[applause] everyone in the room is invited to a reception which will follow this event in room 121, a cannon, which is downstairs. there will be people to direct you to it. thank you all very much for coming. thank you to the panelists once again for sharing your insights with us. h[applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> we will bring this discussion began to you at about 8:45. we will have coverage from the white house with angela merkel. the arrivals began at about 4:45 -- 5 blog 45.

earlier today, tim pawlenty said that president obama was conducting class warfare. he gave his speech at the university of chicago. this is 45 minutes. >> thank you. thank you for the opportunity to be here. this university has some of the best economic programs. we need to implement some of the

ideas that have been implemented and discussed in this institution over the decades. i want to start my remarks by asking you how you are enjoying your recovery summer? that is what the president said we were having but that was last year. now gases at $4 a gallon, our health care system is more expensive and less efficient. and employment is back over 9%. the national debt has skyrocketed. the budget deficit has grown worse. the jobs and manufacturing ports are grim. if that is our recovery, then our present needs to enter economic rehab. the addiction to spending has to be brought to a halt and we must have a president who has a growth agenda.

the president thought the stimulus, the bailouts, and the takeovers were the solution. he said that they worked. they did not. the president is satisfied with a second-rate american economy produced by his third rate policies. i am not. i promised to local with the american people and look them in the eye and tell them the truth. i went to florida and said that we need to raise the retirement age for the next generation and two cost-of-living adjustments for the people coming into the workforce. i went to new york city and told wall street that the era of bailouts had to end.

the economy is not even growing at 2%. that is anemic. that is unacceptable. that is not the american way. the recession might have changed our economy but it did not change our character. the u.s. is home to the most dynamic and entrepreneurial people in the world. they are ready to innovate, and vest, compete, and create new businesses and jobs. that will mean opportunities for everyone. they have been discouraged and weighed down by president obama's regulations. they deserve a better deal. i will give them one. let's start as a nation with a

big positive goal. let's grow the economy by 5% instead of 2% currently envisioned. such a national growth target will set our sights on a positive future. the 5% growth target is not some pie in the sky number. we have done it before. with the right policies, we can do it again. the reagan recovery grew at 4.9%. between 1996 and 1999, at economy grew at more than 4.7%. in each of those cases, millions of new jobs were created, incomes rose, unemployment fell.

this grows at 5% a year rather than the current level of 1.8% would get us millions of new jobs, trillions of jobs and put -- trillions of dollars in new wealth. this would also balance the budget. how do we do all of this? in short, we need to create more economic growth by creating more economic freedom. we should overhaul the tax code. this is currently a 9000 page monstrosity that is full of special deals for special interests. the main goal seems to be to generate campaign contributions, not jobs. american businesses today paid the second-highest tax rates in the world. that is a recipe for failure, not adding jobs and economic growth. we should cut the business tax rates by more than half.

i propose reducing the current rate from 35% to 15%. our policies cannot be just about cutting rates but also promoting freedom and free markets. the tax code is littered with special interest handouts, subsidies, and loopholes. they should be eliminated. such a reform would not only help us to set short-term revenue loss but it would help to reduce cronyism, favoritism, and government manipulating markets for political purposes. business success should depend on winning over customers not winning over members of congress. these changes will make american companies immediately more competitive.

changing tax rates is not enough. the owners are taxed under individual tax rates, not the corporate tax rates. the tax reform must include individual reform as well. small-business owners and hard working americans need a better deal. small businesses should have the option of paying at the corporate rate. we need a sampler and flat fare system. by campos -- proposed two rates , 20% and 5%. those that pay no income tax was day zero. after that, the first $50,000 of income for individual or 100,000 for married couples

would be taxed at 10%. everything above that would be taxed at 25%. that is the whole structure. this would represent a 1/3 cut at the bottom rate and what it would allow people to say that build wealth and represent a 28% cut in the top rate and spur investment and job creation. in addition, we should eliminate altogether the capital gains tax, the interest income tax, the dividend's tax, and the death tax. there is no moral basis to claim a second share the same income. every penny should be yours and your children's, not the federal government. once we unleashed the american businesses and families and individuals as we did in 80 + n 90's, a booming job market would

