>> no legislative business will be conducted today. members are on a week-long break. in our live coverage of the u.s. house here on c-span. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms, washington, d.c., september 26, 2011, i hereby appoint the honorable fred upton to act as speaker pro tempore on this day, signed, john a. boehner, speaker of the house of representatives.

the speaker pro tempore: the prayer will be offered by the guest chaplain, reverend dr. albert keernan. the chaplain: lord god almighty, you commend us to trust in you with all our hearts and not lean on our own understanding. you ask us to acknowledge you above all others and when we do, you promise to make our path straight. the limits of worldly wisdom want to illuminate a path on which we may tread with assurance of your favor. i pray you'll pour a portion of your power into each representative's life. equipt them with faith that sees into the future, hope that unburdens their hearts and minds and the assurance that you, our god, still reign on your throne and help us experience your blessing when we turn our hearts

to you alone. father god, restore peace to the fearful and joy to the burden by the cares of life and be with those in harm's aand their families. this i ask in the name that is above every name, amen. the speaker pro tempore: amen. the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1, the journal stands approved. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all. the chair lays before the house a communication. the speaker pro tempore: the honorable the speaker, house of representatives, sir. pursuant to the permission granted in clause 2h of rule 2

of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on september 23, 2011, at 2:56 p.m., that the senate passed with an amendment h r. 2832. with best wishes, i am, signed sincerely, karen l. haas. the speaker pro tempore: the chair lays before the house another communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2h of rule 2 of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on september 23, 2011, at 3:29 p.m., that the senate passed without amendment h.r. 2646, that the senate passed without amendment h.r. 2343, that the senate agreed to resolution 2347. with best wishes, i am, signed

sincerely, karen l. haas. the speaker pro tempore: the chair lays before the house a number of enrolled bills. the clerk: h r. 2943, an act to extend the program of block grants to states for temporary assistance for needy families an related programs through december 31, 2011. the speaker pro tempore: without objection, the house stands adjourned until 11:00 a.m. onine >> now we're going back to the house hearing on medical shortages. we join it in progress. problem than others and the leading i can think is different is that the way the federal

government treats them they treat them different than other drugs. >> i'm not sur i can answer the question the these are generic drugs they're off patent for the most part, so they are at a point in time the profit-margin for the drugs generally because they are generic and you can have multiple manufacturers as lower and you mentioned medicare cms but there are other group purchasers some of them are government lad and others are private insurance companies that are negotiating in bulk basically for the prices and they are no different than what the federal government does. it's the same. >> why isn't that happening in other clauses? this he seems to be more than others. >> and then on generic world there is one source said there

in the greater bargaining position because they are the innovator product and the have the patent. >> but there is a different system for themedicare. >> the attempt to be priced lower and that is the access point for the pulic. >> but if you have lower costs which are all going to drive lower-cost but you have the lower-cost then you get less supplies because th price is lower and you have less quality of peole producing so it appears there are not others, it's not a mechanism where if you just say a little bit more you are going to get the drug that is going to take care of it. there's not a price mechanism to say we have a low supply the contras mentioned this is talking about therefore if we can adjust the price we get the supply that we need to take care of the patient. >>you're raising interesting point we can get more information and work with you.

>> mentioned business decisions and that's all part of te knicks but there's some things we can do. one of the things quickly the flexible teams is that relatively new reached out to some people and they did talk about some issues with inspection time and congressman shimkus so it sounds like that is being addressed. estimate it absolutely is being addressed. >> that's good because i understand the new physicians and so we appciate your attude and move forward to do so so thank you. i yield back. >> the chair thinks the gentleman and recoizes the chair, the ranking member emeritus of the full committee, michigan for five minutes for questions.

>> mr. chairman, thank you for your courtesy and for holding this hearing. let me begin by asking this question yes orno. do you have authority at the fda for any of the requirements with regard to efficacy from good manufacturing practices or safety, yes or no in the event of a shortage? >> yes. >> you do have it? >> we have the authority to have flexibility in how we implement the regulations. regulatory discretion. >> i would like to add a further answer on that particular point. >> but the requirements are the same how one who reaches them is fxible. >> i would like to have a further statement on that we understand what the authority is. it's my understanding the fda has been working to address

shortages of the medically necessary approach. can you please define what medically necessary means? >> medically necessary is defined as a product used to treat or prevent serio diseases and conditions to know the product available to act as a substitute. >> you indicated your testimony invest majority shortages experienced in the united states is attributable to the injectable salk. is that correct? >> that's correct. >> according to your testimony 54% of the shortages were due to the product quality such as particular its microbial changes resulting in the personalization. is the right? >> that's right. >> are you finding those american pharmaceuticals or imports? >> we are fnding them here in the united states. >> what about imports? >> those are the issues we try to prevent which is why importing is always a

