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tv   Capitol Hill Hearings  CSPAN  August 31, 2011 8:00pm-1:00am EDT

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[applause] [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> coming up next on c-span, the justice department announces a lawsuit to block the merger of at&t and t mobil. president obama talks about transportation bills awaiting passage in congress. and the united states chamber of cio hold a meeting on creating jobs. the justice department today about a civil antitrust lawsuit to block at&t's merger with t mobil. james cole called the proposed
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nomination "anti-competitive." this is a 10 and a portion. >> many of americans rely on telecommunications services and everyday lives. whether you are a parent to check up on your teenager are working professionally using a laptop or a smart frophone, wireless communication plays a vital and increasing role in our daily lives. we all reap the benefits of this incredible technology. there has been fierce competition in this industry which has brought all of us innovative and affordable products and services. in order to ensure that competition remains and that everyone including consumers, businesses, and the government continues to receive high
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quality, competitive pricing, and good mobile products and services, the department of justice today filed a lawsuit in the united states district court from washington, d.c. to block at&t's acquisition of team mobil. the department filed this lawsuit. we feel the combination of at&t and t mobile would result in tens of millions of consumers across the united states facing higher prices, fewer choices, and lower quality products for their mobile services. consumers across the country, including those in rural areas and those with lower incomes, have benefited from competition among the nation's wireless carriers. part together they from among the four remaining national carriers. this seeks to ensure that everyone can continue to reap
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the benefits of that competition. four nationwide providers account for more than 90% of the mobile wireless connections and america. reserving competition is crucial. at&t and t mobil currently compete head-to-head in 97 of the nation's largest 100 cellular market areas. they also complete -- compete nationwide to attract businesses and government customers. were the merger to proceed, there would only be three providers with a 90% of the market and competition of those off the market including price and innovation would be diminished. as can be seen in the complaint, at&t felt competitive pressure from t-mobile.
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an at&t employee saw that t- mobile was first to have the projects and their portfolio. we added them. this would combine two of the four largest competitors in the marketplace and would eliminate t-mobile from the market. one thing has not changed. the division will main steadfast to enforce the antitrust laws. that is what the apartment for did the department has done today. this has been seamless -- that is what the department has done today. this has been seamless. we are seeking to maintain a vibrant and competitive market
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place that allows everyone to benefit from lower prices, better quality, and innovative products. i want to express my deep gratitude for the efforts of so many members of the antitrust division staff who have tremendous expertise in this important industry. i want to thank you for your leadership in this effort. you have done the right thing for consumers. i would like to turn it over to our acting attorney who was a few words. >> thank you. thank you for your leadership and support on this case. this is an extremely vital industry with more than 300 smart phones, tablets, and other wireless devices today. the department of justice has a dividend experience in this
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industry, going as far back as the original breakup of at&t. we know this industry well inside and out. here they conducted an investigation. we conducted interviews. we read via a -- review millions of documents. anyway you look at this transaction, it is anticompetitive. our action today seeks to ensure that our nation enjoys a competitive wireless industry that it deserves. t-mobile has been an important source of competition. for example, t-mobile rolled up the first high-speed data network involving advanced technology and the first hand set using the android operating system. it is an important source of price competition. unless this merger is blocked,
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competition and innovation in the mobile wireless markets in the form of wireless handsets, operating systems and calling plans will be diminished and consumers will suffer. t-mobile competes with other national providers to attract individual consumers and government customers for telecommunications services. they compete on price, planned structure, a network coverage, quality, devices, and operating systems. the combination would eliminate the price competition and innovation. it would reduce the number of nationwide competitors in the marketplace from four to three. eliminating this aggressive competitor that offers low pricing and innovative products would hurt consumers, businesses, and government customers that rely on a
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competitive marketplace to provide them with the best products and best prices. our goal is to preserve price competition and innovation in this industry. i want to thank the deputies for their expertise in council and i want to especially recognized the telecommunications staff led by many others in the division for their tireless work on this important matter. consumers and businesses around the country zero you a great deal of thanks. we also want to thank our partners and law enforcement including the federal communications commission and the state attorney general who have assisted a partner with us. >> also today, president obama
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called on congress to pass a clean extension of the bills. both bills are set to expire in september unless congress renewed the legislation. joining president obama is raymond lahood and david dhevrin. this is 10 minutes. >> please, have a seat. i want to say a few words about an issue thousands of american workers as well as millions of those on the road. at the end of september, if congress does not act, the transportation bill will expire. this bill provides funding for highway construction, mass transit systems, and other projects.
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for construction markers, it represents the difference between making and meat are not making ends meet. if we allow this to expire, over 4000 workers will be immediately furloughed without pay. if it is delayed for just 10 days, it will lose nearly $1 billion in highway funding, money we can never get back. if it is delayed even longer, almost 1 million workers killed as their jobs or the course of a year. that includes some of the folks behind me. there with the federal highway administration. if we do not extend this, all of them will be out of a job.
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that is just because of politics in washington. that is not acceptable. that is inexcusable. they have been the hardest hit. it is inexcusable to cut off necessary investments at a time when some of our highways are choked with congestion, some of our bridges are in need of repair and so many commuters rely on a public transit. the cost businesses billions of dollars every year. if this story sounds a mayor, that is because we have heard it before. a few weeks ago, connors refused to act on another bill, is typically a routine bill that would have ended up, pulling thousands of aviation workers off the job and allowing improvement projects across the
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country. when congress got their act together, the only funded the faa until september 16. when they come back next month, not only did they need to pass the transportation bill but they have to pass a clean extension of the faa bill. it is longer this time and it just back pay for the workers that were laid off during the last shot down. at a time when a lot of people in washington are talking about creating jobs, it is time to stop the political gamesmanship that can cost as hundreds of thousands of jobs. this should not be a democratic or republican issue. this transportation bill has been renewed seven times in the last two years alone. that is why raymond lahood, a republican, is with me today along with david from the chamber of commerce. also rich, tow organizations
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that do not always see eye to eye. they agree on how important it is for our economy that congress act now. i am calling on congress as soon as they come back to pass a clean extension of the surface transportation bill along with a clean extension of the faa bill to give workers and communities the confidence that construction projects will not come to a halt. i propose we reform the way transportation money is invested to give states more control of the projects that are right for them and to make sure we're getting better results on the money we spent. we need to stop funding projects based on his district in is our funding them based on how much could they will be doing for the american people. no more bridges to know where. no more projects better simply funded because somebody is pulling strings. we need to do this all in a way
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to get the private sector more involved. it is how we're going to put construction workers back to work doing the work american need done, not just to boost our economy this year but for the next 20 years. finally, in keeping with the recommendation for my jobs council, it today and directing certain agencies to identify high priority infrastructure projects that can put people back to work. these projects are already funded. we can expedite the decisions necessary to get construction under way more quickly while still protecting safety, public health, and the environment. tomorrow in dallas, my jobs council will meet with local business owners and other folks about what we have done so far to rebuild our infrastructure and what we can do to make sure that america is moving faster and getting people back to work. that is what we're going to need
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to do in the short term. keep the people on the job. the key projects moving forward. fund projects that are moving forward. if we are on is, all we know that when it comes to our nation's infrastructure, -- if we're honest, we all know that when it comes our nation's infrastructure we should not be playing catch-up. we should be leading the world. 10 years ago, we were ranked sixth globally. today it is 23rd. we invest half as much an hour and a structure as we did 50 years ago. more than 1.5 the number of people. everyone can see the consequences. that is unacceptable for a nation that has always dreamed big. from transcontinental railroads to the highway system. it is unacceptable in countries like china are building a high- speed rail networks and building new networks one construction
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orders that could be doing the same thing are unemployed right here in america. but congress is back next week, in addition to passing these extensions to prevent any halt on existing war, we will have to have a serious conversation about making real and lasting investment and our infrastructure from reports too smart for electric grids, high- speed internet, to high-speed rail. at a time when interest rates are low and workers are unemployed, the best time to make those investments is right now. not once another levy fails or another bridge falls. right now is when we need to be making these decisions. now is the time for congress to extend the transportation bill, keep our workers on the job. now is the time to put our country before party and to give certainty to the people who were just trying to get by. there is work to be done. there are workers ready to do
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it. that is why i expect congress to act immediately. to all the folks who are here in the state, thank you for the outstanding work you are doing to maintain our nation's infrastructure. thank you very much everybody. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> hours after the president's request to speak to a joint session, john boehner urged him
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to move it to the next night, citing the need to conduct a security sweep. next wednesday is the day that both congressional chambers are back in session. it is the scheduled date for debate between republican presidential candidates. on tomorrows "washington journal" two members of the commission on the war on iraq and afghanistan. a look at efforts to stop medicare fraud. lewis morris. we will talk to the head of the weather network agency. "washington journal" at 7:00 a.m. eastern on c-span. >> he is a partisan guy. he wants to unite people. all the problems of the air you
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could get from this guy and why we could not elect him. it is the same reason why we went to war. they cannot be resolved. >> he was running against the great military hero dwight eisenhower. i do not really think there is any way that's adlai stevenson could have won. >> he paved the way for franklin roosevelt. there are forcing people in this series, many of comb the may never have heard of. all of them i can guarantee they will find interesting or fascinating and certainly surprising. >> history professor gene baker and richard norton smith talk
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about the 40 men who ran for president friday at 8:00 p.m. eastern. it is a preview for "the contenders" a 14 week series on c-span. this holiday weekend on american history television, the name conjures elegant and grandeur. during world war ii, the queen mary was commissioned as a troop ship. the integration of baseball by african-americans, women, and asians. on covering up 911 from president bush's florida trip and the pentagon. look for the complete we can schedule at c- span.org/history. >> the u.s. chamber of commerce
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president said the u.s. is not enough to address unemployment. he spoke yesterday. up next, we will show you an hour of that briefing. >> good morning, everybody. welcome to the chamber's enable labor day briefing and we are looking for it to hearing from martin regalia, our chief economist, and randy johnson. before that, tom donohue, the president and ceo, has remarks to make and then he will take a few questions before he has to run to another appointment. >> thank you, tom, and thank
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you, marty. we look forward to your latest economic forecast and your assessment of the state of the economy. as you know, marty is one of the best in the business. pleat -- speaks plain english. for an economist, it is a rare skill. it may not agree with him all the time but at least you understand what he is talking about. we will hear from randy johnson. as tom said, randy gets to deal with the easy issues like health care and labor relations and all of the topics where parties seem to agree all the time. i will be very interested to hear what he has to say about the three new regulations issued to the nlrb as the chairman made her way out the door. and they will be very interesting. their presentations, i hope, will help create some useful context to the major economic debates that are now re-gaining momentum as people come back from their holiday. in the coming days, everybody and their uncle will be offering a jobs plan, and that is a good thing, because that is where the focus needs to be -- on
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jobs. we are not going to be able to deal with the other challenges we face if we don't start putting people back to work, to take them off the public payroll and have them paying taxes and driving economic confidence. at the chamber, we have been intensely focused on jobs since the outbreak of the financial crisis. just look at the front of the building. we have been talking about it for a long time. so, we want to share some ideas from the institutions that actually create jobs and opportunity, the american business community. the most immediate priority facing our nation is to create jobs for some 25 million americans who are either unemployed, underemployed, had given up looking, or are new entrants -- graduating from college, leaving high school, where a lot of hope for the
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future and trying to get into the workforce. to do so, we need policies that promote and sustain strong critique and the growth. we need to address the extraordinary fiscal and competitive challenges that are smothering growth and driving away jobs. but at the same time, we must also address the immediate need for jobs now today, for those 25 million americans. we need action now, not next month or >> dear or after next election. we need it now. so, the u.s. chamber is currently finalizing a letter to the president, to the congress, to the public with specific, practical steps that we can take to help quickly create millions of new jobs without increasing the deficit.
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because a lot of the systems and plans you are going to hear are going to cost more money than we will put back into the system. let me give you a very short preview of some of our ideas which, for the purpose of today, falling to six baskets. the first basket and perhaps the easiest is trade. we need to push the pedal to the metal ended the three pending free-trade agreement with colombia, south korea, and panama, completed. i have been saying for a long time that by doing that, we would save 380,000 american jobs. which would otherwise go to our competitors. as you know, canada has an agreement with colombia now and the eu has a big agreement with korea. i hope we would say that many jobs because i know those people are picking up business we are losing. the south korean deal alone, i am told, would create 280,000 jobs for americans in the near -- very near future. another idea on trade you don't
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hear much about. under the executive authority, the administration could enact nearly all of its proposed export control reforms without legislation. by the way, they have been working on them for three years. there is a lot of agreement on doing it, so, if we go out and sell these things that you could otherwise by on a street corner and europe, one study says we could create as many as 340,000 jobs by increasing the number of products we can export without compromising national security. that a lot of jobs. the second area is energy. we can create literally millions of new american jobs if we simply develop our own abundance and its resources on federal lands, offshore, and on private land. of those resources are primarily oil and gas. we can do so in an environmentally responsible way, generating economic growth, job creation, and government revenues, while reducing our alliance on foreign sources. we can also create jobs by building more energy
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infrastructure. for example, we have all heard the argument about the keystone pipeline connecting alberta, canada, to u.s. refineries in texas. i have been very encouraged to hear that the administration is moving in a positive way there. but we need to do this because we can create 250,000 american jobs in a big hurry, and investments in the united states of more than $20 billion and government revenues of about half a billion dollars a year. this is a sure thing. we will, in our letter, outlined four or five more of these. and if you add them up you are talking about millions of jobs without spending money -- only giving the go-ahead to do what needs to be done. the third bucket is
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infrastructure. i am very pleased to be talking about infrastructure right now. david, the chief operating officer, is over at the white house with the president that a discussion on infrastructure. and tomorrow i will go to dallas to join the president's council on jobs and competitiveness to talk about this. what do we need. it is simple. we need a highway bill. and we can't cut the size of it. it pays for primarily from user fees. we need an faa bill and we need a water bill because this is a complicated issue. if you don't have them, then you lose the jobs you have today. if you do get them and we keep pushing forward on it, we can create jobs that we need tomorrow. an estimated $250 billion is sitting around in a global private investment firms that would like to invest in our infrastructure because they have
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a sure way of being paid. we have seen it happen in individual states and we are very anxious that we move forward on this and a big-time way. because the people who get these jobs are the people, many of them would otherwise be working in a housing industry that doesn't exist. we can create probably 1.5 million to 2 million jobs over the next period of time. and i hope to talk more about this tomorrow in dallas. the fourth issue, or the fourth basket, is travel and tourism. no, we have about 7.4 million people in the united states who are employed in the travel and tourism business. if we could simply go back to the 2000 level of bringing people into the united states, we could create another 1.3 million american jobs. look, there are issues, there are national security and border security issues, but people are not very welcome when they come here. folks go from canada, do you, who would normally go to the
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united states, are going to other places because we did not treat them very well. we could do more things about spending money to get more people to come here and bring their cash. the fifth issue is regulatory relief. if there was ever a time and our nation's history where we should say, hold on a minute, we are putting out regulations as best as you can count them. look at that thing back -- things that came out of the nlrb yesterday, look at the things people are talking about coming out of the epa. we think it is time for the nation -- that we should take a breath. we need to be very careful when we look at what regulations we will put in place. the administration should immediately issued an executive order directing agencies not to issue any discretionary regulations that would have a substantial economic impact until the economy improves.
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by the way, you hear all of the discussions in today's news about the billion dollar and above regulatory issues. there are tons of them. maybe they are important. but if they are not life- threatening issues, we are told of them off for a while. now is not the time for a slew of new regulations that kill jobs. now is the time to create jobs. finally, let me say a word on taxes. we need a tax reform and an entitlement reform program. you know, we have written to congress. we think when the 12 apostles get themselves together and start doing this, we really need to look at those issues. we can't do that in the short term. we can do it quickly but we can't do it right now. but there are some tax things we can do right now. i would just mention one. we need to think if we could have a tax holiday and let
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companies bring some of the money they have already earned -- because, you know, we are the only country that pays double taxes. the corporations do when they earn it overseas, they pay in there and pay it here, so they leave the money over there. if we had a tax holiday and lower the number significantly -- they will not bring it all home because a lot of their future business is overseas, where 95% of the world customers are -- but they will bring a lot of the home and put it into the system. by reducing the rate for a specific period for these profits earned overseas, u.s. multinationals could bring as much as $1 trillion back here. i don't know if they would but a good number. a new study suggests this move could create 2.9 million jobs over a two-year implementation period. i don't know if it is that many. but 30 percent of it is worth doing. and there is nothing lost. there is no cost. you are going to pay less taxes
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on it. but you are not getting any taxes on it right now. so, let me conclude. these are a few of our ideas. our letter to the president and congress will contain more details on all of them. our job plan will be accompanied by a massive mobilization of our underlying membership of 3 million companies and our grass-roots army. we are encouraging them to tell our elected officials how our plan will create jobs in their communities and to share their own ideas of other things that ought to be thought about that will get jobs there in a hurry. this will be our underlying focus for as long as it takes to get our economy moving again and put people back to work. our jobs plan doesn't of salt us from the responsibilities to tackle the other -- doesn't absolve us from the response below these to tackle other issues like the tax code and entitlements, and a whole basket of issues.
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the point is we need to act on all of this now. we need to get moving, and we need leadership in the business community, it in the congress, and the administration. some would say, we have heard all of these ideas before. the answer is, yes, you have. not been as many details, not in a simple, "here's how you do it" list. the reason why you are hearing them again is they have not done a damn thing about it. we will keep pressing the point is until our government leaders start moving on them. there will be questions of how quickly these ideas could work. we believe they could start working in very short order. look, there is no magic wands. if you are looking for a miracle, go to church. we are not getting away miracles. if you are looking for practical ideas that could start
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the process of recovering the millions of jobs we lost since 2007, then start these things right now. now, one thing is for certain. if we do nothing, if we sit on our hands, if we wait for things to improve, if we go ahead and try to spend more money to try to make this work, we won't create the jobs we desperately need. we will continue to fall further behind. so, the chamber is committed to bringing -- being the leader in trying to push this particular plan. we look forward to other people's plans, but this one doesn't cost. this one is stuff we can do with the authority of the congress and the authority of the administration. we are committed to working with all parties to ensure america remains not only the greatest economic power on earth, but the greatest country on earth,
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and we better get about it because right now we are losing some of our attraction. i thank you very much. i think when you talk to marty and you talk to randy, you will see why we are making these proposals. we are focusing very clearly on what is going on in the economy and what we can do to help, and we are focusing very, very clearly, with a sharper focus than we have had an eye long time, on what is going on on the labor side and health care and other matters, all of which add to the cost side. what we are talking about, starting this morning, is how we add to the job site. thank you very much. i have to go and do another thing but if you have a couple of questions i will take in. one rule, you have to tell me who you are and who you represent. we will start with you because you got up real fast. >> thank you very much. my name is dan hancock, i write for "inside u.s. trade. could you have been clear calling for a free-trade agreement to come forth and be submitted to congress.
