with taxes and continuing through social security and medicare, if there is an order to reduce benefits substantially, there has to be a change in structure. there is a lot of new ones here -- oncen -- nuance here. what will they accept? what will be difficult to explain back at his and diner, as he was talking about? -- back at his a diner, as he was talking about? -- back in his diner, as he was talking about. we did not get into discretionary cuts, but there are trillions on the table.

someone is going to feel that pain. how does he explain that back home? >> tax increases on the house side, and has to be a word. if i had known that, acknowledged that, they will defend its most adamantly. is interesting to hear john larson say that we will not cut benefits, but that he is open to raising retirement eligibility for those programs. >> working on tax cuts, balancing on their own, take us into next week in where you think this discussion heads. where will we be next week? >> this is friday morning and the house, passing whenever it is called, with boehner and eric

cantor at the podium today, caught -- calling out half the senate. as they have pointed out, the show started, the markets will be watching closely as well. >> the media, pundits, members of congress, think that the government is not going to default. we do not know how we are going to get their. who we do not know when we are going to get there. john larson said it very well, the proposal du jour. the rumopre -- durmor du -- the rumor du jour. go back in the c-span archives, 1995, 1997, it is always dark before the dawn, if i can use a

cliche. i don't know how they will get there, but hey -- they will get there. >> thank you for the plug. if you want to look that up yourself, c-span.org. thank you for being on "newsmakers." [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> following in the third reich. >> i started looking at hughes is i could go to follow the story, and that is what i came upon the first ambassador to nazi germany and his story. >> that is tonight on c-span's "q&a."

it takes a behind the stacks look. "the los angeles times" calls it "required television during -- viewing." the library of congress, behind- the-scenes of the world's largest library at 9:00 eastern on c-span. >> on friday, the iowa senator tom harkin says he wishes president obama was bolder in addressing unemployment. lawmakers joined with a tax force on job creation and the impact of spending cuts on jobs. this new america foundation event is one hour, 25 minutes.

>> the unveiling of the report by the task force on job creation, the new america foundation. introducing one of the authors of the report will be congressman john garamendi, who is to my right. he was elected in 2008 to the house of representatives. he serves on the house armed services and natural resources committee. in four decades of public service, he has served as a member of the california legislature as lieutenant governor of california, the california insurance commissioner, the chair of the commission for economic development, as well has having

been a former peace corps volunteer, serving abroad had helping to negotiate a peace treaty during the ethiopian air train war. he is a man of many talents. today, we will be focusing on jobs. congressman garamendi. thank you very much. this is an issue that is of profound importance to this nation. we set out to look at what was going on and how we could be competitive. the report said there were five things that california needed to do to stay competitive. one, have the best education system in the world. no. 2, do the best research in the world, make the things that come from the research, pay attention to infrastructure, and do not forget about the international. well, here we are.

1979, just as we were doing that, we had 19.4 million manufacturing jobs in united states. there were about 2.6% of the american economy. fast forward, all those years in california, where we neglected education and did not pay much attention to research, never bothered to manufacture anything because we were going to be a service economy, time runs on. 2010, america, 11.5 million manufacturing jobs, some are just over 10% of the economy. whao, something has gone wrong here. and it is not getting any better. yesterday, one of those groups that tend to want to see what congress is up to stop by. this is solar world's little

pamphlet that the left with me. but they also left was of the really scary. the president of it was there and he said that energy security, we have been worried about energy security, or real -- oil security -- we know our future is in the hands of the petrol dictators and very unstable prices in the world. energy security. he said, " do you know that the green technologies that we are so dependent upon for our energy in the future will be controlled by countries in asia?" what are you talking about? he said you need to know that there is one company, one, manufacturing solar cells in the united states. all of the solar cells are being manufactured in asia. and he said, "how about wind and wind turbines? " on and on it goes. the report you will see today is of utmost export -- but most importance to this nation. -- utmost importance to this

nation. it calls to this nation about a very important fact, that we're losing it. we're losing our ability to make things in america. as we lose that ability, we will lose their leadership in the world, our national security will be at risk, and we will not have the kind of wealth that we need to maintain the middle- class in america. fortunately, there are people that are thinking about this. i have the great honor of introducing one of them. leo hendry, jr. is at the new american foundation. he is a member of the council for relations. he is an investor in things that are supposed to make a lot of money and create a lot of jobs, he hopes. and we hope he does, too. he is a former ceo of tci, telecommunications inc., liberty media, and their successor, at&t broadband. he knows what it is to be in the

business world. he is also a blogger. he is a "huffington post" blogger. let me introduce him to you. leo? [applause] >> senator tom harkin, we just had a vote on the floor and turn down the deficit cap that came over from the house. >> wanted to do with it, tom? >> he tabled that sucker. [laughter] i will quickly turn it over to senator harkin didn't let me just say that one of the reasons it is such a privilege -- for all of us. senator harkin. let me just say that one of the reasons it is such a privilege, rep garamendi was my legislator and my insurance commissioner. at no point did anybody in the city california ever speak more eloquently about creating jobs, preserving jobs of quality for the american worker then john garamendi.