challenging issue. >> but you have no authority to address the question of the manufacturing practices abroad, no authority to do with good manufacturing practices, you have no real authority to see to it that the requirements opposed on the manufacturers for safety, efficacy are there and you have very little power to effectively inspect those manufacturers either of the finished pharmaceutical products or compoents and constituents, right? >> that's correct. >> and the ability to know who is manufacturing thesehings and chase them through the product line, is the right? >> that is why he process has done very carefully and selectively. >> i have some legislation and i hope that wewill shortly be addressing it in this committee. >> we would address the problem of the quality poblems by the

ministry process by requiring the drug manufacturers to implent effective system as complies with gmp. the quality system will also be required to ensure risk-management procedures that would address all relevant factors for the supply change and putting our original source materials and their origin and on-site audits and methods to detect the potential risky substances. the believe that this manufacturers also have to intain records to establish the drug was manufactured and distributed under the conditions at ensure its identity, strength, quality or with the legislation of this kind help you address quality issues? >> yes, tracking quality every step of the we would certainly appalled latest in a matter of which i work with the gentleman, my colleague r. shimkus. it's been widely reported that information of the drug shoage

in acted in a market tries to sell drugs in short supply to the pharmacist for hospitals. does this present a safet concern? >> yes it does, congressman. >> howell and what can you do about it? >> this is largely unregulated. the commission is involved in some degree but -- >> they don't have the expertise that you have. would you submit a proper answer informing me of what we have to do to address that particular oblem? >> i would be happy to do that. >> do you know of these drugs have been stored properly to ensure the effectiveness, whether they have been delivered or whether they are free of self and contaminants or -- yes or no? >> unfortunatelwe know very little about the products in the market. >> as i mentioned the many factors to maintain the records establishing the drugs and its materials would produce and putting all the information relative to the producers, and

the manufacturers, distributors and importers with such legislation and such power assist with the safety of these kind of pharmaceuticals? yes or no? >> we want to appoint a safety and quality. >> american consumers and patience are facing three problems. one, are the drugs available and affordable, are the drugs they need a safe and number three, are they efficacious? do they work? >> i believe the committee needs to examine these issues carelly. our colleagues on the senate, mr. harkin and mr. enzi have already called to improve the oversight of the pharmaceutical supply chain. i would hope the committee would follow suit but i would like to have you give a statement of what authority need to adequately carry that out. i don't believe in sending you a letter asking you to do something for which you have no authority. would you submit for the record because my time is up what it is

that has to be done to give the authority to address those problems? >> i would be happy to. >> i think you for your courtesy and i ask unanimous consent that the responses be inserted in the record. >> without objection, so ordered. we recognize the gentleman from louisiana, dr. cassidy for five minutes for questions. >> callow. thank you.

>> there's enough money to inspect every two years there. it's happening only every other nine. ask can we direct resources to send that person over to maybe alleviate some of these by expanding importation, the point was that the unions would not allow this to occur, that they had the right to refuse the overseas assignment. is that true? and to what extent is that limiting our ability to approve the a.p.i.'s -- i forget the acronym, but you know what i'm speaking of. terms of a shortage situation that has not been a big issue. for the most part, when we have a circumstance where some inspection activity is necessary in order to prevent a drug shortage, we find that our staff are extremely cooperative and willing to roll up their sleaves

and step in. sleeves and steph in. westep in. we are addressing the issue of inspection force more broadly in parallel to this, but it has not been a critical issue in mitigating or preventing drug shortages. >> but there's a heck of a lot of generics being manufactured in india and other third world countries. are they just now producing the ones we are in short supply of or are we just not confident of the quality they produce? >> i'm not sure i understand your question.

>> if there is a foreign source, we are usually able to work through and get it approved. there have certainly been circumstances where there have been important problems that would prevent that. but in most cases if it there is a foreign source -- o and going to a foreign source is necessary, we are able to work through that. >> ok. and the gentleman who will testify, he speaks about how d.e.a. has a quota for controlled products and that if somebody goes out of business, that quota might not necessarily be assigned to another manufacturer. and so you have a kind of centrally planned economy-induced shortage. any comment on that in any way that we can address that? >> i can start. i know that controlled substances represent only a very small part of the drug shortage situation that we're talking about. so we do work with d.e.a. but it's limited only to several instances. the doctor might add more. >> it is more complicated having