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given the current atmosphere in congress, what makes you think they can work together on that issue specifically questioned do you have specific -- >> i think it is very clear there is a commitment to work together on the trade it in great -- agreements. they are looking at the numbers fading away. they held them off, both parties, while they were trying to avoid the debt default. everybody agreed as soon as we come back in september we will send them up. it is not only the trade agreement but the trade adjustment assistance and they have to figure out the sequence of voting. i think everybody is ready to do it. if they don't do it, not only would we lose and not the -- a lot of jobs, not only losing the position of responsibility and the americas, but we will lose some position in the world and it would be a very sad day if we walk away from these deals and others would step in our place. they already are.
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do you's business with korea went up 13% and the first 17 days -- the eu's business with korea. >> you said all the details have -- have not been worked out. is there a reason you are confident? >> yes. it is only a sequence -- who goes first, second. look, the urgency of this deal was significant when they all agreed to wait until they came back in september. today it is very significant. we are losing jobs every day. we've got to get off our butt and do this deal. a couple of more -- a couple more. blue shirt. i will keep coming this way. >> who is -- eric martin, bloomberg news. at this point, who is presenting the greatest resistance to a tax holiday, are, but is divided -- our company is divided? >> i don't see a lot of resistance. we are saying, look, if he did
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this, you will put a lot of money in play. if you put a lot of money in play -- and it does not have to come from the government -- some of it -- they claim, last time they gave out dividends and they didn't start new jobs. what do you think people did with the dividends? they went to the store, they bought a car, they pushed the economy. so, i don't want to get in that argument. we are just saying this is one of the things you could do. you could do it by the stroke of a couple of pans. and i think people might find it useful. right here. right behind you.
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>> jason from reuters. you said about $250 billion is waiting to be invested into it and the structure by private firms and that public spending is not the answer. >> i didn't say that. the public spending that we get, money from the user fees, should not be cut. all three of the bills are languishing and we are getting short term issues -- they don't get the six-year bill. those in the state and local communities, they will not put their money out when they did not know if the government will be in for three months or whatever. that part of the federal money has to go. we support and infrastructure bank. i don't care how you do it. but there is lots of private money there. people found investing in infrastructure is a good idea but they are not going to do it unless there are some programs. >> that was the second part of the questions, regarding the infrastructure bank. the ec much chance of support for that from republicans in
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congress? >> i think it could be done if we did the other stuff. if there was movement. and if everybody saw this would create a lot of jobs. this does not require a good deal of federal money, if any. i can't do a lot of these because these guys have got to do their things. which one do you want me to take? all right, good. >> ken hoover. in order to get a highway bill that is of sufficient size, do you think the gasoline tax needs to be increased or is there another way to get the revenue? >> there are three numbers. there is the current highway bill, which some people in congress want to cut back 30%. that is categorically stupid idea. there are some people who think we can do sufficiently with the amount of money we are now spending. that certainly would keep a lot of people employed and might give us a chance, if it were a
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long term bill, to attract some private equity. my own view is, before this is over -- in no, i don't know wind -- it has been 18 years since -- i don't know when -- it has been 18 years since we increase the federal fuel tax, and we are getting more miles per gallon and then so we are doing less with the money we have, so you can make your own conclusions. so, i thank you very much. you will really enjoy this. if anybody was to track down later. it is all yours. thank you. >> thank you all very much. i think i am going to go first and lay some ground work on the economy and then randy is going to finish up with some of the issues specifically in the labor
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markets. when you look at the economy today, we see an economy that has, based on the most recent data, gone through a much deeper downturn and come out of it in a much more tepid fashion than we originally thought. some interesting -- you can draw some interesting conclusions from that. one is that perhaps the stimulus bill, the much maligned stimulus bill, might -- actually might have had a little more impact than people thought because what you see is an economy the first year so grew at 3.3, 3.4%, and then as the stimulus package wanes and expired, use of the economy drifts down a little bit. part of the most recent downturn in the first part of this year was it did to natural disasters, floods in the
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midwest, earthquakes in japan, nuclear meltdown, and a spike in oil prices, all of which have run their course and now are starting to pass behind us. so, it gives us a little hope going down the road that we can re accelerate -- re-accelerate the second half of this year back to 2% or 2.5% growth. the problem in the long run, jobs, the labor day discussion, is the growth simply is not fast enough. when you look at an economy -- and this shows the economy relative to the long run potential -- you see it drops below the potential during economic downturns and then it comes back. and generally it comes back fairly quickly. even back in 1974 or 1975 or 1982 when we had long lived economic downturns that were relatively steep by historical standards, we still got back fairly quickly.
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we did because we grew very quickly and recessions and recoveries since 1991, even though in many cases they were mild recessions -- the 1991 and the 2001 recessions were quite mild -- we did not get back very quickly, we did not grow very quickly. and this goes back at least 60 years. kennedy asked arthur oak, his then chief economist or chairman of council of economic advisers, to exploit -- explore this, and he looked at the relationship which later came to be called his law, relationship between growth and unemployment. how quickly have to grow to get unemployment back. back in those days, 3% to get 1% drop in the unemployment rate.
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now it is about two-one ratio. what it means is if you want to get back to your potential rate of growth, if you want to get back to your long run unemployment rate, you got to grow above your potential rate of gdp. we would have to grow at about 4.5% to 5% for two to three years to get unemployment the wind down from 9% to but 6% level or above 5.5% level that most economists believe is a full employment level. nothing is new here. i hear again and again about the disassociation between growth and jobs. there is no disassociation between growth and jobs. ok? the problem is, we don't have enough growth and if you don't grow at or above the long tube -- long-term potential rate of growth you don't create jobs. we put a chart together an updated with the most recent data, it shows coming out of the downturns prior to 1982, we grew very rapidly in the first year and even the first two
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years, well above our long-run rate of potential rate of growth. and we put people back to work fairly quickly. but in the most recent recessions and recoveries, we grow much more weekly -- weakly. first year, a little over 3%. the first two years, down to about 2.5% rate of growth, which is just about our long run rate of potential gdp growth. what does that mean? the way we define these measures, our long run potential, or the not accelerating inflationary rate of unemployment, how fast the economy can grow and employ all the new entrants into the workforce. that is kind of your potential. that is estimated now to be
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somewhere around 2.5%. so, if we grow 2.5% you create enough jobs to employ all the new entrants. maybe 1 million or 1.2 million a year. something in that nature did you grow faster than that you start to make up the slack that he created during the downturn did you grow slower, you create more slack. we are going to ask later on, what is your forecast for friday on the jobs number, and it is like 75,000. why that? 75,000 times 12 generates 900- something thousand, and that is about the new entrants, and if you are growing at just about your long run potential which estimate to be around 2.25% to 2.5%, then the numbers all fit. i realize it is not real scientific but it is at the front -- the way most people really do for testing. you could build a 300 as equation model to tell you what
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i just did in a couple of sentences but you will not get much more in a way of at received from that than my kind of back of the envelope, straight line roller approach. we are not growing fast enough. we have to get the economy growing faster if you want to create the jobs. when you look at the component told in that bag -- 77% of the economy is consumption. we are not seeing a lot of it. consumption is not something that is hard to explain. it is one of the few things in economics where we actually put together a mathematical -- mathematical relationships that do pretty darn well not only explain the past but what it ought to be in the future. the two biggest components are always income and wealth. if you look at this graph, incomes have come back a little bit -- generating a little, by hook and by crook. not creating a whole lot of jobs. there is some real wage growth. and we are also doing it with tax cuts and reduced taxes and things like payroll taxes and the like, all of this which contribute to disposable income and in turn drives consumption. every additional dollar of disposable income drives about
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65 cents spending. the other big component as well -- and that -- is well. that is where the shortfall is. we've made about 8 back in the stock market mostly. the other big asset on most people's balance sheets, their homes, have not contributed. so, when we look at housing and i look at housing, it is really two questions. one is, how many worked in housing and how much income could degenerate building and selling more homes. but the other factor is, when you get the housing market settled out and you underpin those housing prices and actually start to see price appreciation again, you start to get the welfare no. and that is the more profound impact on housing of the economy today. it is not what you can do with building more homes and building new appliances, which is important.
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this is fundamentally important. that affects 12% of the economy or so. this affects 70% of the economy. and we lost a ton of net worth, and where we have to make it back is and assets. there is no other assets that is going to step up and take over for the house, the home, in the average american's portfolio. 60% of americans, 67 prison sign on their own homes and in most cases they see the -- 60 percent -- 68% of americans, 67% of holmes's and most cases they have seen the value drop. it is a hard market to fix when you have imbedded losses in the home. a you have millions of people who have homes where the mortgage is valued hired and the underlying home, negative equity situations. negative equity situations are almost impossible to address without somebody taking a loss -- either the government has to make a loss to make good on these things, in which case we add to the deficit significantly, or the individuals will hold those loans, namely the banking system, will take a loss.
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nobody is anxious to take a loss so everybody kind of dragging their feet. on the one hand, nobody wants to -- wants to throw people out of their homes and go through the expense of foreclosure and then have to turn around and hold the property on your books at a depressed value. it has a negative impact on capital. if you could keep the people in their homes and talked about up a little bit the ultimate loss is a little bit less. everybody kind of drag their feet. when you drag your feet of these things you don't get equilibrium in the market, and when you don't get the market selling out you don't get them coming back. you can look at the various markets around the country and see where it has worked out. in the places where there was not a lot of overbuilding and
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overcapacity, we have seen house prices firm -- upper midwest and places like that. but in areas where there is a lot of over-building and a lot of current that vacant homes for sale, that is whether prices are most depressed. places like las vegas, and to a lesser extent southern california, the phoenix area, around atlanta and down on to seven florida. those places that were highly speculative. it is going to take some time. the economy will not get back to above potential performance, consistently above potential performance, until we see the housing market bottomed out and start to come back. i think that is the key. unfortunately there is not a whole lot of policy that can be devoted to that that does not get prohibitively expensive and at the same time takes a lot of winners or losers.
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because the people who stayed in and continued to make their payments on their homes even though in some cases they have negative equity, two of such people are my son and daughter- in-law who live in detroit -- they continue to make those payments. they view them as rental payments as well because there is not any capital appreciation. but it is unfair to people like that to sit there and turn around and say, the guy across the street stop paying a year- and-a-half ago so we will step in and make good on his negative equity. it is a very difficult problem to dress and a very expensive one and in the and something the market will have to sort through and it will sort through overtime. we have seen that short sales are up and more of those are taking place. we have seen that the foreclosure numbers are continuing to gradually eat away at this sector of the market that is still not performing. and it is making headway. we are not building any more new
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homes so we are working that supply back in. it is just taking a long time. one of the reasons why the economy has underperformed. investment -- we saw a couple of investment incentives. investment incentives work break -- great. they're robbing peter to pay paul, they shift the investment over time but they did not generate net new investment. if you have a long-term policy, long-term tax policy that decreases the cost of capital and increases the rate of return on investment than you will see some fundamental change in long- term investment. but just providing a temporary tax credit, it moves it from next month into this month or next quarter into this quarter -- which is what happened. a big spurt in investment, which is highly and more -- at normal. big consumption drives and the door down and businesses produce and hires more people advise new equipment. this time we had virtually no demand but we were able to trick anybody into investing up- front. however, those policies have a tendency to run their course and without any demand behind them to keep businesses investing, the investment spurts, and in biblical sense, like the cd who falls on the ground and sports of quickly and dies.
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a big surge of investment for a couple of quarters and now very much a lower rate. we still expect to see a% to 10% on growth in that area. -- 8% to 20%. but it will not pull out the economy. generally speaking it kicks in in the middle of the cycle, to give you a little bit to get towards the end. it is not something you can depend upon to drive the cycle. you look at the trade side, and with the dollar very weak -- talking about tourism, a great time to come to the united states but not a great time if you want to visit europe. the situation is the terms of trade have shifted in our favor, continue to shift in our favor, and helping to make our goods more competitive over time.
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so, it is a shame when you look at the trade agreements and the like sitting on the table, that we are not doing it. with our weak dollar, now it is the time you can make an impact. we got the terms of trade, the pricing mechanism working in your favor and you have this artificial obstacle in selling and penetrating the market. this is when you want to make hay, when you want to get in there because you got a leg up. we are really kind of squandering a great opportunity not to take advantage of these weaker dollars in our ability to trade around the world. the other thing is growth of around the world -- you know, in order to drive an economy with trade, especially a large economy like ours, you need the terms of trade in your favor, a competitive advantage, and you also need growth abroad. the problem is the areas we have seen growth, like china and india, are not places where we have large penetrations of exports. we export more to western europe, to canada, to mexico. those areas, while not doing terribly bad, are not the primary areas of growth of
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around the world. if we could penetrate the chinese market to a greater extent and india, these would provide a growing markets for us to sell into rather than some of the other markets which are not stagnating, but are much steadier and the rates of growth have been much steadier. now we are seeing issues in europe with the european debt situation route -- slowing the growth in europe and providing less of the potential to sell into. trade is helping but it is not going to be the great driver. it is much more of a neutral as you look at the components of the forecast. summarizing the forecast quickly. consumption, 70% of the economy. we expected to get back around 2%, 1.4% gdp growth. picking up 10% growth in investment of 10% of the economy, so you picked up about one gdp point. trade is a wash.
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looking at 2% to 2.5% as to what you can achieve with your grove, kind of the base forecast, and then you kind of work off some of the more marginal issues to drive it up a little bit or down at little bit. "at is why i don't see getting back much above 2% or 2.25%. where do you get it -- get it from? when house of -- housing comeback more, consumption will be back more -- up to 3% or 3.5%. business and the tories are low, you will see businesses invest more which will give you more out of the investment side. the forecast is and it's in pieces. right now, what we are seeing is very tepid growth across the front. what does it mean for the labor market? we lost 8.5 million jobs. we put back 1.5 million or a little more. we've still had 6.75 million in terms of jobs. you've got the situation where
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the marginally attached workers, in that neighborhood of 2.5 million -- it would normally be 1.2 million, so you have 1.2 million you have to replace. part-time for economic reasons, meaning they want a full-time job but there are not full-time, meaning they want a full-time job but there are not full-time jobs out there, that number is 8.5. it is down from 9.5. it is a good thing. but 8.5 is 4 million higher than the norm. which is about 4.5 million. so you add this together and you need about 13 million jobs to replace what you lost and get back to where you work. -- were. then you add a million every year. the next 10 years you get that is where you get to the numbers tom talked about all the the next 10 years -- 23, 24, 25 million jobs. we have never grown fast enough year.
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it is probably the case of this time around we will not be able to grow for 10 or 12 years straight and generate those kinds of jobs this time around, either. it is important to make hay while we can and that is what this economy is not going. it is just not growing fast enough to generate these jobs. if you focus on creating jobs and not focus on creating growth, you are not going to be successful. it just doesn't work that way. you can create growth without jobs because you have productivity improvements. but you can't create jobs without growth because of the growth has got to be fast enough to outstrip the productivity improvements of the businesses can't meet demand just with productivity increases and therefore they have to hire. that is what drives the hiring process.
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everyone says, when will businesses hire? when they don't meet demand. when they are losing customers to the cost -- competition because they are not producing enough. right now they are more than meeting the demand with their existing work force. that is why the productivity numbers are going up even while gdp numbers are going down. that is what we need. it is going to take some time because, as i said, and to stop -- 2% to 2.5% growth you generate a million jobs a year would just provides enough for the new entrants and you have something in the neighborhood of 13 million you have to work off. we need to 0.5 million to 3 million a year for a good four or five years to get the process going. that does not get you back to way ahead of where we are right now and we are not doing even that. so, i am going to stop there because i wanted to focus on the short run and the labor market. we have some longer run issues that we know are out there. we have a deficit and debt problem that the congress is calling to be focusing on of the next couple of months it -- hopefully -- and hopefully we
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will be productive coming to some sort of resolution on how to begin to address that problem. we also have a situation with the fed and the monetary policy issues. we have heard recently from mr. bernanke and a light of the question is, are we going to get qe2. think it will matter because saw it is something very focused and in turn shoring up the stock market but very little impact on overall gdp growth. and the money supply, by the way. you talk about that people are worried the fed at's policy will be inflationary but it can't be if it does not affect the money supply. the reserve position most primarily affected was the excess reserve position. what it means is the banks held these as idle cash reserves and not put them into loans or
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money supply increases, therefore it will not be inflationary but it did not in fact help gdp growth that much. i do not think the fed will continue because their intent, i believe, was to shore up the banking system. i think it was a successful approach. i think they let everybody sit blissfully in their ignorance because what they were doing was re-liquefying the banking system and at the same time providing the banking system a ready supply of profits because they paid a positive margin on the borrowing versus the reserves bread. -- reserve spread. it pumped capital and retained earnings in the banking system. i don't think they will do it again because i don't think the banking system needs of the help. it is the economy that needs help now. what they are going to try to do is try to figure out ways to get the banks to begin lending out more of the excess reserves,
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which will have the impact on the money-supply and gdp growth. i think they will be fairly judicious. and i do not think it will be a the next year or year and a half. i will stop there and turn it over to randy. >> thanks, marty. in view of the time constraints i would like to direct you to the material in your press packets, an overview of our activities in health care and pension area, and the long list of regulations in the pipeline the chamber is working on, along with a letter to the chairman to -- providing a overview of everything going on with the national labor relations board. i will touch on it today but it is a little too complicated to draw down in detail. marty provided the macro overview and i provide the microbe. -- micro-focus on the workplace. i do that because there is a story to tell with facts and figures, but often the union's
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views labor day not just to talk about their agenda, frankly, but also an opportunity to go after and lawyers, often in an unfair way, in my view. i want to direct your attention to the fact sheet on workplace benefits. it is true, it is tough times, tough for employees, particularly those who lost their jobs, but employers also. we are still in a situation where employers are providing american something close to -- health care, close to 170 million americans, providing some storm of pension benefits, whether defined contributions or benefits to well over 100 million americans, they're spending upwards of a trillion in wages and compensation. something like $1.50 trillion in benefits. that is in today's economy. looking back even a year when the economy was arguably in a worse situation. i just want to say for the
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record that employers are trying to do the best they can for employees in these tough economic times. that is a story that often gets lost and labor day that the unions often coincidently don't bring up. i also want to mention, and frankly, i have been surprised -- surveys have shown repeatedly high level of satisfaction of employees and the work fit -- workplace. one came out may 31. 87.5% of those employed surveyed expressed between high satisfaction and a fairly high level of satisfaction with their jobs. the poll noted it was down from 89.4%. but still, 2% drop. i think it's given our economic times, a rate around 87% is worth noting. a survey by the university of chicago national opinion research center came in at about 86% of very satisfied or moderately satisfied. i think it belies some of the claims by many that employers
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are cutting corners without reason, that they are insensitive to the needs of their employees. employers need their employees to compete, and they are well aware of that. a quote on healthcare it -- i just want to mention, 80% of -- 88% of those with employer coverage -- the lucky ones with employer coverage -- they say their overall experiences with the current plan have been positive, including 42% very positive. one out of tens saying the overall experience was negative. this was a recent survey and it goes to the fact that employers what are trying to provide quality health care to employees. they are not just simply raising premiums and cutting benefits but exploring creative ideas like well as programs. -- wellness programs.