reduce demand for assistance and this would increase federal revenues. revenues to the federal government increased by 99%. in the 1990's, revenues climb high enough to balance the budget. 5% economic growth over the next 10 years would generate 3.8 trillion dollars in new tax revenues and with that we could reduce projected benefits -- deficits by 40% before making a single budget cut. the next part of my plan deals with the rest of the equation which is the 60% of that deficit that is not solved under what i described. a balanced federal budget should not be a political sound bite, they should be the lot of the land. as one of 49 governors operating with a balanced budget requirement, i bounced the budget and the state of

minnesota. i know that the legislature gave me this because under our constitution, they had to. we have to face the truth. congress is addictive to spending. that is true regardless of which party has been in control. the best way and possibly the only way to ensure fiscal discipline is to put congress in a spending straight jacket. that is why i support a constitutional amendment that not only requires a balanced budget also caps federal spending as a percentage of our economy. this should be around the historical average of 18% of gdp. only a constitutional amendment has the power to bind a future congress to keep their promises and it will force decision makers to finally make decisions and give statutory reforms a chance to succeed. passing a constitutional amendment will take a while and

the crisis that we face is here right now and it requires immediate action. i have and i will continue to outline specific proposals to reduce bending, reform government, and balance the budget. i have begun that process with proposals regarding ethanol, entitlement, of government employees, informing wall street and much more. -- reforming wall street and much more. i have proposed blocking medicate to the states. we cannot trust congress to do it. there is no historical record that would give us confidence that they would go forward. we cannot allow the situation to risk being unresolved. it will take down the growth and future prosperity. i propose that congress grant the president temporary

emergency authority to freeze spending at current levels and in have up to 5% and up to federal spending until such time as the budget is balanced. as the example of the effect, if we're able to cut or the president is able to impound overall spending, we could balance the budget by the year 2017. just 1% each year between now and 2017. i know that government can cut spending. i cut spending in real times for the first time in our history. we did this with priority based budgeting. we set a record for a veto. it took a veto and a union

strike but we got it done. we did not close our schools, we did not empty our prisons, we cut spending where it needed to be cut and we can do the same in washington. in pounding the money should be a last resort only to force policy makers to finally do their jobs. there are some obvious targets. if you can find a service available on the internet, then the federal government does not need to be providing that service. the post office, fannie mae, freddie mac and others were all billed for a different time in our country.

they revolutionized the private sector and this should be given to every corner of the federal bureaucracy. it is no longer enough for the government to go on a diet. they need to hit the gym and hit hard. using performance based practices to streamline programs that the cia and pentagon and military more broadly. as i can attest, we used this in minnesota. if we apply this approach throughout all federal agency, we can save up to 20% in federal agencies. their real slog of the next administration will be an unrelenting battle against

overregulation by our federal government. this is suffocating our spirit. conservatives have made the federal bureaucracy the butt of jokes. considering what they're actually in charge of our doing like the strength of our toilet heads, the glow of our reading lamp, it is hard not to laugh or cry about such things. federal regulations will cost our economy nearly two trillion dollars this year alone. this is that had been -- this is a hidden tax. make no mistakes, the current administration was for far bigger gains than just the incandescent light bulbs. the private health-care market is in intensive care and the prognosis is bad. the financial regulation is

called for 200 new rules. none of these represent the scandal of freddie mac and fannie mac. they came out and touched in the so-called finance reform bill. no one knows even exactly what the law is or what those regulations will require. the impairment of protection agency is regulating carbon emissions, a policy rejected by the congress but puts millions of jobs at risk. the country doesn't support it, the congress doesn't support it, get the epa continues to try to advance that agenda. if these policies sound as though they were written by people who spend no time outside of government, that is about right. president obama political appointees have been notorious for their lack of private-sector experience.

