a little private lake. >> how was the water quality? >> unbelievable. >> fish? >> good fish. [unintelligible] >> he has a vacation and come in southern iowa. -- home in southern iowa.

>> good luck. >> i appreciate it. of representatives, the republican om georgia. let's give a big iowa welcome to newt gingrich. [applause] >> it is good to be here. thank you all. isn't it great to be at the iowa state fair? this is actually the best state fair in the country. it is the this time we have been here, and our grandchildren, maggie and robert, are with us. and he'd pick up where we talked last night about urgency, about getting things done, and about working at a time when you have to go different parties involved. -- when you have to make different parties involved. i worked with ronald reagan and we developed the program.

we had to find a way to bring the american people together, so that they would say this was the right thing to do. tomorrow is the 30th anniversary of ronald reagan signed a three-year tax cut that launched the recovery that enabled us to create jobs for year after year, and it could only have been done by having the american people bring above democrats and republicans together. when i became speaker, with the contract for america, we had republican house and republican senate, but we had a docratic president. under our constitution, that means you have t find way to work together. the trick is, we foug very hard, but we also fought with the idea of finding a way to make things work.

when we pass welfare reform, the most successful entitlement reform of your lifetime, half the democrats in the house voted for welfare reform, because the people of the united states had concluded that givin people money for doing nothing was destructive, and so there was a genuine bipartisan coalition. when we passed the balanced budget -- ople say bill clinton takes credit. he was presint. he certainly did at least half the credit, because if he had not signed the bills, we cannot have done it. the you have to find a way to work together even if at times your having arguments. i want to start with the idea, what if we took seriously the current problems of the united states, and what have we decided that we, the american people, going to insist that politicians in washington learn to work with each other? i want to bring three specific proposals to you today. this inot about what i would

do in 2013 if i were president. we have problems we need to solve this summer, and we need leadership that is willing to work to solve it this summer. that is why it is so important to work now to do things this summer. [applause] i am going to give you three proposals. that are predicated on you convincing the members of congress to come back to washington, cut off their vacation, and decide that this is a serious enough situation that we are to startver. notice what i just said. if all they are going to do is come back on both sides to fight each other, they ought to stay home. it does not do the country any good to have ople come back just to fight. but if they would be prepared to say this is a serious enough crisis, we are going to start over. erase the board, and i would include in this the gang of 12, which i think it's a

disastrously bad idea. let me talk to you about how i would do it. the first rule is going to sound silly, and all i want you to do is bear with me for a second, because i did spend 20 years in the u.s. congress and i have been studying this business since august of 1958. the first rule is, in both the house and senate, for the first three days of the week, monday, tuesday, and wednesday, they only bring up things they agree on. this first of all requires them find things they agree on. otherwise they will look stupid and there'll be no business. second, what it will do is the opposite of what we have been doing. we have been building issues bigger and bigger and bigger. now is either you have to raise taxes and i won't play. you have to cut taxes are i will not play. it has become such a big disaster that now they are

saying let's play stupidly. that is not any way to run a country. if you can find a way, step by step, that you could agree on something, let's pass it. you will get a lot of small things done, and you will start to build a habit of working with each other. i tried to convince the senate republicans when they were in the majority that one of things they should do is find junior democratic senators that have good ideas and passed them. just to create a framework. people tend to forget that in 1984 when the reagan administration was being too slow on apartheid, a number of junior members worked with ron dellams on what was a very heretical coalition. we said if you believe in freedom, you have to believe in freedom in south afric you had young republicans have

been a senior democrat pass legislation that neither leadership thought to pass. we are going to get together and get outside arco caucus and conference and find ways to find things we can agree on. it would start to break the ice. people would start talking to each other and it would get a ttle better. second, instead of waiting for november for a super powerful, extraordinarily brilliant 12 people to do the work of 522 other people, i would argue -- and by the way, iowa is one of the places i have gotten this from, that they oughto come back and monday, and every subcommittee in the house and senate should be assigned the following task. take every aspect of government your supervising, bring in experts from business on lean six sigma, and apply it to

rethinking the whole thing. i will give you an example that will surprise some of you. our legal visa system is a mess. it is an embarrassment. it makes it more expenve and more difficult to be legal and it is to hire a coyote and come in illegally. i would take lean six sigma and over the entire state visa process. this was first done in government and iowa, in order to redevelop the business attraction program by applying this kind of thinking to make it fasternd easier. the developer believes it is worth $500 billion a year. the entire supersecret intelligence committee of 12 is only trying to get $1.50 trillion over the nex 10 years.

that is a very different approach. we have talked with ibm, american express, and visa. they have ve sophisticated anti-fraud systems. the u.s. government has no effective anti-prod system. if you apply prod system to medicare and medicaid, you could save up to $100 billion the year. if you applied to food stamps, it could save $20 billion a year. i just sed in that one device almost as much money as the entire committee of 12 is going to try to save, but it is a new idea. it is a different way of thinking things. it is not conservative or liberal. is just being smart and applying dern techniques and management to do things intelligently. i second challenge to the congress is simple. stting next week, actually

have every member doing their job, track every member, and ever month, find savings. have as your goal pre-empting the committee of 12 by finding enough savings before thanksgiving that you do not need them. the new can add intelligent savings. -- then it you can add intelligent savings. i am against an arbitrary $0 billion cuttinof defense. i think it is a stupid idea. i think you ought to have a levelf national security you need to have to defend that threats against you. while i am a halt, i am a cheap hawk. i think if you apply lean six sigma, you would save an immense amount of money, but it wod save intelligently by taking out waste rather than cutting out programs because you cannot figure out how to manage. it is a fundamentally different

approach. we desperately need to get this economy running again. let me be very clear. every american of every background should be worried. i don't care if you are rich or poor, what your ethnic background is, your geographic region, i don't care which party you belong to. we are teetering on the edge of an economic disaster. look what is happening in europe. look at the riots in great britain. look at the collse of greece. look at our the italian and french bonds are today. look at the bubble in china which is eventually going to break. say to yourself, how comfortable am i that the current policies are going to avoid the depression getting even worse? as a historian, i am not comfortablat all. when you bounce along at 9% unemployment, you have a grave

risk of sliding down rather than growing up. a third challenge to congress is to come back on monday, and let's start with a couple of things. six democratic senators have sent a letter to the president's asking that their states be allowed to drill offshore. you can put together a bipartisan majority in favor of liberating american companies on american soil to produce american energy, in order to be in a position you do not have just sent $400 billion a year overseas. i got some heat from some conservatives because i favor ethanol. i voted for gasohol in 1984. ronald reagan signed it. we had a simple. if our choice was iowa or iran,

we like having money in iowa. we would rather have money in south dakota than saudi arabia. i talked to a lot of sophisticated ethanol people and i believe in it. i believe in it years ago. i thought was right for national security. i believe that all american energy -- most of the ethanol pele i know are prepared to eventually get rid of the subsidy if we move to flex fuel cars and tanks so the customer has a genuine choice. o prices go up worldwide, ethanol becomes general it -- genuinely commercially competitive, if you have a gas station that carries it and a car that uses it. i reject those that say we have

to do exactly what big oil wants. i am for drilling offshore and opening up lots of land for oil. i think american oil is vastly better than iranian oil. but i am also for ethanol, solar, and wind. here is a fact you should keep in your head. we have more total energy in the united states than any other country in the world. we have more total energy in the united states than they have in russia. you have a federal government which is anti-american energy. it just boggles the mind. i don't want to get involved in an ideological fight. i will oppose this example. there are a lot of things we can do. i hope the house will repeal immediately the dog-franc bill, which is a disastrously bad

bill. you go into any community bank in iowa and ask about the devastating impact of dodd- frank. we need to repeal sarbanes oxley. it does no good. it is just a dump bill d --umb bill. we ought to have a national conversation about this. wewn 69% of alaska. 69 percent of alaska is federal land. alaska is twice the size of texas. that means we currently have in federal land 1.5 texases. surely we could designate one half of texas as national parks, forests, wilderness areas. that would be 125,000 square

miles. and then we could say with the rest of alaska, what if we could find minerals, oil, gas? that means to be opening up an area the size of the entire state of texas. if governor harry gets in the race, he will tell you, that is a really big area. there is no reason we cannot have an honest discussion abt this. the roosevelt created -- i get some heat from the far right cause i really believe we ought to have a healthy environment. how conservative you are, having a river in the middle of a city catch fire is not a good idea. i wrote books called -- saying there should be a common sense, green conservatism. i am happy to have a dialogue

with everyone in the country that says, can we identify a large parts of nevada, parts of aska, and get back to being a country that favors economic development, favors job creation, favors the production of resources? you notice i dinot talk about what i would do in 2013. i came to recruit you to call your senators and congressmen to say to people, we need leadership thisummer. we need action this summer. as far as i am concerned, i want to be a citizen this summer heing my country get back to work, helping my countries of its problems. we have plenty of time to run for president later. thank you vy much. good luck, and god bless you. [applause] is former house speaker newt gingrich with his wife.

>> these look good. >> pretty good technique. >> i could to the other thing. >> was the pan hawaii? -- pan hot? >> a couple over here. >> here you go. a big photo opportunity. new future, newt. that's right. now.u're in trouble

>> you go for it. good form. >> doing pretty good right now. >> we have flipped everytinhing that needs flipping. >> i want to know which one of you is from the food channel.

>> how do you feel about last night? >> good. we have our grandchildren here. how could you not be happy at the state there? >> how do you describe the atmosphere here? what is a like to get out and talk to people? >> it has been clear all day today. people keep walking up to me and speaking well of last night and promising to be with us in january and getting pictures and walking with me. you will see how many teachers -- people are excited about what we are doing. >> sarah palin is here today. rick perry is here today. >> the more the merrier. we have six months to have a national conversation about the right policies in washington. as i said last night. , i wish there were immediate

things that they could do to start turning around the economy immediately, starting with repealing the dodd-frank bill. showed the country that they understand we are in real pain. in the house, if republicans have real control, they should have all the subcommittees' to the right work in september and find all the money we need to find in september and october by having all 435 members do work, not just the six members on the house committee. i thought last night was a great place to start talking directly about that. we need to replace the select committee with the whole congress. do something to help america now.

>> how does your campaign moves forward? >> we never invested here. our goal is in january. we are looking forward to january. brand science, as it affects alzheimer's and mental-health. all time as a loan is a $20 trillion public and private cost by 2050. i want to talk about new and different ways to fix america.

that is what this campaign will do. we are attracting more and more people with that kind of positive message. people who have never gotten involved in politics are saying, this is about my family and my life. i want to be involved. ry much. you vert >> god luck. >> it has your name on it. >> i'll take it. >> that was a highlight. thank you. entirety online.

we take you back to a live look at the state fair as minnesota congresswoman micheleachmann arrives. [applause] >> without further ado, from terloo, minn., michele bachmann. [applause] >> hi, everyone, from one island to another, my name is michele bachmann -- iowan to another, my name is michele bachmann. i am running to be president of the united states in 2012. [applause]

did ybody catch the debate last night? we sent a signal all across the united states, and it is this. with your help tomorrow, in ames, iowa, we are going to make barack obama a one-term president. [applause] it does not get any better than that. it is going to be a great election coming up, and you're going to send a signal. this is where barack obama got his start. this is where he is going to come to his and, in iowa. -- end, in iowa. did you get the change and the hope you believe in? it is time for real change. we're going to repeal obama- care. [applause] and today the 11t circuit court of appeals already made their

decision that unconstitutional individual mandate is unconstitutional. as nominee of the republican party, i will not rest until i elect 13 more titanium-spine senators, and we are going to repeal obama-care, dodd-frank, turned the economy around, and it will not take more than three months to get the whole shooting match up to speed. we're going to do it. are you coming out tomorrow? come on now. come to our tent. we have randy travis live for you in our tent. we're going to have a little texas band and lone star.

we want you there, because tomorrow is the day we make a downpayment on taking the country back. i'm coming out to shake your hand and see you now. god bless you everyone. good to me you. -- meet you.

>> according to your hband, i am a barbarian. you treat me like a second-class citizen. shame on you! shame on you! shame on you! shame on you! shame on you! what about rights? equal rights for every american. >> thank you. god bless you too.

>> our coverage continues with debbie wasserman schultz. this is about 10 minutes. >> thank you to be "des moines register." thank-you to the iowa democratic party. i want to sing the praises of your chair, who is doing a fantastic job making sure that people >> this is my first time to have the privilege of being in iowa and the first time at the state fair. this bear is legendary, and i was absolutely thrilled when we made plans for me to be here. the reason i am here is the same reason that i would democrats are working in the trenches every single day, and that is to make sure that like president obama has said so many times,

americans and by wednesday to understand that we are at a crossroads. we are at a crossroads in america where we have a very stark contrast, a very clear choice we can make. next november, we can make a decision to go in the direction that the nine republican candidates last night pledged a rigid inheritance to, that the tea party wants to reject making sure reject corporate america, that we protect the most -- even in a question where in getting a handle on our deficit and dealing with our economy and getting it turned around long term, their response to our proposal to have a 10-1 cut to revenue ratio, they all raised their right hand and said no revenue, no balance, no compromise. that is unacceptable. i am here to tell you i think that is unacceptable.

thank you. the other choice that americans will have is to continue in the direction that president obama and his leadership have taken us. we have gone, under president obama's leadership, in the month before his inauguration remember let me take you back to a time when we were bleeding 750,000 jobs a month, and passport, -- and that was thanks to the failed policies of the past which all republican presidential candidates are embracing once again. bass or 2.5 years later and we are 17 months straight -- fast forward and we are into private sector job growth to 0.4 million private-sector jobs created, 2200 jobs a month created in iowa in the first six months of the year. just look at the recovery act. that is just a small snapshot of

light in iowa your only at 6% unemployment. 34,000 jobs were created right here in this great state. that is real leadership. what we need to do, in addition to continuing to create jobs and get our economy turned around, is wneed toome together. i know is going to sound a little funny from the chair of the democratic national committee to say we need to come together and compromise, but that is what americans are looking to us to do. they want us to come together and work together. we need a little unity in america right now. that is what democrats have been committed to under president obama's leadership. you saw in the date leading up to the debt ceiling and unacceptable rigidities on the part of the republicans in congress who refused to establish some balance, it refused for many weeks to even sit down and work together with

the president and with congressional leadership to finalize a plan that would get this deficit reduced over the long term. [applause] thank you. we ended with the debt ceiling deal that as president obama said, it was not perfect. it was not the deal that he would have written if left to his own devices, but you know what? i am a mom, and as a mom with young kids, one of the things i always talk to my kids about is, i know you wanted 100% your way, but the reality is, that is nothat life is about. we are not going to come together and solveur nation's problems if one party rigidly insists on it being 100% their way all the time, crosses their arms and stamped their feet and

refuses to compromise and work together. that is not what america needs. what america needs is for us to come together and make sure that beyond creating jobs, beyond getting the economy turned around, that we ensure that we never put insurance companies back in the driver's seat when it comes to your health care decisions. under president obama's leadership, we made sure that you cannot be denied or dropped from your coverage if you have a pre-existing condition. if your 26 years old, up to the time you are 26 you can stay on your parents' insurance. if you are a senior citizen, will make sure that prevented screenings are part of your health care so that you can stay healthy, and not only access health care when you are sick. we made sure that equality means something in america and repealed under president obama's leadership the "don't ask, don't tell" policy which is absolutely

unacceptable in an america that is committed to equality. we made sure that we passed the first bill that was signed into law by president obama meant something significant to women in this country, though lillie ledbetter their pay act, to sure that if your woman, you get equal pay for equal work, and the lot is enforceable. that is incredibly important. my message to iowans and to americans and to all of you here at this fair is that we had an opportunity to come together. we need to reject the politics of the past. we need to reject the notion, as mitt romney sd on this very stage yesterday, that corporations are people. really? is exxonmobil a person? general electric? do they have human life qualities? no, they don't.

it isbsolutely imperative that americans understand that in order to make sure that we can get a handle on our economy, make sure we can quicken the pace of recovery, as president obama is so committed to do, that we go back to washington and make the kinds of investment in infrastructure is that president obama will be championing, make sure that the millions uncle construction industry workers that lost their jobs in the recession have an opportunity to get back to work, fixing our nation's roads and bridges, getting our electric grid modernized so that we can make sure we can really create jobs. let's exnd the payroll tax cuts. let's come together. that is the ttom line. at the end of the day, the middle-class and working families and small business owners need a champion. they have one in the white house. they will continue to have one in the white house with your

help and your advocacy. we need to make sure, and as a mom, as i said, with three young kids, the reason i am in public service as a member of congress, the reason i made a commitment to president obama that i would work as hard as i possibly could to bring him across the finish line and help him stay at work doing the work that we need to have done for this country is becae the future of my chilen, the future of your children is at stake. the future of my parents' generation is at stake. as someone represents a district in southlorida with literally hundreds of thousands of seniors who depend on medicare, to ensure that they can stay healthy. the difference between barack obama and congressional democratand all the republican presidential candidates is all of them committed to end medicare as we know it. get the safety net out from under our seniors and privatize social security.

those policies need to be rejected. we need to make sure that when we sit down at the table together to insure the long- term securit of medicare. medicare needs to recent preserve, not ended. we need to make sure when it comes to medicare, should we be adding another 64 under dollars in premiums to our senior citizens? -- $6,400 in premiums to our senior citizens? [unintelligible] we need to work together, and i know we can. i know we can come together. democrats are committed to that. president obama is committed to that.

we will work together every single day from now until election day to get this economy turned around. we will do it with your lp. thank you very much. >> on a thursday most of the republican presidential candidates took part in a televised debate. we talk to a reporter about that. looking at the headlines today, ben smith, gop debate hitting hard at each other at obama in iowa. the atlanta journal, gop hopefuls joust in iowa. gloves come off during the debate. this bird post, they like the gloves analogy -- pitburgh

post, they like the gloves analogy. what was noticeable for you last night? guest: the race sort of changed and solidified certain candidates, starting to drop in contests and asking voters to choose. the most visiblend exchange was between former minnesota gov. tim pawlenty and congresswoman michele bachmann. they went at it quite aggressively in terms of michelle bachman basically saying tim pawlenty was to political, and hymns and she has no record. the-and he said she has no record. suddenly, mitt romney, was not really the target of attack, started to add a case against texas gov. rick perry who will enter the race looks like this week. use of mitt romney say, herman

cain and i are the only ones who can only do this job because we a private sector experience. i think that was the beginning of an argument against rick perry. host: in the national polls, is an estimate the difference adding rick perry to the lineup. guest: it seems to draw a certain amount in the national polls, but those are pretty meaningless at this point did rick perry has a long way to go. we will see. host: talk about the straw poll on saturday. c-span will provide live coverage, every minute of it. what will it mean in the end? guest: well, the straw poll, someere around 10,000 people probably who will come and be courted by these various candidates.

it is a show of strength. right now, i think the reason you saw miclle bachmann and tim pawlenty attacking each other so fiercely, it is not how many candidates are scarcely surviving, it is a test of strength. host: it is likely some of the second and third tier candidates might decide the voters are speaking to them? guest: yes, but i guess the media may essentially decided for them. tim pawlenty has been working hard to win. he has -- he looks good on paper. there is a sense he has to show voters >> our coverage continues

tomorrow from iowa. we have a preview program on history and impact on the straw poll. it begins at 1:00 p.m. eastern on the campus of iowa state university. those scheduled to speak include michele bachmann, herman cain, thaddeus mccotter, tim pawlenty, and rick santorum. that is on c-span and c-span radio. we will also ever at perry in charleston, south carolina announcing his candidacy. -- we will also have rick perry in charleston, south carolina, announcing his candidacy. go to our website for campaign 2010. it is easy to use and helps you navigate the political landscape with twitter feed and facebook and bay project face looked on updates from the campaigns. -- facebook updates from the campaigns. c-span.org/campaign2012.