later in life, i became a transplant to iowa. was part of the harkin for president initiative when it was popular. on the senate side, it is tom harkin who has carried the mantle for so many years. it is a privilege for all of us who had something to do with this commission task force to have rep garamendi and our dear friend tom harkin with the skin tom, some comments from you and then i will be a little more precise about the report. >> thank you very much. i apologize for being late. i did have that vote. how did you get here so quickly, garamendi? you do not do anything. [laughter] that is probably good. that is probably for the best. we did just turn down that cut,

cap, and kill medicare. it is not really a cut appeared in it is an invitation. it is not really a cap. it is a decapitation of our federal responsibilities. first of all, thank you for mentioning my presidential race. some of you may have missed it. [laughter] i appreciate him mentioning that. let me sum it up this way. the debate that is going on right now is like deciding which train to take and you are on the wrong track. we're trying to decide whether to take the train on the $4 trillion cut or the $3 trillion cut. that is the wrong track to be on. what should be doing right now to stimulate job creation in our society? [applause] that is why this task force is so important at this time.

there are two ways of creating jobs. the private-sector could spend the money that it is sitting on to create those jobs, but it is obviously not doing it. or the febrile government needs to get the wheels going to stimulate demand. i hate to use the word "massive stimulus" but an infrastructure- type program. where does the government get that money? either you are with or you raise the revenues. i say you raise the revenues. if the private sector is sitting on a trillion dollars and they do not want to invest it, then we can.

and that is where we need to raise the revenues to do so. this task force has come up with ideas on that. i have ideas of my own. but there is plenty of revenues to be raised out there. it raises the revenues and then you stimulate the economy by putting it into both human infrastructure and the physical infrastructure of our country. to me, if we did that in a very bold manner, a big manner, you then start to create a demand. the demand comes up and you put people back to work. that would tell the markets out there that we are moving ahead aggressively and boldly. we are not shrinking. we're not retracting. but we will expand and grow and that would stimulate further

private investment. that is why i say that we are on the wrong track. we're arguing about these things. it is dismaying to me to see a president of the united states from my party who seems to accept the fact that we are on the wrong track. i was hoping he would be more bold on the jobs creation effort. ron wyden gave a great speech on the senate floor. i was talking on this very issue. we need more people talking about it. that is why leo, hugh, and a task force and what you have been doing here, we have to be focusing on the single most important thing, putting people back to work, not reducing the deficit. that can come later. but to cut spending now is like putting leeches on a sick person. you will just leave them more and make them more sick. that is a formula for a downward spiral.

leo, thank you very much for your great leadership. i think the task force on job creation. i read it through. you are on the right track. >> thank you, tom. [applause] >> let me add some quickest or zero perspective. what will be fun is -- michael is such a front of this initiative, we will ask for your support and questions as well. this actually began in 2006. it began with tom harkin. we were running up to the iowa caucuses of january 2008. in 2006, we saw that the uncounted unemployed women and men in this country for the first time were breaching a 30% cap that had been on every prior recession. in the worst recessions, the nine prior recessions as we were running up to them, the

uncounted unemployed was never more than a third of the counter. -- counted. we have reached that early in 2006. we knew that, by iowa, something dramatic was happening. that dramatic outcome is that we have one woman or man who is unemployed and not counted for every man or woman that is. so we have 18.5% real unemployment. the tom's guidance as senior senator from the state of biowatch and the run-up, we -- of iowa in the run-up, established the first of these task forces. it was called d horizon projects. the women and men named in the task force were involved in that initial effort it was tom and others who suggested that we create a prescription to generate jobs. as a matter, we knew we are committed as a party and as

progresses to pay-go. we knew we could not always impose on the government to have these initiatives undertaken. we would come up with ways for paying for these initiatives. let me just follow up on one comment that the senator just made. if, hypothetically, the senate pass $3.20 trillion in cuts, we can prove that 1.8 million additional jobs would be lost almost instantly. so we would be digging the hole just infinitely deeper. it was 29.5 million men and women we are concerned about and it would reach up to 30.3 -- 31.3 as a party, we are committed to thoughtful cuts. we're also committed to responsible revenue raising. and so, we have worked with our leaders on that aspect as well.

when the task force was coming together, it instantly migrated and many are here, but it instantly migrated to the reality that we have to have a list 20% to 25% of men and women in this country making something. we can only survive bubble-to- bubble and we know that bubbles killers. we know that. we know that we have an unfair trade balance with china. goods. they have roughly two. $0.5 billion. -- %2.5 trillion. we know that the cost differential between a its counterpart here in the united states is accomplished through subsidies can we have pointed to many vendors at american workers -- which many fingers at american workers and said it is

your fault. you are uneducated sufficiently. it is your wages that cause these problems. that is not the case. it is unfair trade that iswe know that the business community is sitting on its hands. with the senator was describing and the congressman, is that they need a free-market policies that induced the behaviors and the outcomes that will restore the economy. we are genuinely at a tipping point. we are right on the edge of no senator or no member of congress being able to fix the problems. there are 15 prescriptions in the task force report. we are not 90s and think that -- not naiave and think they will be instantly enacted.