it is immoral to force working americans to hold down two or three real jobs just to afford the whims of the so-called experts who have never really had one. we don't need obama care to create a one-size-fits-all program. we need washington to allow allow a personalized market to flourish and meet the needs of individuals, patience, and their families. we don't need dodd frank to further make problems for wall street. we don't need an elected officials that the epa to do what our elected officials in congress have rejected, we need less monitoring of the economy and more monetary of the effect on our freedom and job growth in this country. i will require a sunset of all

regulations unless specifically sustained under a vote of congress. under my administration, the national labor relations board will never again tell an american company where they can and cannot do business. just as the federal government must break down barriers with the federal markets, we must break down barriers in international markets. we shall start new talks with our trading partners and promote our exports over the world. president obama set a goal of doubling exports. his policies heavily prevented this. mine will achieve it. even if we change the way that washington taxes and spends,

many gains could be lost by the debasement of the dollar. a strong dollar undergirds all we do for economic growth. inflation undermines life savings and net asset values. if you want to give taxpayers, investors, consumers and entrepreneurs a better deal, we have to maintain a strong dollar. no more monetizing debt, no more printing money with reckless abandon. the president and congress have incentives to maximize on their own. we need a monetary policy that is focused on a laser on curbing inflation.

that should be the role the fed and nothing more. when times get tough, the american people are encouraged to turn on each other. barack obama is a champion of class warfare. he has been fanning the flames of class envy and resentment all across this country. to deflect attention from his own failures and the economic hardship they have visited on america. class warfare is not who we are. i come from a working-class background. i did not grow up with wealth. i've never resented those who have it. the top 10% of income earners already earned 70% of what taxes are taken in the country.

we could increase it as the president would want us to do. it might make the class warfare more problematic. president obama has had three years to turn things around. all we have to do is 3.7 trillion dollars more in debt and climbing. we have a congress that has not passed a budget in more than two years, a health-care takeover that he pretends it can afford. a fiscal crisis that he pretends we can ignore. we have tried it his way. this is only made the economy worse. other countries around the world have tried it his way and they have met with poor results. now, we have a choice. just because we have followed breeze into democracy does not mean that we should follow them into bankruptcy.

the u.s. has always chosen their own past culturally, politically, and economically. for 235 years, we have taken the road less traveled, the road of liberty, the road of self- government, and free enterprise, and is made all the difference. america is in trouble. the frustration is not the finance. where we are is not who we are. we are the united states of america. we settled the west and we went to the moon. we have liberated millions of people. we have lit the lamp of freedom for the entire world to see. the strength of our country is our people, not our government. americans believe our country is exceptional and they deserve a president who does too.

we can fix our economy. our people are ready to get back to work, we just need to get the government out of the way. thank you for coming today, i appreciate your time and attention. thank you again to the hospitality and may god bless you and continue to bless the united states of america. [applause] >> thank you. many of you have final exams coming up so we have to be somewhat brief but we will get as many as we can. >> thank you very much. we all appreciate it bit of the break. i think today is a really

interesting day and it is interesting that you're here to talk about the economy because i believe last nine when you're talking about the failed economic policies, who was a professor here, has resigned and he has been in the white house for two years. perhaps he will be going in to the white house. how do you think that the cbo should be reformed? how will we fix the deficit? they only incorporate the next 10 years of spending. i think that that kind of skews things sometimes. >> that is a great question. think you for coming. the question related to the congressional budget office and

the so-called official scorecard keeper, growth projections, the cbo does it. i think having been a governor that it is important to have a neutral scorekeeper so that everyone is based in their proposals on a neutral and reliable set of numbers. you have to get people to be scored on a consistent set of numbers. there are a couple of things that they could improve on. they only do static scoring. they don't assume any growth affects for proposals. you can get carried away and make exaggerated assumptions. i think that some very conservative or modest scoring would help model the effect of the programs. they only look at the tenure

window. they are able to make some assumptions internally and there are some that should be held to a consistent standard. for example, sometimes they assume things will be in law, sometimes they think it is only based in law. we will base this on current law. make sure the standards are consistent. allow for at least some conservative dynamic scoring. >> you proposal would be the third round of tax cuts within the last 12 years weighted

towards the wealthy. the first two, this was at 2.6 trillion dollars to the national debt from the bush tax cuts. if there is a class war going on, as you suggest, who is winning the war? >> the thing i would like to focus on is to try to transcend the rhetoric and get back to the reality. for most americans, their quality of life economically will depend primarily on one thing, whether they have a job or not. to give you background about me and where i come from, i grew up in a meat packing town. my mother was a homemaker for much of for life. my father got promoted to terminal manager. my mother had passed on and my dad was unemployed.