>> alice rivlin says that additional tax revenues and entitlement reforms are essential to any successful plan by the newly formed joint committee on deficit-reduction. the 12-member committee is responsible for cutting the budget deficit by 1.5 trillion dollars by thanksgiving. his session focuses on the impact of deficit reduction on american national security and foreign policy. posting by the brookings institution, this is about 90 minutes. -- hosted by the brookings institution, this is about 90 minutes. minutes. [inaudible conversations] >> good morning, everyone. welcome to brookings. i am michael o'hanlon on behalf of myself and peter singer to the far right and colleagues elsewhere brookings, would like to welcome you to this event on the implications of that debt

deal and the deficit crisis for american foreign policy. we are honored,t american spiriy immediate right, alice rlin come a senior at brookings, lacourse a sunny director of the congressional budget office, ran the office of management office and was vice chairman of the thread and continued among other activities to be involved in d.c. finances and therefore prudent her medal in many different ways over the years. stephen hadle was george w. bush national security adviser, one of the most distinguished national security advisers as my former colleague hugo dobler explained convincingly in a recent book on that position, historically in the united states. steve also was the coleader last year with former secretary of defense, bill perry with an assessment of the 2010th quadrennial defense review that seems like 100 years ago already in time so we time so we knew it

fiscal issues the deficit debate was far different than in the aftermath of the n-november of a drug revolution when the tea party came to town and everything else happened has been subsequently what would like to do this morning is to begin by myself posing some questions to each of the panelists to frame the discussion and then of course go to you because we are fortunate enough to have television coverage today. when we go to the crowd, please identify yourself, waitfor a microphone and ask a short queion cannot be specific about who you are addressing it to if you wold. i wa to begin with alice because i think for a number of reasons that brought perspective on what this recent to accomplish is worth to understand before you get into specifics about its implications might eat maybe what they should be or should not be for the broader national security budget, the main focus of our budget today. alice, if you could begin with, i realize it's too complicated to ask you to do a full primer on the deal, b a short

explanation. even though there's been a lot of explanation, some of them confusing, especially to nonspecialists like myself in terms of exact what happened over the next four to five months of the current deal. >> raid. well, i think first it is important to say, how did we get here? we got through this dreadful, awful, outrageous process with an artificial crisis, namely the debt ceiling. and nobody who cares about the u.s. government can be proud of his performance. at that moment it was brinksmanship and irresponsible and it's hard to think of words -- adjectives that are strong enough. but i do think we have a new opportunity now to solve the real problem and that this deal might be the first step towards a positive resolution.

what did it do? not as much as its critics from both ides often imply. it cannot discretionary spending for the next 10 years at apprimately the rate of inflation grows. if you are familiar with differt symbols plan, which i participated in and the domenici, rivlin plan which i also participated in,, those plans were balanced plans, which did pre-teens, which i think are the things you have to do to solve the long-run deficit

problem. they reduced the growth of entitlement spending in different ways. medicare, medicaid, social security. they got more tax revenues by reforming the tax code in slightly different ways. and they kept discretionary spending. now, those are the three things you have to do. this deal has done the first one. and then it says, step one. now, step two is the creation of an extremely powerful 12 member committee joint select committee, half republicans, have democrats with extraordinary powers. they get to look at either the spending side, especially the

entitlement side because that's what hasn't been done yet. and the text i can recommend additional deficit reductio specified as 1.2 trillion over 10 years minimum. but they have the opportunity and they should take it to do more thanthat over the 10 year period. why is this so powerful? because if they can get the majority of the committee, seven out of the 12 votes around the plan, he would have to be a balanced plan to get seven out of 1288, thatthey take it to the floor subject to an up or down vote. that's it. no filibuster, no anything. and that is powerful a mandate as any committee has never had as far as i know, with the

possible exception, that a small potatoes from what we refer to w. then the question is what happens if they don't? what happens if they don't is we have what is known as the sequester, which was designed to be unacceptable to both sides, a substantial cut in defense spending, just what we'll be talking about today and a substantial additional cut in domestic spending of including some entitlement, but exempting programs for low income groups and limiting the cut in medicare to 2%. and when you do that, it means other things that have to be cut

very substantially. so with this committee doesn't succeed, what you get is additional discretionary spending cut, but these are cuts, not caps because the numbers are big enough so they would actually reduce them below for would have been otherwise. and wouldn't fix the problem. the problem remembers because of the demographics and the pressure on entitlements coming from longevity, retirement of the baby boomers and cuts of medical care. so that's where we are. >> if i could follow a period on the issue of what happens if there is no deal or just refused by the congress and the up or down vote, and i noticed it into complex issues of so-called

baseline, but when we look to next year, the tx cut that has been in effect sine the bush presidency are due to expire at the end of 2012 according to current law. and if those tax cuts were to expire not be renewed at all, is it true that even more than 1.2 trillion would be -- and just tried to get the arithmetic rate. i'm not trying to make a policy statement. is it to the policyou're talking about would actually be accomplished? another was to get that much reduction in tongues and play by not extending the tax cuts? >> i don't think so. although i think this is still up for discussion. if not the extensions of the bush tax cut wouldn't be a very large number in exceeding the 1.2, but it is a question of where you start from.

and as i understand the starting point, the baseline, it is current law when other wor you have to cut a 1.2 below what would happen if current law was followed, which means the bush tax cuts. >> thank you. >> there may be some dispute about that. >> that may be a conversation right there. by the way, i should say there are brookings.edu. we will have featured alice's tax for as well as stephen hadley report. if i could turn to you and i guess e broad question i've been intrigued and given your thoughts on, a very good report

on your concern, that even the milder upper state street deficit reduction may cut defense more than perhaps would be wise. in fact, you and bill pey and your bipartisan team called for an increase in the size and the needy among policy recommendations of the man-size in the defense budget above and beyond what would be needed to keep up with inflation. he must be, i'm assuming a bit concerned about some of the numbers you're hearing now. let me not lead to any further and just as. how do you square the recommendations he made with bill perry a year ago, with the current options we see now for defense budget cut. >> i just want to thank you for convening this panel. think all of you for coming out in the middle of august. this is above and beyond the call of duty. their report that michael referred to wasn't independent panel review of the quadrennial defense review.

this was dod's own review of its budget over the next five years. it wasandated by statute. what we were told to do is look at the threads environment over the next 20 years and then try to describe the requirements we have for defense capability and do it in a financially unconstrained environment. as we were told to do and that's what we said, looking only at dissent financially unconstrained. we propose a lot of measures to reduce costs. what we said is even if you do all the things we recommend to reduce cost, without the threat environment was such that we might actually still have to increase the top line, even as we harvest and other things. that was then. this is now. what happens in the intervening is that the focus of the american people on the deficit problem has really riveted

washington's attention. i largely agree with admiral mullen, chairman of the joint chiefs when he said getting her economic and financial house in order is the biggest national security challge we face because the strong economy underpins everything we do internationally. it is the basis for a strong military, basis for diplomacy. it gives us economic and financial influence overseas. it is the undergirding of our national power. and if therefore we are going to address this number one national security challenge in terms of the budget that, then eveybody is going to have to contribute. i ink we have to look at that pending in that context. from a caveat is the phrase, if we're really going to address this problem in a comprehensive way. you know, there's a tendency in

washington. liberal democrats say will cut the defense budget and everything will be fine and conservative republicans say cut nondefense discretionary spending and everything will be fine. well, it won't because even if you do both of those things, it will not be enough. it's about entitlement if you look at tenures come in the budget deficit is driven by entitlements, social security, medicare, medicaid. if the country is serious and of those programs are on the table and if we are really going to make those entitlement programs fiscally sound, then dod ill do its part. so that's the context. but we can talk about the kinds of things you have in mind for doing the defense budget. but i worry about it because our adversaries out there don't always have our budgetary crisis

and they are not taking a vacation or holiday from the threats they pose to us. so even as the ink about dissent spending cuts, it's got to be careful. it's got to be spread driven and prioritize. we can talk a bit about that. >> if were not serious, we don't have a country to defend. >> exactly right. the measure of seriousness about the american people need to insist on its request to talk about social security, medicare and medicaid. but we don't talk about those, were not going tsolve the problem. if that simple. >> if i could follow-up and whether the area, diplomacy and all the other things he worked on informed of the people up to think about, include the state department, foreign assistance, security assistance to the bipartisan accomplishment that often oes unnoticed. the bush administration and to some extent the clinton administration before it an

obama administration has succeeded in rectifying the shortfalls that a lot of people have identified over the years and our diplomacy and strength of our state department, cadre of foreign service officers we've got, and of course the international assistance budgets as well. are you concerned about those being at risk? to have the instinct which could cut a little and can apply some financial discipline and a few cutbacks. you have a notional assent of how far the press is could go? are you with the current effort will also target the state department and foreign aid excessively cause those are also programs not always popular? >> there's some real risk there. every entity to which soared in the kind of environment where in. one of the things this process alice talked about is the national security council, so they have sorted in a grouping

defense homeland security intelligence diplomacy in foreign aid and assistance. i'm the one hand, i think that's good because a lot of what we call foreign-made is itical to achieving our natial security object to it. and we've been trying to talk about one of our recommendations was the consolidated national security company which is a good idea as a planning tool. thproblem if you are under enormous budgetary pressure, pressure will be we need to preserve defense spending, so let's cut diplomacy, development of democracy promotion in the lake. and the iony is that the military dissent and incomes down, as the out of places in iraq and afghanistan as fear of her time in as we face other challenges in places like somalia and yemen and the like, a lot of that nondefense national security spending becomes even more important.

it also a lot cheaper to do things that factor than it is deploying american combat troops. he could deploy and susta an overseas is the most expensive thing we do. so the ironing is there's a trade-off that needs to be between defense spending and what i will call nondefense national security spending. bob gates was all over this. bogates and he was secretary of defense that i want to send money to the state department for some of these that dvds because they are so critical to supporting the defense mission. and i hope that leon panetta, the new secretary of defense will have the same attitude and we start making trade-offs between defense and nondefense security spending. and i would hope in some instances we may cut defense and weay actually add many on the nondefense national security side. >> peter, if i could turn to

you. you've written a thoughtful paper which is now foreign-policy.com website and worth a read for anyone here today about not just the numbers of how much we should cut them how we can take a night for a scalpel or in packs, depending to the defense budget, but the process by which we should think about how to set up cots and to make sure and all th rapid fire process of cutting quickly, we don't cut unwisely. can you see a few words about some guidelines that you would suggest the policy community keep in mind to be thoughtful about how do keep whatever country make. >> the honor of the mathematicians to great american leaders. the numbers that were talking about are such a scale from a shocking. essentially the next five months, we have to figure out how to cut between

400,000,000,001.15 trillion from , most of which will come out of defense. >> over 10 years. >> over 10 years. there's lots of ways to think about those numbers that do how many empire state building is th equal. i prefer thinking about it essentially have to cut somewhere between using the department of defenseestimates to chinese military in the budget for seven annual budgets. but my problem is when you look around at the scores in washington right now, there's two types of questions were wrestlinwith. one is the weather to cut or not and that ignores e fact that the first $400 billion -- that train of 30 left station. the second, as alice pointed to is the only thing standing between him and that hundred 50 billion in cuts is the very

slender thread of first the super committee showing the i would say sort of intelligence and maturity to come up with a package that hates all these other areas like entitlements, like tax reform that would actually have a real effect. and secondly, the rest of the congress and various political parties showing the maturity to vote yes for that. that is the slender thread. and frankly based on their behavior the last couple months, i don't think that is something we can count on. so the weather question as 4075 then most people in d.c. want to jump into the what question. what to cut. you can see the debates have been a are the coalitions are lining up that this is a critical program is you can't cut it. this is a wasteful program i met at. it's essentially a battle of everyone identifying pat rocks

are pet peeves in going after them. what we need to do right now is start to focus on the how question. what are the principles by which we might go about it smartly. and that's what the paper that i was wrestling with good and two. i hope we can talk further, but it's looking at issues like how do you go about making trade of smartly? how do you identify where real savings are versed is false events. how do you start to mitigate and weigh strategic risks? as an illustration, if you're doing cut, what are capacities you can bring back quickly if the strategic environment changes in water cuts that simply he won't be able to restore in a matter of decades. that's the kind of thinking we have to do now. unfortunately that's a tough thinking that washington often veers away from because for easier, much more comfortable playing the blame game or protecting pat rocks. but it's well past time for that.

>> michael, one question comes out of that but i've been trying to get an answer to an alice, you may know the answer. that alice made the point it is 400 alien or 1.1 trillion over 10 years. 15 year when there is program and say none of them look like this. there is a system being purchased that will cost you $40 billion a year for 10 years. if you cut that program in year one and then save the $40 billion in year one, to get credit for the full $400 billion over the ten-year period? if you do, then come and the impact of the lackluster conan and something that says if you cut something to save you 40 billion the first year, in addition you have to cut something that is you 40 billion more in year two if you see what i mean. >> you get credit for the whole

thing. i mean, if it's going to cost 400 billionover 10 years and you get rid of it, then that's 400 billn. let me just reinforce what ter, the 700 feet is talking about if the committee fails. and two points about that. i think the committee by itself may be a slender reed. it will work on that the president and speaker boehner and the rest of the leadership wanted to work. and then it's a slam dunk. and so, that's really the big question. but wow, -- >> in the face of national security, we have to do contingency planning. right now this contingency is onthat i would not put in the extremely unlikely based on the

passive potential or the likely category. there's another thing steve brought up that i think is one of these principles we need to think about is that for example, we are only talking about this in terms of cuts right now. we are talking about a 10 year period. one of the things that plays out is that sometimes you have to spend money to save money in the ng term. so as an example, department of defense energy spending is a big cost or ever. the amount spent on gasoline has gone up over 225% on an annual basis. if you say okay, i'm cutting a first doing kris energy efficiency, we been made at the start of it, you lose the saving efforts. but unfortunately has been the way we've gone about it. >> it doesn't have to be. and that the benefit of the 10 year horizon. another point about likelihood,

the sequestered, the big amounts that would be cut to commiee failed was designed to make it unpleasant to both sides. and cuts of the magnitude you're talking about would be unacceptable to most republicans and many democrats. so it's not a short name that they will happen, even if the committee fails because they could be overwritten. i mean, a lot is the law. >> alice, just to clarify, peter is talking about the 350 billion that's essentially going to come out at the budget already agreed to amass the result to your original intervention of this cat. >> capping defense and domestic discretionary spending at the rate of inflation,rather than

at the rate of gdp growth, which nominal gdp growth which is what the baseline of sins. >> hair-like to cope with inflation, but no more than that. >> is my understanding. using the word hot, which sounds like we'll have a smaller defense budget in the future then we are now is not necessarily right. >> i think it's important for viewers to make sure we are agreeing on that is clear, the expected reduction in war cost is notsomething if you're on the committee .2 is the big savings. >> it is assumed to be happening anyway. >> i'll just mention in front of the war cost was 100 million year. now we are done in the 2012th is clear, which begins a course

in six weeks, which will be down to 120 billn, for iraq and afghanistan together. right now in the calendar year 2012 -- calendar year 2011, even if it's changed a bit, the iraq cost will be very small by the first of the year. afghanistan will be a little slower reduction, but that's scheduled to come down a great deal in the coming two to three years as well. so the numbers are talking about for saving our non-double counng those benefits. >> should we talk about if we get in peter alluded to before or five things people need to have in mind. i would hope that people who are chargesheeted us recognize it needs to be threat days. sack of money and needs to be

prioritized. we should cut things that are lower priority and think about cutting. the most foolish way to do this to be a 10% across-the-board cut for a 5% across-the-board cut because that does not allow you to safer military to the threat you face. peter talked about sometimes you need to invest in order to cut costs. i would elaborate on that by saving three innings. one, there are things that actually you can ct them in a way that forces you to reform and actually come up with a force that makes a lot more sense. in the personnel area, i think you can do some cutting that will actually really force you to re-examine the personnel system in wayshat not only make it better for us, but also one that will cost you less money. similarly, you can do reforms that are going to drive the

process and reduce costs. acquisition reform is something we need to do. it will give this military equipment better, sooner but also can be less costly. finally come as we do these costs, we also have to recognize it for looking over 10 years, we need to cut them if we don't need enough so we actually have money that we can invest in some of those capailities we are no we are going to need. we need better capability for biological weapon threats, cyberthreats. i think we'll need for money for special forces and some of these other things. so i think whate ought to try to do d what i hope the folks responsible have seven reprint to pull someone baseline that they have posed to on their blk board and from other tasks that really guide them in this process. so it can be an intelligence process that cuts in a way that tries to reform and can actually lead to a more appropriate and

maybe even a better force and we have now when you look at the threats were going to face >> i thoroughly agree with that. who could not. but let me make one more point about the defense budget. steve mentioned earlier the importance of entitlements and health care growth in the budget generally. that is also true of the defense budget. the fastest growing major category in the defense budget is health care and has been for some time. and now we are not talking about for a more weapons. we're talking about promises made to retirees over a long period of very powerful political group.

in the tri-care for life program is an extremely generous and costly health care program. and if i'm allowed and it do, i sat with the meeting was a distinguished military retiree recently who was recovering from a kidney transplant, which had not gone well at first, but despite now here he says total bill was half million dollars of which he paid 500. he was outraged by this initiative been outraged. the basic story is there is no contribution or deductible of tri-care for life and we are paying a big price for it. >> is one of the things actually looked at in this independent

panel report. one of the things that was interesting that i was talking to george casey, who was then the army chief of staff about this issue as well as some retired military on our panel. what i found heartening with a focus on this problem and said it's really not very to the air force that the retired forsyth is good of the deal deal if it does. >> to try to change it is very hard. >> it is hard and it's up to congress right now. i was heartened by the military panel in george casey said i can tell you it's time to do that. it is time for retirees to pay more. the only things they asked were two things. one, tasted and so people are not surprised. and secondly, try to means test it because there are some military retirees that can afford it and some can't. i thought it was heartening you had a retired community that began to say we need to make a contribution to this process as

well. there's other things he can do. we let people retire after 20 years. and they many times are fairly young. they get other jobs and still get military retirement. one of the things we suggested in our report as let's lengthen the period of service. let's extend the military career. let's have people in 30 or 40 yes. let's not make it up or out. if people are good at a job, let them stay in that job. and that way we are paying people, but getting some to for it in terms to contribution to our military. and finally, a longer period of time allows military officers and enlisted to get the kind of educational exposure that will make them more effect than dealing with the kind of challenges they face in places like afghanistan and iraq. so my point is there is an interaction instead of reforms that can both make the military better and more effect than also less cost to you.

one of the things that called for was establishment of a military commission on the military personnel system, the national commissn on military personnel to take a look at how these issues and make the kind of reform that adapt the military to the situation we face in our house though would get a lot of cost out of it. this is a huge driver of the defense driver. >> i'll ask when the question of peter inimical to you. either way, there's a very interesting study coming out now which you may intrigued by, which is a match in the spirit of what steve just mentioned. although, an additional point is that while while benefits might be delayed, there might also be changed benefits might be delayed, there might also be changed to allow people to stay in the military for five or 10 years to get retirement benefits away with a private dirt and the united states as well at a more modest level, so kind of a

contribution to a 401(k) type fund, which doesn't currently exist. you have to stay 20 years to get anything. if you do stay 20 a the lot and that's an aspect the defense business board takes on. the point i want tomake is the following. i think one broad question a lot of people have on their minds, especially people who think that it cuts can command a defense and should come out of defense is basically stated the following way. under bill clinton at the end of the clinton administration we were sending in $2011 if you adjust for inflation about 400 billion a year. george w. bush did not plan to increase that a lot. ..

to get rid of tha times ten years there's $3 trillion right there. will the would be nights it was quite that easy. let me, in the interest of just trying to explain a little bit of the arithmetic explain what happened to get us from 400 to 700. and by the way, i do believe we can make sbstantial defense reductions petroleum dollar target scares me. i think it would be excessive and let me give you a sense of why. the 300 billion increase going from 400 to 700, of the 300 billion increase -- again in the annual budget, i'm comparing a certain year, 2001, to a subsequent year we are in today -- of that increase, about

