruit and vegetables and they bought more junk food. a few more fruits and vegetables, but not enough of said. -- not enough to offset. that is what we focus on a dead doyle nutrition institution. >> i want to push back on this too much consensus on this panel. >> it's a red flag to be raised. >> there is a notion of this

toxic environment. >> i do not think we agreed with that toxic but with the environment notion. as a whole. >> i am not going to install the anarchy. but there is an issue here. if you characterize the problem as an environmental problem, you instantly shift the responsibility, don't you? if i lived downwind of the leaking nuclear-powered station, that is an environmental problem and not a great deal i can do about it except move. but it is up to me what i buy when i go to the grocery store. it is up to me whether i had breakfast, lunch, and supper. it is a distortion, could one not argue, to regarded as environmental? when people have