i come to make background that is not of wealth. this gives you a little bit of perspective. for my family and families like it across the country, when you ask them what matters to you, what gets you excited come up most often people will describe their faith and then they will describe their family and then they will describe a series of things that are meaningful to them. i am really worried about gas prices and the ability to even fill my car with gas or able to afford my health care or if i can get my kids to college. if they have little extra money in their pocket, i would like to get my basement finished. if you go down the list, there is a common feature of each and that they need some money and people have to have jobs.

set aside whether the wealthy benefit or not, the real measure of these proposals is will it generate more jobs for more people across this country. there is about 5% of the country which is the entrepreneurial class, the people that in fed things, build buildings, conduct research. if that 5% become 6, 7, 8, 9%, we have a very bright future. if it becomes 4, 3, 2, 1, then we are in deep trouble. this is not about whether some people get wealthy or not, it is about one of those things that we need to do that businesses will start, grow, add in police,

by capital equipment, build buildings, conduct research, and do it going. when you ask them, all those people across the country, what is your big concern, what is the you, growing employes, they say the same thing, everyday, everywhere, all across the country, they say this -- that the government off my back. some of them talk about taxes, regulation, the slowness that impacts permits. i am not focused, nor should the country focused, on whether this makes a group wealthy or less wealthy. their real measure, will it grow the economy? will it add jobs? we're not focused on being pro business. we are being pro jobs.

it does not work. i understand the spirit of your questions, but i reject promise that this is fundamentally about normal measures of who gets wealthy, and it is really about important macro measures of whether the private economy is growing at an the leak rates, average aids, or tour- charged rates, and i am for the latter. >> good morning. thank you for coming. i am still here at the university of chicago from venezuela, and i read there is a group of people in the congress that are trying to include venezuela in the list of countries that promotes

terrorism. i would like to know your opinion about that issue. >> i followed the rhetoric of president chavez, and it is troubling, concerning, threatening. as to whether he should be listed or the country should be listed as a terrorist country, that is something i want to give some thought to because that is a term of art and certain thresholds are required before that label is applied. i want to give that additional thought. as the hugo chavez, i think he is extraordinarily misguided. i think he is dangerous. i he is imposing burdens on the freedoms and democracy and human rights and constitutional principles of venezuela that our course of and wrong. as to the label of terrorist country, i want to give that study before i give you the final answer on that. >> thank you.

the first tuesday of every month and the south side is the time when the civil defense mergee me -- the emergency warning signal was tested, and that was 10:00 a.m. this year standard and poor's gave its warning, and it is good you have spoken about this issue, an emergency that deserves our attention. you propose a major tax cut which in the short-term will decrease revenue. right now if you look at the federal budget and if you go to one -- poll want to one side for programs, the remaining spending by itself, even if you cut all that, is insufficient to come close to balancing the budget. in the short term, are you willing to commit to major cuts in spending on one of those four programs, medicare, medicaid, such as occurred, defense, or

would you characterize the plan as waiting for the economic growth to balance the budget for you? >> that means that all the spending side, and i would tackle the growth side. the federal outlays, the government takes in about 2.2 trillion dollars a year in revenue, all sources, and it is now spending about $3.70 trillion a year. there are trillion doubt -- trillion dollar deficits in the future as far as the eye can see. if you look up i chartres and cover the red part on the pie chart as the non discretionary outlays, is to be social security, medicare, medicaid, interest on the national debt, and a few other entitlement programs, read part would be over the halfway line on the eye chart, and at the rate at which that is growing, it will be over the three court line within 15

years. almost all the rest is defense. there's a little sliver in there for parks and presence and a few other things. if you fast-forward 15 years and look at what i charges on to look like, it is almost all entitlements and defense. anyone who is serious about solving this problem on the spending side asked to be willing to put on the table sacred cows, including being able to talk about in detail reforming entitlements programs. i take up that challenge. if you are going to be president, you look at people in the eye, and it is going to be the jack nicholson election. there's the famous line when he is on the witness stand and he says, you cannot handle the truth. the american people i think can handle the truth. it does not mean we free them out or scare them, but it is important and the responsibility of leaders to reform, education,