175 billionis in malkoff so then you have more than half. that number is going to be coming down which is why the 700 billion-dollar number will be coming down. but nonetheless if you're trying to understand what happened that is a big chunk of their right there. second, a lot of the personnel system changes we made in the last years have been free costly. i agree with the point steve and alves have made that some of them have been inefficient. but as a nation war with to conflicts simultaneously and an all volunteer force i think most of us would agree that we certainly have to take care of our men and women and be attended to those who are deployed, those who are injured and so forth, which means a fair amount of that increase while it may not be optimal, and we probably should reexamine it is understandable and so some of it again does require re-examination but let's understand where that number me from. a third piece is a lot of norm

defense costs just in the regular peacetime activities of the department of defense go up faster fan inflation because they are part of our economy, too and we know a lot of costs go faster than inflation whether it's health care which now cost the department of defense 50 billion a year en leaving aside veterans administration activities, which are separate. whether its environmental cleanup, whether it is pay to try to entice good people went to the military at a time when you need competitive wages to do that -- some of these costs just go up faster than inflation. i don't want to double count this allows for any increase that somebody might propose, but it explains some of it and the last piece, and this is crucial to keep in mind, and the clinton years i think we need a sound strategic decision not to buy a lot of weaponry because in the 1990's we didn't need a lot of weaponry because we had bought so much during the ronald reagan buildup in the 80's so the planners first in the bush 41 administration of george h. . bush admnistration and in the clinton administration cut the

procuremenbudget by more than half. it is disproportionately targeted for reductions in that period of time. i think it is the right strategic call. some people argue it went too far but and he said it is not an option available today because we have never managed to repeat anything like the 1980's reagan buildup. we do not have military equipment that is particularly young, dependable, reliable today. at best we've been treading water the last few years, at worst we continue to exacerbate the problem because of the intensity and the pace of activity overseas so you have to bear these in mind and the procurement issu explains another 50 billion-dollar increase at least in the 300 billion-dollar gross. so when all was said and done i don't want to see it get it passed the 400 billion to 700 billion increase you probably have 50 to 75 billion of the total amount that is really withinreasonable realm of policies, discussion and debate.

that a lot of money but to even save half of that is going to get to 350 billington your target. that's going to be hard by itself is the notion that a trillion is easy and there for the picking i think does not understand t of arithmetic on what contributed to the cost growth. it doesn't explain the whole situation but i wanted to leave that out. >> go to peter but i have one more point. since i'm the only on the panel -- >> i'm not sure if peter is going to respond directly but i wanted to ask him peter, my qution for peter is going to be about any ideas she may have that should be to the mix on reductions it's a little more specific. why dont you go ahead? >> why are we having this coersation at all or about domestic discretionary. it's because we face a really big catastrophic problem of our debt rising faster than our

economy can grow. that's programmed in, and when you sit down in a bipartisan group as i have twice and say what are we going to do about this, then youstart with entitlement else steve did and you do various things that will be politically unpopular to reduce the rate of growth of medicare and social security. then you have realized we haven't done anything in the near term because about the retirement program you can't change them right away. you've got to save it in very slowly and far in the future so you are driven to discretionary spending. and you say some of this is not run as efficiently as it might be coming and we need to take this fiscal imperative to do some things that committees and

commissions have recommended for long time to read i don't know whether we nd a new committee or military personnel but most of the things you talked about have een around for a long time and are in lots of reports, the acquisition process, everybody knows that it's not very efficient, that the congress weighs in, first the military is smart enough to say every system has to be built in 234 congressional istricts, and if you to cut anything including an additional engine for a plane you may not nee, then the commercial way in, as we have to take this and produce some of thsensible things that might have been done sooner and then

you are driven to the revenue side because even f you the reprioritization on the defense side and the entitlements we are not going to be about to accommodate a larger population of older people that need medical care without tax increase so you have to have the three things. >> you may want to respond to this debate as well the question i have for you was that as ma in the crowd know, you've written some extremely influential books including maybe the to definitive books on private and military contractors and on a military robotics. and these suggest interesting areas of explong the cost savings and that's not the jump to have the detailed proposals the day after the target is announced and then to set up a process that's thoughtful but you have instincts about the kind of options we might at least set out and study further that might spring from either of

you well-known books either way in which the private work force, the private contractor work force has grown so much over the years with the way in which robotics may not offer a possibility to do certain things more inexpensively. >> i will try to weave in answers to both it goes back to the question of what principles are going to guide us in this process, and there's a couple principles that i think matter and i will get some heads nodding and disagreeing with me as i lay them out. the first one it's interesting we had ash carter here, the undersecretary defense a couple weeks ago, and he liked to use the phrase the famous bank robber willie sutton said when they asked why do you rob banks? because that's wher the money is. so one principle followed his law and that's true with third you are talking about every dollar that the pentagon snds on weapons, of 30 cents of it

goes towards buying the weapon, 70 cents goes to maintaining it. on the question of private military contractors the pentagon spends 55 cents on services that are billable hours from the private military contractors versus 45 cents on buying goods. yet when we look at all of the commissions to the like ty are always about cut this program. that's not where the money is. it's like robbing the drugstore right beside the bank. this was -- the personal system is another part of this where it's actually where much of the cost of growth within the pentagon is to read this leads to the second principle which is we have to be willing to question 20th century assumptions about 21st century national security. one of those assumptions is the personnel and benefits system. we have a personnel and benefit

system that is designed for the generation of madman that is now the generation of google. it's expensive, it doesn't fit their needs, its antiquated, is a 1960's model but this is where i will get steve to not not happily with me. is questioning assumptions also goes into other areas. so as an illustration we have to admit there are certain areas within the pentagon spending where the emperor has no clothes and we need to stop spending all his or group. national missile defense. we have spent more on that project than on the entire apollo space program that the man on the moon. now presently he success rate for the ground intercept system is eight out of 15 limited. so a man on the new inverses not that reassuring success rate. but more importantly, if it does

become successful it still is a system that is inadequate to stop the missiles that actually can reach us from russia or china and may be enough to reach the missiles that don't yet reach usucket under the current budget the budget is supposed to increase. or another example, the nuclear weapons complex, which we only looked at through the lens of negotiations with the nation that lost the cold war. that is we need to look a nuclear weapons, not just through what can we give up in negotiations in other words we need to ask ourselves if you cut 200 or 500 warheads from the 5500 that you have, what is the tree of? what is the national securities all you? the protection that you are getting from that, 5,252nd or head versus where can you spend that on the action military?

i'm not arguing for the global i'm just saying these are the tradeoffs we have to make and mike's point on robotics and other technologies we have to be looking at how we will organize ourselves presently and may be willing to cut certain pet rocks. so, whether it is the fact that how many tanks do you think the army actually has? the army actually has over 5,700 tanks. how many did we use in the 1991 gulf war? 1900. so, as an example, even if we were somehow to get into st mazar mur campaigns, sides of the gulf war and 91 which no military planner would think of, we don't ave the logistics to actually get the tanks there or in terms of air force structure, the cost value of 13 es 35 we can alternatively package that

as the eight es 35 space to fe team electronic warfare, four of the m q naim current generation of unmanned rike systems and of the global hawken so 13 verses that package and by the way, you still have an extra $180 million left over so it's not again whether to cut the entire year at 35 program is what are the alternatives that might give the force planners a better option and a wide array of contingencies but we are not willing to break the structures because essentially that's the way we've always done it. three quick points to lead this is exactly the kind of debate we need to have. we do need the point. i will give you my example. we are not going to do iraq again or afghanistan again. i don't think we ned to do them again to the country safe from

the terrorist threat. i think we are going to use a different model than places like timoney and somalia and it's going to be about training and equipping and supporting local forces, sharing intelligence with them, maybe using our manned aircraft or predator aircraft, may be vocationally specia forces. that is the model how we will wage the war on tear or the next ten year can you see what does that mean for our military? what does it mean for the ground forces and we have to ask exactly the questions peter asked about the big tank formations. i would argue that if we are going to have that model we also need a civilian capacity to help the state's better perform for the people as the deal with these terrorist threats. second, strategic forces. you know, arms control i think has been one of the great forces for preventing countries to do smart things with their military because they wait to have a negotiation where they can get some credit for it, and i would

like to see us not have a next strategic arms negotiations. i would like our russian and american military planners to sit down and talk about how they would like to streamline the respective forces in a transparent and reciprocal way so that we can actually move much more quickly missile defense, we can have that conversation. of course it is in direct that china. it's not directed at prussia extracted in north korea and iran and i can tell you the last time that we had a missile test we had two major tests bynorth korea. it's a long range intercontinental ballistic missile. that's the good news. but on the occasion -- >> the systems perform better than peter wood said just but i will tell you that once in the bush administration and once in the obama administration we put our national missile defense system and the ai force base vv

to base in alaska on alert so that we can protect against that missile if in fact it were coming to a western part of the united states. we also use those systems to take out a satellite that was headed towards earth that was not making the controlled reentry. so it is a needed investment for a limited system that is directed at north korea and iran, and those are very unstable powers. but again, my point is not to beat peter but this is the kind of conversation that we ought to have to say what are the efforts of there and what are the real capabilities we need to meet those threats and then we have to have the urage to make some debts and prioritize and cut them. s back with that, let's go to you. please come as i say, identify yourself aft the microphone has arrived and pose a question but specifically a one panelist.

let's start with you. >> i'd like to ask both panelists the reaction to the composition of the committee are you encouraged committee of concerns. >> alice, would you like to start? >> i don't want to comment on the individual's. i think it is for people appointed by the leadership of a point, and it does not -- it strikes me as a pretty good group and representing the congress with no real extremist.

>> the father was a good group as well if inexperienced group there are a number of people who know how the legislative process works and how to reach a deal there are clearly some members who reflect treme positions within their parties and i think the leadership of the co-chairs because alice mentioned something important and they really are most effective if they can be unanimous. >> one other point i think is a lot depends on the leadership largest of the co-chairs it's the leaders behind the scenes or hopefully out for not and by that the speaker and the

president particularly. >> that's why i think it's important bill leadership really try to put pressure on the group to breach something that is fairly broad consensus the will make it more powerful and politically within the american people and seven out of 12 if you're going to get a streamlined consideration that alice talked about. >> we had this problem with a group bill perry indicted and boht a wide-ranging group and a fairly consent set of goo consensus recommendations and our sense ws rather than oing to the lowest common denominator we found that if you were old and could make your recommendations on the vehicle for the proposals for a wide range of people you actually got more likely to get consensus by the bullet rather than the lowest common denominator and if there was one of hope after this

group i the would be bold and go beyond the .5. >> far beyond it. >> it would be bold and see if we can get something that is going to say to the international community and our own people and the to make tough decisions and really take on this problem. that's what the american people want to see and what i hope these folks will consider. >> and there's also aside from the question of composition there's a principle i hope the follow the also the folks in the other agency with the imications of it the first thing to cut is the chatter. they are not going to be able to be bold if they're running to the press and the like and the secretary dates required staffers to sign the nondisclosure agreements we are

going to need something along the equivalent o this so that my fear is we will constantly see options being floated out therin the press which will shut down the old thinking that is needed and will lobby groups are going to pop up and the like and the other we need to remember is that if the group and if these other entities are going about this seriously everything is going to be on the table but in the act of putting everything on the table it's going to feel like to those within the military, with the other agencies that their programs and even their jobs are under threat and so when you don't want to have happened during the next few months is a sort of demoralizing effect where people are only hearing about the various cuts floated and not understanding the context that they are made, the strategic trade-offs and ec. >> i agree with that, but we keep talking as though this

group was going to be talking about defense cuts. i don't think it is. the defense cuts are the fallback position descriptions could be focused on entitlements. >> here in the same road and we will work our way back. >> from the commodity markets counsel my question is specifically for steve hadley. we've been talking of your report, and i think if a understood correctly one of the recommendations was to increase spending on the needy and i would like to understand more about that. why specifically the navy and not the other branches and then i have part b which is, currently we have been talking about some of the other sort of non-defense foreign spending in terms of whether it's democracy promotion or foreign aid or that kind of thing. can you help us understand what he wou increase or decrease in that portion of foreign budget?

>> the navy is all about asia and if you look at over the next ten years the united statesas a huge interest as does the rest of the globe and what happens in asia. if you look the projections for economic growth over the next ten years and alice is the expert on this is all asia all the time at this point in time. you have the emergence everybody talks about the major emeing countries, china, brazil, india. i call them the major surgeon companies -- countries, and the integration of china into the global system is a very big challenge for all of us. china is the big player in asia. it's scary number of our allies in that region, and it's very importanif we are ging to participate in the economic growth and if we are going to

continue to provide a stabilizing influence in asia as we have since the end of the second world war we need to be present in asia in every dimension with our diplomacy, with our military which has a reassurance effect with our allies and says to china but we have some capacity there if it adopts a more aggressive posture with respect to alice and the key to the military presence is the needy and the needy ten, 15 years ago as 500 plus ships now projected to go to something over 200 the role in the surface area that is covered by what is not any less. so, that's the point about we've got a problem in terms of trade. asia is to get there by trade agreements and we are on the sidelines so that's driven by e need by the united states to be present in asia. second of all, the point is we have spent since world war ii a

lot of money and resources to learn how to recruit, train, exercise, fight and improve our military, and it has given us the best military and the world by far. it is a huge resource, and that's why as we talked about defense cuts we've got to be careful not to squander that resource. we have not me anything like th effort to develop the civilian capabilities that will go in after a conflict and hel rebuild countriesnd governmental institutions, train the police and stand of the law enforcement capability, get economic activity going, increase the services, all the things you need to do post conflicts to get a country like afghanistan and iraq back on its feet but also precontract some

countries don't descended to violence. every time we have one of these challenges we do it as a pickup game, we don't do very well. we haven't made the kind of investment to develop these severely into the these like we ha on the military. it's a very hard thing to call for the country to do at a time when we are in the kind of budget crunch we are. i grant that. but er the long term i think we need to invest in these kind of capabilities and that's why i hope that we follow what bob gates said and at the same time as we deal with our budget capabilities we don't do it on the backs of these abilities which not only to be preserved as anything they need to be expanded over the next decade. >> another question. >> here in the blue shirt. >> thanks very much. from the strategic policy institutions, the question sort of follows the previous one as

the broad principles that are going to bite the kind of cuts that were -- the u.s. is facing. it's interesting. is device has been much about the internal dynamics of the size and the shape of the u.s. military has implications for alliesuch as australia, countries like us and the south koreans who are growing in the military quite quickly in response to the point steve made about the changes in asia. so what my question is both to peter and to stephen perhaps, what are the implications of the cuts at are coming through in the defense budget year or the grand strategy if you like and in particular strategy in asia. >> i think you hit upon another one of those principles which is through this process ot within the super committed within particularly the pentagon and the nsc etc. and really the broad policy community as we are resolved through this over the

next five months the principle is to keep your friends in the tent, and that relates to engaging wth allies both about this process. the first level of engagement actually may be for all the frustration we sometimes have with other allies reducing their defense budgets they now have lessons learned to pass on to us. but the other aspect of it is that looking for where are our alliances creating the capacity that's troubled ther than where can we be sharing a particular area in asia as it essentially the navy and the air force is moving towards what they called the a year and see battle doctrine which is designed to deal with a growing threat from any ship or submarine capabilities in the navy and from the asi power that shall not be named.

the problem of the doctrine is that we actually haven't engaged with our allies about the doctrine even though it relies on those allies it's a similar thing there are certain capacity is where we are doubling up this aspect of may be having that communication and finding where can we shae also has other aspect, a tough message needs to be set out to other allies that essentially were not in the position to do the 20th century things we did before. to put it more dectly, we can't both be creating capacities and only one party is willing to use them, something we specifically seen in the operations and essentially we are getting the point now where we are going to have to say you either get in the game, pay for someone else to play o we are not going to provide the service. that's the tough part of this

dilemma that we are facing cuts in import a reminder when we talk about the comparison between the budget on the other powers out there and i did it myself in comparing the skills of the chinese budget the difference so why we spend so much is that we are a global power with a global network of alliances and there is a relationship there and regardless of decisions lie would disagree with and where we deploy force and the last decade we have engaged in certain discretionary operations, butwe have other alliances that don't change, and that's why we can't look at this as just oing back to 2011, the 2001 levels. >> steve? >> i would agree with that and australia has been a terrific ally. when we really need someone to be with us australia is a country that has been there. i think some of our european allies -- eurith has to decide the going to have a real military force or not because

they have cut their budgetsnd the forces are shrunk. they don't work together in an integrated way you see that in libya and europeans are going to have to make some tough choices about where they go on their defense astonishments even while the deal with some very severe economics the heavy tendency to get a free ride and those days are over. >> another question. >> here in the front row. sorry, in the back. >> i washington lawyer, and i don't think how this special committee and the success unless they face the whole question of the meaningful tax reform. both commissioners o talk about

1.1 trillion of the tax expenditures a year. a lot of them had to cut back and maybe it isn't the 1.1 trillion available. but what success do you think this committee can have when so many members have already committed not having any tax increases even if you take away a loopho for one particular group is considered a tax increase by this group of people. so what do you think the chances are? >> i couldn't agree more, mark. i think the tax reform that increases revenues is essential to the success of this committee as it is in trouble with reform that reduces future growth. those are the two imperatives, and if they are successful in bringing forward a package that includesa serious tax and

entitlement reform it probably can't all be done at once but good steps in that direction. then we are not going to have this conversation about the defense budget, and we will have moved forward from a precarious position in which we might clearly faces of the recession to the sustainable budget so that's right we have to do two things andhis is the committee that can do it. >> another question. >> kuran the third row on this site. >> the american foreign service association. i would like to go back to a point he made earlier, mr. hadley, about integrating the diplomacy more tightly. i think that makes a lot of sense. but in terms of the current

budget debate to you think that the grouping has put them in competition especially given the secretary leon panetta's vigorous defense budget and the fact that the spending is popular with thepublic, the state department list so and in some cases foreign aid is not popular at all, and how do you think we get past to something as you described? >> it's a little bit of a case to be careful what you wish for because one of the problems is foreign aid. it sounds like a giveaway program and americans unfortunately tend to understand it as such they think it's a much bigger portion of the federal budget from the fact it is. as a way to understand the purposes and they think it is much more substantial than it is. so, to counter that, in the bush administration and the clinton administration tried to do this

as well we try to make people understand the foreign aid is not actually foreign aid. it is something we do oversees that advances our national security interest so we were very much interested in putting these kinds of diplomacy and development assistance programs into the national security context as a way of protecting the for cuts. fast forward now two years to the deficit problem that we faced having succeeded in putting them together. now it's a bit of a hobson's choice because it is told package has to shrink the concern is we will preserve defense spending at the expense of these items. i think it is right to think of them as an element of our national security strategy. it is the risk that they will suffer as a consequence, and i think the only way to do it is to have a discussion so that

people understand what those progms actually do and the contribution they make to the tional security. i think bob gates was front and center on that, and i suspect you will see leon panetta when he gets into it picking up the drumbeat because a lot of these programs, the principal supporters are actually the u.s. military. because they are men and women overseas that have seen the value of the programs but again it is no rson we have to have an informed debate on the subject because there is a risk. another question. yes, ma'am, the fifth row. yes. >> i'm fm "the wall street journal" and my question if anybody on the panel would like to weigh in last week as president about the announced the unemployed veterans especially those who are

returning from iraq and afghanistan unemployed in greater numbers than other groups of veterans i'm wondering if there's any discussions that any of you have participated in and is there any chance that the cuts t the defense budget could have an adverse impact on those returning veterans given that the department of defense has played a role in helping them with the transition process. >> i think people will be pretty sensitive to that. if y look at the quadrennial defense review that rviewed, they talked about the commitment to maintaining the all volunteer force, but they also talked about our commitment to the veterans. general john cartwright, who was the vice chairman of the joint chiefs retired last week and i went to his retirement ceremony coming and one of the things she said that i think resonated with the audience and i think will resonate with the american people was that our men and women in uniform who, in harm's way on behalf of all of us and

to many of them have come back and grievously wounded that we have a lifetime commitment to these people. this isn't just to get them back, he'll their wounds and get them started on the integration into society. we need -- we have a commitment to these people that extends throughout their life, and i think the american people get that. one of the big differences, and alice and i can remember this between, you know, the iraq experience and the vietnam experience is that the american people really love this military and the respected and see it when people go through airports and people spontaneously break out in applause. so i think the american people get it, and i think they provide support to these programs and i hope the people who are tasked with to responsibilities will keep that in mind. can i say one thing -- again, i'm sitting here on this thing

this is way outside of my expertise, but i would just say one thing. i think a lot of republicans particularly conservative republicanshen they hear balanced approach, they hear tax increases. and when they are in a situation where the economy is soft, the last thing you want tdo is increase taxes. >> immediately but nobody's talking about that. >> that's the point though. alice has made exactly that point. we have to have a debate on this because, you know, there are some for example republicans who would like to see some tax reductions, the corporate tax rate reduced because corporations are at a competitive disadvantage overseas. so the question is whether we can be wise enough and clever enough to basically get people to say yes, you may get some tax relief but the only way you're going to get tax relief is if we can do some closing of loopholes and things like this. i think -- i keep one of the

problems is this debate has gotten politicized. and what we need is this -- [laughter] >> and we need to have a sensible discussion on this because this is a tricky business. we have a huge deficit problem and we have a very soft economy and the last thing we need is a double-dip recession. so we are going to have to work these out and again i am way outside of my area. it is to all the things we are talking about and entitlements for instance one has to make the same point about medicare and social security and medicaid. one would only reduce thos benefits witha lot of lead time but people don't understand that, you talk to people on the street and they say i need my medicare. it's going to get cut.