they're written by our colleagues that -- we are not naive in thinking that they will be instantly enacted. they were written by our colleagues. nobody speaks to it more ably than our two members. the national injured -- and need a national infrastructure bank. it needs to attack the $3 trillion of decrepit infrastructure we have that this has not only forestalled full employment, but has naidas made us -- but has made us increasingly uncompetitive in the global economy. we are fully prepared, anxious to see credits go there. those that are responsible to the community to bring manufacturing where it belongs. we are partners in the green economy initiative. we are particularly sensitive to these men and women who are 50 and older. i think something on the order of 13 million men and women have been an unemployed for more than a year. again, these are numbers you do not see publicly. there are at least 8 million to 9 million of them who are 50 years and older. about 5.5 million of them are 18 and older.

half have a ab.a. or a bs. some have a college degree and cannot find a first job print some have a high-school diploma and cannot find a first job. the manufacturing renaissance would be the best thing that could happen to the older worker and a youth employment initiatives for the younger worker. finally, it is china. china is the dragon in the room, not the gorilla. it cheats and it cheats everyday. we thought we needed to have the backbone that were spoken of. owen speaks more ably than i do for anybody else to manufacturing. michael, we thank you for your leadership in introducing it. thank god you got out of that

fort, tom. >> thank you, leo. -- that floor, tom. >> thank you, leo. this does have the feel of being an alternative reality in this room, discussing what most economists consider to be the

critical problems in the american economy while, on capitol, they are discussing how to further hurt the jobs picture. there is no real liber discussions, as far as i can tell -- no real vibrant discussions, as far as i can tell. i guess all you can do, at the new american foundation, some of the gentleman here, is to try to inject this into the conversation. we have now had a generation, maybe a generation and a half since the reagan years, of a set of policies that has pretended to support the american middle class and allowed the world to consider them as the consumer of last resort while policies have, in a termite fashion, have been undermining the middle class in so many ways.

of course, the real lesson of the giant crisis in 2008 was that it was all an illusion. the american middle-class was sustained by enormous amounts of debt, debt that was promoted and encouraged in many ways by government policies as well as by wall street. what we see now in this long aftermath, two years after the recession supposedly ended, but still feels like one, is basically an inversion of that junk credit bubble going on in the 2000's. we are in the middle of what some economists say is perhaps the worst recovery on record. leo alluded to this earlier. and even scarier figure in some ways than the official unemployment rate, which is 9.2% -- although the actual unemployment rate is much higher -- is the number of americans who have ventured to the ranks of the long-term unemployed or the permanently unemployed.

if you look at the bureau of labor statistics data, it is released it -- it is really scared. -- scary. in the previous recessions, you do not see the figures that we see now, something like 43% of the unemployed in 2010 were unemployed for 27 weeks. many of them are for more than a year now. we do not have policies in place to try to bring them back, to get them trained, to give them the skills, to give them the work. this jobs report, and this task force report on job creation could not come at a more important time. it notes that it has probably not been since the great depression that so many americans have been unemployed for so long in a supposed recovery. more than 20 months, i think it says.

so with that, let's begin the discussion, not only of the specific proposals laid out here, but of their political liability. -- viability, because i think that is very much the question at hand. because of what is going on, because of the kind of debate and discussion on capitol hill, seemingly divorced from the economic crisis we are facing, and what can the president do? what can the congress do in terms of these kinds of these proposals? we have already had partial introductions. leo, senator harkin, as well as the congressman, cheryl swittenger, another author this report. the director of the new america foundation economic growth and strategy programs. we also have one of the founders of the group and the founding editor of "the world policy journal." 1983 to 1992. patrick malloy has served four

two-year terms on the u.s.- china economic and security commission. we will want to hear from him a lot about the china trade issue. was that, why do we not start the discussion? how will like to start off by asking what do think of these kinds of proposals being laid out in this report or that are politically feasible at this point? i would just throw that out there. what do you think is politically feasible in this kind of environment? >> politically feasible? [laughter] >> ok, next question. >> i kind of alluded to it in my

opening statement. political feasibility depends upon political leadership here -- leadership. in political leadership comes about from individuals who have a deep feeling for and an intellectual concept of what is happening to our society at large. if a political leaders this to -- says to you that our unemployment is 9% and does not mention the 18%, they do not have a firm grasp of what is happening in our society. happening in our society. if a political leader and says we have to have more of these free trade agreements because it will help our country and employment, they do not have a firm grasp of what has happened in the past with these free

trade agreements. what is politically feasible depends upon political leadership. i am not in the mode of bashing president obama or anything like that. i think the times call for bold, innovative leadership on the part of the president of the united states. if we do not have that, it comes back down on our side in the congress. we take our cues from our constituents in many ways. we lack the kind of cohesiveness we need for political leadership. i think we need a strict examination of how we went in a little over two years from a president elected with a huge mandate, with the progress of

mandate and a congress that was run by good progress in the house and in the senate where we had 59 votes now to in congress into round by the tea party on the house side. we have 53 votes on the democratic side in the senate. out of that, you have four or five that have gone wobbly in the knees on a lot of issues. how did that happen in two years? we need to look at that and why we it to find out have gone so far in the other direction in two years. i believe it is because we have not paid attention to the underlying problems in america. that is the jobs issue, especially among young people. read the part in the report

where it talks about young people cannot find a job. that hangs around for the rest of their lives. that is one of the most debilitating things happening in our society, the lack of jobs for young people. >> i think it is important to understand that politics is not static. economic realities will reshape politics in the next six months. the economic realities are pushing us closer to an echo recession, and additional major downdraft in the economy that we see showing up in the data currently. the underlying factors are moving us towards a new financial crisis.