the d.e.a. involved for obviously good reasons, it does create an additional step and complicates this. but we work closely with the d.e.a. when a controlled substance shortage is at issue. >> i understand that. but is there any plans to make it so that if somebody stops producing, their quota is transferred to someone who would? i gather that's not the situation now. and although we're working closely shall that's an obvious solution that i'm not sure is being implemented from your statement. >> we are continuing to try and figure out how to expedite these kinds of issues with d.e.a. i don't have an answer for you about exactly when that will be resolved, but we are committed to doing it as are they. >> it was also mentioned, because i like to read what the other panelists say as i refer to this, i'll quote, speaking of a source of an active pharmaceutical ingredient they say that the qualification process to identify a supplier for such can be very on russ

to -- onerous to qualify and f.d.a. approval for supply or alternative manufacturing site for an already approved supplier, can take as long as to three years. now, i am channeling my inner tiva, wherever it is. you don't have to testify anymore, but what would be your response to that? >> again, these are areas where we're trying to show as much regulatory flexibility as possible to accelerate approvals when necessary. so we are hoping to address these themes through the maximum flexibility as possible. >> and we already do. whenever there's an issue related to a supplier where it requires f.d.a. to approve a new supplier or even a new facility, i think that was one of the other concerns, we turn those around very, very quickly. these are not business -- in a matter of weeks. to months. weeks to months. these are not business as usual where there is a long wait time. we understand that patients are

they end of this line, and we need to do everything possible to get on the case and work with the companies. and we've done that with tiva. >> i yield back. thank you. >> chair, thanks. gentleman recognizes the gentleman from utah, mr. mather son, for five minutes of questions. >> thank you, mr. chairman. i appreciate your yielding time to me and i appreciate you holding this hearing. i think we've established the problem. i'm sure lots of people talked about circumstances in their district. university ofe utah. they project more than 360 products having shortages in it that many products by the end of this year. so i guess everybody up here has a story, i thought i would tell you it's in my backyard as well. i was wondering if you could address for me some of the concerns about gray market activity as a result of these drug shortages and the integrity of what's out there, in terms of quality of the medications, if

they're counterfeit, or how we can address some of these challenges of a gray market in these medications. >> well, i can start. first of all, thank you, congressman, for your commitment to research. we deposit say explicitly, but we can say now that this drug shortage issue is a dramatically affecting clinical trials as well. in cancer and infectious disease in many -- in many parts of n.i.h. so that's very, very troubling to us as a nation that prides in scientific advances. the gray market unfortunately is very poorly understood. as mentioned already, it's largely unregulated. and to have now at this dimension complicating an already complicated situation is very disturbing. so we appreciate your attention to that. and we want to address that as well as all the other factors that are involved here. >> other actions we should take on addressing the gray market specifically? or should we really just be addressing the underlying problem, please medications?

-- these medications? that would eliminate the gray market problem, i guess, if we don't have shortages. we know about the products that appear on this gray market. do we understand when they where they came from? and are they made by the company that is experiencing the shortage? or are they counterfit products? we don't because we don't have a tracking system within the drug supply to know what product comes from what. >> i appreciate that. i'll give my 30-second advertisement. i just introduced this week our track and trace legislation, our pedigree legislation, for maintaining integrity of drug supply in had this country. we're operating our rules that were created in 1988, and the world has changed. this country is getting beyond -- beyond the topic of this hearing, but there's too much money on the table for counterfeiters in had terms of the u.s. pharmaceutical marketplace. i hope this committee can take a look at that legislation. i do think it's an important

safety factor for the integrity of our supply chain in general. i appreciate your coming here. mr. chairman, i yield back. >> the chair thanks the gentleman. recognize the gentlelady from tennessee, ms. blackburn, for questions. >> i want to thank our witnesses for being here. as you know, some of us arrived a little bit late. we did have the oversight hearing going on downstairs. so we completed that one before coming up, but we are grateful that you're here in our second panel of witnesses. we're also looking forward to them. i'm glad we have a tennessean on us. panel joining just a couple of questions. as you can see, we're going to look at how we address this issue, and having you here helps to inform our decision making process. so a couple of things i would like to know. if you don't have the answer for me, please submit it to us so that we can include it in our

records. i wanted to see if each of you had any examples where you had worked closely and collaboratively with your agencies, with manufacturers, of drugs where there was a known or a projected shortage, and see if you could articulate what that process was, the interface that transpired there. and if you have those examples now, please go ahead and give them. and if not, we will accept those in writing. >> congresswoman, i can repeat that we are proud to share for the first time, the life-saving drug use for acute leukemia. this shortage received tremendous national publicity. representative dyer challenged for cancer patients. when the f.d.a. worked with the industry on this particular