nobody has been talking about cutting the benefits immediately or indeed raising taxes immediely. it hasn't even been part of the conversation but people have such a figure that they are afraid of it and i made this point on a television program no one was talking about cutting medicare or social security immediately i got hate mail saying yesthey are. laughter christa mick interesting to read two last questions and then give the panel a chance to respd and conclude with observations and we will take to the very end on opposite sides o the aisle one after the other, please. >> christa want to applaud stephen peter for recognizing the importance of asia into the air sea battles, but i want to see that a lot of the challenges that are being faced the challenges on the air and space power, the air force the no less a strategic force and a stabilizing force within asia

faces some of those problems. and so, as you discuss your principles for where you want to go, how prominent welfare consideration for the ndustri base to protect those aspects that give the united states a distinct and an asymmetrical foreign policy freedom of action that relies upon global warming and surveillance to rely upon the air mobility and rely upon the ability to have an air superiority and reach out and touch the world to make e effect swear need to respect before we get responses come over to you and with a vietnamese americans and i think you for bringing up the violence approach and asia, and my question has to do with business because that's the whole focus that the next battle is economic and right here in america. so, why we are cutting the budget which we somehow have focused to build upon the

business here in defense of our own jobs to protect our jobs for our veterans in case chinese come here and established companies here with support from the old government without the ability of the company. so, with any sort of channeling some of the budget from air force and other weapons into the budget to support the small businessman. >> i think that we will look the other way from which we began. if you would start in the way that he would like for the questions on the table. >> short and i actually want to hit the question of the veterans as well. one of the things we need to recognize and goes back to the principal of cut the chatter is that folks within the military, and i experienced as through conversations recently including one just last night are starting to, you know, phrase things with

my job gets cut or they are making their decisions on how and where would offices, what service, with offices they choose to go towards based on the think might happen in the budget so we need to realize there are people behind this and it's another part of it what we do not want to happen is the sentiment of someone coming back from afghanistan and iraq and divide given of think you very much we will see you later. that is to be avoided all costs. the second part of that the was that we need to be clear in our discourse related to the pentagon and this is not just in these discussions but even things like promotion strategy that we don't turn cost-cutting into the holy grail can' we are seeing that kind of like

starting to have been so that concerns me because this aspect of war fighting is what distinguishes a veteran from another ty of benefit. of benefits programs or entitlements program and men and women asked to go into harm's way on behalf of the nation. to the point about what can we do relat to the industrial base in asia and the like i think it hits again that idea of where are their capacities that will be needed more in the 21st century verse is the 20th century so we can't go back from the 2001 budget and in 2001 you didn't have a cipher command back in 2001 we didn't have over 7,000 unmanned aerial systems and the force that in 2000 when you also didn't have 44 other nations other people also building systems that's the strategic situation today but another aspect of this is the

importance of areas like research and development and every budget cut process in history and in the u.s. and unfortunately in every bipartisan advisory commission related to the current sow proposed that r&d be cut by a greater amount than the rest of the force, yet r&d is the seed corn for when the stratecs attrition changes. so that is an example. and also, by the bece the r&d in my mind is really what sustains the national defense industrial base not so much thinng out it in terms of the distributing jobs in every congressional district. so those are some of the principles we keep in nd in this process. >> every time we have done these defense budget cuts we tended to do it well, and in some

instances we have regretted it when a military challenge subsequently emerges to this. so it's very hard to do it right, and peter has laid out in the articles and writings and i try to as well even getting some criteria and a really forcing the process to respond to those criteria. second thing i would just like to say, you know, this is a very challenging time for the country. and sometimes i think there is a sense out there where americans are beginning almost at the first time to un -- to wonder whether the challenges before us are too big to handle. i was out and he said last week with madeleine albright talking about my 11, and one of the things she said at the end which i think is very important, she said 9/11 was a huge challenge. i don't think people really remember how traumatic that was

for the country. and the kind of terrorist attacks that we anticipated at that time. through a lot of that effort, by a lot of americans, most of what we feared after 9/11 colin the mass casualty attacks, weapons of mass destructions did not happen. and the united states and actually got through the ten years and we dealt with a problem of the challenge in a way that didn't require us to fundamentally change hour were society, and other than who we are in all always have been. there was a challenge and we pulled together as a nation, and we overcame it. we now face a huge challenge in terms of the budget deficit. i feel we need to remember from things like 9/11 this is an extraordinary country, and we can't do these things. we do it in our own messy way. there's a lot of politics, churchill's of the americans always get it right, they always try every alternative first and final leg in the end of the right they tend to do it right the can get this done it can

overcome these challenges that so we have to recognize we have to give it a smart way. but we have to keep in mind that we are facing a new threat and a new situation with respect to the future of he federal budget. we have not been in this situation before we have done other budget cutting and we will do other budget cutting in the future but right now we are facing a situation which is totally unsustainable. we cannot go on like this the spending under the impact of health care and aging is rising faster than our economy can grow. we can't go on that way. and it's not a blame game, its

good intentions and we created programs that were very popular, but we have to cut back and raise more revenue and improve the tax code what has to be done as we keep saying over and over on this panel and stays in overtime. but it has to be done. there's no escapes coming and that is the challenge to this new process and we will see in the next few months whether it works or not. the deadline is thanksgiving. that is not very far from now. so, we re either going to have a solution or we will be starring in a pretty deep the event. >> sooner we know to the redskins are going to the super bowl. [laughter] >> i want to make one very brief comment in response to the question of helping our

businessmen and businesswomen. this is an unusual note to finish with the discretionary accounts are often severely criticized and they should be scrutinized, but that is also where we sometimes do our investment because these include support for education for scientific research, they provide a lot of the services that many of us want like food safety, airplane safety and so on, and so all the more reason why we need a balanced approach but that is to look at where the big money is which tends to be much as anything entitlemens and so i just want to underscore on that last point that if you are worried about investment in the future economy there are actually some prgrams the government does that are important for that and we have to remember what they are as well. let me thank you all for being here and please join me in thinking this panel. [applause]

[inaudible conversations]

any other anniversaries? i think it's also the day julius caesar was born. well, mr. shaw has not arrived in the interest of time we will get started. good morning, everybody. as we know this is the auspicious date of august 12. this is a meeting of -- [inaudible] yes. this is a meeting of u.s. commission on civil rights. it is now 9:35 on august 12. this meeting is taking place at the commission headquarters located at 624, ninth street

northwest in washington, d.c.. chairman marty castro. the first part of today's me will be devoted to a briefing on the topic of the civil rights implications of eminent domain abuse. immediately following the briefing, we will conduct our regularly monthly business been. before i begin introductions of the panelists and our printing, i would like to do something that is always a good thing to do is welcome a new member to the team. i'd like to welcome david come on this commission was just appointed about a week ago today i believe. we are glad to have you onboard. today's briefing features four distinct panelists. each panelist will speak in turn for approximately 10 minutes. i will be the timekeeper. i have developed a specialty at that from our last briefing, until. after all, the panelists have had their presentations made, we will then turn to our commissioners for questions. will have approximately 50 minutes of questions that will be commissioners asking the

panelists. as at the last briefing what i would do is i will acknowledge commissioners who raised her hand and i will be fair and balanced in terms of the opportunity. unlike the last briefing we'll have more time here. so if the commission was to ask a follow-up question to the original question, please do so. if you want to fall to your follow-up they will ask you to hold onto the next times would try to make sure that at what has a fair opportunity ask questions to out the period. so the speakers, you'll see these little traffic lights in front of us. so when the light goes from green to yellow, that means it's time to start wrapping up. when it gets to read, of course that means stop. when you see yellow that means you have to manage remain in your time. i will do my best to strictly enforce that so we have a full opportunity to hear from you, at the same time have commissioners ask their questions. with those bits of housekeeping, let me just add that this is a briefing that was proposed by our colleagues in the former commission majority, and in

interest of bipartisanship, we are pleased to be able to do this briefing today because it does raise some very interesting issues. issues that we all have reviewed the material that were distributed for him. we are very much looking forward to hearing the statements. i know have a lot of questions to delve into this topic. but we're pleased to be able to do this in a bipartisan fashion. our first panelist is ilya somin. and associate professor at george mason university school of law. professor somin's research focuses on constitutional law, property law, and a study of popular participation. and its implications for constitutional democracy. among his many accomplishments, in its amicus brief on behalf of the urban planet scholar jane jacobs, which was cited by the sub in court in his majority opinion in kelo v. city of new london. our second panelist is j. peter byrne, a professor of law at georgetown university law center. he teaches property, flanges, historic preservation and constitutional law. in addition he is faculty truck

of the georgetown climate center, and at the georgetown environmental law and policy center. and i visited georgetown last month and it's a beautiful campus. i had never been there. our third palace is not here yet. but i will get his background when he arrives so he can immediately go into a statement. hilary shelton. mr. shelby lasers at the director of the naacp's washington bureau. and senior vice president for advocacy and policy. the naacp joined an amicus brief in support of the plaintiffs in the kelo case and has testified before congress regarding the civil rights implications of eminent domain use. our final panelist will be david beito. he is a history professor at university of alabama. much of his academic work is focused on african-american history in the 20 century. he is also chairman of the alabama state advisory committee. is what good does that because as a former sag member, sector as well, i'm pleased to see you here. it's something the commission wants to do is engage more of

the work we're doing. is hosted of good to have a member of our extended civil rights commission family at the table. also, professor somin understand is the spouse of one of our special assistance, so we have family at the table and we always appreciate having that. in his presentation, professor beito is going to explain the work of this alabama state advisory committee on this topic. it's already conducted two public hearings on the subject of the eminent domain use in his state. so we're looking forward to hearing about that. and with that i would like to ask professor somin to begin your remarks. >> thank you, mr. chairman. i'd like to start i thinking chairman castro, vice chair, and other members of the commission for your interest in this very important issue. president obama has written that our constitution places the ownership of private property at the very heart of our system of liberty. unfortunately, over the last

several decades, both of course and often legislatures as well have routinely consigned property rights to second class status, usually failing to give them the sort of protection that is accorded to other individual constitutional rights. it is particularly appropriate, therefore, for the u.s. commission on civil rights to consider this issue here because property and the ownership of it was actually at the heart of the conception of civil rights that underlay the enactment of the 14th amendment. it was central to the rights of the framers of the amendment hope to guarantee african-americans and other minorities. in my presentation, i will first briefly speak about the constitutional law of eminent domain, particularly with respect to the public use clause of the fifth amendment. then i will talk and a bit more detail about the impact of eminent domain on racial minority groups, which both historically and today has often inflicted great harm upon them. and, finally, i'll briefly talk

about the reforms that have been enacted since the supreme court's decision in kelo v. city of new london, and explain why those reforms, while the have improved the situation, in many cases do not go far enough to fully protect the rights of minorities and others threatened by eminent domain. so i will start off by looking at the law of eminent domain, with respect to the public use clause of the fifth amendment. that clause like similar clauses in the state constitutions allow taking and condemnation of private property only if it is for a public use. there's been a long-standing debate as to whether public use means in actual use by the government or by the general public, or whether it merely means anything that might potentially benefit the public in some conceivable way. during the founding era there was not a lot of discussion of the meaning of public use. however, most jurists and commentators did have an

understanding that taking the transfer property from a to b. as he was sent from one private individual to another, that those were not permitted by the constitution. perhaps more relevant to our current debate is the fact there was a lot more discussion of this during the time surrounding the enactment of the 14th amendment in the 1860s. and, of course, its the 14th amendment which applies the public use clause and the rest of bill of rights to state and local governments, the government entities that can dust the vast majority of taking. during that period, opinions and certain was divided. however, as my recent research suggests, the majority of state supreme courts and also the majority of treatise writers on this subject of eminent domain took the view that public use does in fact have to be a used by the government or at least by the general public, not merely something that might benefit the public in some way. moreover, as i've already noted, the framers of the 14th minute, one of the principal

reasons for wanting to incorporate the bill of rights against state governments was to protect the property rights of asking americans and also by supporters of the union in the south against the depredations of state governments that were threatening those property rights in many ways. and so it would not have made sense given that objective to apply an interpretation of public use that essential that state and governments, for whatever reasons they want. those other entities the amendment was supposed to constrain and prevent from engaging in a jesus. now, unfortunately modern supreme court cases are the last 50 or 60 years, particularly the berman case in 1954 and most recently the kelo case have taken the view that a public queues is almost any potential public benefit of any kind. had even taken the view that it is not even the case the government has to prove that the

supposed public benefit will actually be achieved. in my written testimony i described in some detail why this modern jurisprudence is deeply flawed. here i would just make one point about it, and that is that their position really makes very little sense given the whole point of having a constitutional right in the first place. the position of the supreme court is that the definition of public use is largely left up to state and local government. but, of course, the whole point of having a constitutional right is precisely can -- to constrain, so it makes no sense to leave up to that very same government the definition of the scope. and, of course, the court hasn't taken a similar view with respect to any other individual right in the constitution. this is a unique case almost. now, given the state of affairs for over several decades the supreme court and lower federal

courts have given very little protection to property rights. there has been a tremendous social impact on americans of all racial and ethnic groups. however, by far the biggest impact has been that on racial and ethnic minority. and this has been recognized by scholars, activists and others from across the political spectrum. since world war ii, hundreds of thousands of people have been forcibly displaced by polite condemnations, and also by economic development takings of the sort that the supreme court approved in the trade came? but the vast the good of those people were forcibly displaced are, in fact, called poor african-americans or hispanics. during the 1950s and '60s, the prejudice in these sorts of takings was so blatant that urban renewal takings were referred to by many people as negro removal. today, minorities continued to be disproportionately victimized

by polite condemnations and other takings of that type. in my view today, the motive is really open and explicit prejudice against minority. however, the political weakness of the urban minority poor is a big factor and the reason why they tend to be targeted for these sorts of condemnations. and that political weakness is of course at least a part of a consequence of the prejudice and discrimination that these groups have suffered for decades in our society. and in most cases when people are displaced by these condemnations, although they do get some compensation payments, they are left off significantly worse off than they were previously because the payments rarely, if ever, fully account for their losses. in recent years, in addition to taking areas which one might consider to be truly blighted, in many states the definition of blight is expanded so much that almost any area can be declared

blighted and taken. in recent years courts have ruled that such areas as downtown las vegas and towns pressure and time square in newark city are blighted, thereby justifying condemnation in those areas. and, of course, if times square is blighted than almost any area could be so consider. in addition to like takings, a. economic development takings of this sort up help intranet also tended to most affect minority. some people have argued that takings i actually benefit the minority poor, because they promote economic growth in their communities. i think this argument is great overstated for a couple of reasons. what is it the sort of condemnations often actually destroyed far more economic asset than they create. they routinely destroy large numbers of businesses, schools, homes, and other valuable assets for the committee. second, in those situations where there is a meritorious

private development project that is likely to produce more growth than it does places, the market has good methods to allow developers to acquire the property without resorting to eminent domain, methods that are superior to eminent domain. i discussed this in my written test mike and i'm happy to discuss it further in questions. finally, it should be noted that respect for property rights is itself an important engine of economic growth. recent research in urban economic and development economics strongly suggest that areas with respect copyrights see more investment, people are more secure in their homes and businesses, and that tends to promote growth were as an constrain government in copyrights are reassortment of them tends to have opposite effect. economic growth is an important objective, and so is the removal of blight. however, i would argue that we do not need to destroy a community in order to save it from blight. there are more humane and also

more effective methods of alleviating blight and use of eminent domain, and ones that don't forcibly displaced a large number of people. in recent years since the supreme court's kelo decision in 2005, some 43 states have acted new eminent domain reform legislation. and some people have said this solves the problem of eminent domain abuse. i wish that were the case, but for the most part it is not. as i discussed more fully in my written remarks, the majority of these new reform laws actually will have little or no effect. they claim to ban economic development taking, but they allow the very same types of takings to go on under the name of blight condemnation, with blight being defined so broadly that pretty much any area qualifies. even in states which have limited the definition of blight to areas that a lay person would consider blighted, the minority poor still tend to be at risk because of course many of them tragically to live in

communities that fit that definition. only four states have completely banned all white condemnations, and, therefore, only in the states are the rights of the poor against these sorts of takings completely secure. i think any aftermath of kelo there has been some genuine progress made, and certainly public awareness of this decision has risen. however, there's a great deal more work to be done before we can fully guaranteed constitutional copyrights to all americans, particularly those are most vulnerable, such as the minority poor. so i very much welcome the commission's interest in this issue, and i hope your interest will stimulate further discussion and further and more effective reform in this crucial area. thank you very much. >> to fester byrne? >> -- professor byrne? >> thank you, chairman castro and members of the commission,

appreciate the opportunity to speak with you today. this hearing addresses claims that the use of eminent domain for economic development unfairly and disproportionately harms racial and ethnic minorities. professor somin has a remedy which reprinted all eminent domain for economic development, including a nation from blight requirements. in my view, this is a non sequitur to remedy and nonexistent problem. the claims that eminent domain unfairly harm the minorities draws on history of urban renewal prior to the 1960s and, indeed, many african-americans and others were displaced by publicly funded projects that bulldoze their homes in largely failed attempt to modernize cities. justice clarence thomas' dissent in kelo v. city of new london for the audit the use of emmett domain for economic development would inevitably harm minoriti minorities. such concerns in our time are seriously misplaced.