there is exposure to double dip in the housing crisis. it is not cost as much unemployment as the original bubble. -- it is now caused as much by unemployment as the original bubble. it will be politics dominates the discussion for six to nine months. we have to play a role in redefining that. after the initial euphoria may take place in the market, the realities of the debt deflation taking place in the american economy that will grip large parts of europe, the slowdown in asia and emerging economies -- that will be the dominant reality. interpret them in a way

that will give us another opportunity. neil has given us a platform when the opening reemergence in the next six to nine months. let's not assume we are in a static political environment. we will be in a dynamic political environment because we are in a serious economic situation that is going to impose realities on the political leadership in a new way that you have not seen in the last six months. >> congressman? >> the american public wants a job. that is what this is about. they want to go back to work. they want to support their families. it is incumbent upon all of us who think we are in politics and want to be political leaders to develop a jobs agenda, a

program that will create the jobs that are necessary in america. i agree when you talk about how it will switch from the deficit. the central issue is putting people to work. in the house, we have tried to develop and make it america agenda. is a piece of the puzzle. there are many different bills involved. some of them are in this proposal. what we need is an overarching program. it is this kind of thing. we need a comprehensive jobs agenda, something that speaks to all the pieces of the puzzle. then the house and senate will put together the pieces of legislation to cause it to happen. you cannot be more correct. there's something about this that is missing.

that is the leadership. there has to be a voice that makes this a reality. as we go through the rest of this, we can talk about the individual pieces, as we should. in this report are the elements of a successful program. there are some that could be added. some may be subtracted along the way. we have to have that overarching message to the american public and a program beneath it that can actually create the opportunity for this economy to turn. i really like what you have done. hopefully we can grasp it and run with it. i would love to put this and the president's hands. he is over in maryland talking to students. he is here, there, and everywhere. there is not one mention about a job. what are we going to do? you have given us an answer. >> from what we can tell, there

are three places where there seems to be inordinate sentiment to do something -- to buy american. pat, you would have an insight into this as well. the currency bill aimed at china is the biggest of the several subsidies that are killing us. roughly 1/3 of the 90% of the subsidies is currency. the rest of it is financing and siding and things. i detect within your members almost in a bipartisan fashion a lot of support for china currency, national infrastructure bank. it seems it would be hard to go home to california and iowa and

say that by american does not make sense. >> we also did a piece in the stimulus bill with the high- speed rail. the international high-speed rail companies, not one company in america. when the bill was passed and $12 billion was put up there, they rushed to establish manufacturing facilities in the united states. it can work. i have two pieces of legislation to say if you are going to use our tax dollars to go green, you will buy american. why should we allow our tax dollars to be used to buy chinese solar panels correct. it makes no sense to me. >> it does seem as if the politics might be going in the opposite direction. i am talking about presidential politics.

it seems as if the political strategy of the administration is to avoid discussion of jobs or the unemployment rate at all. let's talk about some of the specifics. patrick, maybe you can talk more about the china trade issue. >> i am a member of the u.s.- china economic insecurity review commission. this is like a bipartisan congressional think tank. we have issued a number of reports. almost all of them have been unanimous with republicans and democrats seeing it the same. i am not speaking for the commission at this meeting. everything we do is on the website. let me quickly go through this. in the last 10 years, the united states has run $6 trillion worth of trade deficits. we run $2 trillion worth of

trade deficits with china. when you are running these kinds of trade deficits, outsourcing manufacturing, and bringing it back, most of our imports from china are manufactured goods. 60% of china's exports are made by foreign-invested companies. when you are shipping your manufacturing abroad, that is tied to your budget deficit. revenue that used to be produced here is now being produced abroad and imported into the country. people used to have good jobs in this country and pay taxes are now no longer paying taxes. we're putting money into keeping them going for unemployment and other things. i have watched this debate going on in the congress. i have not heard any one time the budget deficit to the trade deficit -- tying the budget

deficit to the trade deficit. you go to restore and cannot even buy anything made in america. china was a great civilization. they fell apart. the communists took control. they tried to build a centralized economy. the real genius in a long in 1979. he said they needed foreign investment, foreign technology, foreign markets and that was the way they would build their comprehensive national power. they do not just talk about economic power. they used a term called comprehensive national power. political, military, and economic. it is all based on the economic. their military is growing rapidly. i do not mean to be a china basher. in 1989, i saw a very poor country. if you go now, you will see a very prosperous country for at

least 400 million of the 1.2 billion people. they have a strategy. they are incentivizing our to outsource production to china. our companies are contributing to job growth in china. there are various things we could do. we talk about that in the report. our guys get a tax break for building jobs abroad. they do not have to pay taxes on the money they earn. is that a crazy policy or what? we talk about that in the report. china underprices its currency. the imf said yesterday it is substantially undervalued. that means when we ship goods to china, it is more expensive than it should be. the goods from china coming here get an export subsidy from the underpriced currency. a further incentivizes american companies to build production in china and ship it back here. that is all part of what is happening.