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it's talking about the nlrb later -- you will hear and the next couple of days, we need to change the rules of vote road of the board even though they have been there since the 1940's, but we need to change the rules of the road because the rate of unionization has fallen. employers are no longer the employers of 1912 and made famous in "the jungle" but fairly decent men and women trying to run a business and they treat their employees fairly well. that is the reason most employees choose not to join a union or feel one is not necessarily. obviously the federal government stepped in with statutes to provide the basic protections that the not exist in the past. going back to the theme of job growth. marty's.me and if you look in your packet, you will see a long list of labor and and when the regulations
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that we are looking at in the chamber. if you had insomnia, feel free to read the package. these are the only ones of the chamber is work in one. there are the ones. there are 67. i had my staff go through and say how many of those are pages and the code of federal regulations, the federal register, that we've as employers and the real world would have to go through to act -- understand exactly what is coming out of this administration. it is many, and it comes out to 1910 pages. you might say, that is not so many. hopefully you will say it is quite a few. in any event, if you think is not so many, this is one page dealing with the proposed health-care regulations on administrative appeals. now, i can tell you, going through that -- it is complicated stuff. i have staff that has gone through it. this is only one page out of over 1900 that we have to deal with here at the chamber, but all employers across the country have to deal with it and they want to understand what is going on in the regulatory sphere. many say, to heck with it, i don't understand it, so i am afraid and i will not hire and i will hold back.
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there is a common theme in these regulations. one can debate the merits. i am sure i would have a disagreement over at the board regarding the posting ranks and with phyllis over at the pension benefits security administration over certain regulations, but the one common theme of these 67 regulations is none of these help job growth except for lawyers and consultants. i would ask the administration, as tom did, in this kind of environment, what the heck is really going on here with regard to the white house says one thing but the people below the white house level are pumping out regulations that create uncertainty and it cost a lot of money. you might say how much money? we are not sure. but i can tell you the department of labor and other agencies typically under estimate the cost of these regulations and leave out -- i spent six years at the department of labour -- they leave out little things that are
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important. for example, one regulation says you must train your employees on this regulation and would -- we estimate it would take a half-hour or. it is more like two hours. the point is, and as regulation and the titular the department of our did not cost out what it might cost the employer. a half-hour of time away from the job has a cost impact for any employer concerned about any level of productivity. that is just a small example. if i do share a regulation -- let out multiple areas of coverage light ira's and small pension plans that would have to comply with an -- new regulation and assume, well, we can't figure it out so we will not hot bother and say it is zero. under the nlrb posting regulation of that i will talk about in a little bit, it covers literally every employer
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except for the smallest. the national labor relations board assumes no cost at all for every employer except for those very few hit with the unionization campaign. i can come back and say this is what the cost are. my point is these agencies typically underestimate the cost -- it is and the normal course of business but in this time of the economy i think it is troublesome. we will go through those as we comment on the regulations. attention. i think it is an indicative -- it indicates the arrogance of " these agencies as they pump out these new initiatives. the national labor relations board had been in the press lately. there was a letter in your packet addressed to chairmen klein that goes through the case is pending. i will not go through them there. the infamous boeing case. it is now pending at the board.
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there will be legislation on capitol hill to reverse the case, to prevent the board going forward with a remedy that would require the company to close down in charlotte and go to the state of washington. i think the dam has broken. we will see a lot of new cases coming out. i think the letter to chairman klein paints a good mosaic of not just the three or four cases the press focuses on the what is really going on at the agency over there. i'd think you will see that what we see in the press is just the tip of the iceberg, a lot of other things that unbearably seem to be directed at one thing, which is, make it easy to organize. make it tougher for employers to talk about their side of the case with regard to why unionization could be bad, often at the expense of employee in free choice. with regard to agency arrogance, i do want to talk about a little about what is often a sacred cow, the equal employment opportunity commission and also mentioned the other area of the law, enforcement, that often people
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don't want -- focus on. this is often below the radar screen. and yet we have seen their -- there situation where they have gone after employers and basically have taken it to a new level where it is sue first and take questions later. some companies have taken eeoc to court and they have had to pay attorneys' fees, $2.6 million in one case, two runs and $25,000 in attorneys' fees to another company. $225,000 in attorneys' fees to another company. this is the situation with the underlying cause of action is extremely for the list. courts rarely step in and did this. real money coming out of the
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taxpayers market. it comes out of the eeoc budget but out of the taxpayers' pockets, and it takes them away from legitimate cases it can be pursuing. we can talk about the law, statutes, and regulations but the murky area of enforcement often gets lost. you could at the best laws in the world but if you have an agency of using its discretion bigot be just as bad as a bad law. it costs employers real-time and money which takes away from their ability to create jobs. that is just a few cases. you could imagine a number of employers just confronted with an agency that they can't afford to fight and they are bludgeoned and sediment. we have seen similar action with contract compliance programs. i am just going to mention immigration at some point. tourism, tom brought it up. there is big money involved. marty is right. this is the time to come to the united states and spend money but what we are seeing is a lot of tourism, to france and england, particularly from brazil and china, because it is increasingly hard to get to the united states, increasingly hard, particularly that you are from a country that is not a visa waiver program to get a b-1 or b-2 music. -- visa.
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why is this going on, we are not sure. but we are seeing a slowdown but i can guess why. it is real money out of the pockets of american businesses and something we have a strong coalition on and will be going after. we do support mandatory e- verification laws that will likely hit the house floor next month. a controversial position for the chamber. there is a new manned did -- it puts a new mandate on employers but it is a time for a new system and we see it as a downpayment. we see that as a down payment on other types of emigration reforms, if the bill can get to the house. health care -- what's done is done. it's interesting. you look at the public surveys and see an increasing declining support for the bill, even among democrats. the more people about it, the less they like it.
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it is unfortunate we are in a situation we are in. we are working on several improvements, part of the early the elimination of the employer mandate. we will be having a press conference on that. other areas, like taxes, the non-deductibility under the flexible spending account. the real action there, until there's a change in the white house will be in the regulatory area. they have, and some areas, the administration has worked with us. in other areas, they have been less than friendly. health care is one of the ongoing issues we will have to deal with. it's in the courts. it's in the regulatory regime. we will continue to deal with it. we have testified on it many times. i will say that our predictions, when we testified three years ago, have turned out to be true. that is, it will result in job loss and less coverage for
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employees as some employers drop their plans and move their employees into exchanges. it is unfortunate, i think the president did not more honestly talk about the deal to begin with. this is not about saving costs. it's about covering more people. that is the deal on the table. it's not about saving costs. the legislation was never about controlling costs. i think there's a little bit of -- it is a lot of the land and we are dealing with it as best we can. aboutt going to talk pensions. but i could. it is 11:00. >> hi. it's on. catherine lewis. i'm here for "fortune" and i wanted to ask you -- the question of job creation, when
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you look at the state of the economy, gdp's only bright spot is often the profits of private companies. as much as $1 trillion is on the sidelines waiting to be invested, waiting to create jobs. why isn't that money being spent by companies to invest in the future or to create jobs? >> as i said during my presentation, companies do not invest and hire people just because they have cash on hand. they hire people because they can put those people to work producing a product, good, or service that they can sell at a profit. that's what they do. right now, the economy is not presenting that opportunity. there's no exigency in the market right now. businesses respond to
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competition. if somebody were taking their market, invading their market share, selling products to their customers, taking those customers away, they would be responding very aggressively. that is not happening. in a moribund economy. if you really want to get businesses to spend that money, give them a reason to spend it, not a part-time subsidy that says, "hire a personnel and we will give you a break for six months on their salary." that business has to weigh the following equation. cam that business to generate revenue -- can that person generate revenue through the life of the employment, not just the six months, that warrants the salary we pay them? if the answer is no or we are not sure, then you do not hire them. that's really what's holding it back. as soon as businesses start to
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see the market working and the economy working, then they will want to step in and step in quickly to get ahead of the game. it's only going to take that spark. it's not like you have to finance the whole process. the money is there to finance the expansion. what we need is the spark. it is difficult. that's the least that economists know about the economy, it occurs at the turning 0.3 is always a chicken and egg -- it occurs at a turning point. it is always a chicken and egg thing. with as much uncertainty as we're having now in the economy, it's much more the latter than the former. everybody talks about uncertainty.
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a lot of people say, "businesses are always operating in a certain environments." that is true. i liken it to one of my favorite sports and that is standing at the craps table. when you look at the dice, you do not know what is coming up. i do not know what is coming up. you know what the rules of the game are. you know what the odds are. people will stand up there and that into adverse odds again and again and again and again because they know the odds and they know the game. if you took the same game and said, "ok, before every role of the dice, i'm going to cover up one of the spots," now what is the betting going to be? you would find a whole lot less people willing to play that game than the game that we all know and either love or despise, as the case may be, on any given night. that's what's happened to the uncertainty in this economy.
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because of the rule changes, businesses and not only have to deal with the vagaries in the economy, they have to deal with the vagaries in the rules of the game. that adds a level of uncertainty that many are incapable or unwilling to take on. when you see that, you can see that there are compound levels of uncertainty. what we're facing now is a very, very high level of compounding nine dealing with that uncertainty -- compounding in dealing with that uncertainty. >> going into an election year, do you think it will take until next november until there's a clear certain path forward? do you have a scenario where there could be some of that certainty for businesses to start to hire before the next 14 months?
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>> i am not a big fan of campaign speeches and i do not believe most of them. they are more for entertainment value than anything else. i think that as you see the campaign for and you see the platform is being discussed, you may get a feeling that some of the longer run uncertainty is changing. as you see the various candidates getting narrowed down and the odds on the outcome been posted -- outcome been posted more often, you may see some changes. in all likelihood, it will take some time. in any kind of difinitive way. >> thank you. >> veronica smith. how does the chamber view the infrastructure bank? agence france presse. what is the chamber's view on this. >> infrastructure bank is an
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interesting concept, and if structured appropriately, could work quite well. the questions are, what is the exact structure? what is the funding? there's that old commercial that you cannot fool mother nature. you have an economy that's not fooled easily either. robbing peter to pay paul to somehow provide a better bang for your buck -- most times, it does not work. when you look at the infrastructure bank, the concept is great. public-private partnerships that pyramid private money with public money to get a bigger pie -- that makes sense, as well. it will depend on how it is structured, what the rules are, what types of limitations there
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are, how much, and what kind of a return of crews to the bank versus the private sector? it's almost impossible to say. conceptually, it is fine. the devil is always in the detail. >> [inaudible] any particular plans with the white house? >> not on the infrastructure bank. >> josh with "politico." how do you see the political environment shaping the outcomes you talked about today? how do you see it moving on the [inaudible] >> labor issues?
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>> regulatory issues. you talked about trade. the whole host, the whole basket. tourism, you name it. can you hear me better? >> we can hear you. >> if you focus on the micro, on the national labor relations board, the well has been poisoned to such a degree that no candidate could pass -- no candidate this administration would offer up with us during the senate in terms of an additional point to the national labor relations board. i do think that is indicative of a very -- i guess, more partisan situation on capitol hill then i saw when i was there for 10 years. we are working on some solutions
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in the appropriations bill on a lot of these regulatory issues. i do think that in the area of regulatory relief, you will see some bipartisan support for bills that will adopt some of the ideas the president has put in his executive orders. there is a bipartisan recognition that there are too many regulations coming out of this administration, and we need to slow things down. the nlrb's traditional issues has become overly part of this. i think there will be bipartisan solutions, at least to provide temporary relief to the employment community. tourism is a tough one. it is wrapped up in national security. i think some people on the hill
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-- is tough for us to quantify what exactly the problem is that the state department in terms of delays. we have our studies, but a lot of people think we're going to sacrifice national security. we cannot do both. we have left a lot of money on the table. goings a lot of tours and to other countries. it is something congress needs to address. it means creating jobs. >> jim from "barrons." you mentioned excess reserves. do you think the fed will discontinue paying interest on these idle reserves? would that be a good thing or a non-event? >> this computer is locked up or i would show you a slight. -- slide, jim. the excess reserve positions of the commercial banks --
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reserves that do not have to be held to back up to demand deposits, they normally run about $2 billion. as the said engaged in its activities to liquefy the system, they have risen. the fed engineered that. the law changed and they were allowed to pay interest on deposits held at the fed. by adjusting the interest they pay on the deposits versus what they charge that the borrowing window, you can encourage or discourage the holding of that type of asset. at a commercial bank. they very much encouraged the assets. they encouraged the banks to hold these things as idle reserves. it gives the banks more liquidity. when the world is falling apart around you, liquidity is king. that's what they wanted the system to hold.
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at the same time, it provides a profit stream, which goes into retained earnings and bolsters capital over time. i think that was as much of the intent of qe1, qe2, and everything else. shoring things up. it was quite successful. going forward, the fed can do a couple of things. they can unwind their portfolio and at the same time play with their rates to get the banks to essentially just -- to expunge the excess reserve position. in other words, they turned around and pay the money back to the fed. the bounce sheet of the fed would shrink and the excess reserve position would shrink, theoretically. i believe, at some point, the fed will try to do that. why? that will not have a big
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negative impact on the economy. the fed is not going to reduce the money supply, and reduce the liquidity, of the economy. they will reduce the liquidity of the banking system. problem is that has never been done before. in one of my trips to las vegas, i was dragged away from my favorite craps tables to see one of those performances with a swing through the air in the dark. it was amazing precision. you never get to see that crashed that nascar fans like myself are always waiting to see. everybody goes happy at the end -- goes home happy at the end. the fed has the same sort of process. they have the same intricacy in unwinding the reserve position. they have not had the practice. the people that put on the shows have had practice. they will have to do this one
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without practice. i'd think they have very good people and very smart people. i think they understand the delicacy of the problem they face. i think it will be a little bit of a trial and error. it has not started yet. i think bernanke said in his presentation after the last fomc meeting -- we are going to keep these rates low for a long time. he did not really speak to unwinding the portfolio. i think we will begin to seek them doing that a low but sooner than 2013, which was the -- do that a little bit sooner than 2013, which was the rate target. they will wait to start until they see a little bit more growth. nobody wants to start this kind of delicate surgery when the
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patient is in such poor state of overall health. you wait until the economy picks up a little bit. i would expect maybe in a year from now, we will start to see them working on this process. in the meantime, i am not expecting to see qe3 for the simple reason that if i am at all right as to why they did qe2, there's no reason for qe3. qe2 did not impact the economy. it did not impact the money supply's. the money supply shows none of the sharp increases during that entire fed process that you would have expected, if it was running through the normal type of transmission mechanism where base goes up, money supply goes
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up, expenditures, and the economy go up. that's the kind of classical approach to monetary policy. that was not evident. did they really not notice that their stuff was not having a big impact, or was it having an impact on what they cared about, which was underpinning the banking system, which was vitally important to the economy, but does not necessarily result in gdp growth. >> thank you. leslie from mcclatchy newspapers. can you talk about what you would like to see out of the president's jobs package next week? you mentioned the much maligned stimulus package might not have been as bad as it was perceived. does that mean the chamber would support some kind of stimulus
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spending in this jobs package? >> we did support the original stimulus package. we thought the original description of 40% tax cuts and 60% spending on infrastructure was the right mix. that's not what we saw. it does appear, and we've always felt, that the stimulus package had a positive impact. it was not a panacea. it was a positive impact. and the stated at the depths of the downturn as it was, we believe it was the right thing to do. we believe it would have had a bigger impact had it been done better. would we support another one at this time? the fiscal situation has changed. the economic situation has changed. at the time that was instituted, we were in a freefall. we were headed down. as we saw from the revised data -- heading down a lot further and a lot faster than we originally thought. in that environment, that was the right call. we are now looking at an economy that is sputtering. it's not gaining momentum, but is not in a recession. it is not falling into a deeper
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recession. while the chances of a recession are higher, the probabilities are higher than they have been in the past six or eight months, they are not 50/50. might be one in three, one in four. given that backdrop and given our fiscal problems, i do not think you could justify the type of fiscal stimulus the way that we did in the prior case. looking forward, i think that if you are going to look to the fiscal area, the place to do it is in tax reform. complete tax restructuring. put in a tax code that has the proper incentives, that does not penalize savings, that does not penalize investments, that encourages expansion and irene, capital appreciation, and the like. a tax code like that could still raise the same amount or more money -- revenue.
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do it in a way that does not have the negative impact on the economy that an income taxation -- one that we are not competitive with the rest of the world -- does to an economy. you can get the same amount or more money in a way that has a much less negative impact on the economy than the way we do it. >> turning back specifically to the labour market and the situation of 14 million employed americans who are beginning to feel desperate, it's my impression that the bonds of power -- and the balance of power, employers had
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the upper hand. do you agree with that assessment that workers are, at this point in our economic cycle, less able to negotiate? do you see that changing, or is it part of a trend in our broader labor market? >> i will answer the first question and like the trend situation go to randy. in terms of the current market, yes. you are absolutely correct in a very clinical way. when you have significant excess supply and 9.1% unemployment qualifies as significant excess supply, the provider of the labor has less negotiating power than the commander of the labor. we are starting to see the skill match-up running short. we have anecdotal evidence that people would hire 25 people if
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they could find the right skill set. they cannot find that skill set, in part because the labour mobility has been impacted by the bad housing market. where someone might have moved from chicago to poughkeepsie to take on a technical manufacturing position, they cannot afford to do that because they're under water in their current home. you are seeing in the labour market mobility being negatively impacted by the housing market. in many ways, the skill mismatch is shifting the advantage back to the provider
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of the labor, to the individual who can move and thus have the skill set. in general, and excess supply situation with certain pockets exhibiting a short supply of specific types of labor. >> yeah, the only generality that can be made -- for those people who have a high school degree or less, they tend to be more expandable pin because they're very low-skilled. surveys will show that the unemployment rate fall dramatically. we are experiencing reports that in manufacturing, they cannot find people with the skills they need. on september 28, we will be having a conference here led by mayor bloomberg to focus on that issue. it's not limited to computer sciences. for example, we have a company that cannot find skilled welders. they do not fall within the
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programs. it is hard to make generalizations about the state of the economy. it is a continuing problem, which will increase, as the economy does get better. one reason the chamber is actively involved in domestic education issues, but also immigration. >> i have a question for marty. how much of the economy do you think the debt ceiling deliberations -- some people have pointed to that as to why consumer confidence was down. do you think it caused much harm to the economy?