read-a-thon projects using eminent domain continue to be an invaluable tool for maintaining the economic competitiveness and livability of the urban areas where property ownership is fragmented and where minority's live in large numbers. the discriminatory elements of older from an -- generally prevalent to click live in the 1940s and '50s. and have been largely eliminated either growth and part of african-americans and other urban minorities as well as the change physical relations between the federal government and local governments, the fx which has been to give greater control over redevelopment projects to local local processes. use of eminent domain rarely now apply to residences. today requires political consent and community buy-in. eminent domain is a crucial legislative power exercised by governments around the world dating back at least to roman times. in a passionate it empowers

government for the construction of networks and the assembly of large tracts, even private owners do not wish to sell or hold out for excessive payment. under our constitution, owners are protected by the requirement that the government pay them just compensation. the meaning of the takings clause of the fifth amendment related taking property for public use long has been controversial. but no, and i repeat no supreme court decision contradicts the holding of kelo, the public use includes publicly approved condemnations for economic redevelopment of economically distressed areas. the quality of redevelopment projects of course varies, but recent successful projects can be found from the ferry building in san francisco to times square in new york. economic revitalization of urban areas tends to aid poor minorities who disproportionately dwelt in cities by increasing employment

and tax revenues for education and city services. without emmett, such eminent domain, large-scale development projects can occur only on greenfield sites, on the edge of cities, exacerbating urban sprawl and pushing new employment opportunities further from urban minorities. political realities have changed dramatically since the urban renewal period. minorities have secured significant political power in nearly every u.s. city, as was increased influence in private real estate markets. redevelop projects have largely come under control of local governments as federal money and direction have disappeared. local officials tried to avoid displacement of homes because of negative political repercussions and expensive litigation. federal and state statutes had many instances have increase the payments due property owners about what just compensation requires. these circumstances the condemnation of homes is rare and has little or no identifiable ethnic or racial character. the plaintiffs into kelo case

were white middle-class people which explains a good bit of the political hysteria that surrounded the decision. the changes in the political of our economic government can be seen by comparing the urban renewal in southwest washington, d.c., in the 1950s, approved by the supreme court in berman v. parker with the use of condemnation in d.c. today. a massive condemnations bulldozing and reconstruction of southwest washington comprised a complex episode with many facets, but poor african-american residents seem to have suffered this portion displacement. at that time there was no democracy or elected government at all in washington. statute authorized the project was enacted by congress where d.c. has no representation, and till today which is a good topic for this commission to take up. and the members of the redevelopment land agency decade of the project were appointed by the federal government, or their d.c. appointees.

the most controversial exercise of eminent domain in washington, d.c., in the past decade has been the condemnation of stores in the sky abandoned strip mall, to permit the construction of badly needed private supermarket for an underserved community. that action, although bitterly contested in court by some owners, was supported by many members of the local community, specifically approved by the d.c. council which is a majority, which was majority african-american membership, and signed by mayor anthony williams. although specifically exercised in order to convey the land where private developer would be absurd to suggest that the case presents a civil rights issue appropriate for consideration by the u.s. commission on civil rights. but it would come within the kind of concerns of professor somin, to which i will return. similar observations can be made about the use of eminent domain by the dudley street neighborhood initiative in boston to assemble land for

affordable housing projects. nowhere is the reason that development are more likely to harm minorities and condemnation for traditional public uses. many of the most brutal condemnation in the urban renewal period were accomplished for highways and public housing where the government would own site. government has the same general incentive to seek less expensive or flourishing lands for condemnation, would ever be used to be made. if the goal really is to protect minorities, why are the proponents not seeking to constrain the use of eminent domain that have historically been of most harm to minorities? yet legislation recent introduced in congress, h.r. 1433, ignores these exercises of eminent domain for highway construction and other public projects while prohibiting economic develop that gives him power to aid in low income people. it also protects speculative ownership of vacant land. there's no special protection offered to residences.

the case against eminent domain here has been advanced large on the basis of advocacy by libertarians for whom i have great respect for their principled positions they take. which broadly oppose the use of eminent domain because they value private property more highly and local democracy. the evidence that they marshal such as the lord victimizing and vulnerable presents ambiguous data is highly colored language. the study shows no more than commuters are somewhat more likely to pursue redevelopment in poor areas than in more affluent ones. it does not sure properties were taken. ..

>> one might find more procedural protections or compensation to residents and commercial property owners. one could mandate minimum payments to tenants of, who don't own their own property who normally receive no compensation when rental housing has been condemned. the fair housing act be amended to clarify it applies to condemnation of residences without regard to intent, a

topic pursued by a student of might be in a paper -- mine in a paper that's cited in my talk. they do not meet the agenda of property groups driving the issue which to limit further the powers of government to the court in favor of private ownership. proponents, rather, would deprive the d.c. government of the power of eminent domain. in a world of growing economic inequality and a political climate demanding cutting taxes as well as medical and pension benefits, it is unfortunate we are spending this time discussing the nonissue of the effect of eminent domain on minorities, and i look forward to discussing all aspects of that in our question period. thank you. >> mr. shaw? >> thank you, chairman castro. ladies and gentlemen of the commission who invited me to talk about civil rights violations of eminent domain abuse.

my name is hillary hilary shelton, a most widely recognized grassroots base -- [inaudible] we're locate inside every state in our country. the naacp washington bureau is our federal legislative and policy arm. given our nation's sad history of bigotry and the basic disregard of too many elected officials to the concerns and rights of ethnic minority americans, it should come as no surprise that eminent domain has been misused for centuries against racial minorities and the economically disadvantaged at highly disproportionate rates. although nobody knows the exact number of people displaced through eminent domain across the nation, everyone seems to agree that african-americans are disproportionately affected. it is estimated between three and four million americans have been forcibly displaced from their homes.

it should surprise no one that a vast majority of these people are racial and ethnic minorities. another study says between 1949 and 1973,2 -- [inaudible] displaced one million people, two-thirds of them african-americans making african-americans five times more likely to be displaced than they should have given their numbers in our population, unquote. the naacp has a deeply held concern that the newly sanctioned expansion of the use of eminent domain to allow the government or designee to take property simply by putting the property to a higher use as approved in the supreme court in the 2005 decision will foster more discrimination as it sanctions easier transfers of property, wealth and community stability from those with less resources to those with more. the history of eminent domain is rife with abuses specifically targeting racial and ethnic

minorities and poor neighborhoods. indeed, the displacement of african-americans in urban renewal projects are so intertwined that oftentimes urban renewal was often referred to as black removal. sadly, racial and ethnic minorities are not just affected more often by the exercise in the domain power, but we are almost always affected differently and more profoundly. the vast disparities of racial and ethnic minorities who have been removed from their home due to eminent domain are welcome wl documented. in my written testimony, i give several examples of instances in which racial and ethnic minorities have been displaced at disproportionate rates through eminent domain, but for brevity's sake, i hope you will review my written testimony. many who observe these patterns throughout our history contend that the twisted goal of the majority of these displacements is to segregate and maintain the isolation of poor, ethnic

minorities and otherwise outcast populations. furthermore, low income neighborhoods are often easier to accomplish because these people usually lack the resources to effectively contest the actions politically or in our nation's courts. look at areas with low property values when deciding where to pursue projects. thus, the state or local government gains more financially when they replace areas of low property values with those of higher property values. thus, even if you dismiss all other motivations allowing municipalities to pursue eminent domain for private development as well as was upheld in the u.s. supreme court in the kilo decision will clearly perpetuate, not exacerbate the disparate impact of african-americans and the economically disadvantaged in our country. as i said in the beginning of my testimony, not only are african-americans and other

racial ethnic minorities more likely to be subject to eminent domain, but the negative impact on these men, women and families is much more severe. first, the term just compensation. when used in eminent domain questions, it's almost always a misnomer. the fact that a particular property is identified and designated economic development almost certainly means that the market is currently undervaluing the property or the property has some trapped value that the market has not yet recognized. moreover, when an area is taken for economic development, low income families are driven out of their communities and find they cannot afford to live in the revitalized neighborhoods. the remaining affordable housing in the area is almost certain to become less so. when the goal is to increase the tax base, it only makes sense that the previous low income residents will not be able to remain in the area. this is borne out of not only the common sense, but also by statistics. one study from the mid 1980s showed that 86% of those

relocated by the exercise of eminent domain power were paying more rent at their new residence with the median rent almost doubling. furthermore, and to the extent that such exercise of the taking of this power is more likely to occur in areas with significant racial and ethnic minority populations, the effect will likely be destabilized organized minority communities. the dispersion, this dispersion both eliminated or at the very least dramatically undermined estimates of community mechanisms that has the dehe tore crouse effect on these communities' ability to exercise what little political power they may have established. it will also hinder the development of stronger racial and ethnic minority communities. one's own community financially and otherwise directly correlates with the confidence of one's ability to realize the fruits of such efforts. as i have discuss inside my

testimony, too many of our communities, racial and ethnic minorities, the elderly, the low income have witnessed an abuse of eminent domain powers that has too often been devastating. given the numerous chronicles of abuse, it is the hope of the naacp that all responses, legislative, administrative and others so address eminent domain abuse be educated and well informed by our shared history and challenges. we need to insure that some segments of our population that have too long been muted in the issue have a voice. we need to understand how it has been too easy to exploit these communities by imposing eminent domain not only in pursuit of economic development, but also in aim of addressing blight. we also need to make sure that any compensation is fair and equitable and will not result in those who have been displaced being worse off. in considering the interests of our communities, we raised broader concerns with the use of eminent domain for any purposes

including those traditionally viewed as public purposes such as highways, utilities and waste disposal. even these more traditional uses have dis proportionately affected the poor, racial and ethnic minorities and working class families. furthermore, it is not only our owners that suffer, but also our representers. whether they are small businesses who are often provided no protections and pay an uncompensated price even when eminent domain is imposed. for those reasons as the majority in kilo suggests, there must be a sufficient process as well as protections for racial and ethnic minorities and low income communities. the process must be open and transparent, and the full participation of those potentially impacted communities need to be guaranteed as well as fair compensation must be given. fair or just compensation should include replacement costs, not just technical appraisal value. we need to insure compensation for the loss of goodwill of a business and to fairly

compensate for the length of time a business or family has been at that particular location. this is the voice of our communities that all communities observe. thank you again, chairman castro and commission members, for allowing me to testify about the naacp's position on the civil rights implications of eminent domain abuses. the naacp stands ready to develop policy to end eminent domain abuse on concerns like building affordable housing, communities with good public schools and effective acts of the high quality health care system, small business development, opportunities in the growth and a significant available living wage job pool. again, i thank you very much for the opportunity to speak with you, and i look forward to your questions and our discussion. >> thank you, professor shelton. >> i've got three handouts here, i've got ten of them, so maybe a

couple of you could share. thank you, chairman castro, for inviting me here today. it reflects the spirit of partisanship that we also found very much in alabama where we decided to pursue this unanimously; democrat, republican, black and white decided to pursue this issue. let me start by saying that i speak for myself today rather than in my capacity as chair of the alabama advisory committee. i have little to add to ilya so-in min's -- somin's very insightful overview. i'm not going to revisit this these issues, at least in my talk right here, or even really talk much about conventional eminent domain or eminent domain as conventionally understood. rather, i want to highlight a generally overlooked threat to the property rights of the poor and vulnerable. for lack of a better term, this threat could be called eminent domain through the back door. now, we decided to pursue this

issue several years ago, the advise advisory committee, and as i said, all of us agreed that this was an important issue, and we've had two public forums. the first was in 2008 which was at the historic 16th street baptist church in birmingham. and the witnesses at that meeting recounted some disturbing examples of how blacks were losing especially in the city of montgomery, we gained more and more information coming out. blacks in the city of montgomery, a city often called the cradle of civil rights, were losing their property through an extensive application of section 1153b1 of the alabama code. and i quote that more extensively in my longer paper. and this provision leaves a major loophole for the indirect taking of property outside of conventional eminent domain.

if a local government deems a property structure blighted or a nuisance. now, in contrast to standard eminent domain, montgomery property owners -- and that's what we especially focused on because that's really problem to us seemed greatest, the complaints seemed to be the most extensive -- montgomery property owners on the receiving end of this section 11-53b1 do not have a right the compensation even in theory. once declaring the property a nuisance, the city typically demolishes the structure and then bills the owner, often by slapping a lien on the property for the cost of demolition including the carting away of rubble. because the owners are often poor and many cannot atord to pay -- afford to pay and, thus, have to sell or abandon their property. all right? now, at our forum if you go to

the next slide, please -- oh, yeah. there's a a quotation from frederick douglas that was in my longer paper, but it does reflect the concern for property rights in the history of civil rights, and i think it's something that we could all learn today, um, about application of property rights regardless of economic class. we hold the civil government to be solemnly bound to protect the weak against the strong, the few against the many and to secure the lumbar blest subject -- humblest subject in the full possession of his rights of person and of property. all right? of course, douglass was not referring to slave openers there, he believed that was man stealing, that was theft of legitimate property or people that own od themselves. -- owned themselves, in fact. go to the next slide, please. this is the presentation given by a developer in the montgomery. i wish you could see it a little

bit better. but he showed on a map he demolitions through this section 11-53b1 in a single year. many were in a small area of montgomery's most heavily black areas including rosa parks' old neighborhood which is in that area. now, another witness who testified at another forum that we had which was in montgomery was, actually, this was at the montgomery meeting as well. we had two meetings first in birmingham and then the second one in montgomery. and this was presented at the second meeting. now, another witness we had was jamie mccall, and he was a rarity among montgomery's property owners threaten with the demolition of their homes. he, he decided he was going the fight back. a little bit about his

background, he had scraped together a living and still is as far as i know by salvaging raw materials from historic homes and then selling them the private builders. finally, he, over time he's able to accumulate enough money to purchase two acres of land in montgomery on a very busy thoroughfare, and he started to build his dream home, what he called his dream home. he did the work himself, he used materials accumulated in his salvage operations including a supply of sturdy and extremely rare long-leaf pine. eventually, his dream house, what he called his dream house took shape. he built it very much incrementally. from the outset the city showed unremitting hostility, and he almost lost count of the number of road blocks that it threw in his way including a citation for keeping the necessary building materials on the back of his

property which is not even visible from the road. more seriously, in 2007 he was charged under section 11b-1 on the grounds that his home, then under construction, was a nuisance. please go to the next one. all right? there's his home prior to demolition. um, go to the next one, please, i think that's another view of it. fortunately, he had snapped these pictures right before, shortly before the demolition, other side we wouldn't have -- otherwise we wouldn't have known what it looked like. and the reaction of montgomery's city fathers to this, to mccall's efforts seemed very strange the him. his view was that he was trying to fight blight by building a new home in an underdeveloped area. and be he suspects that -- he suspects that, no proof here, wealthy developers are trying to get their hands on the property

which is on a major thoroughfare, two acres. but as i said, he fought back, he hired an experienced local lawyer, he negotiated a court-enforced agreement which gave him 18 months to complete the home. only a month after the agreement took effect in 2008, the city demolished the structure. and local bureaucrats were very much in a hurry, they did not give him notice when they sent in the bulldozers on the same day as the court order authorizing them. mccall then went back to the same judge who had allowed the demolition. she stated that she had been misled, she ordered the city to pay compensation. montgomery, the city of montgomery appealed, and the complaint, the ruling of the judge, they appealed it. and at this writing, mccall has not received a cent. and his view is that the city is

just going to try the drag this out as long as it can until his money runs out. 2010 i received a phone call from karen jones, another property owner from montgomery. she related a case which was no less compelling. the city had just demolished the day before her family home including furniture, family bible and old photographs. the authorities charged the property was a nuisance because the front porch was in disrepair. please go to the next slide. that shows the property. she had no photographs to share, but we got this from, a reporter got this from google earth, interestly enough. interestingly enough. please go to the next one, please. all right. they said the property was a nuisance because the front porch was in disrepair. although the city had sent out notices before sending out the bulldozers, none of them went to jones. instead they went to finishing

ori jones, you have her death certificate, her grandmother, and matthew jones who is also deceased, deceased in the year 2000. you have, also, the city still regards them, as you can see from the official documents, as fori jones as the official owner of the property even though this has been pointed out many times to them. now, the city, as i said, claims that karen jones is not the owner, although she pays the property taxes and which are not in arrears, has a warranty deed from 2002 indicating that she is an heir, and apparently all the other family members support her decision. despite asserting that jones is not the owner, the city is, you know, well, let's go on. in may of this year, the city tried to sell the property at auction still naming the

deceased, fori jones, as the owner. and, again, in the official online -- >> can you wrap up, please? >> okay. i'm going to end there, but why don't we show this very short youtube. i'm sorry i went over, but i'd be happy to answer any further questions. hope this works. okay. >> headlines across the state, people are accusing the city of montgomery of taking their property without compensation. using the city's -- [inaudible] montgomery -- >> raise the volume? is it possible to raise the volume? >> i was born here in this house. >> built in 1920, the home of karen jones' grandmother is now a vacant lot, demolished by the city of montgomery, alabama.

>> anything that's not up to their par, um, they'll just tear it down, not try to revitalize, not try to bring life back into a neighborhood, just kill it. >> city officials claim the house is in disrepair and used local blight ordinances to take it down. they did the same to a house jimmy mccall was building despite state and federal court rulings in the home homeowner's favor. >> they have no regard for the rule of law, you know? they do what they want to do. >> montgomery has condemned dozens of homes under its blight ordinances, often billing the owners for the cost of demolition. the city then markets the properties to private developers. >> the actions that we're taking, i think, are speaking volumes about cleaning up our city and having a safe neighborhood so that we can raise our family and enjoy the fruits of our labor. >> much of the demolition is taking place along possibility come ri's historic civil rights trail to make it for appealing

to residents and visitor. ironically, these efforts violate civil rights. >> people are losing their property, the poor and vulnerable and minorities really within the shadow of this apartment complex where rosa parks lived. >> the chair of the alabama state advisory committee of the united states commission on civil rights. >> the commission calls this eminent domain through the back door. all right? it's taking property, i think illegally, without due process. >> five years ago alabama passed legislation to prevent local governments from using eminent domain for private development, but the law makes exceptions for the seizure of blighted properties, and in the case of the latter, property owners have no guarantee of compensation. jonathan serrie, fox news. >> thank you. so we will now begin for the next approximately 50 minutes or so questions from the commissioners. do -- commissioner -- [inaudible] followed by commissioner jack

key. i'm sorry. >> one second. i thought this was an excellent panel, and i wanted to recognize margaret butler. >> thank you. appreciate that, thank you very much. [applause] >> thank you to all the witnesses. it was very informative and, again, i echo the fact that the chair, i'm sorry, the staff has put together a very good panel. um, one of the reasons why we had proposed this at least when i had suggested it was not the concern with respect to kilo, but this probably predated kilo and had been a concern of a number of people crossing the ideological spectrum; conservatives, libertarians and liberals. setting that aside for the moment, professor somin, you indicated that the determination of what constitutes a public use is often or exclusively left in

many cases to state and local governments. does that signal a tension between first amendment concerns and fifth amendment concerns? if it does, does primacy, should primacy be afforded to individual property right concerns over tenth amendment concerns? >> i don't believe there's any tension here at all because the tenth amendment simply says that powers that are not delegated by the constitution to the federal government are retained by the states and the people. however, any specific individual constitutional rights that are protected by the constitution including those protected by the i have -- fifth amendment, they clearly are within the power of the federal courts to enforce, and no one has ever suggested to my knowledge that the tenth amendment somehow prevents that. >> and when did we get to a point of the notion of what

constitute public use -- [inaudible] was it in the berman case, or was that in the hawaii housing authority? where did that happen? >> even as far back as the 19th century, some people made that argument and it was held under state constitutions, but the federal supreme court did not adopt that as an interpretation of the public use clause of the fifth amendment in berman v. parker in 1954. there were cases in the early 20th century and late 19th century which were also fairly deferential to eminent domain, but if you look at those case as i did in great detail in the one of my articles, none of those cases actually addressed the public use clause of the fifth amendment. rather, those cases were heard during a period when the supreme court had not yet taped into view the -- [inaudible]

so, therefore, the only way to challenge a state take -- taking in a federal court was the. 14th amendment. and under that clause the supreme court applied a fairly deferential approach although not as deferential as later in berman and kilo under the public use clause. however, in the rare instances during that period when the federal government undertook a condemnation that was challenged in federal court, the supreme court actually made clear in the 1896 gettysburg case that a higher level of scrutiny should apply when the taking and transfer of property to a private individual. unfortunately, there is some misunderstanding over this fostered in part by the supreme court in kilo where they claim there was 100 years of precedent backing their position. there was, indeed, precedent beginning in berman, but every one of the cases they cited before then was, in fact, a case that had nothing to do with the

public use clause of the fifth amendment but was in reality a so-called substantive due process case under the 14th amendment. >> thank you. >> [inaudible] >> thank you very much, will chair. as a preliminary comment, i just want to say that i had concern about the title of this briefing from the very beginning because it seemed conclusory in its title saying that there were civil rights implications of eminent domain abuse as if that, indeed, a matter of fact. and i think that was, unfortunately, mirror inside a comment that the administrator just stated on the video where he said that the commission calls this eminent domain abuse which we have not yet done. we have not yet said that, this briefing does not state that, this is a very different kind of creature. >> [inaudible] >> i understand, and it's something that we are very sensitive to here. >> although our local committee unanimously -- >> yeah. the committee, but you said -- >> you're right.