there's something called indigenous innovation. when china joined the wto, they used to say to american companies if they want access to the chinese market, they had to build staff in china. here is the way they do it. they tell an american company that if you want to sell to the chinese government, you have to be on this list. if you want access to our market, you have to be a friend of china and do r&d in china. our technology, brainpower, and what we did well -- now the chinese are getting that technology and know-how in china through the indigenous innovation. that is contrary to the wto mandates. they say they're not forcing the companies. it is not forced technology. we're just telling them if they

want to be a friend of china and make money in china, they have to transfer their r&d and technology. weekend incentivize this game. we can agree incentivize -- reincentivize this game. we cannot hire taxes on companies in china. we cannot look this go on. our children's futures are being sacrificed. >> the challenge does seem to be to try to package and this strategy so that it does not run afoul of free trade. there are a lot of proposals like this that have run aground because they are perceived as protectionist. the key seems to be about the right kind of leadership.

what do you think about that? is it possible? are we able to move beyond the adoration of the free-trade god that has persisted for the last couple of decades? >> i hope so. a i remember the debates i had with bill clinton. do not get restarted. [laughter] >> it is time to replace those debates. >> winded debate, wrong to protect america? -- when did it become wrong to protect america? i do not get it. when the policies that have been a place for the last 20 to 30 years are exactly the opposite. they do not protect america. in fact, they harm america.

look out the tax policies. why do we reward american companies with a lower tax if they offer offshore jobs? not one republican voted to repeal that tax. it did pass. there is still more of that is in the tax policy that rewards the offshore and of american jobs. what is wrong with protecting american jobs? we ought to adopt the policies that the chinese have adopted. what is wrong with that? use our tax dollars to buy american made equipment. 18.5 since, every gallon of gas. out of every gallon you buy, it goes out there to buy what? yes, i had nothing to do with the bay bridge. it was a horrible mistake.

to save 10%, they went off to buy chinese steel and thousands of jobs are in china and not in california. at the end of the day, it turned out to be more expensive. >> one of the things that the congressman is striving to -- if you take the 15 proposals that we have within the g-20, you confined counterparts in 19 of the deed 20. -- in the g-20. we're not being protectionist, we are being reciprocal. 19 nations have domestic policies. by domestic policies, there are multiples of what we have today. what little we have today is because of -- if they can do it, let us do it. tom was the architect of the phrase "fair, not free.

" it is just fair. these trade agreements. 11 of them have failed to deliver their promises by large amounts. they have not created jobs. they have not improved our trade balance. at the same time, we look ahead to the three debtor on the table and we find them faulty. -- the three that are on the table and refine them faulty. it is not free trade, it is fair trade. >> as a journalist, i've been covering this for a better part of the last couple of decades. i have watched these proposals and these ideas to flounder. getting back to this idea of free trade, i guess my question is, is it about time -- isn't this the moment when we have seen in your disastrous failure of this absolute idea of free

trade and how was supposed to raise all boats. it was supposed to be good for america. the results are in. i am wondering why the political environment has not changed more that it has. accounting for the distractions caused by the rise of the tea party and the focus we are seeing on cutting the budget, i am not sure why some of the underlying economic thinking has not changed more. >> there is one sector of the american economy that hasn't suffered. what sector am i talking about? the financial sector. the financial sector has not suffered a bit.

you have to look at that. why we genuflect at this altar of free trade? and you have a huge sector that has a lot of influence in congress. they like things just as they are. they're doing quite well, thank you. that is what has happened in our society. we have moved from manufacturing being a financial based economy. read kevin phillips book, "wells and democracy. and democracy. the underlying balance of power,

which was that equilibrium for a long time, has changed dramatically. capital goes anywhere it pleases and labor is more restrictive than it was during a period of globalization. now you have a very on equal situation in a fundamental sense. >> if i might take some of the recommendations that are in this report and apply them. sun world manufacturers, solar panels. it is the only domestic manufacturers of solar panels. the president comes in and wants to talk to me. we have about 18 months and we're going to have to make a decision to go out of business in america. why? a couple of things. china's currency.

you speak to china currency. you speak to that issue and you have talked about -- you need to understand the way in which china is financing the businesses. the chinese government finances their business with loans that are not available anywhere else. super cheap loans. loan rates and obligations that are unavailable, literally of free money available to those companies. you have the issue of making it in china policy. we cannot compete with that. we have to make a decision to shut down our manufacturing in america. what does that mean? california, $86.8 million. i want -- iowa, i do not sit on the list.

on and on and on. because of the lack of american policies. you speak to each of these things in this report. how would we applied it? what we do? if i am not mistaken, i think there are only two or three manufacturers of solar panels left in america. >> just want. >> last one. >> we are the ones that developed silicon chips. reporting a lot of taxpayers' money into the development of this technology. the basic research and getting a developed. it has all gone offshore now. >> can you be more specific? this is the only company that does all of it in america. other companies may assemble pieces in america, but this is the only company that does all that.