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going forward, and do you think -- house important is it for this joint committee to come up with a solution from an economic standpoint? >> i think it had a big impact on consumer confidence. we have not seen the full impact down the road. we got a credit downgrading from one agency only, because of the impasse. that was a kind of political downgrading of the market blew off. they said it was politics. if you're going to sit there and be offended, as it were, by our political system and the way we bicker and argue and take everything to the last minute,
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then, yes, this process was really offensive to you. the markets understand that. while it is not pretty, it's come to be a process we all know and love. everybody expected it to come down to the 11th hour. it did come down to the 11th hour. one ratings company says that means we are politically dysfunctional. i think we have always been politically dysfunctional to a point, but we are getting pretty good at the political this functionality over two hundred years. the next question, where do we go from here? can we continue to act that way and even more so and not have it have real the fax? no, at some point, you have to show how the task can get done. the task that was assigned to find $1.5 trillion in spending cuts is not insurmountable. the numbers that have been discussed in this whole process encompass that aspect. the problem is that we need even more than that and we all
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know it. do i think it's possible for this group to get together and that if this group does not get together there will be significant ramifications? yes, i think there are. if they do get together and get $1.5 trillion, there will be immediate criticism that they did not get more and that more is needed. that criticism, while somewhat untimely, is correct. they do need more. we have suggested they go beyond the directive and that they also look at fundamental tax reforms. we think there are ways to raise revenue. there are a variety of process these. there are permitting issues and things like that.
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also, through a more efficient tax code that would expand the base and provide for a more efficient collection, and, therefore, a higher amount of taxes without having any more negative impact. we have said we think you should do both. they have got to get the $1.5 trillion. if they do not get that, you will see other companies. moody's already alluded to the fact that they will be watching the process carefully. i think there could be more fundamental ramifications, if they do not get the $1.5 trillion. >> thank you so much for coming. have a good afternoon. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> afl-cio also had a meeting today. there was an hour-long press conference in washington.
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>> let me say good morning. instead of hearing me delivers fromong remarks, i want to ask you to listen to the stories of some of the people that i'm honored to represent along with my fellow officers. i would like to now introduce a working american member from minnesota, -- >> hello. i live in maple grove, minn.. i am a member of working america, and i am currently
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unemployed. i have been employed previously as a retail manager and a business manager. every company i have worked with, we have a pretty close to quadrupled sales and cut costs. i have a reputation for that. however, last year, a startup company, but we were profitable and our first year. for me to put them in a business plan, moving forward to be profitable. we did it. when that contract was up, i thought i would go back to being employed. i did not think it would be difficult. i have never had difficulty before. for the last five months, i have been putting resonates in -- resumes in. i am unemployed. i have never been in a situation
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like this before. what i would like to see is our politicians encouraging companies to keep jobs here so that people like me can be employed and support our families. also, if our politicians would stop telling us what their colleagues are not doing and start telling us what they are doing. thanks. >> oh thanks. and by the way, her last name is spelled -- if your interested. and now, steve, who works at a communications company in is a member of the ibew from new hampshire. steve? >> good afternoon. i am a conservative and a republican. from the united states navy. i am a communications worker, and i do not support what the republican party is doing today
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to diminished labor unions with right to work initiatives. those are not the issues that i vote when i vote as a conservative republican. i do not vote to have labor union as diminished. over half of the employees serving in the military or you're at home, trying to feed their families. unions fight to keep wages at a fair level and benefits intact for families. my family benefits from what labor unions do. my family directly lives on the money in benefits that are brought about by collective bargaining, and i do not agree with any position that tries to diminish collective bargaining or the power of labor unions, so that is why i am here today. >> thanks, steve. and now, i would like to introduce our secretary- treasurer. >> thank you, rich.
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it is very clear that people are not paying attention to the impact of the economic crisis and its impact on young workers. one year ago, we met in this very room, and we talked about how dire the situation was then, and yet, today, very little has changed. young people in this country are still struggling it, and the lack of attention and that officials and have given to this widespread problem is inexcusable. we hear a lot about unemployment rates in this country generally, but those numbers are even more dismal for our young people. the unemployment rate for high school graduates under the age of 25 was 22.5% in 2010. compared to 12% in 2007. partner that with the increasing cost of tuition for higher
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education and the resulting debt that young people are suffering under it, and what options do they have? the strength of this country has always been that anyone can access the american dream, and if you work hard enough, you can achieve it. that is really not the case today. supposedly, our elected officials focus on debt as it reduction. there was partly out of concern for the future of american youth. we have heard a lot about that, but how does cutting funds to public services and programs provide the public safety net, health benefit the young people of america? how do those cuts benefit than people? the number one thing that will help young people is devoting our nation's smartest minds and best resources to creating jobs and making sure young people have access to those jobs.
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rather than spending all of our time and energy on cutting programs, we should be focused on creating the new economic engine that would help our economy thrive in years to come, so without investment and job creation, young people will suffer in the future as a result of stunted opportunities in the present. the long-term repercussions will be devastating, and not only to our young people but to our entire country. it is neither justin or intelligence to set aside as a generation is impacted by the mistake of the previous generations shortsightedness. the good news is that the next generation is not just going to sit back while their opportunities are squandered away. young people are making a difference all across this country, across the globe, from egypt to wisconsin to ohio and
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arizona and anywhere in between, where workers and students are being treated unjustly. it is no wonder with unemployment at an all-time high, jobs being scarce, growing debt, and a tax on workers' rights that young people are mobilizing for social and economic justice. there are countless examples of their activism. we hear about them every day, and we are so proud with what we have been seeing, and one of the exciting examples that has been coming up is a summit which begins september 29 in minneapolis, minn., and hundreds of young workers and activists and leaders from minneapolis and all over the country will take part in a creative dynamic summit that is designed by young workers for young workers, and our affiliates in workers are excited by the aggressive,
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creative efforts that the afl- cio are undertaking to in power the next generation of activists, and there is no question that this effort will benefit not only the young workers who so sorely need it but all workers in this country. thank you. >> thank you. and now, " we have a bus driver from ohio and a member from out there. >> good afternoon. my name is -- everybody calls may -- me v.j. i am a very proud bus driver and a been a bus driver for many years now. i have not seen the governor create any jobs in ohio. he wanted to get rid of the unions. he wants to take away -- take away our rights. then there is a voter id which takes away the rights from black
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people, the middle class, and the unfortunate ones. he took our money from the public schools to do vouchers, telling us this was pointed up the budget. when you take money from the public schools, this does not take and help with the budget. all we want to do is work. he is attacking our police. he is attacking the fire department. our teachers. the common worker person. he wants to take all of our rights away. we just want to work. we want to raise our families. we are not trying to be rich. we just want to feed our families, get a closing, and educate them, and when our children go to college, we want them to be able to come back to our community and make a living and work their in their community. we pay into our pension, and the
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money we get those back into our community. that is what we want. we want to be able to have a decent job and work. >> and now, i would like to kazakhstan the afl-cio executive vice president to take some words. >> thank you so much, and thank you so much for sharing your story. we reflected on dr. martin luther king and the march in washington 48 years ago. we are reminded that dr. king, who talked about jobs and freedom at that march, that that message is as relevant today to us, because, quite frankly, we are in a crisis in this country with 25 million people unemployed and underemployed, and then you think about the percentages, when we think about 9.1% of our people overall not working, but you break it down for communities of color,
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african-american, 16% unemployment. latinos, 11% unemployment. it still continues to resonate because people need the freedom to work, but there is another freedom that people must have in this country, and they must have the freedom to vote, and what we're seeing across the country in so many of our states is this disenfranchising attempt to disenfranchise so many with these so-called voter i.d. laws, which, quite frankly, our voter suppression laws, and it is a new poll tax, if you will, and so, in order for people to fight aggressively for new jobs, they have to be able to vote for those who support an economic agenda for all and to support the american dream. we know a little bit about poll tax. i know a little bit about it park -- personally, because in
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1958 1959 when i asked my mother to buy me a pair of new issues, she told me she could not do that because she had to pay her poll tax. as an adult, she paid her poll tax until 1965. voting should not have been that hard for my mother. it should not be that hard for the millions who will be impacted by these laws today, and when wewhen we talk about te numbers we're talking about people who do not have identification because it costs. it is shocking to see that and unnoticed push, all of these states this legislation has been introduced by republicans. they have done that under the guise of preventing voter fraud. but these laws disenfranchise voters rather than stopping actual fraud. there is little or no fraud to
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stop. even the bush administration's investigation uncut -- uncovered only 86 instances of improper voting across the entire country. about 21 million people is in danger because of a lack of state-issued ids. it should not have to be that hard but it is a certain community that will be disenfranchised. it is young people and people of color and the port. -- poor. this is not acceptable. we are civil rights advocates and a voting rights advocates. we will continue to fight. we will not be silenced when it comes to putting america back to work. we will never be silenced when
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it comes to ensuring that everyone in this country has the right to vote. >> thank you. he works at at&t in missouri. >>, afternoon. -- good afternoon. i am a vice president for the local 6300. i am active in organizing mobilization. i am active for many reasons. for my daughter, she is 10 years old, and for the future of our kids. the right to work is something they want to take away. it is not deserving. i will continue to fight that fight until it cannot do it anymore. thank you. >> thanks to you for telling such powerful stories. and to my fellow officers for
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their leadership and a tremendous energy. these stories from across the country are only a few of the stories. to many people inside the beltway or people who live in a gated communities never here. making sure people hear the stories is one of the core purposes. working people with a powerful voice when we band together. now more than other. working people need to have a voice heard politically. to pare faced bill clinton, there is nothing wrong with america the cannot be solved by holding our politicians and our executives accountable. we got here because our politicians experimented with an extreme economic theory. deregulation of the nearly every imitation on the whims of the
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elite. these were supposed to generate wealth that would trickle-down to working men and working women. that theory failed. millions live with the consequences. 25 million americans are out of work or working part-time. this is a moment where working people will judge all of our leaders. will they propose solutions that are on the scale necessary to address the the job crisis and that america has right now? we need to return to the america that i remember, and that millions of us hope for. with each generation, more and more people's voices matter. we what purpose and progress. the economic mess is the result
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of politics. it means the solution must be political as well. our politics must be flipped right side up to work again for working families. we must give the working people that i share this stage with and the millions more that we represent a new independent voice in our politics. that is what the afl-cio intends to do. only together can we reinvigorate our democracy. that is why unions of the afl- cio are pooling our resources and developing your around mobilization capacity of our own. independent of parties and
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candidates and fuelled by the power that comes from unity. we will listen, and we will talk to all working people. not just those with the benefit of a union contract create the problems and solutions belonged to all of us. as we declare our political independence this labor day, we are announcing our independent advocacy arm. this will help build the power of america is silent majority, the middle class, and poor, who are struggling to just get by. it will not directly fund political campaigns. nor will its matched the endless flow of cash from corporations. but it will be an effort by and for working people. communicating beyond our membership and striving to
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ensure that all the work -- all who work have a strong voice in the political process. what do we want to accomplish? first and foremost, we need to put america back to work. we cannot let the cramped politics of washington prevent us from realizing that our great nation can and must return to full employment. the afl-cio has developed a jobs plan that is serious and reflects the scale of the crisis that we face. with an air of bipartisan consensus. in an area where everybody agrees that precious little action has taken place. that would be investment in our infrastructure. with construction workers idle, and our schools crumbling, now is the time to rebuild our
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schools. in fact, i just got back from the white house. the chamber of commerce and i stood side by side with president obama to call for investment, large investment in infrastructure. we also need to remind u.s. manufacturing and stopped exporting jobs overseas. we need to put people to work doing work that needs to be done it. targeted work needs to be provided in communities of color, african-american and latino communities where the unemployment rate is two and three times as high as the national average. we can and we must provide the funds to end state and local government layoffs. we must help fill the massive shortfall of consumer demand by
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extending unemployment benefits and keeping homeowners in their homes. quite frankly, we must reform wall street so that main street can create jobs. we must also recognize that our joblessness has hit all communities the terrible force, african-american and latino communities have been hit especially hard. in the world's richest country, the rates of unemployment among people of color art and outrage. it really -- are an outrage. it should preoccupy it all politicians regardless of race or party. in this land of plenty, one out of five children now live in poverty. in african-american communities, that is three times as high. in the latino communities, that
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is three times as high. that is why our agenda is both ambitious and essential. we take seriously the job of making sure that jobs are good jobs. expanding the right to bargain for a better living standard and helping more working people gain a voice with new aggressive tactics that fit the 21st century. the country is changing, and our approach to organizing is changing as well. together with our community affiliate's, working america, we go door-to-door to communities across the country with 3 million members and the recruitment model that works anywhere, working america that is engaging union and nonunion working people on a massive scale. working america members are going deeper. those members are becoming leaders and building activist
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networks. we are working with groups such as the taxi workers alliance, that are doing some very exciting organizing among workers who are refusing to let blocks -- the law from stop them from coming together. more than any time in my memory, we are working hard to build a movement. the voice of workers has never needed more amplification that it does right now. we are moving forward to make sure that the voice is heard clearly across the entire country. at this time, i would like to wish you a happy labor day.
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all of us are happy to answer any questions that you may have. can i have your name? >> [inaudible] matt with ccn.com. --don't thinkthe microphone [inaudible] >> i do not think that microphone is working. >> all right. experts on both sides of the aisle agree that the current fiscal situation is unsustainable. i believe i heard you call for a lot more federal spending. is that responsible at this time? with record levels of debt and
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deficit? >> first of all, i am tempted to ask you to come with me and look at the real figures. the united states does not have a short-term debt crisis it is a short-term jobs crisis. if you look anywhere else in the world. let's look at it this way. if you put workers back to work so they are contributing, the debt goes away. it is an investment in america. you do not pay for the house this year, you pay for it over 30 years. it is an investment in your future. you send your kids to school and
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you do not pay for the schools because most people can afford to pay for a whole year of schooling. you borrow. why do you do that? because you are investing in the future. investing in job creation is the best investment this country can have. putting people back to work will help solve that problem to the extent that it exists. >> ok, next question. >> i want to ask, what are you planning to do the legislation, as well as issues in ohio? >> you will see the same action on us on 194. that we did -- you will see us working in coalition with
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progressive partners to get the necessary signatures to put that on a citizen's ballot so that the citizens can vote on that. >> september 29 is the date that we have to submit the signatures. just as the citizens in ohio gathered those 1.3 signatures for the citizens of the tote, -- people areot, working diligently to get the necessary 231,000 signatures that are needed to qualify for a citizens' veto. they only needed 231,000 and they turned in 1.3. they will have the same kind of diligence.
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>> [inaudible] >> typically, political outreach is focused on the ground game, knocking on doors. is this and ushering in of a new era for unions and their political advocacy? >> it is going to allow us to do several things. it will allow us to have year round advocacy. we intend to keep that structure in place year round. we will build on that between election cycles. that will allow us to move seamlessly. in addition to that, our program in the past was geared toward talking to our members.
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we will now expand out and talk to all workers, which we will do. we will be building those partnerships and talking to workers beyond our membership. educating them, mobilizing them, and getting them out to vote. >> [inaudible] do you have a fundraising goal? >> no, we do not. >> you have been very clear in your opposition to the free- trade agreement. you talked about the importance of not exporting jobs. with the current atmosphere in congress right now, are you hopeful, do you expect that maybe they will not be able to pass the free-trade agreement? given all of the acrimonious atmosphere now. what do think will happen? >> we intend to oppose those trade bills that we think are
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bad. we think the korean bill is bad because it will cost us jobs. we do not need to be going in the opposite direction. it also has a very low domestic content requirement. the europeans have a 55% domestic content requirement before it can be considered one of their own. this deal only has a 35% domestic content. that means korea could produce 35% of a car, somebody else could produce 65% of the car. that is not a smart deal. columbia deal -- the colombia deal is something different. we are told that the mexican government -- the colombian government has suspended its
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union protection program. one of the hallmarks that signifies the change of the government and their desire to protect workers. they are now suspended that. that does not bode well. i ask this question of my ceo friends. it's 51 -- if 51 ceo's would have been assassinated last year, would there be a clamor for a trade bill with colombia. workers, union officials are no less deserving as human beings and ceos.
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we will continue to fight that. the workers on both sides of the border also opposed to those trade agreement because they know that it is not going to be good for workers on either side. until we get a trade regime that really is fair to american workers and helps us to export products, not jobs, we will oppose that regime. >> [inaudible] i understand your opposition. i was wondering, with the poisonous atmosphere in congress, are you hopeful that they will not be able to get this done? >> first of all, the republicans do not want to add taa to its. every trains workers who lose their jobs because of trade. they do not even want to add that into it. it makes our job all little easier.
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no one is going to support those trade agreements without taa adjustments. even many republicans. i think we have a real shot added. the fact that the government has not been able to stem the intentional violence against trade unionists should bring most people to their senses and hopefully they will vote against that bill as well. >> can you tell us some of the things that you are asking the labor department to do? to help stimulate job creation and to help insure workers were currently employed targeting the wages they're supposed to get?
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>> we are asking them to enforce laws and protect workers. that is whether it is health and safety laws in the work places, and we are asking her to step up enforcement of the fair labor standards act. people should be paid the right rate. sometimes they get reclassified. we are asking her to look into classifications. we're asking her to do everything to make sure that workers get the full pay they are entitled to. quite frankly, she has responded admirably. she has enforced better than anybody in the last decade. she has done a terrific job. we are very supportive and thankful for what she does to protect workers. >> at this point, i would like
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to go to the telephone. operators, you can give us a number from the phone. >> with the democratic majority headed from [unintelligible] >> we are having trouble hearing. can you start again? >> with the democratic majority handed down from 3 to 1, 2 to 1, how satisfied with you -- how satisfied are you about what they have done with their cases this year? which cases do you want to see resolved? >> i think they have done a good job under the circumstances. you will recall that under the
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bush administration for the last three or four years, they were not functioning. it is exactly what the senator says he wants to do now. there were thousands of cases that got backlogged. they had to resolve those backlogs. they have worked steadily to go through that backlog and they have done a good job. and then they did some routine enforcement. look, the law says that when you threaten a worker, when a worker does collective action, you can not threatened, punish, or retaliate. boeing openly says, we are retaliating against them for doing activity. it has been a violent -- a violation of the law for 50 years.