drug, they found that one of the issues complicating the production was the crystallization of the drug in the solution, and that rewarming it would restore the safety features that would allow infusion into patients. so with that collaboration between the f.d.a. and industry, that issue has now been recently resolved. and we're very, very pleased to report that. i know my colleague has other examples. actually like to expand on that one. before the issue of the crystals in the vile vials, where the shortage began, it was being made by three companies, but it was being made -- the majority of the supply was by one firm. they were experiencing significant production delays. so what f.d.a. did was we contacted the other manufacturers to work with them to increase their production, in

order to be able to supply the market. in the course of them increasing their production and trying to produce product rapidly, the crystallization occurred in both facilities. then came in -- so that prehe seeded the crystals. we then resolved that activity as well of. so in had that case, we also, when there was concern about whether we would find a solution to the crystallization, we began -- we also investigated alternative manufacturers, whether there were any overseas. we were not able to identify any alternative manufacturers. >> let me interject there. do you have examples other than this one? are there examples where you worked with some of those alternative manufacturers and brought them into the fold? and then once you identify that there is a near shortage that is approaching, do you think there

is a way through the production process or the compensation model to provide incentives? so that you have a more predict able supply. >> well, another example that we can provide for you, congresswoman, has to do with an agent that's used in anesthesia. when those shortages start occurring, the f.d.a. could facilitate temporary importation of a substitute agent to help appealate that situation. so that's yet another example. i know the f.d.a. has many others. the economic issues here are so complex that offering any economic exclusion really requires first a careful analysis. we're trying to do more of that. especially for our assistant secretary for planning an evaluation. and we hope we can come out with more definitive recommendations for you in the near future. >> thank you. and in the interest of time i'll yield back.

>> the chair thanks the gentlelady and recognizes the gentlelady ms. meyer for five minutes of questions. >> thank you, chairman. thank you, all of our witnesses. i was also at another hearing, so i'm sorry i missed your testimony and some of the questions. like everybody else, our area is experiencing the same problems. and our doctors, we meet with them constantly but particularly in an serology and oncology, as you well know, we have the same problems. and it is scary from the standpoint of what could happen with somebody if they're given another drug that really doesn't either work or, you know, they have a reaction to it or something. so we hope and thank you very much for any efforts in trying to get to the bottom of it. and i wanted to ask if, really, the consolidation that's taken place in the drug industry over the last few years and continues to take place, you know, what effect -- or how does that

contribute to the problem that we're seeing today? i mean, is this a large contributing factor because of fewer manufacturers available? >> thank you, congresswoman for your interest and support. yes, we view industry consolidation as one of the driving root causes here. as you can imagine, if you were the -- if your denominator of available manufacturers shrinks and any one of them has a delay, it really puts the onus on the others. and if the others don't happen to produce that product and if this particular company is a sole source producer, then you have the ramifications that we're seeing right now. so there's no doubt that industry consolidation has contributed to this. >> so what, if any, recommendations do you have of how we get over this hump? you mentioned the generics which we're all very much aware of, and the fact that they aren't as popular to do because of the

cost factors and other things that have entered into it. what it that you think we should be doing or looking at to try and get to the bottom of how we can help with this? >> well, again, we want to stress the importance of communication and early notification. because that will help all parties to work together. and as the numbers of industries involved shrinks, we want to maximize the communication with those manufacturers. and we're doing so as we speak. and then as the doctor mentioned, we also want to have more assurances that the products that are being produced have high quality so that we don't run into these quality manufacturing issues. so those are two things that be very helpful to us. >> and you find the companies work well with you? >> we've had excellent dialogue to date. and we want to do much more of that. not just the f.d.a. but the entire department, and also engage the public in this as you have heard. >> thank you.

i'll yield back, mr. chairman. >> the chair thanks the gentlelady and recognizes the gentleman from pennsylvania, dr. murphy, for five minutes of questions. >> thank you. and i thank the distinguished panel. we appreciate your concern for our citizens of this country. a couple of areas here. are you meeting with the manufacturers? i want to ask a couple of questions to find out here with regard to what are some of the causes of this drug shortages? you laid out a very number of things well. thank you. but say, for example, cancer drugs. why the shortages with cancer drugs? we know they're very expensive in many cases. what specifically is the reason for that? >> it's very distressing, congressman to see some of these time-honored life-saving medications now being caught in the middle of this public health crisis. agents that we have mentioned here, time-honored agents that have shown to be effective for decades, are now stuck in these shortages.