>> -- the commission which was a step beyond. and that's why i was concerned about this title. i'm also concerned about how, whether this panel is truly balanced or not which i've stated in years past. but beside that, that's beside the point. i want to talk about i was a local government official. i've, i was involved in the use of eminent domain, and i though that abuses have occurred in the past. abuses in the early '60s or the '50s. there was a thriving african-american neighborhood in san francisco, and there was a lot of relocation and uprooting through there. i also know that there's a lot of good that has been done from what we have done as well. in fact, when you see parts of san francisco now that have been through a redevelopment process, it's a wonder what has occurred

in terms of the jobs and the economic growth that has occurred. i am not one who believes throwing the baby out with the bath water which is, seems to be part of what i've been hearing here today. because if there are issues that need to be addressed, they can be addressed. but i'm not as unarguably convinced that the whole mention of eminent domain is by it an evil. and i just want to ask a question to mr. byrne and also mr. shelton. i think that part of, part of the sort of parade of horribles that have occurred in the past is precisely because they occurred in the past during a very different time before the civil rights act of '64, before the voting rights act, before, actually more importantly, redistricting one person and one vote cases that helped create seats for minorities have

political power at the table. i just want would like your comment on whether or not those changes in the last 10, 20, 30 years are important developments in protection against the potential for uprooting, relocation of minority or disempowered communities. >> well, it's my view that it is. one can't say that in every community that minorities have the kind of political power that they have in san francisco. but i'm sure you know from your experience in local government there that elected officials in a city would, are -- understand the difficulties of taking anybody's home and particularly doing so in a way that has an ethnic or racial tilt. it creates a kind of a political, political firestorm that is a major deterrent. one of the things about urban renewal was that the structure

of urban renewal was such that mayors could bypass the local political processes by working with federal agencies. money would flow directly to specialized local government entities dominated by the mayor and pursue projects over which the normal sort of citizen processes -- as imperfect as they were -- had really no effect. this has been wonderfully illustrate inside a book by douglas ray on the history of new haven, connecticut, which is cited in my article. so, you know, one can't say that there's never abuse of eminent domain in contemporary cities, but i think that the realities of the political process in which there is not a federal pipeline like that, in which the political processes of nearly every american city have been

substantially democratized in terms of race and ethnic participation, and in which the money to be able to accomplish these things, a lot of it has to come through local sources. um, the kilo case itself is a reasonable example of that where the use of eminent domain there was pursuant to a fixed state program that was approved by the new london city council after extensive political discussion. and justice stevens in his opinion pointed at the fact there had been an elaborate political process in place to the determine that new london was blighted, that this project was an appropriate response or appropriate attempt to remedy that problem. so can we do more to make participation better? yes, and i appreciated mr. shelton's commentses in that regard. but we've come a long way. >> i would agree. um, there are too many challenges and problems with those who don't have political

power, economic power, so forth when the issues of eminent domain come about. quite frankly, we are disproportionately poor. the property values are disproportionately low, and it becomes a bargain for those who want to buy in lots in one place and do some major project whether it's a local government project or a private project for that matter. we've got a lot of concerns with people that feel they have not had an opportunity to fully participate in making the decision, and that's why we make recommendations to address the problem. but also i think what you're getting at, commissioner, that we also strongly agree with is that there are a number of examples of eminent domain projects that prove to be very, very helpful. you are sensitive to the issues of the poor that live this those communities, there are examples in brooklyn and even manhattan where major construction projects actually made sure they honed in on those who were poor, created rent control scenarios for those who were able to come in and get first priority coming back in at the same rate.

that is not done everywhere, and we'd love to see more examples that should be utilized across the country, but the safeguards are necessary because there are those officials who will exploit the opportunity. >> i just want to make a comment, and then that'll be it. i was going to agree with you because one of the things when we were doing this new project called mission bay in san francisco, one of the associations i was engaged in was setting aside a good proportion of homes not just for low income, permanent home ownership as well as low income permanent rentals. so you actually see on some of the sides of these buildings homes in the low, well, for san francisco whatever it is which is still way beyond what any normal person would do, but it's still very, an affordable level that we deliberately chose to insure that we would have a diversified, mixed community and allow people the chance to come back. and this is pretty much a brand new neighborhood where there's no displacement other than bricks, mortar and a lot of toxic stuff.

>> absolutely. and, again, the problem is those are still too few and far between. we'd love to see more of that happen. what we're seeing too often is when major projects like these occur, we see our folks find themselves in situations they cannot afford to come back into the communities they left. indeed, we also find one of the topics not discussed is when you talk about people of low and moderate income, they develop other forms of capital among themselves whether it's one mother baby sitting for another mother while they go to the grocery store, you bring me back a gallon of milk. that as is not talked about, and we have to talk about those as well. >> professor, just briefly go ahead. >> let me briefly say the issue of lack of balance, major todd strange, officials in montgomery were invited to come here today, and they did not come here. they have repeatedly taken that position and, again, we have the death certificate here, somebody

that they still identify as the owner of a property. if that isn't eminent domain abuse or abuse of property rights, i don't know what it is. so my recommendation is that the commission bring in the mayor, ask him to come, ask karen jones to come, ask these other property owners to come in, and at the very least we want to avoid these kinds of abuses. and it's not the only example of this kind of abuse that has occurred. >> the chair recognizes vice chair dunstrom. >> thank you very much and thank you to all -- [inaudible] i'm going to lose my voice. but, anyway, all members of the panel. this has been an issue i've long been indirectly involved in since i'm -- oh, i'm sorry. my voice wasn't picked up. i was just thanking the panelists. and going on to say this is an issue that i've indirectly been long involved with because i'm on the board and have been for

ten years, the board of the institute for justice which, of course, put ql and eminent domain on the national map as it were even though it lost that case. one could argue it won in the court of public opinion, though, that is not what the institute for justice regards as a victory. i have a question for professor somin and really is asking him to comment on something that professor byrne said. professor byrne has described these decisions as, um, local democracy at bork. at work. reflecting the political judgment of the local communities and, um, and, of course, um, the local democratic

processes are something that we all have some republican for. respect for. but i wonder, mr. chairman, if you would be willing to talk a little bit about that issue, and you might want and you can take any example you want, but i've got in mind new london. i don't think that's really an accurate descriptionment -- description of the new london decision to go after homes that were not blighted, and nts were white, low or middle class. i'm not sure, before or after -- professor byrne, why you'd say that. the fact that homes like those in new london were white and middle class explains the political hysteria, and i'm very

biased on this whole issue. i wish there were more political hysteria, but in any case, professor somin, i wonder if you would speak to the issue of the kind of democratic quality of these processes. >> sure. certainly. so just a brief comment on the issue of blight. you are, of course, correct, no one claimed including the city government that these homes in new london before blighted. in fact, that's the whole reason why the supreme court took the case in the first place, because it was a case of a pure economic development taken where there was no allegation of blight contrary to what i think professor byrne may have inadd inadvertently suggests a few moments ago. on the broader issue of democracy, at some level, yes, almost anything a local government does can be characterized as the actions of local democracy. but, of course, that doesn't resolve the issue of whether there should be constitutional rights to constrain that if

local government engaged in censorship or unreasonable searches and seizures, all of those things can be seen as exercise of local democracy as well and sometimes have the support of the majority of the population, but that doesn't mean they don't violate the constitution and doesn't mean they aren't of concern. if you look more closely at how these sorts of takings work both in new london and elsewhere, it's actually often very difficult for voters and ordinary people to exercise real influence over what's going on for two reasons. one is many of these projects are very complex and difficult for nonexperts to assess, and often it's not evident for many years after the fact whether the economic development that suppose we justify the taking is actually produced. for that reason because of the difficulty of acquiring knowledge about these matters, often ordinary voters have

little or no real influence over what's going on. often they don't even know what is going on. in addition, obviously, both in new london and in other places powerful interest groups are heavily involved in the process, politically connected developers and others. in the new london case, a key role was played by the pfizer corporation which had lobbied for the taking of the one of the city's own experts in the case testified that pfizer was the, quote, 10,000-pound gorilla behind the taking. the new london development corporation, the quasi-governmental agency that organized the condemnation at the time the chair of the agency, her spouse was actually an important pfizer executive. now, having studiesed the case -- studies the case, it is not my view she undertook the condemnation just because she thought it would benefit pfizer. i think she genuinely believed it was in the public interest,

but that's sometimes influenced by, you know, these sorts of connections. if you work for general motors, you tend to believe that's what good for general motors is good for america, and if you have a close connection to pfizer, you might believe the same about them. so at some level, yes, this is an act of local democracy just as is anything that is done by local government. at the same time, this is an area where the democratic process often work quite poor and is often heavily influenced by interest groups. the one last point i'll make about this is i feel the panel is certainly a sign of great progress that african-americans have much more political power than they used to in the past in the urban areas, but that does not prevent, in many cases, the kind of abuse because of the people usually targeted by this sort of thing are, in fact, the urban and minority poor and lot of studies as well as common sense suggests that those groups have only very limited political

influence, and urban politician like other politicians if they want to stay in power, they need to favor the interests of those with political leverage over those who do not. >> [inaudible] >> yes, thank you. so i didn't mean to say that there was, that there was a blight finding in the kilo case. if i did, i misspoke. in fact, i had an interesting conversation with a connecticut state official who said to me that they proceeded under a different provision of the connecticut state law involving eminent domain which allowed there to be eminent domain when there was a finding of economic stress in a city and that could be shown that the project would address the economic distress of the city. connecticut used that process because they thought it was more transparent. professor somin before correctly, i think, said that the blight determinations that exist are often quite elastic, and the term "blight" is a kind of a stand-in for a need for

economic development, and it's a troubling term. connecticut was trying to avoid that and making it more transparent. now, um, the history of the taking in the new london is very complicated and interesting. but it's fair to say that the dissenters in the connecticut supreme court who voted to find that the use of 'em innocent domain -- eminent domain was against state law specifically found that the project was not done for the benefit of pfizer. it was done because pfizer had already located a test facility in new london. at the same time that the navy had -- or the coast guard had abandoned a military site. and the hope was that by redeveloping this part of town, they could attract other corporate development. um, there's no, there's absolutely no proof that there

was anything untoward done on the basis of the decisions, and and as i say, it wasn't just done by the new london development corporation. it was specifically approved by the new london, by the new london city council. now, look, nobody says that politics at the local level as at the federal level is without the influence of powerful entities what's needed, of course, is more transparency and more participation. and i strongly back that. but i stand by my, by my view that those are the proper remedies and not taking away an entire power from local governments to engage in economic redevelopment. >> i'm going to ask a question, then -- >> whatever order. >> that's fine. and commissioner harriet, commissioner kline. last week the pew research center issued a report that shows that the net worth of

minorities, especially latinos and african-americans, has plummeted particularly due to the current economic conditions that we find such that latinos and african-americans' net worth now is 22 time less than white americans. and i think there's a civil rights issue embedded there, but that's not what i'm going to ask you about. most of the wealth that minorities have accumulated in the past has been based op our homes. -- on our homes. however, i think when you look at minority communities and immigrant communities, one of the ways to find success has been through entrepreneurial efforts, and you and your comments, professor byrne, mentioned the distinct between compensation for homes and compensation for businesses. do you make a distinction between a business that may be a family-owned business or family-run business versus something that is owned by a corporate entity, and could you speak to that? >> sure. i don't have any problem with the idea that it would be a good idea to provide growing concern

value as part of compensation, particularly for small businesses. what i was trying to draw attention to was that the proposal to prevent or to prohibit abusive eminent domain for economic development would also prevent use of eminent domain on vacant lots held by investors in which there is no going concern value, but merely an attempt to try to speculate. so it -- so i agree with you, and i think that that is, i think that the remedies that look to increase compensation which shifts the calculus involved in the use of 'em innocent domain is a very fruitful avenue for further study. >> thank you. commissioner grass yang know? >> >> thank you, all, but i kind of particularly thank professor byrne because it helps me understand those people who like you who say there isn't a problem, that this is a solution

in search of a problem. and i'd like to mention two, um, matters that seem, you seemed to raise that bother me and get your reaction as well as professor somin. the first is that if some of the people involved in the coalition concerned about eminent domain are libertarians and be they happen to have a concern about the scope of government power, you didn't imply that they can't really be motivated by the plight of minority students, but you seem to say, well, that could, that that isn't, that that isn't. it bothers many he to -- me to suggest that just because one might be libertarian one isn't powerfully moved by the special plight of poor and particularly minority. it certainly isn't the case that those who were concerned about voting rights generally couldn't have been powerfully moved, the

north by some of the examples that this commission showed the plight of blacks in the deep south in the '50s and the '60s. so that's one concern i have. um, the second is the notion that seemed to animate part of the written submission and oral that as long as government has the right motives, then government will usually help minorities more. and i'm glad we're beyond the stage where, um, you know, a lot of eminent domain may be motivated by racism. but the history of urban renewal is littered with so many devastating mistakes, um, the hud probably had the best motives to group people in these huge, horrible housings. you in your testimony seem to suggest that mixed use is a

great thing, and government is best to decide. i became involved in the issue about 4 years -- 24 years ago in a zoning fight in houston, became acquainted with the now-deceased but beloved colleague of commissioner harriet's on the university of san diego, usd, i should say, bernie segin who did a study. back then the city of houston wanted to end mixed uses because to them in their covenant neighborhoods, mixed uses that the poor had -- and i was in one of the, you know, more well-off neighborhoods -- were ugly. but his pathbreaking book and many of the other fallout studies showed that, in fact, what was unappealing to government at the time, um, really decreased rents for minorities compared to dallas and other cities.

so i suppose my question to both you and professor somin is whether we should be so trusting of government even when they're supposedly well meaning? >> well, thank you for your question. first off, um, thank you for, um, the comment that -- and i totally agree that libertarians can be motivated quite sincerely by concern about the plight of the least among us or racial discrimination as part of the response that they make. and i hope -- but let's -- the, that was not what kilo was about. kilo was not about racial minorities. and the focus of the institute for justice has not been, has been on property owners' court, on eliminating eminent domain for economic development entirely. and so it seems to me, and the

way in which the issue was framed to me for this hearing today suggested that the main concern of the civil rights commission was the undue impact of eminent domain on minorities, and that's what my remarks were addressed to. but the solution that's being suggested both by professor somin and, i suppose, by yourself is to eliminate eminent domain for economic development period. and that does not address the harms that come to minors that come from highways or public housing for that matter, and it takes away one of the tools that have been, that has been used to try to maintain the economic competitiveness of cities with greenfield -- [inaudible] so i do have concern as to what the focus of this discussion is about, and i don't mean to impugn anybody's motives or, or -- at all. and and i'm sorry if it seems as

if i did. now, you're making then, commissioner, a very broad argument about the, whether government has a role in land use regulation at all. and i understand that there are people, and bernard segin is certainly one, who have argued over the years that that power is, um, is unhelpful. the problems with eminent -- so, and mistakes have been made. i mean, urban renewal has a very mixed legacy, and, you know, the definitive book has not been written on that yet. but, plainly, mistakes were made, and mistakes are being made today in government policy involving urban development. however, urban, the understanding of urban planning has come a long way since the 1950s. we have a much less grandiose idea, we understand the value of

mixed development, and we understand the limited role that government can play as a catalyst in, um, helping particularly redevelopment of areas that need it. t a very large -- it's a very large question to discuss whether government has a role, what the role of government properly should be in land use planning regulation, goes well beyond the issue of eminent domain. but it is certainly the case that we can point to uses of eminent domain in the last decade that have been, in fact, very helpful. the government can assemble plots of land in a way that private developers cannot. they can overcome holdouts, they can insist on, they can insist on a planning process that involves the community. and i think that's valuable. and the, the larger issues

perhaps save for another day. >> professor somin, are you now or have you ever been a libertarian? [laughter] >> i've been a libertarian since i was 15 years old, and i even described how i first became libertarian. perhaps more relevant to your specific question, i think there is no contradiction between advocating for property rights for the poor while also believing that the same property rights should apply to the wealthy and others just as there is -- [inaudible] with our view that these protections should apply to powerful media entities like "the new york times" and not just unpopular speakers. so, similarly, i think property rights apply the all. that said, as discussed in my testimony, it is the case that the poor and politically weak with respect to speech are all the more vulnerable. and that does get to the question of the role of government. one of the reasons why i'm libertarian in the first place and others are as well is that

problems with government are not directly the result of particular planning processes or particular individuals who might make mistakes, they're also systematic, and government does have a tendency to favor the politically powerful over the politically weak, particularly in areas like eminent domain where the issue is complex, and it's difficult for the general public to scrutinize what is going on. you don't have to be alibertarian to recognize this particular problem, but i think the libertarians and their contribution to this debate is to see its systematic nature. now, with regards to the question of the broader role of government, obviously, like professor byrne, i don't think i can fully address that question in this hearing. however, i would note that i think both 1950s urban planning and modern urban planning tends to oversaying what the -- overstate what the appropriate role of government here is. it's true there are holdout problems, but as i discussed in my testimony, private developers

have good way of overcoming them, one of them being secret assembly. and those have is the advantage -- have the advantage that they don't victimize the poor and the pretty create weak nearly as -- politically weak nearly as much, and they require the developer to pay for the project with their own money, right? >> when the developers pay with their own money, they have more incentive to actually do a project that will promote more economic growth than it destroys whereas when they can do so with heavy public subsidies to transfer other people's property to them, you often get very bad results. not in every single case, but i think in the majority of the time i give a couple of examples in my written testimony. i just mentioned the kilo case which has already been discussed a lot. to date some $80 million in public funds has been spent there, and so far years after the taking nothing has been built. the only beneficiaries of the

taking so far other than the, you know, other than, you know, officials and lawyers involved are some feral cats that are currently living on site. .. the >> than from ones that transfer lands from private parties because as i indicated the way private developers get arnholdout problems is by

operating in secret and not letting people know this is a big assembly project that's going on with a public project where public funds are being spent, we do want public scrutiny and even if we didn't want it we'd probably get it anyway because government tends to leak if they can't keep military secrets they probably can't keep development projects secrets either even if we wanted them to do so. >> professor, i'm glad you're answering the political philosophy because it would be highly ironic if you answered your system. [laughter] >> the chair recognizes commissioner harriet. >> thank you, mr. chairman. i want to say a word on behalf of them of $80 million but at least i'm happy for the ferreal cats. professor coleman you had mentioned there are more effective methods of dealing with the urban blight. can you elaborate on that a little bit. >> sure. i think urban blight is a genuine problem which i mean

blight which really are blighted in the term where dilapidatedtation, threats to public health and the like. i think the best and most effective long-term method is dealing with this is having long-term growth and property rights are actually an important part of that. most scholars in economics the problems going on in underdeveloped world is underdeveloped property rights and there's a series of books on this. i think in a number of urban development scholars also think we have a similar problem albeit in a less severe form some in fact poorer and less developed areas of our own country. in addition, while long-term growth is the best solution, there are other more targeted measures that can be taken, for instance, public health codes, the situation where maybe there are infectious diseases breeding in a particular property owner's

area. and also in some cases one can use nuisance abatement and private losses. and finally we should promote legislation that's already been done in many states that should have more private plan communities so people can use their own money and their own voluntary cooperation to create a better living space for themselves. today over 50 million americans already live in private planned communities of various types. and more can be done to make that option available to even more people and i think actually that's the kind of participation which is often more effective in promoting people's interests than the ordinary political process is. so i don't think there's an absolutely perfect solution to blight. however, there's a great deal that can be done without resorting to eminent domain and especially since these other approaches -- they have the advantage that they don't forcibly displace people from

their homes or away from their businesses. taking the target small businesses often inflict as much harm as target homes but the public sympathy in those cases tend to be less. >> we have less than 10 minutes left for questions. i have the commissioner who will be next. and prior to doing that i would ask if the commissioner had an opportunity -- she had an opportunity to do so. and that may be our time. so commissioner? >> thank you, mr. chairman. thanks to the panel. professor, i read your testimony and you were shocked they actually had eminent domain in downtown las vegas as well as time's square. were you ever in time's square in the early '80s? >> yes, actually, i was. >> do you want to admit that? >> i should wait and let you finish your question.