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they face a tremendous backlash by everybody out there. the republicans are trying to intimidate them. trying to get them for making decisions. and they have investigations, and they have subpoenas, and they do everything they can to prevent them from doing what it is intended to do. that is protect the rights of working people in this country. we are all working men and women. i think they have done a good job. we know the intentions of the republican party. if you only have two people on the board, the supreme court has said they cannot make a decision even if they both agree on that decision. we will do everything we can to prevent that from happening. i think president obama and the secretary are both committed to making sure that the rights of workers are protected and we have a board that can function. and remain independent, as it was intended.
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>> thank you. the person in the suit in the middle. >> i know you just came from the white house. do you feel that the president has made good on the campaign promises that he made in 2008 to organized labor? will they be able to support him next year? >> to the extent that he has been able to, it has not been a one-way street or a walk in the park. i think he has delivered on some things. i think he has not delivered on others. we continue to push him on the things that are good for working people. the thing we continue to push on his job creation. i think he is going to do everything he can to create jobs from the scale that we need them. we will see if there is any kind of bipartisanship. >> [inaudible] there have been some suggestions that it was an
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effort to find -- fund elections. is that the case at all? what is your answer to that? >> we have always participated in elections down the ballots. we will continue to do that. it is to allow us to talk to workers beyond remembers. so that we can reach out to workers everywhere and bring them into the fold. enable us to be a more independent. it will allow us to build a structure that is beholden to working people 365 days a year. it will be beholden only to working people. to our friends, it will give us greater ability to help them. to our acquaintance, we will do to them what to they did to us. we will tell them we love them and wish them good luck. >> thank you.
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the gray suit. >> hello. you agree with the chamber of commerce on the concept of an infrastructure bank. i am wondering how close you have gotten to tom donahue on that issue and if you have agreed what the nuts and bolts of an infrastructure bank should look like. >> i will not speak for tom, but we are pretty much in agreement that an infrastructure bank is a good thing. it can help out if it is properly funded. he agrees with us that infrastructure is woeful in this country and we have to address it. it causes us as a nation to be less competitive and it causes individuals additional costs. the society of american engineers estimated that it could cost individuals a couple of trillion dollars over the next couple of decades is our roads, bridges, highways, and school starts to crumble.
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we use about 2.4% of our gdp on infrastructure. that is less than we used in the 1950's and 1960's. europe does about 5% of their gdp on and the structure. china is doing about 9%. he and i understand the consequences of that. the longer you postpone doing the and the structure, the less competitive you are. right now, you have low interest rates and a lot of people that need work. it is insane not to be putting them together to fix a problem that the country needs fixing and can make us more competitive in the world. in addition to that, we have joined with the business and a couple of others to put together a fund from our pension funds to be able to leverage.
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the clinton global initiative, for instance. one of the first place is people do the retrofitting is right here in this building. we have had an audit done to see how we can become far more energy efficient. hopefully, we will make this headquarters the example of what people can do. it can pay for itself by the savings that it generates. it pays for itself and becomes a tremendous investment and the future. it will draw down on the cost of energy and it will create work for people the need to work so they can contribute to society. >> but go ahead and do another question from the -- let's go ahead and do another question from the phone. >> you mentioned you were going to declare a political independent labor day. does that go beyond the super pac?
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does it have more practical implications for your political efforts in the 2012 cycle? >> i do not know what you mean by practical implications other than the thought that the allowance for the first time to move from electoral politics to advocacy to accountability. it will allow us to talk to all working people and get them involved in the process and give all working people union and nonunion alike a greater voice in the process. working america will be a real part of that process. we will be expanding them. they will be talking to more workers at the doorstep of put -- about what we can do to create jobs in an economy that really does not work for anybody. the practical aspect of it is that it makes us more effective and it gives the workers a larger voice and a broader voice. >> thank you.
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>> are you expecting to raise the dollars in another form and fashion? >> we're going to use it to be able to talk beyond our members and a number of different forums. it will enable all of us to come together. it will give us a broader base. >> do you expect it to raise large salary donations? >> we will take them wherever they come from. workers will donate. there will be smaller amounts. they will get their voices heard. >> thank you.
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>> looking back at last year's labor day, in the past 12 months, what has been the most significant events or changes for american workers, both union and nonunion, public or private sector? >> you would have to look at the unprecedented attacks on state and federal workers. from the overreaching of a new class of governors and state legislature. and the attacks in wisconsin, ohio. people act like this was a spontaneous thing. it really was not spontaneous at all. the american legislative
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exchange council had a meeting of 2000 state legislators, passed out hundreds of pieces of model legislation, whether it was taking away rights, increasing the amount that people pay for health care or pensions. people like scott walker took advantage of that. it turned a surplus into a deficit so the big jump on the bandwagon. the ultimate goal was to eliminate the vote of 10% of the people that voted in the previous election. that is what you see. you take wisconsin. the voter i.d. law, we have to do this because of fraud. look at what it does. 78% of african-american males between the ages of 18 and 24 gets disenfranchised because of that law.
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25% of the elderly, the seniors, get disenfranchised because of the law. 55% of latino women get disenfranchised because of that law. what does that law due to create jobs? i want you to think back to the state legislature and give me one instance where those attacks created jobs. those people were sent to office because they said they would create jobs. that is the most important thing they can do. for the workers, aboard the local school system, for everything else. that was probably one of the most shocking things. the response was just wonderful. we have been drawn to have a
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debate on collective bargaining for 20 years. we have not been able to do it. scott walker, the best mobilizer we have seen for a while, gave us that opportunity. we may present him with an award for being the best mobilizer of the year. people responded. independent business people. >> people from all walks of life and all political backgrounds came together and said, this is outrageous this is overreaching. this is outrageous, we did not vote for this. we had a recall election. a lot of you out there smirked with the recall election. i have to tell you why we were so heartened by it. in 2008, barack obama one in wisconsin by 14 points. those six senate districts,
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that was an equal margin. they were the only six districts that we could recall. it was that like we picked those six. they were the only six because of the way the law as written. in those six districts, we took a 49% of the vote. if i were a republican, if i were scott walker and i looked at my six best performing districts, i might not be too heartened by that. in fact, i might look at the other side and see them smiling. that is why i am smiling. that was a heartening thing. to see workers come out, independent business people come out.
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it brought us a lot closer together. they tried their darndest to make this wedge between public workers and private-sector workers. you can see that the which does not exist. -- wedge does not exist. let me conclude with one thing. the most disheartening thing that happened during that year was people coming forward, in leadership positions, and saying, those workers and wisconsin had a pension. they have health care. and you do not have it. let's take it away from them. that was never the american way. america always looked at those who did not have and said, how do we help them? how do we get that for them? not looking at those who do have and say, let's take it away. that is unamerican. the people that say that, they have given up on america. we have not given up on america.
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the workers in this country have not given up on america. the vast majority of people called there have not given up on america. we resent those who say that the best years for america is behind desperate that we cannot give our citizens a good job. that we cannot give our citizens health care. that we cannot give them a secure retirement. that we have to scale back the american dream in the richest nation on the face of europe. we refuse to accept that. >> [inaudible] just to follow up, what is your scenario for creating those jobs? what is at stake for workers? >> what is at stake is the future of the country. and whether we will have a
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country that continues to bifurcate. or you have rich and poor, but note middle-class. -- where you have rich or poor, but no middle-class. whether we will have a bright future or a dim future. whether the sun is rising or the sun is setting. that is what is in front of us. that is what is at stake in this election. what was the first part of the question? >> [inaudible] we will pass out our job creation program. it covers a lot of things. infrastructure, not just the surface transportation act, the faa, the clean water act, increasing manufacturing. that would include the tax code. that would include trade law. that would include a number of other things. targeted job creation and communities of particularly high
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unemployment levels. aid to state and local governments of the can stop the layoffs. there are four drivers of the economy. consumer spending is the biggest. as long as workers' wages are stagnant or falling, consumer spending will not drive us out of the doldrums. the second is business investment. without demand, with all workers been able to buy, we will not see that. the third is nets exports and our country has not seen that exports in many a decade because of portrait laws. and poor enforcement of trade laws. and the last as government spending. we talk about aid to state and local government, here is what is happening. we have some spending by the federal government and we had extraordinary contraction from
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the state and local government. they were negating the good that the federal spending was doing by contracting. if we continue to let that happen, more people will be laid off. we will give you the program, it is about six points. it also includes wall street reform. so they cannot continue to do the things that got us into the mass. -- mess. they can actually start lending again. small business needs money and they cannot get it because the banks are not lending. one other thing i just want to add because it affects so many people, we really do have to correct and fix the mortgage crisis. that would put a tremendous amount of money back into our economy. and allow that consumer spending to actually -- the last thing on the list is the extension of unemployment benefits. if you take two or three or 4
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billion people and you cut off all of their money and they stop spending, all of a sudden, a consumer demand falls. the economy contracts and it is bad for all of us. >> ok. i think we have time for one more question. >> how significantly do you think the initiative mr. obama can pass through congress will improve the economy by the 2012 election? if it does not -- if they do not go far enough, are you concerned that the voters will be more skeptical of stimulative measures? >> could you repeat the last part of the question? >> are you concerned about voters grown skeptical of stimulative measures?
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>> look, the stimulus package is absolutely you worked. it has created 3 million jobs. it created more jobs in a year and a half during a recession than george bush created in the 8 years he was president. he had a negative job creation. people are cynical, people are anxious, people are nervous and they want action. i think they see who is stalling. when mitch mcconnell says his main mission in life is to make sure that the president fails. people understand that, they are not dumb, they understand that this guy will do anything to stop the president from succeeding, even if it hurts the american people. you have to question the motivation behind it. is politics that much more important than the country?
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that is what they are saying. politics is more important than the country and every citizen in it. i refuse to believe that. i think it be took a survey of the people up here, everyone of us would say that the country really ought to come first. that is why workers have lost their voice. because of policies and political brinksmanship. it takes us to the brink of political disaster rather than coming together to solve the problems. they're fed up with that. they are fed up with everybody that is involved. they will check and see who is pushing for jobs right now. they will see its main purpose and focus is jobs. i think they will support that person or persons. those that go through the motions, they will be able to see through that. they will be able to talent very quickly -- they will be able to tell us that very quickly.
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it is going to be more difficult to educate and motivate and mobilize people. that is a reality. but we will do what we have to do to make sure that people that support working people get the full support of the american labor movement. >> i think we are out of time. thank you very much, everyone. >> no clapping? [laughter] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]
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>> coming up, wartime contract in releases its final report to congress on iraq and afghanistan. later, meetings with xavier becerra and senator mike lee. to mark the 10th anniversary of the 9/11 attacks, the study for terrorism and responses to terrorism will host a conference. panelists will discuss how to prevent people from coming terrace, identify trends, and the future of home and security. you can watch it tomorrow morning on c-span 3. 2. >> and machiavelli has become an adjective. i do not think people want to be described as a machiavellian.
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not too many people would call themselves that. >> his name is synonymous with cynical scheming and the selfish pursuit of power. author of miles unger argues that the theories may have been a response to the corruption around him. at because on c-span's q&a. >> the name conjures elegance and grandeur but during world war ii the queen mary was commissioned as a troop ship. a university professor on the integration of baseball by women and asians. and remembering 9/11. from the florida trip and the pentagon. cook for the complete schedule at the c-span.org/history.
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the commission charged with investigating u.s. spending in iraq and afghanistan found as much as $60 billion in waste and fraud. congress created the commission in 2008 and released to their final report earlier today. org.can read it on c-span. jim webb introduces the co- chairs at this hourlong news conference.
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[indistinct conversation] >> good morning. i am co-chair with my partner, chris shays, who is -- he and i will handle the initial parts of this briefing. each commissioner will also participate. first, i would like to introduce senator webb from the state of virginia. he is one of the two conferences, why we are today -- two cosponsors, why we are here today. we are grateful for senator webb's support, we are grateful that senator what is your day to provide his comments.
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i look forward to his comments, as you do. senator webb? >> it is a pleasure to be able to come here today and to thank all the members of this commission for the work that they have done on on this issue. this is the way that congressional commissions should work, bipartisan, high energy, comprised of a highly qualified people who are brought in for a specific period of time. this is a sunsetted commission, which is why you are having the out-briefing today, and will continue to maintain a very high-profile careers out in the community once this is over. they have come up with specific recommendations. as a member of the senate, one of the two co-sponsors of this legislation, i can say today that they will be listened to, recommendations will be listened to. the energy that went into this
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will be appreciated. as someone who spent years and a pentagon, it was clear to me that in a period when overseas infrastructure and security programs were being put into place in iraq and afghanistan after 9/11, something was clearly wrong. there were good companies, as this commission report has been clear to mention, that were doing a lot of good work, but there were also a series of structural and leadership deficiencies in terms of how these contracts were being put into place. a lot of them were being put into place. you can look at the dynamic of what was going on, particularly in iraq at the time, and it was not out of the question to be saying even then that there were billions of dollars in waste, fraud and abuse taking
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place without a proper structure. when i came to the senate, one of the eye openers for me as a member of the senate foreign relations committee was when we had testimony from the department of state discussing $32 billion programs that were going into iraq reconstruction, and as someone who was -- spent a good bit of time as a bean counter in the pentagon, i asked if they would provide us on the foreign relations committee with a list of the contracts that had been led, the amounts of the contracts, the description of what the contracts were supposed to do, and what the results were. they could not provide us that list. for months we asked them. they were unable to come up with a list of the contracts that had been let. after many discussions with senator claire mccaskill of missouri, when expressed similar concerns as a member of the armed services committee, we introduced this legislation in 2007.
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we had to, like in all legislative proposals, it did on some areas we believe in strongly, such as retroactive accountability for some of the abuses that had taken place. we did not get that. we did not get the ability to have a subpoena. but what we did get was the structure that was put into place in this commission, and just as importantly, we got an agreement that this would be bipartisan, and that it would be energetic and that it would come to us with the types of recommendations that could prevent these sorts of actions and abuses in the future. this is what we are receiving formally today. i wanted to come down here and endorse the quality of the performance of all of these individuals. christopher shays, michael tivo, the cochairs, come highly qualified. christopher shays spent years in congress, michael was a
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member of the defense contract agency. clark kent ervin, a former inspector general of the department of state and homeland security, a former undersecretary of state for management also assistant secretary of defense. the former assistant secretary for management at the department of veterans affairs. the former managing director for acquisition and sourcing management at the gao a professor of government contracts and legislation at the university of baltimore school of law. if former undersecretary of defense, controller and chief financial officer at the department of defense. there credentials are much broader than what i just read, but it will give you an idea of the quality and experience that went into this commission. again, i express my strong view
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that these recommendations will be listened to and when appropriate, at acted upon by the united states congress. thank you very much. >> good morning. thank you, senator webb, for your kind remarks about our work. we appreciate all of you coming this morning, especially senator webb, and are grateful and his initiative in supporting the commission. thank you, ladies and gentlemen of the press, for attending this briefing on the final report to the congress for the commission on wartime contracting in iraq and afghanistan. i am the co-chair of this commission. with me is my partner, coach chairm -- cochairman christopher shays, and fellow commissioners previously introduced by senator webb. after opening remarks, we will be happy to take any questions that you have. we have provided a summary sheet
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on the report. at the end of the summer, you will see all of our names in prior affiliations if you want to quote anyone. the commissioners will be staying here after the close of the period if you want to pursue specific topics one-on- one. the commission has filed the final report with the officers of the u.s. house of representatives and the u.s. senate. this is titled "transforming wartime contracting, controlling costs and reducing risks." its pages include extensive the findings, fact and recommendations, plus 15 strategic recommendations for reform. we believe that implement our reform proposals will save great amounts of money and, even more importantly, human lives, while improving the diplomatic, military and development outcomes in iraq and afghanistan. equally important, our reforms will do the same for future
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contingencies. whether they take the form of hostilities or humanitarian interventions, overseas or domestic responses to declared emergencies. let me also noted that when i said we believe, i really meant "we." our report has no dissenting views. every recommendation represents a bipartisan consensus. you would be truly hard pressed to tell during our meetings which commissioners were democrat appointees and which were republican appointees. for almost three years, this has been a collegial and bipartisan effort to serve our country. here it is some quick background on that effort. the commission was established by congress in the national defense authorization act of 2008. we are independent, bipartisan body with eight. -- ate up with the commissioners and supporting staff. we participated in more than 1000 meetings and briefings, maintained field offices in
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kabul and baghdad, it made 20 trips into theater and other destinations, and issued a 205 special reports to congress. i will mention a few highlights and turn it over to congressman shays. total spending on contracts and grants in iraq and afghanistan from fiscal years 2002 projected to the end of this fiscal year amounts to $2 billion. 31--- $200 billion to $31-60 billion of that total is being lost to waste and fraud. waste amounts to a total of 20% of contracts and grants bennet -- grants spending. we base these ranges on hearing testimony, our own commission research, a non-public
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government documents on fraud research that were performed in theater. we believe as much or more waste it may develop as programs and projects turn out to be unsustainable by the iraqi afghanistan government. as to that point, i want to be clear that this report is not about criticizing contractors. it is about criticizing bad contract in. whether that involves poor planning by officials or poor performance and and misconduct by companies.
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even if you take the upper range, a significant amount of money spent on contracts and grants in theater appears to be spent affectively. that point is important. the troops certainly feel that way. at all levels for the quality and effectiveness of for the effectiveness of u.s. effort. our focus on problems derive from our concern that the cost of contract support has been unnecessarily high. competition -- government has not effectively managed contracts to promote competition, reward good performance, and accountability for misconduct by both government and contractor personnel. having said this, i yield to the gentleman from connecticut. christopher shays. >> you saw mike with this -- he is usually more upbeat than this. to follow up what mike was saying, despite some progress, the government remains on able
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to provide large-scale contract oversight. that is troubling the because u.s. doctor was held for more than 20 years that contractors were part of the total force that would be deployed in contingencies. yet the government was not prepared to go into afghanistan in 2001 or i racket 2003 using large numbers of contractors. we're still not adequately prepared to use contractors to the scott gail required. this is even more troubling given that the scene of defense officials have testified that the united states cannot go to war without large contract and support. our report begins with a chapter describing the way the government has become over reliant on contractors.