the whole thing. >> it starts and stops. do we want to have a national manufacturing policy or not? the other 19 members of the g-20 have such a policy that is very specific. china's is the most specific by far. it would not tolerate a circumstance where only 8 or 9% of american workers are in the sector. it would not tolerate a world where small and medium-sized enterprises cannot get loans. it would not tolerate a world where china, it gets its construction loans for free, it gets a tax holiday and did dumps emissions into the air. it starts and stops with can we add the nation survived much longer with only 8 or 9% of men

and women making something? then you have to go out to where would be most immediately seek a manufacturing renaissance? that is in that $3 trillion of decrepit infrastructure. you would have a policy first and then you would have a kick and the pants, at the opportunity would be in our own infrastructure until we got this in balance. >> that is your number one recommendation in the task force report. i wonder where you would talk a little bit about that. some of the other recommendations -- are these in order of importance or feasibility? >> they are not. i do think the group felt very strongly about two issues. bank, domestic, and a harsher perspective on china trade. let me digress a minutes on the

bank. the bank must be a bank. it must have an equity capitalization accompanied by a debt to capitalization. when you go to the white house, they talk about an amount of money that would come out in block grants. yet we know from the center's work -- we know from the wonderful treasurer of the state of california that the largest pension fund and the world would love to have an investment opportunity in a national infrastructure bank to be the leverage for that bank. it is a superb idea that members of the senate and house appreciate the opportunity, it gets we cannot get past tim geithner who wants no banks except his banks. the wonderful congressman just walked in. i cannot find a manufacturer in

iowa a $50 million loan today if i predicted my life depended on it. what the congressman is trying to do, it has been diminished by an insensitivity to small and medium-sized manufacturers and the absence of a fundamental manufacturing and industrial policy. >> if i could just make one point. one of the things that this report recommends on page 33, is that we move to balance our trade in five years. we need to balance our trade. the head of ministration has set a goal of doubling exports. if you look -- the administration has set a goal of doubling exports. when you have a negative net

export figure, that is a drag on your economy. we have massive net export figures year after year. warren buffett advocated that the united states needs to adopt policies to balance its trade. people -- you here in the debate now, china on so much of our treasuries. where did china get the money to own some which are treasuries? we did it to them by running these massive trade deficits year after year. here is the way the chinese do it. when the dollars come into china, the chinese government buys those dollars from the people to bring them and. the chinese government issues bonds. the chinese government and set up with the dollars. they do not want to put them in a mattress, so they buy

treasuries. therefore, they get income from the treasuries. they also get leverage over us. is this a crazy thing for this country to be -- the hole is getting deeper. we are in another day older and deeper in debt. we have to change the trend here. when kennedy said we did get to the moon, in this decade, nobody knew how to get to the moon. he said the goal and we figured it out. >> i want to expand a little bit on the comments about and the structure. about the infrastructure. this is the linchpin between the goal of building our manufacturing sector and the macroeconomic goals relating to jobs.

it is just not reject there is paradox that -- -- it will cut the amount of fixed income data available. there is a shortage of fixed that is occurring because of the collapse of the mortgage market. as baby boomers approach retirement, fixed income investments become much important to them. as the emerging markets population into their prime savings. it, there is going to be an additional flight of capital. we actually need to generate attractive a fixed income investments that a national infrastructure the bank in order to have a workable banking and financial system in the world.

what's -- the infrastructure bank leverages and puts to work all this idle capital. it is $3 to $4 trillion. in the like-minded amount and you put eight -- then you also facilitates not just the manufacturing sector, but some other key sectors of the economy upon which america is future rests. in particular, the energy and transportation systems.

we have an enormous -- let me talk about natural gas. we have an enormous abundance of natural gas and shale oil located in all parts of the country. we do not have the infrastructure to move that. there will be $1 trillion of investment in an enormous amount of jobs that are needed over the next five to 10 years to build dow that infrastructure to make us -- to balance our energy picture. we have enormous potential if we rebuild the manufacturing base to move goods and services around the country. one of the principal ways of doing that is our enormous waterways. not just the mississippi, but the great lakes. we have allowed them to deteriorated so enormously that they are -- they are not as

energy efficient. these are the most energy efficient ways of moving goods and services around the world. we need five or $10 billion of investment to be able to move the goods and services in a much more efficient and attractive way. it makes it three attractive to manufacturers and the center of the country. move them around new population centers that are located whether it is in the great lakes or taxes. and the structure investment and a bank in particular -- infrastructure investment and a bank, in particular, has an enormous appeal as the centerpiece of an economic recovery and jobs program. >> before we turn it over to the audience for questions, i want

to know if any of the panelists have any thoughts on the specific proposals. the progress certification -- i want to know whether you had any thoughts of your own. professor is the director of the department of international affairs at the international association of machinists and aerospace workers. he is also a professor at georgetown. >> [inaudible] thank you. when you said professor, i was looking around the room for my father. just a couple of very quick things. i really do want to thank the