[laughter] >> as young looking as you do. i too will be a libertarian. [laughter] >> but i was, and i think that their redevelopment plan has been successful. would you not agree? >> to some extent, however what i was referring to took place in the early 1980s and it specifically with a taking the transfer of property that by normal standards was not in any way blighted to the "new york times" for purpose of building a new headquarters. >> you were referring to the general condition of times square in the early 80s. >> i was referring to times squares at the time this case occurred which was in 2001. >> right. and then the taking in downtown las vegas. have you ever been around that property? >> yes. >> and that taking was really a problem of notice, was it not? >> no. >> not without having an order to enter? >> are you referring to the --

the fundamental issue there was, in fact, whether the area was blighted. and the owners of the land said it was not and it went all the way to the state supreme court and they ruled it was blighted on the grounds of nevada the definition of blight at the time was any area that was underdeveloped in some way, or which essentially was any area which does not have as much development as produced by alternative use. so there may have been other procedural issues in the case but the aspect that i was referring to, the one addressed by the nevada supreme court was specifically the question as to whether the area was blighted or not and the nevada supreme court ruled that it was on the basis of this very broad standard. >> and then your last remark in your comments was more work was needed to ensure a constitutional property rights. has any of these types of cases shown a violation of civil rights and property rights like

kelo and the hawaiian housing thought which stand these court tests, the constitutionality. >> it was a close 5-4 decision. i believe the majority in that case got it wrong as many of the cases do. there's some lower court decisions which have struck down takings on the basis that the official rationale was pretextual. and there also have been a number of state supreme court decisions which have invalidate those takings under state constitutions but and part of my testimony was precisely the federal court and some state courts as well have not done enough to approach that piece to the fact that most of these cases are run by the government at least in federal court. i view not as a positive sign that nothing bad is going on but rather as a negative sign that, unfortunately, the courts have not been doing their job in this

area as well as they should. >> the chair recognizes commissioner yonke and commissioner achtenberg will have the last question. >> i want to say one last word to the professor to begin with. what you've been describing in your testimony today to me is very powerful. and if it's indeed the case that they're using this different method of demolition to deal with homes primarily run by african-americans in montgomery county in montgomery, it is something that i wish we could go down there for because then we could use our subpoena power to force the officials to come forward with those records. this is a much broader hearing than that. in terms of what you're talking about, that could be a potential abuse of a police power that i think could have -- we could have a very significant interest in. i just want to address really quickly the alternatives. one of the things you talked about was secret assembly or in other words, we'll call the developer's shell game and they

run around and buy little puzzles there and hold in a conglomerate together. i want to get all your options as quickly as possible. to me having watched that and seen that happen in various cities across the country, including my own, the one thing that comes up is the fact that in many ways, one, i don't necessarily think that the developers are paying the highest and best price for some of those properties. they're paying in more than the government would. and number 2, in doing it in this sort of shell game frequently using nominees shell corporations, other kinds of things to do so, it actually becomes almost undemocratic so that question that mr. shelton would want raised, where are these people going? what are we doing with them? what is their right of return? what actually is going to happen here and whether that is a good and efficient use of property? i don't think those questions

ever get answered in the secret assembly type thing until the very end when they may have to go to the planning commission to get it done. by that time, you know, when you have a -- your abilities may or may not be limited at that time in terms of your ability to deal with the issues that have been raised by mr. shelton, and by mr. burton and yourself, too, in terms of on the impact of minorities. i just wanted you to address that and whether there are undemocratic aspects of that, that might actually militate against some of the comments you were talking about in terms of the perceived ills you see of eminent domain on racial minorities. >> thank you for that question. it's an interesting point. i think the important thing about the secret assembly is that when secret assembly or any kind of voluntary assembly are going on, people don't have to sell unless they agree to the selling price that is offered to them. so as a general rule, if people will not sell unless they feel they are better off with the money than they would be with the property.

and that's a fundamental difference from eminent domain. now, whether they always get paid the highest and best price, you know, that may vary depending on who's an effective negotiator or what nnot but they're getting paid a better price than keeping the property. the most important property rights is the ability to say no when people come and say i want your land or whatever it is that you own. you might say it's undemocratic in the sense that, obviously, until the project is later announced, it's secret but i think part of the point of my argument is that a better way for people to participate is to be able to make their own decisions about the disposition of their property and to be able to say yes or no to the offers that are brought to them rather than having a voice in the political process whereas an individual particularly, a poor one, your chance of influencing

the outcome is small. by contrast, if you can say yes or no to offers that are brought to you, then you have a much higher chance of actually having a say in your on own fate. so if you believe the money being offered is not enough and you'll end up living somewhere else or be worse off, then you can just say no. i think that's a good thing from a fairness perspective. it's also by the way a good thing from the perspective of maximizing economic efficiency and economic development. if, in fact, the current owners of property value it more than the developer does, then even if all you care about economic efficiency if you're like -- a libertarian of stereotype only cares about economic growth or whatever, then you still would want the secret assembly rather than eminent domain because you would want those projects that are not worth more than the existing uses that they would displace. >> the chair recognizes commissioner achtenberg for the

last question. >> i want to direct this question to professor burn if i might. my concern in reading the material has been that the data, at least as far as i can tell, is questionable in terms of the statistics that have -- that are available to us about what has happened since 1980 or 1990 or in the most recent decade past in terms of the allegations that it is clearly a disparate impact that's being felt as a result of eminent domain on minorities and other disempowered communities. i'm wondering, am i missing

something or is the data as scanty as our current records makes it appear? >> i think -- i think -- i think there's a big problem with a lack of empirical study of the employment of eminent domain. certainly, as you say in the last two decades or so, done to rigorous social science standards. we really don't know very much about the incidents and who's affected by it. and so i think that would be an enormous benefit. and i think something that's agreed across the political spectrum that a better understanding of what actually occurs would be helpful. the study referred to in terms of the victims and whatnot that's in there, really doesn't look at who's affected. it just looks at the census tracks in which eminent domain

is used and that just doesn't tell you very much. and we could use -- we could all understand this better. >> thank you. please, everyone, join me in thanking or panelists. [applause] >> i think we had a very thoughtful and thought provoking discussion this morning. i just want everyone to know who's listening here today that we're going to have the record remain open until september 10th for any public comments. those public comments can be mailed either to our office here at 624 ninth northwest, washington, d.c., 20425 or emailed to publiccomment@usccr.gov. that's public comment one word at usccr.gov. thank you all and we're going to move immediately into our regular business meeting. so thank you, analysts you may go about your business. feel free to stay and watch our

some of theting

candidates' meeting with fair goers. this is just over two hours. >> the 20 minutes does not include the introduction. >> it does. >> get started. [laughter] >> good morning. welcome to the "des moines register" soapbox.

our first candidate of the morning is herman cain. he is a former georges businessman. he is seeking the republican nomination for the presidency. let's get and i will welcome for herman cain. [applause] >> thank you. good morning. i love that kind of greeting. that is good. it's felt like you are energetic and ready to go. so i am -- so am i.. i am happy to be here in iowa at the state fair. i heard you have something called a pork chop on a stick. i just sent my staff out to get me one. in georgia, we eat pork chops for breakfast, lunch, or dinner. i feel right at home. i am glad you are here. crosses for stopping by. thank you for the opportunity to share a few of my thoughts about

this great country we live again. the first announcement i want to make, we are an exceptional nation. the united states of america. [applause] in a cain presidency, i will never do an apology to work. we have nothing to apologize for. the founding fathers got it right. the founding fathers got it right when they said "we hold these truths to be self evident that all men are created equal, that they are endowed by their creator with certain unalienable rights that among these are life, liberty, and the pursuit of happiness." it did not say anything about a

guarantee. it said the "pursuit of happiness." it did not say we need to establish a department of happy in washington, d.c. we do not have a department of happy in washington, d.c. but the pursuit of happiness is under attack. it is under attack, but we can take it back. that is one of the reasons is i am running for president. we have become a nation of crisis, but we can fix it. we have an economic crisis. we have an entitlement spending crisis. we have an immigration crisis. we have an energy crisis. we have a fall in the foreign- policy crisis. the biggest crisis we have is a deficiency of leadership crisis. the biggest one. [applause] next to national security, getting this economy going is a job one.

here is how we do it. first, recognize that the engines of economic growth is the business sector, not government. the business sector. in order to get the engine driving this economy, we have to put the fuel in the engine. that is why in the first 90 days as president, i am going to ask congress to send me legislation that will lower the top corporate and personal tax rate to 25%, take zero taxes for we appreciate it pockets -- for repatriated profits, and take the capital gains rate to zero and make them permanent. that is that we put fuel in the engine. [applause] once we get the economic engine moving, then we can address a lot of the other issues that we face.

you know, when i was growing up as a young man in atlanta, i never said or dreamed that i would run for president one day. that was not what i wanted to do. when i was growing up, i came from a very humble family. my mother was a domestic worker. my father was a barber, a janitor, and a chauffeur all at the same time. because that new debt he needed one job to put food on the table, a second job to keep a roof over our head, and that third job to save for his american dream. because just like your parents, dad wanted us to get a little bit better start in life. and we did. he was able to achieve his american dream even though he

what all they form at the age of 18 literally with just the clothes on his back. he achieved his american dream the old-fashioned way. he worked for it. [applause] that is one of the reasons i am running for president. i want our children and our grandchildren to be able to have the same opportunities that we had. on what our children and our grandchildren to be able to grow up in a nation where we get government out of the way, government off our backs, and government out of our pockets because it has gotten out of hand. [applause] like i said, the founding fathers got it right. -- got it right when they talked about the pursuit of happiness. they got it right when they talked about limits to government. the founding fathers got it

right when they talked about individual responsibility and individual liberty. that is what we have got to get back to. when i was doing my radio show in atlanta before i started running for president -- i was on the radio for odd years -- but when you run for president according to mccain-find the old rules, you have to become unemployed. so i am now unemployed to run for president. you would think you'd be able to keep a job while you are running. no. those already in all this get to keep their job, but they told me i could not keep my job. i think it is a little bit of a double standard, but that is not going to stop me. because i am learning that the american people have an appetite. the american people have an appetite for a non-politician. i have never held public office.

[applause] i am 8 business problem solver. that is what i have done all my life. i happen to believe that those same skills will work in washington, d.c. from the white house. i happen to believe that. [applause] when i give my speeches inside the beltway sometimes, i will have someone stand up and say, "your ideas about taxes and replacing the tax code with the fair tax, that all sounds well and good, but you cannot do that." my response is, "what do you mean i cannot do it that?" "if you do not know how washington works." my response is, "yes i do. it does not." [applause] it does not work. why do i need to learn how it does not work?

you would be sending me to washington, d.c. to change washington, d.c., not become a part of the problems in washington d.c.. -- problems in washington, d.c. former senator everett dirksen popularized a statement -- "when they feel the heat, they will see the light beer "the heat comes from the people. that is you. my job as president is to be a president of the people, by the people, and for the people. not for the politicians, not for washington, d.c. that means i am going to listen to you. -- listen to you, not listen to the lobbyists or listen to the establishment. listen to the people because the people in this country are crying out to the top of their voice.

we the people are still in charge of this country and we want to take it back. that is what the people are saying. [applause] when people ask me why am i running for president, like i said, it is for the children and grandchildren. i will never forget when i looked into the face of my first grandchild in 1999. i look into that little place in the first thought that crossed my mind was what do i do to make this a better nation and a better world? i did not know the answer then. 12 years later, i believe i know the answer. 12 years later, i believe i know the answer after a lot of prayer, a lot of soul-searching, a lot of prayer and a lot of soul-searching. that is when i made the decision to run. now i love it when people say that i do not have a chance of

getting the nomination. that i do not have a chance of winning the presidency. all that does is it inspires me to work a little harder and work a little longer. i love it when they try to count me out. [applause] love it. but, you see, here is something they do not know about herman cain -- i have been going against the odds all my life. this is not anything new for me. when i discovered godfather's pizza in 1986, godfather's was supposed to fail. they predicted it would go bankrupt. it did not go bankrupt when i got there, surrounding myself with the right people. why did we fail -- why did we not fail? i did not get the memo that we were supposed to fail. i did not get the memo that

america cannot fix its problems. that is why i am running. i had been going against the odds throughout my life. let me tell you about another incident back in 2006. -- back in 2006 where i beat the odds, which is another reason i am running for president of the united states. in 2006, i was diagnosed with stage 4 cancer. the doctors told me i had a 30% chance of survival. three out of seven. i said, "well, doctor, i am not going to be in the '30's, i am going to be in the ones that survive." back in 2006, against the odds, i had to go through chemotherapy, double surgery

where they took el 30% of my colon, 70% of my liver, full chemotherapy, and now as of two weeks ago today after it might latest annual checkup, i have been cancer free for five straight years against the odds. [applause] against the odds. i show someone the letter i got from my doctor with my 5 year clean bill of health, he said, "god did not want to deal with you yet." i said, "maybe he did not, but i believe god wanted me to stay here so i could make a difference in this community and in this country."

he said, "not yet." that is another reason is i am running because i happen to believe that we were all put here on this planet to make a difference. everybody can make a difference in a different way. with your talents, your time, your treasure, your abilities -- we all have the responsibility to make a difference in this world. i happen to believe that after achieving my american dream that i am is supposed to do something else other than just retire or go into a nursing home. i do not believe you retire. you refocus. you want to do something with that time. i happen to believe that this is what i am is supposed to be doing right here at this moment in time. and i am optimistic that we are

going to get this nation back on track because of what i call the spirit of america, the same spirit of america that inspired the founding fathers. the same spirit of america that has brought this nation through some of its most turbulent times. that same spirit of america is going to cause the american people to stand up, speak up, and rise up, and that this nation back on track. [applause] i was asked last night after the debate to name a president i would pattern my leadership style after. i said ronald reagan. [applause] ronald reagan.

and then the reporter says, "well, he was not perfect." no, but he was ronald reagan. [laughter] you do not have to be perfect, folks. yet to be yourself. people connect when you are yourself. and so it was ronald reagan's leadership that helped to turn this nation around. and he did. it is in the same spirit that i am running for president. ronald reagan reminded us of this thing called liberty. -- this think all liberty when he said "freedom is never more than a generation away from extinction." we cannot pass it on in the bloodstream. it must be fought for and protected. one day we will spend our sunset

years and our children and our grandchildren -- with our children and our grandchildren. we will tell them what the united states of america used to look like. i am not going to have the conversations with my grandkids. i do not date you want to have that conversation with your grandkids. the founding fathers got it right. that is why we must be -- we must become the defending father's. we must defend the at declaration -- we must defend the declaration of independence. we must defend the constitution of the united states of america. we must defend the life of the unborn. we must be the defending fathers for the greatest country in the world. [applause] i happen to believe that we will be able to do that because on

our currency, on that money you have to pay for that porkchop on a stick, it says "in god we trust." in the fourth first of the national anthem, there is a phrase in the middle of it that says "in god is our trust." that is why i believe that the united states of america is going to get back on track. ncain.com and ian cain.co am running for president. >> he are you doing? -- how are you doing? >> we have to define and shape thvalues.

they are reflected in the constitution of the united states. >> thank you very much. >> you are welcome. thank you, sir. appreciate it. thank you. appreciate that. [unintelligible] >> i thought that name sounded familiar. i saw him the other night. he was great. >> we are thrilled you are running. >> thank you, barbara. it is good to see you. good to seyou. let's keep looking a little bit. do you have your camera? >> i will take a picture of you and the kids. >> me and the kids? all right. how are you.

you are seven? how old are you? >> i am 4. >> you are for? all right. -- you are four? all fight. say cain. love it. it is good to see you,an. we are hanging in there. when i say inside the beltway, they are very skeptical. but when i say that to regular voters, they always applaud. they are looking for somebody who is in non politics.

>> the downgrade in credit and the tea party and all that? >> i do not understand the question. quite the thing is, that is what is wrong with washington. they want you to accept the old rules. e american people are saying "we want some new rules. we want to change the rules, otherwise we will never change the country." that is what this is all about. the biggest misconception about the citizens' movement, that is what i call it, it does not just the tea party. every organization that has members are mobilizing the members becausehey are fed up with what is going on. the citizens' movement is about fiscal responsibility, the free- market system being allowed to do what it does, not being overburdened with too much legislation and regulation and

then at legislating to e back door -- people are sick of that. thirdly, recognizing people's constitutional liberties. do not rewrite the constitution, enforce the constitution. quite a bit when it comeso gay marriage? >> do not rewrite the constitution. there is a difference between writing the constitution and adding something to the constitution. pe rick santorum at the soap box. >> if you want someone who has actually done that, not pounded their fists and said i will do this, if you do not do this and this, i will not vote for anything. it is easy to vote now. it is hard to get things done to move this country in the right direction. i have done that. when i was in the united states senate, with the democratic president, with a bare majority, which had 52 were 53 republicans. we need bipartisan support to

pass anything. i pushed for a welfare reform bill that and a federal entitlement, something we will have to do with medicaid, food stamps, education and housing programs, if we are when you get this federal budget under control. i did it with income support for poor people, and said this is not a federal responsibility. it is a state responsibility. we end of the federal entitlement, required work, and put time limits on welfare, and i got bill clinton and half of the democratic caucus to vote for it. that is the leadership we need in washington, d.c., today. so, if you want to look at a record of political accomplishments -- by the way, in 2000, i ran for reelection. george bush ran -- lost the state by four points, and i was the only conservative reelected, and i want it by five. if you want someone with a record of accomplishments

politically, with respect to getting things done, and it is not just in the area of economics. i was a big proponent of a balanced budget amendment. we came within one vote. i continued to push for it. that when i did not succeed, but i've not given up, and i think that is still the issue today. i got other things done. on cultural issues, nobody stood up and font for the sanctity of human life as much as i did in the united states senate. thank you. i will take that. and the applause, and the times, please interrupt. i was at the heart of the abortion industry. we finally got this issue out before the american public, and guess what? bill clinton kept vetoing, we

kept trying to override, but i get 12, 13 democrats to vote for us. when-by-one they came over because i went to the floor and pounded away. pat leahy, one of the most liberal democratic senators out there, who came up after me after this debate and walked up to me and said i want 20 minutes of your time because you apportion time between the two sides. i said you want 20 minutes of my time? >> he said you either give me 20 minutes of your time, and i will -- or i will vote against you. i said take 25. he went up there, and he stood there. he counted the arguments i have been making, and he said he can no longer stand against the wake of the argument. ladies and gentleman, that is what we need.