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but over reliant, we need a become the default option. contractors have performed some tasks that are preserved for federal personnel. tasks that require the research for personnel. even those that are legally permitted, contracting out some tasks may be inappropriate and risky to united states interests. we are deeply concerned that excessive confecting undermines the ability to perform court missions. the titles of succeeding chapters describe problems the commission has identified in co.
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>> now, our final chapter explains that the way forward to bands reform. we offer 15 strategic recommendations for major reforms to address these problems. a the discussions in details appear in various chapters of the report. it lists of these and other recommendations we have made. it this is our report. we have had a second report which had a new burst number of recommendations. they are all compiled in our final document. all of our reports can be viewed and download it at the commission website --
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www.wartimecontracting.com. here are a few of the recommendations from the final report filed today. our third recommendation, phase out private contractors for certain functions. recommendation seven, for contingency contract in of the joint staff. the combatant commanders staff, and in the military services. recommendation eight, established a new tool -- duelheading position and the national security council staff to provide oversight and strategic direction. recommendation nine, create a permanent office for contingency operations. recommendation 15 -- congress should enact legislation
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requiring the reporting of the agency's progress in implementing reform recommendations. this last recommendation must not be overlooked. the commission sets on september 30, but the problems in contingency contract in do not. there are still trying to make a difference and i iraq and afghanistan, there will be new contingencies. congress has a vital role to make sure we are better prepared for new contingencies overseas or domestic. it also has a vital role to avoid new strains on the federal budget. having served 21 years in congress, i appreciate the difficulty of proposing new spending in a time of revenue constraints.
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some required notice spending. some can be made by simply reallocating existing resources. even for reforms that would involve new costs, holding back would be really false economy. with tens of billions of dollars already wasted and with the risk of recreating these problems, the next time america faces a contingency the nile and delay are not good options. they should not even be an option. the recommendation for the commission's final report will repay themselves many times over in terms of money and addition outcomes. the challenge in implementing contract the reform will continue for years. we have presented our blueprint. now we can only encourage others to turn our blueprint into solid constructive outcomes. finally, on behalf of all of the commissioners and like, i want to express our appreciation for those in government, military
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macadamia, and those who -- we are grateful for the long standing interest and support of u.s. senator jim webb, susan collins, and joe lieberman. u.s. representatives john charity. we also appreciate the members of the media to have followed our work and transcribe it for the public. we are in all of our men and women who serve in the military. we pay incredible respect to their sacrifice, those who have been injured, the families who lost loved ones. we also want to include in that list equally the contractors who have lost their lives and the contractors who have been wounded. there have been thousands who have lost their lives. the sat thing is, it is almost like they have been expandable. have not gotten the kind of attention their desks require. we want to say, thank you to the men and women who serve oversees
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both and our government, the military, as well as contractors for our government. we will have one minute comments from the six commissioners behind me. we are all equal partners. there was really no first among equals. i think dixon can affirm he got re here having to deal with eight commissioners to have strong opinions on things. we will start out with catherine, then we will go to doug and charles and bobbitt. then we will go to grant green and it end up with clark. >> i just want to restate the website is www.wartimecontracting.gov. thank you, and thank you for
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your remarks. i thought about what in this two your stent i had it surprised me. in many ways, there were many few surprises. the outcome is that we found were expected. there were a number of causes that have been the around for a long time. many people know what they are. they still are not getting fixed. the one thing that did surprise me is that the numbers we are talking about just are not resonating. 32 $60 billion does not sound like much when you say it every day, but in the report we have broken that down to $12 million a day that we are wasting. maybe that will make a little bit of difference in the attention that people pay to this. the second thing is as we go through the next couple of years looking at how the government is spending its money, my hope is that we do it smartly. part of the reason we are in the
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position we are in is because the meat axe that was taken to the acquisition work force in the 1980's. we decimated the government work force at the same time that we were calling more and more on contractors to do the work of the government. as we go through this, i would hope that we look at reallocating resources, not just cutting resources. a contingency environment offers a perfect opportunity to show how the different departments of the government can work together. as you will see in one of our recommendations, we believe that those decisions, missions and responsibilities, has gotten very much out of whack between the military sites of our government. we have put in place a recommendation that we hope will rebalance those efforts. thank you. >> thank you very much. i also want to reiterate our
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appreciation for the military, civilian to go out to the region. we were out there. this is not an easy place to work if you are a civilian and not if you are wearing a uniform, also the contractors. we did not look at this as a partisan way at all. we looked at what is best for the united states of america. we are convinced that westing $30 billion to $60 billion is not in the interest of the united states of america. we are going to have more contingencies in the future. if we keep saying we will deal with that contingency when it arises, we will never fix the problems that have risen over the past decade. there are some problems we do not even think about that are inherent in the way we started to do business. for example, we have policies that make a lot of sense to give local nationals priorities in
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giving contracts. it makes a lot of sense. unless you stop and think about the fact that we have limited oversight over these folks. when we have limited oversight, that means money can get wasted. we have to do something about that. we also have to think about projects that will start but are not sure that can be finished or sustained. our report talks about that as well. what is the point of spending hundreds of millions of dollars on projects that will fall into disuse. then we will have a choice. either to let it fall into disuse and write it off as a waste, or to keep spending taxpayer money for a god knows how long in order to keep projects going. we need to avoid those sorts of things. $206 billion is a lot of money on contracting, but so is 60
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billion on waste -- which much of which is a fraud. we have to do something about that. we need it to do it for our troops, our civilians, our contractors and the american people. >> i took a particular interest in what is now chapter 3 of our report, which is the over 40 particular significant instances of waste and iraq and afghanistan. i think that in some respects, we will produce the authoritative listing to date of big items of waste. i want to mention some specific things about this. you hear the figure of $30,000,000,000.-129694732 dollars and wonder where we get confidence in this figure it part from basic gyration. if you start looking at
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individual items, if you start looking at the lack of competition in the awarding of contracts and i racked for 10 years, we calculated a $3.3 billion was lost on that a loan. one other thing i want to say about the list, there is a tendency of some people -- i do not think much year the press will cover us for the people who watched the commissioner hearings, but the broader public think the problems with the waste are primarily a problem of the iraq the war, that is what some of the names of companies like halliburton were household names. and eventually we hope to draw down troops in afghanistan. maybe the problem is behind us. if you look at the role of shame in chapter 3, you will see we start with some incidents in iraq, but we have many current
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instances in afghanistan, some that have come out this year as a logistic contractors, the waste goes on, that is why we come up with these proposals my colleagues are talking about. >> good morning. we were asked a couple of specific questions in our legislation, to determine the reliance on contractors. we were asked to look and establish the amount of waste. our conclusion is there is massive waste. this is some much more than a contract in story. this is at the end of the day about the success and ability of our defense, diplomacy, and development efforts. at its essence, it is truly a national security story. we have been told time and time again by a senior defense officials that we will not go to war, we will not go to war
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without contractors. so just as important as procuring weapons systems, training and readiness of our troops, the affect of this and deploy ability of our diplomats, we have to take contractors to were seriously. it is a national security imperative. we cannot afford to fight the next war the way we fought the war and iraq and afghanistan. it is a national security issue of the highest importance and demands reform. thank you. thank you. >> i am going to rehash some things to have already heard which are certainly important to me. you have heard many times, all of you recognize we are going to go to contingencies with contractors. you heard it this morning over
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and over and over. not just in a combat environment, but natural disasters and humanitarian disasters. where we lack a capability is that the departments and agencies that we looked at -- i would venture that it probably extends across the government, do not take contacting seriously as the core function. they may do ok buying it stuff, when it comes to contingency contract in, particularly for services, they do not take it seriously and they do not have the mechanisms in place like the do with procurement of systems. what are recommendations due to debate asgree didn't they attempted to institutionalize, taken
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together within the department and usa i.t., institutionalize processes and procedures which will help eliminate some of the problems that we lay out in the report. when we need it to do is change the culture. that cannot be done overnight. it will not be done overnight. it has been mentioned in the budget dilemma this country faces. we recognize that. as others this morning have said, not of our recommendations cost something. there are many of them that just require a change in processes and procedures and regulations. it leads me to, in my mind, one of the most important aspects of our work. that is the follow-through. all of you have seen many
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reports and unfortunately, many end up in the dustbin. what our concern is that when these wars in afghanistan and iraq bank end, we no longer see the casualty list, we go away at the end of this month. at some point, where is the forcing function so that we do not fall back into the same bad habits. that is why i think the last two recommendations that we have made in the report are so important. despite to the budget dilemma that we face, congress has got
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to look at to these recommendations. if need do, do a cost-benefit analysis. what does it cost? is it worth it to do recommendation why? then you get to demand from the the part -- demands from the agency. regular reports on their progress. they may not be able to do some of these things. if you do not have those departments, we will fall back into the same bad habits at the next contingency. >> i would like to emphasize two points made by others today. and then to and with one final
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additional costs. as a number of us have said, we are not naive. there are some recommendations that if implemented would require additional resources. we would argue that not it is urgent that these -- will continue to rely on contractors. it is also clear that the nation will continue to engage in contingencies. the present contingency is one that could not have been anticipated. a long time ago at the inception of the work. there is ongoing activity presently and yemen and somalia to name two countries. the second one is, as we heard, we were conceived of in a bipartisan fashion with principal support.
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we operated not just in a bipartisan fashion over the lasted three years but in a non- partisan fashion. now it is up to the congress working with this white house and subsequent ones to implement recommendations and our hope that our government will work in a non-partisan fashion. finally, the key to implementing those recommendations is not just government action but also the support of the news media and calling congress's attention, the white house's attention, and the public's attention to these issues on an ongoing basis. these issues that we are talking about are not just dollars and cents as important as that is in a time of budget restraint, it is a question of national security. it is a question of the lives of men and women. it is the safety and security of the american people. thank you. >> we will take your questions after a comment.
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>> it is like trying to get your one minute. the point is, you heard the commissioners. we did not get up here and say he will say this, you will say that. i take great pride in having worked with them. i take great pride in alleging that they have an auditor's mentality. that is my history. as an auditor, i will be remiss not to cite three numbers for you in the report. 61, 111, 162. if someone says what are three of the areas that are most noteworthy, 61 is security and it relates to both contract thing organizations and subsidizing the caliban. 111 is about sustainability that was mentioned and the $30
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billion that will be spent. 162 is it out to the auditor opportunity to have a mediate cost-saving opportunities to refunding them. i hope in closing that the three key is the leadership to bring home these recommendations. >> mike asked me to conduct the question in part. thank you for your patience. if you have questions, the commissioners are happy to respond to them.
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>> if these recommendations are not implemented, everybody is talking about congress taking them seriously, can you describe what happens if no action is taken? >> the question is what happens if these are not implemented. who wants to start? >> what happens is what happened before. as you have heard, we did not anticipate libya. we also did not anticipate afghanistan or iraq. we fight contingencies that whenever expect. the size of them is not just the action of the actual fighting, it is the reconstruction. for example, there are talking about reconstructing libya. who will do a lot of that work? contractors. who will oversee the contractors that a very small federal acquisition work force and a very small oversight work force.
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so what you are doing is asking for more of the same. more waste, more fraud, more abuse. to estimate how big it will be? no. every dollar in this budget constrained environment that goes to waste is a dollar that should be going somewhere else. >> i will make another point on that. over the course of the life of the commission, we have actually seen improvements. more attention to these issues, more people being devoted to managing contractors and contracts. what we are starting to see right now is those gains are at risk, if not being lost. a number of the commitments leaders have made to strengthen their functions, we are already seeing falloff. i think that would be another point that were restrained us greatly. >> you know, again to take the dark side. if these recommendations are not implemented, you folks up there
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in the media who can address that. there ought to be accountability in that hall. as has been outlined, there is an opportunity at hand. that ought to be addressed. >> you talked about the emphasis that compare to some of the other types of cuts, this is still a comparatively small when it comes to entitlements. do you feel it is a failure of the super committee if they did not implement some of the things -- >> would it be fair of the super committee if they did not implement some of our recommendations in spite of the fact our numbers do not come close to the trillions that they have to reach? the answer would be it would be a failure. >> one of the longstanding complaints of military commanders in the field is a lack sufficient control over contractors within their area of
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operations and responsibility. some have gone so far as to recommend that the commanders should be given part of the consent policy to ensure that policy is followed. how do you feel about these recommendations? what would you recommend if you see this as a developed problem getting better control? >> your question is basically saying the commanders in the field have some significant concern that they do not have oversight over contractors. even in some cases, maybe having them do what they should be doing. i want to grant -- he might want to take this first or someone in the military directly. >> i have heard in our travels similar complaints. in my mind, most of those lead
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to the fact did not have the appropriate or an adequate number of contract oversight representatives which are to be provided from that unit itself. we sought units getting ready to deploy to iraq and afghanistan early on in the process that had no idea how many contracts they would fall and on when they arrived. there were ill prepared to oversee the contractors in many cases. i must say that is getting in my experience much better. units now are deploying in some cases a set number.
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>> i would also just add that we would expect since nearly half the personnel overseas are contractors, equal to the size of the military, there needs to be better integration by the pentagon and at that you would not just see a passing comment in theqdr about it. the state department has done more about contractors than dod has and yet dod has the bulk of the contractors. this is a solvable problem. we did not want to inject ourselves too much in telling the military how to run their operations but i think it is that what we need to do. >> can you compare how that are different or the same? >> i think all of us could jump in on that one. do you want to start first? >> the problems of abuse and i
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iraq were sort of a very crude because of the need for contractors started very suddenly in 2003 unexpectedly. large number of contracts were given out that were not definitize at all. large amounts could be wasted under them. in contrast, afghanistan for our purposes, the large numbers in contract in dollars came after the two surges in 20009 and 2010. by this point, some of the lessons of iraq had been learned. but there was still a great deal in terms of reconstruction projects which had been a big failure in afghanistan because the area was not prepared or money that is not siphoned off into the insurgency of afghan
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security subcontractors. what we found was there were plenty of problems in afghanistan even if they were further down or different from the direct ones. >> let me also take a crack at that. what we have seen unfortunately is some of the lessons learned have not migrated to afghanistan quickly or in some cases at all. for example, and i iraq, they evolved into having a contractor operation into wall what they were doing. in afghanistan, they decided not to do that for reasons that delude us. defense and state entered into a memorandum of agreement. they did not decide to do that in afghanistan for reasons that are not apparent to us. the lessons that were hard
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lessons that were learned in iraq have not migrated as quickly or as well as they could be to afghanistan to solve problems and get a head of it. >> i would just add one point to underscore what the commissioner said. people tended to forget that the afghan war preceded the iraq war. the focus began just after a few years ago. the lessons that ought to have been learned from iraq were not applied in afghanistan. one further example that i would cite is that of the afghan reconstruction, that inspector general was even slower. it is presently improving its performance, but i think all of this underscores the importance of one of our recommendations in particular. that is having a permanent contingency inspector general so that the next time america goes to war or we engage in activity
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there is a standard -- it can be scaled as needs dictate to be sure that the lessons learned in iraq and afghanistan are applied to next time there is a disaster or contingency. >> i will add one new thing. i think the commissioners would agree that however bad sustainability is, in other words projects in either country that cannot be sustained and it therefore will be a wasteful expenditure, are magnified in afghanistan. they do not have the resources to carry on in many cases. >> do you think congress has demonstrated an ability to work affectively, a very urgent issue. you have outlined that these are also urgent recommendations
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congress to act on. when confidence to you have that there will be follow through? >> let me take that. i admire the men and women who serve here. i always went home and said i have met some of the finest people. when you see the collective outcome, you are not impressed. then there are a few that can make everyone look bad. i think both sides of the aisle and now we have a gigantic problem. we have postponed a dealing with their issues for decades. this is the year -- this is the decade of decisions. decisions cannot be put off. i would like to think that they would be eager to implement proposals because in the end, you're going to save far more than you have to spend. that would be my answer to your question. >> is it going to cost money to
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save money? is there any recommendation for structure in the existing process for those to pay for entertainment, to pay for what it would take to ensure the short answer is no. there are some agencies, defense contract management agencies that were on a reimbursement basis. therefore, if they can advocate and convince organizations that can provide better contract administration, they are refunded. there are other organizations that are funded as a line item. that is why we make a point to report that those agencies have to be addressed. the short answer is no. is it valid to continually look at methods to finance oversight organizations so that we know what the contingency occurs the can hit the ground? yes. >> would you give us a little
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more insight into that? >> repeat the question. but the question is, how do we come up with the numbers who came up with. there is a general sense out there when you speak to people from the inspector general for iraq or afghanistan as well as a lot of academic studies that waste is somewhere north of 10%. we had our staff -- we met with people in the field we met with experts. we got a lot of information that people did not want to say officially but gave to us.
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the front side is a little interesting. we came up with 5% to 9%. the association of fraud examiners says that 7% of all commercial contracts are lost through flood. we were at 5-9%. we think we are pretty much spot on. it is an original commission estimates. we stand by it. we are confident in it. as i said earlier, i personally believe the number is much closer to 60 billion than 31 billion for all the reasons you heard from everybody else. >> i might add, we are participating in two countries that have a different view of waste and fraud. what we would call fraud, they would call the tax on doing
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business. >> i would like to add one other thing. i do not have the page in front of me. one of the things we found that is hard to calculate is the amount of money being spent to buy off insurgents. we actually have a photocopy of the documents that we were handed when we were in afghanistan. it is a bill from the islamic republic of the east afghanistan or something. it has a telephone number. it's as, you want to operate safely, here is the number to call. we did not put the number in. the point is, you are getting all kinds of money siphoned off that is just impossible to measure. the estimates are 10 percent, but who knows. >> on this page and in chapter 3, the chapter that charles did
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a lot of work on, we had to tone him down because it would have made be added a another 30 pages to our document. let me go to decide. >> you have an interesting perspective. you were there at the iraq war has control. now you are on this side criticizing much of the war. now you have a book about the bush administration mismanaging afghanistan. how much was the rush to war and poor planning, how much did that set the stage for the $30 billion to $60 billion or estimating today? what's the question is not accurate. we are not criticizing the war. i do not want anybody to think we are. i needed to clarify that. we are criticizing that contract in in the war. >> i do not know if i should answer that, but you did advertise my book so i will repeat the question.