new america foundation for all of their work on this. it is timely and it is critical. i think it goes without saying that we are in a crisis. it is urgent. we can ill afford to spend all of our time getting more studies done. the answers are here. we did talk to act. i shall ensure leadership -- we just need to act. by showing leadership. one of the recommendations that has been discussed, it is a critical one. i think we were all shocked that many of us received when we were trying to get buy america into

the recovery act. it was seen as being protectionist. we would like to call its industrial policy. we would like to call. national and economic security and i do not think there is anything to hide on that. we are talking about buying goods that are produced here in america using u.s. supplies and raw materials, but we also have to ask ourselves, the taxpayer would be shocked to learn that some things we consider to be domestically made only have 51% domestic content. if you were to ask most folks down the street or even folks at the federal trade commission what is made in the usa mean, it would mean an entirely different thing. the second part is there is no

uniform guidelines throughout government on defining what is domestic content. some would be shocked to learn that some intangible items are figured into determining what domestic content is. those things should be low hanging fruit. it would be interesting to see those who actually oppose that. particularly when we see unemployment as high as it is. the second belated recommendation goes to the issue of employment impact station. we have environmental impact stage -- statements. they have been around and tested for a long time. it does not appear that many government agencies have incorporated a simple question when letting out a contract, and awards, whether it is for a huge military issue or smaller ones

to simply ask the question, how many direct jobs is this: to create and the u.s.? what kind of jobs will be created and how long will those jobs last? these are simple questions that should be factored into all this. if they were, at least it would give policy makers much more in information that they can consider when a fund government programs. thank you. >> thank you very much. i would like to open it up to the audience. >> the go ahead, senator. >> i wanted to mention, when we are thinking about infrastructure bank. it has to be an investment that is in addition, but not a substitute for, the level of federal government grant levels that we have right now.

i still think we need some pay- go as they go along. we have to be careful. we do not have to spend any federal money whatsoever on the infrastructure. secondly, to really invest in long-term infrastructure projects, you need patient capital. capital is not looking to spend in a hurry. here is a place for we can get a twofer. my committee has been having a series of hearings. what is happening to pensions in america? the fact that people are losing their pensions at an alarming rate. it started in the 1980's and we shifted from defined benefits to defined contributions. everybody could have their

401k's and take it with them and it all sounded so nice. it has decimated any kind of a pension system. something that you can rely on until you die. two out of three people that are going to be approaching retirement within the next 20 years do not have sufficient money to last in their lifetimes. a lot of people are taking out lump-sum as of $100,000. they do not have any kind of retirement. one out of every four persons in america of working age have 0 amount of money in their pension. we need to rejuvenate the pension system so that we have more of a defined benefit programs. we can build a hybrid system so that it is portable, so that you can move around the matter where you can go.

that provides you with patient capital, capital that can be invested for long periods of time. that is where the infrastructure bank can go to get that kind of capital. now you have a pension system that will pay back to people later on in life. >> we will take some questions. >> my name is martin. i want to commend you first on being able to integrate a whole number of separate realms and ideas. everybody who is prescribing the solutions [inaudible] you have to integrate a lot of different parts of the system to

make it work. we seem to always get to our trade balance in china. in all of your sets of data, this seems to be a vigorous lover than most. if you look at how that came about, -- seems to be a bigger lever than most. why don't we we create it immediately in a form that well? i do not care his name id pass. set it up so that it can function and solve the problem of fair trade, balance is between countries based on currency exchange. if we do this properly, instead -- and set a time limit of a couple of years, there may be a lot of things that can happen between us and china. there will be some frictions.

somewhere in that exchange rate, we have to make an exchange that can help generate the necessary state i tell kind of things. i love the idea of patient capital, but there is another way of looking at it. our financial system is the tail that is driving the dog. it makes all the large companies look at short-term profits. in order to do that, they cannot invest in long-term potential opportunities. that driving force has been pushing. one of the drivers that moves a lot of our jobs offshore. we have a lot of invention in this country, but it is not able to be kept here.

these are the things that we have to attack together. you have a huge set of steps to began. the last component is education. we have to have the university system in which the people who graduate -- >> excuse me. >> let's confine this to questions and not speeches. >> thank you. >> in terms of trade, we spent a lot of time on enforcement. enforcement of existing agreements. we mentioned the words tariff as an inducement of proper behavior. in the area of the corporations, i am very strongly opposed to a lot of these multinational practices.

we do not have in place a tax structure. on education, with all respect, it is one of the greatest insult to the american people to suggest that there -- they are insufficiently educated and overpaid. everybody wants to fix the education system. i promise you, there are millions and millions of sufficiently educated and motivated and unemployed americans to fill any gap in the near-term. we did not see education as our prerogative. we left that to the members. >> thank you. let's take some more questions. let's keep them short and to keep them questions. >> i want to bring out that in

creating jobs, it is best to take the order that franklin roosevelt dead. deal would be -- that franklin roosevelt did. >> is there a question? >> in europe, yesterday, this bailout policy spirals on and on. i want to bring back glass- steagall restoration is introducing -- both democrats and republicans are pushing for that bill. i invite anybody on the panel to comment on the relevance of that. >> it is extremely relevant. i was the insurance commissioner for eight years of my life.