we need somebody that can look it the cameras, talk to the american public and members of congress and bring the wake of the republic behind us. i have done it in the toughest areas you can reach a pending federal and fireman's, getting people together on moral, cultural issues. -- and in federal entitlements, getting people together unmoral, cultural issues. i was able to win elections. i've also the the national security experience prepared every -- experience. every one of those years, i brought a bill to the floor. every time i was able to get bipartisan support for what i was doing, and it was moving the country from a cold war force to a force that would be the threat of terrorism before 9/11. i was the head of the curve in reshaping our military. it is the same thing if you go

to the foreign policy issues. israel pulled the mere existence is at stake because we have a president that has turned his back on the state of israel. [applause] >> you love, was the head of the curve was the greatest threat -- of the curved, what is the greatest threat to israel? i supported a bill that put sanctions on a new clear are wrong when the cia was saying -- a nuclear iran when bessie i s the cia was saying it was ove. that bill passed after being blocked by none other than joe biden for six months. we got it done. why? i was right, and ahead of the curve. in doing what was right to protect the state of israel and

our national security against iran. if you want someone with a record of accomplishments, with a clear vision for what this country needs, to get our country going again -- we need to cut these entitlements. i have done it. i was the leader on social security in 1994, talking about these issues. i was talking about social security reform because i knew today would come. it is demographics, folks. in the last 15 years, 300,000 people turned 65. this year, when 0.5 million are turning 65 and it will be this way. if we knew this was coming, and every politician ducked, i stood up. you want someone that will tell you what the problem is, why the

problem is there, and exactly what i will do, then i need your help. of the road is an important meeting tomorrow because the national media has done a very good job of not paying attention to our campaign they give candidates who are way below the in the polls, which is not easy to do, that of god and a lot more attention than i have. why? -- that have gotten a lot more attention than i have? >> why? every candidate at some other name recognition go up dramatically except one? why? what is the national media have against a guy who was beaten three democratic incumbents who was then able to get conservative things done in washington, d.c.? i wonder why they're not providing national coverage for someone like me. [applause] listen gentleman, iowa, not the

national media, not the abundance get to decide who will be the next president of the united states. i wish we could do something to let those people we think. we could do something. we want to elect a consistent conservative who can win an election against the best the democrats have to offer, and deliver conservative solutions for this country, and lead us in a direction like ronald reagan did. was it ronald reagan's policies that made all of the differences? sure, they were great, but it was his ability to go out and tell the american public who we are. who we are is a country that believes that our rights come to us from our creator. to each and everyone of us, and equally. [applause] i love the constitution. i love the tea party, but when the tea party says it is all about the constitution, there

are only half right. our country was a constitution without the declaration of independence -- our country without a constitution and a declaration of independence is france. the constitution is the how, and a declaration of independence is the why -- who we are. we are is a country that has rights given to us by god to reach and everyone of us. what does god give us those rights to do? he did not give us the right to do whatever we want. there are laws. the mosaic code. there is a natural law. there are values that hold this country together as a daily- christian country, and those values in the judeo-christian country, and those values make as a judeo-christian

country. they said those rights could not be violated, and it is being violated in america today. [applause] they talk about liberty. look at what is happening right now with obama-care. it is the greatest threat to liberty. it is the end of liberty. look what happened two weeks ago when barack obama's back was against the wall. what did he do to try to scare americans to call their members to congress? he threatened social security recipients that their money would not be there. he threatened medicare recipients that the money would not be there. why do you think he shot the obama-care down the throats of the american public? his hooks ins everyone. he wants you to be dependent upon government, and once he is,

once they get you, your freedom is lost. look at what is going on in britain, and greece, it is so pathetic. i am not surprised. those people did not come here, but your ancestors did because they chose freedom over government security. that is what is at stake in this election. finally, our founders said life, liberty as a pursuit of happiness. they did not say a guarantee of happiness or a provision of happiness. they said every american without the right to pursue happiness. it is not happen this summer on the far right and the far left suggest. happiness is not the pursuit of pleasure. look at up in webster's. happiness was the pursuit of what was morally good. [applause] >> god gave us rights so we could follow his while.

our founder, john adams, every founder said the same. our constitution was made for a moral and religious people. it is wholly inadequate for the governance of any other. you cannot be free and with whatever life you want. we would either be constrained from chains from within or chains from without. if we want to be free, we need to be a decent and moral society. we need to believe in the institution of marriage, and stand for those principles, because that is where those moral values are inculcated. if you want somebody that is going to be able to go out and remind americans that we do not need a president who believes in government, we need a president to believes in you -- [applause] >> please go out, go up to aimes, and that the national

media here you that you want a winner, a leader, and someone that can go off to the american people and remind us to believe in ourselves again, not to listen to the siren's song of someone who says i can do for you better than you can do for yourself. that is not what made america great. america, america at the time of the russell -- revolution -- average life expectancy was between 35 and 46 years of age. to the time of jesus christ, and their average life expectancy was the same. we were an agrarian society 1800 years ago. then, america happened. america said know. we're not going to believe in top-down, kings have no rights, and people been subject to the king. we are going to believe in free people, and guess what happened?

in 235 years, life expectancy more than doubled, we went through an industrial revolution, and the poorest person in america today is richer than someone who was one of the richest 50 years ago. this is the dime and ms. -- and the dynamism of america. that will be over if barack obama is reelected and obama- care is implemented because they will put you in chains called obama-care, and you will be dependent upon government, and you will never break away. final comment -- margaret thatcher when she left said she was never able to accomplish what ronald reagan accomplished in america -- to transform a society to believe in itself again, which reagan did, and and this march toward socialism.

the reason was the british national health-care system. weightism gentleman, do not degeneration after -- ladies and gentlemen, do not be the generation that he gave up freedom. stay, and fight for freedom. thank you, the blessed. [applause] >> i am carol hunter, politics editor at the des moines register. our next speaker is representative ron paul, the congressman from texas. he is seeking the republican

nomination for the presidency. representative paul. >> thank you very much. [applause] thank you very much. i am glad you are out this morning. i was just wondering, how many will be in ames tomorrow? that was good. maybe we can get a few more of you to come as well. most people no white candidates are in iowa this week and what is going on tomorrow. it is delightful to be here and attending the fair. enjoying the weather as well having come from texas just recently. it is great to be here, but of course, the real thing that motivates me is the issues i think have been messed up in our country and that we have to change our way. we have to change our direction. the american people are pretty tired of what they are getting. they know there are serious problems. there is a lot of anger and frustration going on. a lot of unemployment.

somebody ought to come up with some answers. well, a few years back in the 1970's, i first ran for congress. i was concerned about what was happening then. i believed the stage was set for the proble we have today. it happened back in august of 1971. that was at the time that we decided that money did not matter. we could print the money. there should be nothing to back our currency. we could print the money and live happily ever after. that means that we believe as a people that if we could carry it our own moneywe could live and not have to work anymore. what did we end up with? a huge amount of debt. we owed $3 trillion to foreigners. our jobs have gone overseas. now we are deeply in debt and there is a debturden and they are very frustrated in waington, which makes it frustrating for the people across the country. a lot of people become dependent on the govnment. we are doing way too much. my simplest explanation of our

solution is we have to drastically shrink the size of our federal government. [applause] most people are starting to realize this. the big argument is where are we going to shrink it? people say, we need bipartisanship, comprise, and sacrifice. my argument is we have had too much bipartisanship. it is the bipartisanship that has endorsed all of our problems. if we elect republicans to shrink the size of government, they doubled the size of department of education and get us involved in a bunch of wars. we elect democrats to and the war's end the expand the wars. then we have republicans that expand the budget and demrats are doing the same thing. there is always this compromise. there are the big spending conservatives and big spending liberals they get together and they do not have to worry on the short run. but it always delay it. sure you can tax to a degree,

but there is a limit to how much you can tax. it can bar to a degree, but if you borrowed too much, interest rates go up. there is a magic answer to this. it is called keynesian economics. just print the money when you need it. that is what 1971 was about. no restraint on the monetary story. all our problems in the last 40 yearcame from the fact that the government has subsidized and taking care of by the printing press of money. right now, the american peoe are starting to realize it has a lot to do with our monery system. they know that prices go up when the value of the money goes down. they are not very happy about it. the standard of living goes down. people can make a little more money and the jets can go out, but if the money value goes down, that is one of the reasons people are very upset. people on retirent, people getting social security are

starting to recognize this. the tragedy here is that the production in this country is down. productive jobs have gone overseas because of this monetary system, over regulation, and over taxation. we chase our jobs overseas. in order to get capital back in, you got to have a strong currency and a tax code that invites our business is back rather than chasing them overseas. it is sad to me to think that in my lifetime we sell a point where there was a country called communist china evolve into being our banker. beer is something about that, and we should reverse that, but we have to endorse a very basic principle -- freedom and the constitution. [applause] since it was bipartisanshi that gotogether and spend all the money, how do you get out of this mess? how'd you get people to agree to cut spending? that is where the difficulty is.

there is no agreement in washington. what i have done is try to propose a way to get the two sides to come tother. an area we could most easily cut is what we spend overseas. we spend way too much overseas. we have an american empire overseas. we spent trillions of dollars. we are obligated to spend trillions of dollars taking care of the seriously wounded individuals coming back home, which we are obligated to do. we passed out all this foreign aid for national security. all of thi militarism does not help us. it does not make less secure. people will not vote against it because iyou vote against the military budget, not realizing all you ar doing is giving subsidies to the military industrial complex, they accuse you of being on american and not caring about the mility. i will tell you what, that is the way i have been voting and i am very proud of one thing --

during this campaign and the last campaign, our campaign always raised the most money from theilitary people more than all the other cdidates put together. [applause] having served in the military -- i was drafted in 1962. i was in the air force for five years. i understand what it is like to have a bad war going on and people being spent -- being sent around the world. we should be able to have a nonintervention for policy based on moral principle that you do not initiate wars, you do not fight unless it is constitutionally declared. there is a very simple answer as far as i am concerned about how to start off by saving a lot of money. that is stay at the business of the other countries, like our own business, and bring all our

troops home. [applause] that means the middle east, japan, germany, south korea, the whole works because if you do that one thing instantaneously, and the president's it does have the authority to move the troops around, if they are going to get paid all this money, let them spend the money here rather than in japan and germany. psychologically we will give a tremendous boost to our economy. but you got to change a lot more an that. you got to change the nature of what the people want. the appetite for big government has been around for a long time. there is a lot of blame to go around. he complained the president, congress, the philosophy of economic -- you can blame the president, congress, the philosophy of economic intervention.

congressmen have, over the years, voted for these things and got an reelected. government, very frequently d most likely, will reflect the attitude of the people. that is why im interested in changing the attitudes and understanding of the role of government. what should the role of government be? should it be to police the world and finance a welfare entitlement system, or should it be as the founders wanted and our constitution dictates tha the purpose of the constitution is to protect your personal liberty? [applause] liberty comes up to us in a national -- natural way. you should have the right to life and liberty. you ought to have the right to keep your own money. [applause] that would solve a lot of our problems. e other goal in my effort to

spread the message o liberty is that to have an understanding of liberty, we have to get this splitting up of what freedom is about into two branches. one says you can live your life as you please, which sounds like a good idea to me. the other says we want to run your life but allow you to spend your money as you please. what would be so bad to have a country that says you can live your life you please, run your life as he pleased, and spend your money as you please as well? [applause] but the correction has become not only with the change of our foreign policy. we have to deal with the moneta system because it is coming to an end. the financial markets are in shambles. th have been that way for several years and it will get much worse because we are trying to correct 40 years of mistakes. 40 years of debt accumulation

and investment. the one thing that is a little difficult to understand what is an important economic issue, if you have a pile of debt, in order to get growth again if you're spending all your money to pay interest, it does not work. that is what you do not bail out bad debt. that is what the bailouts were so bad. all the people who make all the money g your money and you got the bad economy. [applause] if an individual is bankrupt and has too many credit cards or two-minute cars and they lose their job or -- too many cars and they lose their job, they know they have to cut back, cut the credit cards, sell a couple of cars. once they get out of debt, they will be under control again. politically it is virtually impossible for the politicians to do that because there is always one groups saying do it because i want to keep what i

earn. there is another group saying no, you're going to cut my check. they are getting very angry. this is a worldwide phenomenon. it is not just the united states. it is because we did issue this funny money, this paper money. paper money never works. and never last, just for a short period of time. the real money has always been something with real vue, like gold and silver. we had the privilege of printing it, sending it overseas, buying this and services, living beyond our means, accumulating debt, allowing three trillion dollars in debt now. what did the foreigns do with the money? the loan it back to us. the u.s. treasury bills as the reserve. thatecame the gold standard. the worldwide phenomenon -- it will not last. that is why there are a shambles and the markets today. by next summer, you're going to have a lot more price inflation because all they have been doing in washington is spending and

inflating. we got into trouble because we were speing too much and regulating too much, taxing too much, and tningoo much money. they recognize we are in deep trouble and we have to do something about it, so they accelerated the spending, borrowing, the regulations, and the spending of money. and we wonder why things are not getting better. it would be logical to expect that if you try to treat a problem by doing more of the same, it is not going to work. all of this can be summarized by defending liberty. that is what america is all about -- liberty and freedom of choice. we had the largest middle-class in the wealthiest country in the world and we are losing it. the middle class has been shrinking significantly for 10 years. we are losing our jobs in this country, but this can all be reversed. it is not difficult. understand and respect where our

liberties, from in a natural, god given way, defend thatnd have confidence it does work, and also, what fits in so perfectly with this, all you have to do to achieve this is ask anybody that you vote for how serious are they and how consistent work day in defending the constitution. if we get back to the constitution, we are going to solve just about all of our political and economic problems. thank you very much. [applause] please welcome former gov. tim pawlenty. >> thank you very much. appreciate it. >> good afternoon. thanks for the opportunity to share a few thoughts about the future of our country but before i do that, i wanted to do is a

special guest, my wife mary, former first lady of minnesota. a big part of my campaign. i know she would like to share a few thoughts with you about the great state of iowa and this country. mary pawalenty -- pawlenty. >> thanks for being here. i know you're seeing one or two politicians along the way. we love the seeing eye was a fair and going to the minnesota state fair, of course. i would like to say thank you. i appreciate i was -- iowans. we have come to appreciate all engage you are and how people genuinely asked good questions of the candidates and doing the job you do so well cycle after cycle. it matters, obviously not only to iowa but it matters more broadly to our country and ultimately to the world. thank you for doing what you do best. i do want to say a couple of things about my husband who you will hear from in a moment and

hopefully you will get the opportunity to ask him some good and perhaps tough questions. but i want to tell you a little bit about who in it -- who he is. you all see and in this political arena but he and i have been married almost 24 years -- this september. two kids, anna going off to college this fall and mara who is 14 years old. i support my husband not only because i love him so much but also i support him with my head. i have watched him and tough times and good times and bad times. i have seen him throw it all, as all of you who have been in long-term relationships have. i know this is a person whose head and heart are generally -- genuinely connected. is someone who has his compass said. he is someone who, i think you got to know him, he is the kind of person who who you would want

as a neighbor. in a long-term friends and neighbors -- that you would know this is a person you would like to not only be your friend, somebody you would like to be alongside, but someone you can genuinely respect as a leader. i am confident that he is the person who has the best judgment and wisdom, character, strength, and experience to be the next president of the united states. ladies and gentlemen, again, my husband, tim pawlenty. >> love you, thanks. >> thanks a lot. i know you are out here to enjoy the fare and the weather and the food. i appreciate you coming by. i am just want to address one issue today -- jobs in the economy. and there are questions, i would be happy to take them. i know one issue facing iowa and our country is if people had access to jobs. if we had a chance to go around and ask each of you what matters to you the most, i think we would hear about your family, i

think you would hear about the importance of having housing and paying for your mortgage or the rent. i think you would hear about concerns about putting gas in your car. i think you would hear concerns about being able to pay for health care and down the list. all of those things and more. getting kids to college -- it requires money. for most iowans and most americans, the way to get money is to have a job. the best way to answer the question is what are those things that we can do to make it most likely that the jobs will grow in this country. because of you don't have access to a job, your life it's pretty tough in a hurry. you know that's the issue. we have had three years or so of president obama's direction and we have to step back and ask, how is it working? the answer is, not very well. with a crushing levels of unemployment in the country. nearly $4 a gallon gas. we have a federal government

that seems out of control and not capable of getting spending under control, and we have an economy it pointing toward instability and maybe a decline. it is not acceptable for america, not acceptable for iowa and reduces our ability for a better quality of life for citizens. we should talk to the people who provide jobs. 6 million people -- 6 million companies in the united states. 5.9 million of them have 500 employees or fewer. so, most of the jews in the economy is in small or medium- sized businesses. if you talk to the folks who want to either start or grow businesses will provide jobs, they tell you the same thing -- they say, the burden has gotten too heavy. the costs have gotten too high. they talk about taxes being too high. they talk about regulations being too heavy. they talk about regulation costs being too expensive. they talk about health care

costs going through the roof. and if we don't answer those concerns or address those concerns, we are not going to be about to provide the quality of life for our citizens that we want. i think what we do about that is turn to our government and say we want to take it back and getting -- get it in a better direction. i have the most specific, aggressive, bold as pro-jobs graph -- plan. number one, we've got to get the business tax rates from some of the most expensive in the world to more competitive so our companies can compete. currently are companies get taxed at 35%. we need to bring it down under my proposal to 15%. in exchange for that, clean out all the loopholes, credits, exemptions, as many as possible so a business possibility to compete depends on your ability to connect with customers and not your ability to get a lobbyist or buy off or influence

congress. a flat, symbol, tax rate. [applause] number two, most of our small businesses in this country and jobs providers pay their taxes on their own individual returns because of what is called a pass through entity. they don't pay the business or corporate tax rate but they pay it on the individual terms as a small business. i think it is important we do individual taxpayer relief as well. i am proposing to take the six tax rates down to two and had a simpler, flatter tax system, and it and limit taxation on interest, dividends, capital gains, an estate tax. then we called for an energy policy that is an american energy policy and not a middle east and energy policy. [applause] and then we need to fix health care reform the right way. look, if you like the approach president obama has taken on health care, vote for him.

but my experience, taking a problem and dragging it into washington and creating a top down system where you offer citizens one choice for a limited number of choices and then you regulate it and yet government employees staff and bureaucrats run it and you tax people more to pay for it, is not a good plan been in the long run it will not best serve our people. it will be financially insolvent in the next 15 years. we do have an out of control health care system but it has to be fixed the right way, like i did in minnesota. we have to have individuals who have skin in the game, with better information about quality and price. we have to pay providers just not for volume of procedures, but we've got to make sure they are actually getting paid for better health. then we got to let in on the regulations more broadly. a lot of business -- they say, yes or no if i need a permit but tell me quickly. so there is a whole proposal

about regulatory reform. i want to get to your questions, but i want to close with one overarching thought i think some of this whole debate. that is this -- if you think about what separates the united states of america from the rest of the world, it is not that we are the biggest country in population -- we are not. we are not the cheapest country in the world, although we do need to be more competitive. if we are not the biggest, and we are not the cheapest, what is it that has made us the most successful, exceptional nation the world has known? the answer is, we are the freest country in the world and when people are afraid they can do a number of things. they can dream as they see fit. they can invent, create, they can design. they can associate as they see fit. they can worship as they see fit. they can speak as they see fit -- like this german does. that freedom unleashes in the human potential the ability to say "i can do this. " it is fundamentally different

than most other cultures throughout the globe through most of time. when the government comes and say, you know what, we are going to take over, where they say we are going to make it more difficult, or they will tax it or regulates it or make it slower or discourage it, they not only run of their budget but they do something else that i think is equally or even more corrosive to the country, and that is, they weighed down the american spirit. they weighed down and discourage the american people. you have people all over the country who are discouraged and war. not because of themselves, not because they lost faith in their family or their church or neighborhood or community, but they lost faith in their government. they lost faith in their government. what is going on with that, people say barack obama had his chance. he came through iowa and other places and he said both for me, and he had great speeches and

rhetoric. the great speeches did not put gas in my car, great speeches to not pay your mortgage, great speeches does not pay your health care, great speeches does not buy your groceries. [applause] so, what we need to do is this -- tell barack obama that he had his chance. it's not working. and if you like the way the country is going, vote for him. but if you want to get this thing moving and grow jobs and gas prices down and get the federal government under control and get results -- not based on flapping your job and getting fancy speeches, it is getting it done like i did in minnesota. thank you. i'd be happy to take your questions. thanks a lot. all right, who's got a question? sir. >> we have been hearing a lot of candidates talking about jobs overseas, keeping them here at me