and mobilized a positive solution. here's what we should do. on social security, as you know, the numbers are upside-down at it as a big part of the pie chart. i propose specifically we are going to tell the people on the program or near retirement he will not be affected, did not be afraid. we will continue to keep commitments. if you come into the workforce, gradually over time we are going to raise the retirement age. that changes a big part of the numbers. it does not solve the problem, but changes a big part of the problem. i do not like means testing philosophically. i think it is not a great thing, but we are choosing between a bad option, so one part of social security reform should be to say if you are wealthy, you're not want that the cost- of-living adjustment. if you are middle income or

poor, you will. the wealthy folks will have the cost of living adjustment under my plan shot off. this does not solve whole problem, but those two things combined make a very different picture: ford. on medicaid, medicaid is the federal-state program for health care for the poor. the federal program runs it and micromanage is a at a level that is frustrating to innovators. when i was governor, we went to washington and ask that we could try something new. can we do this or that? mostly, they said no. every time we meet a request to approve the medicaid program, they said no. we need to and the tool management of medicare and medicaid, shut off the spending increases, decide what we can afford, make congress to appropriate the money each year, and you will see amazing and

positive results on reform. on medicare, which is the program for health care for seniors, we will have a medicare plan out in the next couple of months or less, so make sure you check that out on the internet, but the parts of it will say if you are near retirement, that is great, and in the future we may now -- we may allow that as an option. there will be other options and we are or to give people financial incentives to use the system wisely for people on the program. we have to switch the way we pay for health care in medicare and more broadly with this principle in mind. right now medicare pays providers based on volumes of procedures performed. guess what -- there are regional disparities between those charges based on historical costs. if you do a knee replacement in

minnesota, the reinvestment -- the reimbursement is different than if he did it somewhere else in country. it is not based on anything other than some historical witness in the way that medicaid reimbursed. if i charge you for volume, what do you think you're going to get? lots of volume. we do not want to pay hospitals and doctors and providers just for how many procedures that perform. we need to pay them fairly for their hard work, but we need to switch the payment system from one that just pays for volume to pay for better results and better efficiency. we have done these kinds of initiatives in minnesota, and the war. if you did a survey as we did of what kind of care and out comes type one diabetes patients are getting, about 8% of the type one diabetes population was getting what you would consider

world class or mayo clinic level claiare. f he did not treated by thit correctly, a can lead to other morbid conditions. it can lead to organ transplants, which are marked as of, -- which are more expensive. we need to say we will pay bonuses if you get increasing numbers of patients not to this poor level of care, but increasing levels of care and outcomes. they have responded well. costs are going to go down over time, and outcomes are improving. there is a lot else, but those are the big three. as far as defense, i think we can slow down its growth compared to the baseline of cbo, but those savings can be realized and put back into

defense. it is important we maintain the first responsibility of the country, which make sure -- which is make sure our country is secure. that is the first responsibility of our government. thank you for coming and good luck on your finals. if you want more information, stay in touch with us, but over the course of the summer, you will see a series of an additional policy initiatives from our efforts, and we would love to make sure we keep this dialogue going. thank you for coming. [applause] [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

>> we take you live to the white house for the german state dinner. angela merkel is in washington for her sixth visit during the obama administration and her first state dinner since 1995. she will present chancellor of merkel with the medal of freedom. we will show that life to you when it happens. there are other guests arriving for the dinner, and that is happening at the booksellers'

area, downstairs in the white house, as they come in. we will watch and let you know that the donor gets under way this evening at 8:00 eastern, and we will have the dinner and a toast. the dinner is happening in the rose garden this evening, live coverage tonight, here on c- span.

>> dr. stephe n olestad and his wife.

the hon. ambassador philip murphy and his wife, tammy murphy.

and his shoemakcher wife, mary briggs.

ms. lena kennedy and her guest. the hon. secretary of veterans affairs and his wife.

>> i feel great about being here tonight, and i am wearing a -- you guys all look great.

mr. douglas redeker. the hon. senator and her husband. >> this cost $170. there you are. thank you.

mr. eric garcetti and his wife. mr. james rogers and his wife, mrs. mary ann rodgers. -- rogers.

the hon. secretary of the treasury, timothy geithner her, and his wife, carol geithner and .

mr. david leonhardt, and his wife, lauren.

mr. antonio perez and his wife. mr. robert mcdonald and his cdonald.ane macdonal

mr. robert gillette and his wife, ms. lisa bunche. mr. mark ayers and his wife, deborah ayers.