it ought to be reinstituted for many reasons. some of which you have already described. >> the other parts of the roosevelt agenda was to create a parallel banking system, a public purpose of finance system. my colleague has written a very important study on how you recreate a public purpose finance system that has been eroded over the last 10, 15, 20 years. it seems like the first missing piece is to put in place ways to be able to channel excess idle capital into productive public investment and public- private investment. one of the true legacies of the new deal was all of this loan,

lending, and banking systems that were put in place in 19 -- in the 1930's and 1940's. >> we all have votes that we which we could change. i was one of eight senators in 1998 to vote against the repeal of glass-steagall. [applause] i did not mean for you to do that. [laughter] i wanted to say that i remember the pressure that was put on us by the white house, by larry summers, that this was the thing to do. >> [inaudible] >> i recall your floor speech.

let's take some questions at the back of the room, maybe. >> i am a freelance writer. i been to a number of job creation panels over the last year. one thing that has -- always seems to be left out is how to remove impediments to existing jobs. the thing that concerns me is the growing practice of use of credit reports by employers. there has been a bill sitting in congress for average that is not getting any traction. six states have passed similar legislation. i want to know from the panel. this is an area of work they would consider bringing into the task force. it is creating an underclass of millions of unemployable people. people like me who have degrees

from oxford and georgetown and cut out completely from federal work and contracting because of the requirement to have sterling credits. even though we know credit reports are often filled with errors. >> there are many issues involved in getting the american economy back on track. you just raised one of them. there are probably another several dozen. employment discrimination problems that exist, credit reporting cannot be useful. it can also be very discriminatory. it has to be looked at in the context of employment discrimination. to get something going in congress, we cannot get the big things going in congress. the overarching issues, and the

discrimination is something we need to deal with. i would like to take this opportunity to ask my colleague to take my seat. i would like to get out of town before the faa shuts down. thank you very much. >> it is not often that you have the luxury of a reserved congressman. >> [inaudible] >> congressman, we have not heard from you. >> i just want to salute all of you for having this. we are certainly in a crisis and you all know that. when history is written, what is it going to say? i was somewhat relieved -- i

wonder what we have to do to get tim geithner to leave? i would like to see them go do whatever he does well. we are at a crisis. we have got to get to building things with american hands. until we can do that, we will continued to go the wrong way. i will just say this. i think it is ok to have a debate on its. the american people will get its. we have the capacity to do other things. why aren't we doing that? it is very frustrating. the country needs it.

there are some things there that we know we have to do. go to any state or any city and you will find out that we are falling way behind. think about our asian neighbors, our european neighbors, we think we're going to compete. we have to get to doing things. >> thank you, a congressman. i think we have time for one more question. yes, sir. >> [inaudible] two things that need to be brought up. there are a couple of things that are fundamental to bring up. these questions are directed to the rep. i think is pretty obvious that mr. obama has come out publicly and pushed the agenda of brutal austerity. he is talking about putting social security on the table,

which most citizens means the chopping block. my question to you, is there going to be some serious resistance against this president? this is a more technical question. if we look at the effects of sustainable technologies on third world countries, it is really murderous and it keeps these countries backwards. you cannot run a modern day hospital with a wind belt. it is just not possible. art -- windmill. are you willing to consider technologies that are more efficient? nuclear power development? i know the media has been hysterical about making people be afraid of nuclear power. we need ambitious programs and i wonder if you guys agree that we should have programs like the apollo program. the right kinds of programs that stimulated the economy. thank you. >> there will be resistance in

any cuts in medicare or social security. social security is sound and it does not contribute to the debt. you all know that. quite frankly, looking ahead, after 2036, when social security is anticipated to be 75% of the payout, to make up that additional 25%, why aren't we talking about raising the cap on payroll taxes? why is it fair that someone who makes $50,000 a year pays payroll taxes on every last dollar? someone who makes $500,000 a year only pays on 20 cents on the dollar. why is that fair? just by raising the cap, you will have sufficient funds to take care of any problems in

social security. yes, we will resist any of those things. there has been a move afoot within the republican party to privatize social security for years. i can remember in the 1990's, newt gingrich. wall street has always wanted to get its hands on some of that money. talk about free money. social security, they can invest. they always wanted to get their hands on something. we have to be very careful about any kind of partial types of privatization. on energy, the cheapest barrel of oil is still at the barrel of oil that you do not buy. the cheapest barrel of oil is the one that we save and not to buy. that means conservation. here is jobs. infrastructure jobs.

renovation, renovating the buildings we have in america to make an energy-efficient. huge savings in energy and you could block an american made goods. doors, windows, new heating and ventilation systems. retrofitting the buildings of america would save you -- you employee lot of people to do that. you can talk about nuclear power and wind, and a lot of that is okay for the future, but what are refocusing on the things that will create jobs, stimulate manufacturing in america, and save energy all of the same time? >> thank you very much.

[applause] i think we have a lot of agreement on the need for a national policy. here is the report, a ticket tom. -- take it home. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> tomorrow on "washington journal," david walker offers its own plan to solve the

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