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it is called -- i wanted to get it right. we are a bipartisan commission. we are really non-partisan. the contributors to this matter were also bipartisan. you have to look back and see how the acquisition work force were cut back. the people during the oversight, there were not as many of them. then you get into the afghan war or you do not have in the first few years anything like the money that was spent in the last few years. to give you an example, we spent in the region of $1 billion or $2 billion. that doesn't matter. in iraq, we immediately spent huge amounts of money. as mike tivo pointed out, the contracts that were signed or signed sow per lead they did not specify details. for that reason, you had huge
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amounts of spending. and the contractors themselves to not had the acquisition systems to manage that amount of expenditure. you have a problem on top of a problem. you have a shortage of people doing oversight because they have been cut out in the 1990's. then you have a very rapid acquisition program. contractors were not ready for it. stock had to be done. when it started to be challenged, and it was challenged by my office under the direction and part of mike teebow, it took awhile to get that resolved. as things were getting worse off, money was getting spent. who is to blame? everybody is to blame. that is the point of this commission. let us learn lessons and to do something about it to regardless of who is making the decisions in the white house and the state
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department and congress. >> [unintelligible] >> i probably overstated. let me make sure since clarity is important. let me be really clear. first off, we are just one small part of their mammoth task. if they do not take a good that look at it, it would be a failing -- not a failure of the committee. >> [inaudible] >> there is a whole issue that might ask could speak to just as an example. >> [inaudible] >> a couple of points. the dollars are driven by defense. there are opportunities out there for significant cost reduction. i think the point we make is
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that the committee can look at that -- and we have seen some indication that they are very keen on it. i will get the one example i referenced on page 162. the defense contract audit agency has put in a request for 100 auditors. that is not a lot of cost. that way they can reduce the backlog that goes back to 2005, 2006, and 2007 and forward. if you are trying to be fair to contractors, tried to be a contractor that has to support a claim and they committed six or seven years of claims and have to be supporting it. or the opportunity is, they have a backlog in there presently that will go up to one trillion dollars. those are on audit it costs. if you use the historic returns on their audits, right now in the immediate backlog of $588 million, we estimate 1.1 billion
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of dollars will be recovered. that is subject audit today requested. the funding process is going on right now. you can authorize the funding, they do not find them. late in the year, we are already one year behind. those types of things are occurring. if you look at the $1 trillion, those are the kinds of a media decisions that i would think the committee would be interested in. >> just take a few more questions and then we will stay for any individual question. >> [inaudible] >> who wants to take that question?
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ok, scott. >> the question was, how involved does the government and the afghanistan or iraq in the corruption or the fixing of things? i can answer both. clearly there is a lot of corruption in both countries. two point to any individual in the government's is extremely difficult. frankly, sometimes people end up getting killed. we want to be very careful about who we accuse. in terms of the solutions, a yen, there are people in both countries who are working very hard for solutions because they realize if they want to have continued american involvement in the reconstruction of their countries given the debt crisis that we face, the american public might say, enough. cut off. if that is the case, they will
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lose out. i believe there are many officials in afghanistan and iraq who would be sympathetic to what we have written. >> if i can mention a specific illustration that is somewhat known, that is the failure of the $900 million bank afghanistan. it illustrates the way our commission dealt with it. was it a problem with the government in afghanistan? of course. high officials on the government were on the board of the bank and were receiving loans that were not backed. i am not going to go on and on, but of course it was a government problem in afghanistan. on the other hand, our particular interests or the contractors involved. they hired them to be a consultant to the central bank
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of afghanistan and to look at things like the cobble bank which is 40% of the banking system in afghanistan. even though it was privy to many indications of fraud and that this was a ponzi scheme, it did not tell the united states government what it knew. the united states government in our report found out about the problem of from the contractor it paid but from the washington post. the united states government -- contractors have their aspects and the afghan government has their aspects. >> one more point in regard to this. we met with officials and afghanistan -- i cannot give you the office as i do not want to endanger their lives -- they provided tremendous information in their official capacity about fraud in the afghan government. this is afghan officials.
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they submitted it. they did their jobs. they were very fearful that it would become public. in other words, they disclose to the corruption within the government, but they knew it would be kept quiet. it was not kept quiet, they feared for their lives which is a real disincentive to pointing out fraud in your own government. it was in large amounts of money and a major government officials that were involved. we will just take two questions. >> when you talk to either chairman lehman about these recommendations involved over the bill in the next couple of months, which of the recommendations would handle legislation? >> it is a good list that we will provide you. secondly, we have been in continual contact with staff.
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our big achievement yesterday was to issue this report without the press getting it first and the staff reading about it. we were determined that none of you would get this report and we succeeded. we were trying to build a little credibility with the staff. >> iraq and afghanistan were not the first for this has happened. but back to vietnam, contractors were involved for a long time. what makes these two bourse, what makes it so much different? >> it is easier to prevent if we put the resources to prevent it. it would be easy to prevent. not all of it, but the bulk of it. i just may have mike close up and we will be here for any individual questions. >> part of the answer to that was the runner-up was so quick in both wars -- the immediate runups and troops that contractors were trying to be
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very supportive. we were literally throwing contractor support out of necessity. what happens is a good company tries to be responsive, sometimes their business systems lag. the only closing, i want to make is -- a commission like ours. we will not put the seal of approval. that was not our job or mandate to say here are companies have done a pretty good job. here are government organizations that have done a pretty good job. my history is when you put the housekeeping seal of approval, something happens the next day. somebody says, why did you do that? with that said, we have seen numerous examples. the one i want to cite, and 2008 and afghanistan we would say, who are the oversight officials for the tremendous buildup of contractor work? there really weren't any. they could not give a list.
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within a year, they had in the list and the assignments. within two years, they had -- it was clear in the military you had to provide these people. it was clear within the government oversight you had to evaluate. could a person logically say, you should have had that at the outset? i would say part of our commission is to take these lessons learned. it is the same infrastructure they are laying out that ought to be able to take that tremendous build up that is the nature of contingencies and more effectively deal with it and not waste so much money. last of all, i just have to thank everybody that is here. it was a collective effort. >> thank you all very much. [captions copyright national cable satellite corp. 2011]
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[captioning performed by national captioning institute] >> coming up next, a town hall meetings with congressman xavier
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becerra and mike lee. the justice department announces a lawsuit to break up at&t and t-mobile. president obama comments on transportation bills awaiting passage in congress. >> on tomorrow's "washington journal," chris shays and charles tiefer. lewis morris, chief counsel for the health and human services attorney general's office. and we will talk to the head of the climb agency, jane lubchen co. >> he is a partisan guy who wants to unite people. all of the problems of the era, you could get from the sky and why we cannot collect him is the same way we eventually went to
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war. they cannot be resolved. >> he had the unfortunate problem of running against dwight eisenhower. i don't see any way stevenson could have won. >> he paid the way -- he paved the way for franklin roosevelt. >> there are 14 people in this series, many of whom the worst may not have heard about. all of them they will find fascinating and certainly surprising. >> history professor gene baker, and historian richard norton smith talked about the 14 men who ran for president and a loss, friday. it is a preview for "the
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contenders," beginning friday, september 9. this weekend, a three day holiday weekend on book tv on c- span-2. afterwards, harvard law professor looked at the influence of racial politics on the first african american politics. former editor and columnist, ellis cose, on race in the media. sign up for a book to be alert on booktv.org. >> c-span is covering town halls and around the country this month. as members of conference -- congress talk to their constituents during the recess. next, we take you to los angeles where xavier becerra talks about
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the economy and the deficit. he is a part of the new bipartisan panel set up to find deficit cuts. this event is one hour and 15 minutes. >> why do i not do this? with people walking in, i want to save as much time as possible for folks to ask questions and make comments. why do i not go through some of the mechanical stuff i usually go through in these town halls. many of you have been here before so he will be bored by it. it is always good for those of you knew to be -- to hear from an. since i am not always here, it helps for you to know who my staff members are and to know the process of how this works. ok. can i asked someone from staff to ask -- to grab my jacket.
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ok. we always begin by thanking our host. those who make it possible for us to be here. i think it is a treat to be here at this particular school. it is a cluster of schools. this is where the ambassador hotel used to be which is now a landmark as a result -- have been here for a long time. many of us still remember that bobby kennedy was assassinated at the hotel. it is great so many people have a chance to learn history as they come to school every day. thank you very much for hosting us. we want to say to the principle , is miss lazo here? thank you very much for letting us use the school and facility. [applause]
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i always try to make sure i can get the name. i do not know if i have it. after we leave, ms. lazo has to make sure this facility is ready for school. folks will be cleaning up when we are done. we say thank you for being available after hours, late hours to be able to clean this room and have it ready for the kids tomorrow. i also tried to introduce -- thank you for doing that. i also introduce my staff. they are the first point of contact most of the time. you know who my staff members are and hopefully you can start the process of seeking my assistance or services as quickly as possible. let me go down the list. and want to begin by mentioning my field staff.
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she may be outside. also brenda who is on staff. she used to save on staff and is working with us when she is finishing up her master's degree. she is working and going to school. you see a lot more of that these days. this is outside. we have a lot of folks outside. gail is outside. she is my out reach supervisor. the deputy press secretary in charge of my website. also michael nelsen right here.
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michael is important. if you have a particular issue. also this outside as well. amy is one of our interns. a student at the university of pennsylvania. she is from l.a. but she is here from us. you have to applaud for m. e.. we do not have to worry. daniel is here. portia as the translator. let me introduce to you some of the folks that are here from the los angeles police department. lapd has been gracious to attend these forums i do. also to answer questions. if you have a question that relates to public safety. i am a member of congress.
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if you have a concern about safety in your neighborhood, drug dealing going on, i would answer it as well as someone from the lapd would. they're here to make sure we have a good time. let me introduce the folks were here. we have a few. we have our senior lead officer. the senior lead officer for this area. we have several of the officers as you will see as well throughout the evening. sometimes we have representatives from some of the other elected offices. and if you ask a question that relates to the federal
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government, i am the one who will be answering that. sometimes others can answer more directly. that is in their jurisdiction. writer here, thank you for being here. if we have any issues, hopefully they are available. i typically then proceed to give you a quick glimpse of what is going on. we have a big crowd. we have an hour. what i would like to do is reduce the amount of time i take to give you a sense of what is going on so i can leave as much time for q&a or other comments you might have. as we move into this session, let's try to get as much done. let's hear from as many of you as possible. we do not have enough time to address all the questions you might have for the comments you might want to make. we're going to run out of time. what we do is ask you to write
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your name down on a piece of paper. i will draw names because -- so there is no picking our choosing. we will take those questions and as much time as we have, hopefully you have given us your paper with your name on it. we'll get your as many of these as possible. we're not going to get through all these this evening. we will go through them as quickly as possible. perhaps the reason you are here is you may have heard i was appointed to serve on this deficit reduction committee. because of the 535 members in congress. 12 have been appointed on to this committee which has a sure short life span. we are tasked with trying to achieve deficit savings of 1.2 to $1.50 trillion.
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and it is open to us to explore every avenue to come up with the ways to reduce the deficit. also it is a tough task with a shorter route of time and 12 less have been charged with that responsibility. i hope you have a lot of good ideas and comments. i will take that with me and i hope to have opportunities as we move forward to talk to folks as often as possible about this assignment. i consider it a privilege to be on. i get as much congratulations as condolences. it works both ways. any number of things i can talk about. i will keep it to that and ask this. we will go straight to question that this is the way we try and handle it. if you noticed we have cameras here, c-span which is a public service cable station requested
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an opportunity to be here and we said sure. i do these all the time. we will do our copies -- coffees. we will allow c-span to film and if anyone has any objections, this is national cable. it will be broadcast nationally. they are a public service station. we will try to go through as many of the questions as possible. i will draw them randomly. i will try to answer each question as succinctly as i can and i ask you on behalf of everybody who is here to respect everyone who has come. our neighbors who are here to ask your question asks simply as you can. maker, and as succinctly as possible. we have a lot of questions.
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we will get to as many people as possible. i love it when you applaud and i hate it when you boo. we will spend more time taking questions or comments. we will have -- when i call your name will draw for names. i will draw four different names. please make sure you raise your hand. if you hear your name, raise your hand and walk to the center of the aisle. but we will do is we will have a staffer with the microphone. everyone can hear your question or comment. otherwise most folks will not get to hear you. and so if you hear your name, politely make your name to the center of the aisle.
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this way you are ready to go. as i finished with one person's question or comment, i will draw another. we will have four people ready to go. at least hopefully in an orderly fashion. we will get through as much of this as possible. here goes. are you here? go ahead and make your way to the aisle. you will be the first to ask. i will call out three other names. patricia -- recinos, where are you? get behind stephanie.
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it will move faster once we get these names done. eric ares. come to the center. and then -- wouldn't you give us your question or comment? thank you for coming. >> thank you for the opportunity. i am representing thousands of members of the green alley coalition including the sierra club. we're here to speak to you about the land water conservation fund and we're asking you to
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fight for. we really need someone to make sure the land water fund does not get decimated or devastated. it is a small percentage of the federal budget. it is a bipartisan issue. it need not be used to correct the budget deficit. thank you. >> thank you. i am a strong supporter of the program. what i will tell you is this. i have been tasked with finding out 1.2 to $1.5 billion in savings. the 12 of us who have been given this assignment, i do not believe we have a right to walk into this negotiation with preconditions or protecting any special interests are making special interest pledges i will protect whenever i think is important. i think that nothing is a sacred
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cow and everything should be considered. even the things i have fought for. i believe i have a right to fight for things i believe in to try to come up with a mix and -- i believe is good for america. i have to be ready to put whether it is conservation funds or whether it is a program for seniors or children or something for companies and corporations. what i will tell you is this. take a look at my record. you know where i stand. you probably have the sense of what i will be fighting for. i cannot guarantee what will happen because it has to be part of a negotiation. hopefully everyone goes in to this negotiation putting their egos and preconditions at the door so we can have a good, robust conversation which i hope the work of the 12 members and the deliberations are public
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and transparent. thank you. who did i say was next? patricia. and one other name. ann. come on down. >> thank you for having this town hall meeting. i am very happy to be here. politicians talk about shared sacrifice. the people in our community have done the sacrifice already. what do you plan to do on the deficit committee on making sure the taxation it really goes to the wealthy and not the working poor? in addition to that, i want to know your stance on the free- trade of columbia panama, we run the risk of losing jobs in california. interdistrict a loan, it is 5247. i left at intermission with
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your staff. >> i love when you, with data. --i love when you come with data. i want to make it clear. i will not stand here and guaranteed that i will not let them touch -- you fill in the blank. let me give you a quick example. i and the ranking democrat in the house of representatives when it comes to social security. i and the highest-ranking democrat. i do not believe social security should be on the table for cuts. why? because of social security -- please. tbd favor. why? because the social security in its 70 + years of life has never contributed one penny to these deficits that we have in every year or the debt.
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not one single cent in debt is due to social security. in fact, social security today has a surplus of over 200 trillion dollars. some people are saying, we should take money out of social security, raise the retirement age, all sorts of ideas to help with deficits. i do not think that is there. i have to hope that i can argue well enough and windy day in that debate that everyone would agree with me that of the 12 of us, we should not go after social security benefits to solve this deficit and debt crisis. i cannot tell you that because i have a socials -- i have a strong belief of social security that i would close the door. i would be doing a disservice to all the americans in this country who believe the 12 of us have a sincere obligation to try to find common ground. if i see you cannot touch social
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security and somebody else says you cannot touch medicare or taxes for the rich or money for schools -- i think we have to be prepared to deal with what ever the majority in this committee comes up with. look at my voting record, he will see where i stand. i do not have a right to close the door on things that are my sacred cows. on the trade deals, it is time in this country where our biggest export was not a american jobs. our biggest import was not will. we have to come up with a trade policy that recognizes that we must grow jobs in america. in fact, i will tell you right now that my belief is the biggest deficit in my country
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today is a jobs deficit. you put 15 billion americans to work and that they are paying taxes. they are paying taxes, the treasury has revenue. if the treasury has more revenue, the deficits go down. it is tough to imagine the government will balance their budget is 15 million americans are out of work and when they get home they have a hard time determining how to balance theirs. we have to have a trade policy that generates jobs in america. not one that just opened supporters and we have to move businesses abroad. those trade agreements, while they are making progress, i think there is issues with some of them. we have to make sure that if we are going to open our doors to columbia, columbia is treating not just its capital properly, but is treating its people
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properly and not making it difficult for workers in colombia to be able to have rights. in colombia today, you are as likely to be assassinated for being a worker tried to help people organize as you are if you are a narco traffickers. there are some real issues there. we have to get these right. next was erick. before you go, let me pick in other name. richard spicer. are you here? come downtho the center aisle. >> a good evening. i am a lifelong resident of your district. i appreciate the opportunities for conversation and your sincere effort to get the opinions and thoughts of your residence. i will push back a little bit because i know you have been put
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charged with a great task. i just want to make it clear to you and it to your staff that when you say things like special interests and sacred cows, i understand that. but the residents who are struggling are not sacred cows or special interests. they are everyday people who live off of social security, medicaid, and food stamps. the you understand that we are not sacred cows that the way other people are, we're trying to live our lives. please do not see us as another special interest or sacred cow. if that is not clear enough, we are having an event in los angeles to try to portray that livelihood that we are living on september 22 at city hall. in by somebody from your staff to come here some more stories of folks who are struggling and why we need you as a leader, somebody we do respect, to take that to the table as well and make that a message. >> i appreciate your point.
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let me go right to it. let me say this. do me a favor. i can see that the cameraman behind you is trying to figure out how to fill a around your heads. why do we not all get to decide so they have a clear shot. and remember to smile. you are right, but caution. what i consider a special interest -- somebody else might say, no. that is not a special interests. let me give you an example. how many here own a home? all of us who own a home, we have a special interests. every time it is time to file our taxes, we get to do something that people who do not own a home get to do. we get to write off the interest
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on our mortgage. if you grant, you get no such tax break. we also get a tax break because we pay property taxes on the home. we get to write down how much we have made and how much we will pay to the government because of the property taxes we pay on that home. somebody who rents, they do not get to do that. they are helping to pay the property taxes and mortgage on the property owned by the person who gets to write off expenses. our homeowners special interests? my point to eric is this. what you may think of as just the people, someone might say, are you talking about the people getting medicare? are you talking about people getting homeowners' mortgage deduction? tell me what you mean. that is why the best way to approach this, i believe, is to say, "i will not come in
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protecting anything or anyone. but i will fight like the dickens for those things i believe in." i do not think i have to be coy about what i believe in. i have been in congress for 19 years. you can see what i believe in. that is why i say to folks, it is pretty transparent what i will fight for. i just have to believe that i have done more training and prep and someone else. at the end of the day i will prevail in convincing my colleagues at something like social security should not be cut so we can pay for deficits. but thank you for the question. next person, we have carol. francis. c.g.r rodriguez.
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are you here? go ahead and make your way down there. we will go with stephen smith. are you here? right over here. go right ahead. >> i think special interests most people think of as the people who are making, you know, the billionaires, the millionaires and people who cause the economic crisis. i really appreciate the whole idea of you going into the committee -- the super committee without a set agenda and willing to be flexible and try to persuade. but that only works of both sides to it. when the republicans begin by saying -- >> to me a favor.
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i want to make sure everybody has a chance to hear what is being said. i do not what somebody walking away misunderstanding what is being said. the more you applaud, the more i am going to have to say please hold, stopped for a second. at some point, somebody is going to feel like, you clapped. i can do. before you know it, it will escalate. let us focus on the q and a on the commentary. >> what the republicans have said, we will make sure that nobody who believes in raising taxes on anybody, on the top 10% or the top 1% or anything that are going to be on the committee. if they already have that preconceived and you come in as saying -- it is only the democrats who want to be flexible and republican said, no, we will go with this agenda.
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we know that we need to cut the war in libya and iraq and afghanistan. quit funding at israel for no matter what it does. we need to do these things. >> let me go ahead -- i need to keep going. i get your point. i am not stupid. i am not going to walk in saying, i have no preconditions. and by the way, i see you have 30 of them. let us continue to play in the sandbox. when i say i believe we should walk in with no preconditions making no special interest pledges that i sign on the dotted line i will not do this or i will do that, i am that if we saying th
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want to be serious and honest with all of our constituents, i cannot have in my back pocket this "get out of jail free"pass for one constituency. everybody is going to look for those passes. i have to believe that if i walked and earnestly sank to my colleagues, "you just heard what i said about social security," but it is on the table. before we leave it on the table to find savings, prove to me why. i believe i can win that argument. but i have to test that theory. that is why i think it is important for this to be a transparent process. social security has never contributed a dime to these deficits or the national debt. if somebody votes to keep it
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on, i want to see -- to me, social security is one of the greatest inventions america has ever given us. i understand your point. you may still have issues with my position. if i walk in sang, so when so, i know you have always taken this position and you will never do this and now you are on this committee. because i know you have always taken a particular position, i will take a particular position. this will break a part. i do not think failure is an option for us on this. if we do not do something, the 12th of us, the consequence is there will be an automatic trigger for the same amount of cuts. that is like having it all guillotine come down and decide where the cuts will be. it is better to have 12 americans who at least profess to wanting to do the best for
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their country come up with a solution and it just take a guillotine with our eyes closed and say, we need to top off all this money and let it come down. that is not the way you legislate. i do not believe. i understand your point. please understand my predicament in trying to get this done. i hear what you are saying. do me a favor. we cannot proceed if anyone wants to interject. please, sir. we will just ask that you all try to cooperate. please be respectful. as i said, it will escalate. this is what i ask. please respect your neighbors who have taken the time to come. please respect the rules.
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please respected the law. this is a public forum. if you break up this form and make it impossible for us to continue, you are committing a misdemeanor. we would ask that everybody respect your neighbors if nothing else. at least respect your neighbors who have taken the time to be here. they just announced that have no intention of ever operating a museum. cable not let the southwest museum name be used again. they are ready to give the
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property to the city of los angeles, do we have any options? >> we have discussed this many times. obviously -- never to resolution. . it is not an issue that i deal with on a day to day basis in washington. this is a local issue having to deal with an important site over in the northeast area of l.a. that has been closed for many years. they have control of the site and the collection. it is the very precious collection of native american artifacts, one of the best collections in the united states. the concern of many local residents is what will happen to
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what is a treasure in the community? a museum in an area not to void of a lot of treasures and historic sites and opportunities for people who want to come into the community. as i said as always, i understand the passion. it is a treasure we want to continue. at the same time, they will say it was a museum that was on the verge of closing, its attendance was very low. it was having financial difficulty. somebody had to come in and where it would close permanently. it is a city issue. i know city council members to have jurisdiction over the issue have been talking quite a bit a about it. i know the mayor has been involved as well. suffice to say this -- i agree with the residence who want to keep the museum there. i do not know if i agree with
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the residents who say we must keep it there at all costs. somebody has to bear those costs. somehow you have to be able to prove to those who will run the museum and own at that they can bear the cost. museums are very expensive to operate. if you have to keep everything in our climate condition, and you have to make sure you have security. that is what makes it tough. i wish i could give you a better response, and the last time we spoke about this was a couple of years, i do not know what has transpired since then. i have not dealt with that at the federal level. i am always welcome to work with you to make sure that that site has every opportunity to remain the southwest museum. thank you. ok. who was next? i think richard, you are next.
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then we have c.g. and stephen and one more. judy. you will be next -- fourth. >> thank you very much for having this forum. in your role on the committee, i would appreciate if you would share some of your ideas about how to make it work in the manner you have suggested -- either conduct, transparency, perhaps ways in which the members of the committee could share and education on some of these complicated subject matters, and to do with any matter that keeps everything on the table including revenue reform, increases as well as shared cuts across the board -- not across the board. smart choices on ways to make
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cuts. >> i think you're going to the heart of this without asking me to comment on something. let me let you probe my brain a little bit more, which i think you have a right to. i am voting for you. you gave me that privilege. first, i said it earlier. i believe it has to be a transparent process. if not, it is too easy to gain the system. wink wink, not not, you come out with something like the smoke of the vatican north dakota try to figure out why was he chose an for the vote. transparency -- as open as possible. i think that is crucial. secondly, i think we have to have an initial opportunity to talk about how we are going to -- what can be put on the table? what is really in the next?
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what i think is extremely critical -- i do not know if all of my colleagues would agree. the whodunit? what happened? just the facts. how did we go from 2001 when we had the largest federal budget surplus in our history and we were being told by the fiscal referee for these things, the cfo, that we would have budget surpluses so large that over the next 10 years we would likely see budget surpluses totaling 5.6 trillion dollars. surpluses. so much so that we were going to be able to wipe out all of our national debt within that 10 years and have extra. we would be free and clear of any debt. that is what the congressional
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budget office was telling us. that is the most neutral referee that we use to determine costs, revenue, those kinds of things. in fact, we would use them for this committee. all of a sudden, 10 years later, we went from that projection of record surpluses to now, record deficits. a turnaround of 12.7 trillion dollars in 10 years. $12.7 trillion. go home, right out the number $ 12 trillion. breakdown. you are probably going back to before the caveman days in time. 12 trillion is an astronomical sum. what happened in 10 years? we all watched. i believe we have to answer the
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"whodunit" question. otherwise, we are going to say chop this year, change medicare here, change taxes here. what caused us to get into this mess? now, we have a general sense of what did, but we need to probe further. the biggest contributor, i do not say this but the congressional budget office's numbers, the biggest man-made contributor -- the bush tax cuts of 2001 and 2003 which over the next 10 years will cost us over four trillion dollars. in the first 10 years, the cost about $three trillion. second largest contributor, likely, the wars and iraq and afghanistan. why? we have never paid a single cent
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of the cost of the two boards. it is all borrowed money. over $one trillion dollars and growing. we never paid for that. you could start to add up these sounds and see where we went awry. if nobody says, we should do something about those bush tax cuts, which went mostly to very wealthy folks. nebraska there are some millionaires in this room. your tax break for this year was probably a about $120,000. if you are somebody making the average income of $45,000, you probably got enough of a tax break to give you to tanks of gas. we need to figure out what caused us to get there. once we do that, we can target better what we do to come up with 1.5 trillion dollars in savings. if we blindly say, we have to cut the schools because we have no choice. i do not know any child who
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spent any of the money in iraq or afghanistan. i know no child who got that tax break. i think we have to go and figure out the sources, the drivers of the deficits. that way you can answer every american plainly what we have to do to get this right. the bottom line, my bottom line what we do, will it create a job or kill a job? i will not be any -- very favorable if it is going to kill a job. i believe the quickest way we get america back on track is to put america back to work. there are too many americans who are not working and paying their taxes and feeling good a outworking. maybe not great, could it not
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paying taxes. long answer, i apologize. i have to keep them briefer. but as go to the next one. >> i want to thank you for your support of educational programs that you provided in the past. can you share ideas as to how you can promote those kinds of programs, protect those programs? i am very concerned that it is going to be on the chopping block and it will be a blind cut. >> what i love about these sessions is, you all tell me through your passion with you care about the most. invariably, it is something very important to the family and neighborhood. in this case, the program to help kids, a lot of children who are mostly disadvantage and modest income families, it helps
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them make sure they catch up so they do not fall further behind and to drag some of their peers with them because the teacher has to teach to everyone. the program has been very successful getting a lot of these kids a lot closer to where we want to see them. can i guarantee that something like trio would be cut? nope. i cannot guarantee that. have i been a supporter? i have been more than a supporter. when i served on the education committee, i was one of the principal advocates for gear up and trio. i have fought to expand those programs because of the work they have done. i guarantee we get a lot of those resources for gear up and trio here because we have a lot of kids who come from modern income -- modest income families and they are trying to survive. it is tough. you can talk to any principal in
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the unified los angeles school district and they will tell you how gut-wrenching it is to send out pink slips every spring and summer to teachers because they have to be sure they can meet their budget come september and hope they can pull back some of those pink slips by the time school will start. not a way to educate kids. that is the way things have gone. it is tough. we have to figure out where the sacrifice will come. as i said before, if you can find me a gear up kid who told us to go to war and i iraq border got $120,000 tax break, i am willing to talk to that kid and say there is something we have to do about that. thank you. let me give you two other names. next is too deep. after judy, we will have been. ben, are you here? go ahead and get in line over there.
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after that will be donald. we will not have that march more time. richard, are you here? we may only get to these last four depending on how quickly they are. and i am sorry, steven is next and then judy. by the way, i hope you do not mind, steven, we are friends because we ran against each other when you're a go for congress. he was my worthy opponent last year for congress. >> we actually had a very interesting debate. >> we did. "i would like to make a comment on education since it is brought up. what is happening in los angeles is a tragedy. what i am looking at numbers that we on the have 50% of our students graduating high school
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and in nebraska los angeles arkansas congressional district respect -- especially the hispanic community is running 30%, the fact that that is not front page headlines is very upsetting to me. i am very upset about that. you would not have your job on that tour person committee if congress, the senate, and the president had not failed putting together a budget. that is very sad. i hope we can be successful in that. i would like to comment in terms of taxation as well. if we were to take that $250,000 a year wage earner and above and take 100% of their income, my understanding is that would only cover about six months' worth of our current budget. the numbers are huge. just a huge in terms of how far we are behind. that is very disturbing to me. the question or comment i have
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for you, you have a remarkable act -- opportunity right now. i hope you take advantage of this. that is to say, there are some areas where there are common ground. we know where of there will not be. you know republicans will be a little hard-nosed about taxing. we always see it as being wasted. there are areas in terms of savings, major tax reform that we can deal with. i just want to encourage you to let go of some of the things and start to build piece by piece and find areas of commonality that we all have. >> i agree with pretty much everything you say about the part of 250 and above -- the amount to collect and revenues. it is much more than what you have indicated. otherwise, i think are absolutely right on education. that goes to the point of gear up. it is so important for our kids to have a chance to prosper.
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i say that because i in the first and my family to get a college degree. my wife and i, who also has a college degree, she is a doctor. her father and mother were carried little and education. we made it more in one year than my parents probably made in 20 years. nobody can ever take away my college education. i don't need to be a member of congress to be happy. i am a very proud that because i got myself educated, i had a chance to run and had a chance to serve. we need to make sure others have that opportunity. there is so much talent in this country. some people are saying, our best days are behind us. i do not believe that for a second. there is no country that has the vitality that we have. this diversity has helped us so much because there is always somebody coming in who can talk about the really tough story and life, but all of a sudden in
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america, they are making it. it reinvigorate you to see that folks believe in this country. what a shame if you cannot give to a kid a chance to show their parents that they can just do some phenomenal things. my dad would tell me stories when as a young man he would walk on a street and he would see a sign outside a window that said no dogs or mexicans allowed. he could not go into a restaurant. guess what? my dad has met the president of the united states. only in america would a guy who could not walk to the doors of a restaurant get his kid a stanford education and introduce him to the president of the united states. our best days of -- our best days are ahead of us. we just have to believe it.
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let us focus on giving everyone the opportunity. if you do not want the opportunity, which should not be helping you. if you are willing to work hard, that is what we ought to be about. these decisions i have been privileged to be cast to make, i understand that i was given something that so many kids did not have. i also know that it was hard work, parents went through to give me this chance. shame on me out if i fail in this committee, share on -- shame on me if i fill my parents to give me the chance to be on this committee. go right ahead. judy, you are next. and and and and donald. >> i am a mother of two boys who are going to the charter school across the street. we have been at the mercy of charter school lotteries for a lot of years. i will do a quick laundry list so please bear with me. republican colleagues that
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signed the allegiance to go with norquist instead of the constitution of the bill of rights should be shamed at every moment. it is a shame to swear allegiance to some guy in a piece of paper. the waste they are talking about is over 750 bases all over the world. the military telling our young men without an education to go over 100 places around the world where they can serve. we need to get out of iraq and afghanistan immediately. we should not be advertising to see the world. where are the hundred bases? how would we feel if all of these other countries have military bases here? then we are paying these people $500 to have privatized the military. a bodyguard for a congressman fit -- visiting over there on are getting budget why are we
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not paying our own military people that? where are we wasting on contractors -- the good old but military industrial complex that eisenhower talked about. i am sorry, i am getting emotional. >> wind down. >> my friends and belgium and work for the eu to solve the issues of poverty. she had six months off, her kids in childhood care, they have all these things in europe without any more taxes than we pay here. something is really wrong. something is basically really wrong. spending all of this money on military and privatizing it should all be going to our schools, our children, our roads, and infrastructure. sorry i went on. >> thank you very much. i hear again the passion and i
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appreciated very much. i will say one thing. first, i have seen a number of families who have lost their sons and daughters, sons and spouses over a number of years. you give me this right to vote for you. i take it very seriously -- especially when it comes to the military. at some point, i may put your son or your daughter in harm's way. when i had to go visit a mother or a wife and provide them with a flag of the united states has a token of appreciation for their husbands or sons of service, it is tough. what more do you say to somebody who has given their all? i do not want to look back and
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say, i could have done more to make sure that soldier was better trained or equipped. i never want to have that kind of regret. i think we have an obligation -- and by the way, i am a very progressive democrat. i think we have an obligation to make sure somebody that puts on the uniform, the give them the utmost to make sure they can do their work. their work is as precious as it comes. they are defending us. however, i do not think that means that the pentagon has license with my vote to spend $32,000 for a refrigerator. that does not give the pentagon the right to say, well, you cannot audit us to say how the pentagon keeps our books because we are too big and of audible. pentagon, we could not audit them, any firm could go in and
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give an idea of how dod spend their money because they are in such a shambles. they do too much importance stuff to not have their books in order. the more we get them in order, the more, i think, they will make sure those contract overruns into the hundreds of billions of dollars do not occur. as i said, i am not interested in cutting a program that makes sure our soldiers are the best equipped and prepared to fight with whatever they need. by god, i am not interested in telling them they need a $32,000 refrigerator to help fight this country. that is what we have to go after. you make some very good points, but again, without telling you i'm going to go after this or that or protected this or that, there are areas where we can make some changes and find savings without having to go
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into the bone of what america cares about. letting the public sees so that the public knows why we did what we do. i have no doubt -- americans, i have no idea why. maybe it is the sense we can always do what can we go for the underdog, americans believe we can get this done. we just have to prove it. let it be open so that at the end of the day we come out with a product. kasich, i know how we got this because i watched this. i can see the record. thank you for your comment. please do not stop having that passion. a lot of folks talk about the bases. >> when i heard you were on the super committee, i was very grateful and if very relieved. whenever i checked your votes, you are always voting what is at my heart. i am very proud to say you are
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my congressman. >> thank you. >> i will be a little specific into details, i do not know if this fits your radar, you know i care very deeply about arts and the endowment of arts. we have been operating on $161 million this year. the administration proposed $146 million. there were several motions to eliminate the endowment which you opposed and were joined by moderate republicans and all the democrats to defeat the elimination of the endowment and to defeat the defunding of the endowment. i am very grateful for that. we are going to need a champion in that committee. i know you are not making any promises, but the interior subcommittee approved a hundred $35 million. there was some very strong language in the appropriation to support core programs of the
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endowment. we were hoping it would go to the senate and and reconciliation be boosted up. i do not know if there will be any reconciliation anymore or if you guys are doing that. that is one of my questions. if you are doing it, and there will not be a reconciliation with the senate, i would implore you to look inside and consider being our champion on that committee and at least supporting some sense of language with the preservation of core endowment programs with sufficient funding. you know the arts creates jobs, it inspires people, it enriches people's lives, and supports education. all of the things that make it worthwhile of being the american are supported through the arts and the endowment. >> thank you. again, my record will speak for itself on those issues about the arts. i will to say for those who may
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not know, i think the arts are important not because of the adults and the talents that the show. i think the arts are important because of our children. i think the arts give our kids to express themselves in ways that too often we do not give them a chance. financially, they do not have a lot of resources so they are of limited in what they can do, or perhaps there are of limited in their capacities because they never had an opportunity to open their minds and learn. to me, the arts are a very fine way for a child to really explore the mind. that is where you find the talents. all of us can do one plus one. it is the kid who can take it and it turned one plus one into something we've never what have thought about. the creativity that i think creates patents and copyrights that make us the country we are today. the country that builds google
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and microsoft's of america. the more we give kids a chance to explore -- especially in ways that are affordable -- i think the more we will create an america that is strong because these kids will have used their mind from an early age. to me, it is very distressing when you hear that a school says, we have to teach the core curriculum. arts, music, pe, we have to sacrifice those things. it is hard to say to them, how dare you. do we want them to sacrifice mad and science? know. but those are the decisions we are making. those are the options we are being is given. teach a kid math or let them also the music. to me, that is the wrong set of values that you have to give up
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that intellectual capacity a child would have if he or she had an opportunity to play that instrument or to do that art. because we want them to learn math or science or english or geography. i went to public schools when i was growing up. in fourth grade when we had a chance to get an instrument, i was in line. the parents could not buy one for may. i ended up a little late so i got a mellophone. there are some people who know what a mellophone is. i wanted a trumpet but i got a mellophone. it is a smaller french horn. can you imagine a fourth great kid having to carry a french home -- a french horn every day? but then i got my trumpet. it was not my normal appearance but the schools. i played in a band. i got some great opportunities and got to meet some girls. it was a great opportu

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