so again, these are older, generic, sterile, injectable drugs that are typical of the ones that are being involved in the shortage. >> do we not have enough manufacturers, for example, working on these things? is that part of the problem? >> that's part of the problem. again, because the industry has consolidated. so we don't have the dozens -- >> of those who are there, are they not working at capacity? do we know if it that's an issue? >> i'm not sure i can address that directly. >> i think that what often happens in a lot of these companies, they make dozens of products. hum. injectables can only be made in certain types of facilities. so there are a limited number of those. and because of the market and the few number of producers, there is pressure to produce and continually produce. and, so, are maintenance of the facilities themselves is often put off, because it requires an investment on these low profit

margins. >> very expensive? >> right. of them are not terribly expensive, but low profit margins. >> that's important what you just said. so this is one of the concerns we have. certainly we want medications to be affordable. why window shop when you can't afford? but in the push to make sure that drugs are affordable, are we also tripping over ourselves? is it hurting the patients when we say we want there to be such a low profit margin that it ends up backfire and we don't end up to save medication lives? is that part of our policy that's getting away for us? you for posing those questions. and obviously ultimately our goal is to protect the patient and give timely delivery of life-saving -- >> even if you don't have the information today, is that something you could advise us on? i'm look for -- i really want to know from the standpoints of myself as the health care provider if we're doing

something that is saying we want drugs to be affordable but we're cutting the price so much that want to make them. that's a serious concern. so my question is policy interference. if you can't answer that today, i just want to know if you'll us with that. >> sure, congressman. those are precisely the issues that we are wrestling with as a department ands as a country. thank you for posing that. >> i say this from the standpoint -- look, oftentimes there's accusation in politics. we can't afford to engage in any of that on these life-saving issues. so i'm trusting you to give us those honest answers. and i really appreciate it from one colleague to another here. >> thank you so much, congressman. >> and also, with regard to inventories, i'm hearing that hospitals are saying they are having a hard time keeping their inventory. an issue that they're not purchasing enough, correct? or is it? if a hospital says we can't have some of these things in supply because it may be too expensive or too difficult for us to keep these in inventory because of

special requirements for how to maintain them, how to secure them, special conditions under which there might be, is that part of the problem, too? they may not be ordering because for themselves it's also very expensive? a i believe it can be problem. there also has been a trend. and it's certainly not 100%, but there has been a trend in the industry to have what some people call just in time production. they don't have the long lead time of production that -- particularly for these injectables that there may be for other products that have longer shelf life. they tend to make less and distribute it out in smaller amounts. it certainly contributes to hospitals not being able to maintain a supply, in addition to a large supply and cushion, in addition to what the other concerns that you make. >> and inventory is one where they're thinking if they also have a small margin. look, we understand health care is expensive. sickness is more expensive.

and we all want to work together. so i do appreciate and look forward to seeing your information on this. thank you very much. i yield back. >> the chair thanks the gentleman. and recognizes the gentleman from georgia for five minutes for questions. you veryairman, thank much. i'm sorry i missed a lot of your testimony, witnesses. but thank you for being here. let me first address to the secretary, in your testimony you cite that there were 178 drug shortages in 2010 and the sterile injectable drugs make up a large and increasing share of these shortages. and by my count roughly 132 of the 178 were forester iminjectibles. these injectable drugs, can you tell me how many were in shortage of previous years? has this been a long-term problem or just recently? >> this is a long-term problem, congressman. unfortunately the trend is going wrong way. the shortages are increasing

year by year. we have data back through at least 2006. the trend is getting worse since then. >> and then tell me this. are there any other common characteristics that you're aware of among these 132 besides the fact that they are generic and they are sterile injectables? for instance, are these drugs typically newer generics or drugs that have been on the market for years. actually, you just answered and i thank you. the other thing on that is, are the profit margins typically very low or any other issues that you might be aware of? >> so, on the first question, congressman, the irony here is that these are older generics drugs that we understand are very helpful if not life saving. so to have this situation is really quite ironic and tragic. you're right. there is an issue with respect to business forces here and the profit margin is understood to be quite low for many of these individual products.

>> and my last question can go to really either one of you, mr. secretary, or doctor. help me understand something. earlier it was addressed. many of the drugs we are talking about are these older generics, not just the sterile injectables, where the profit margins can often be very low. these low profit margins can oftentimes lead to a very little competition or even drugs which only one company makes the product. the point was raised about the market prices. and i understand maybe, mr. secretary, you tried to answer this for him. i just want to be clear. do one of you have any thoughts as to why you get to the point where there's a limited number of manufacturers of a particular generic, why the prices at that point remain low. i mean, the market should be able to work.

the market of supply and demand. and obviously when a brand name drug, which is very expensive, first goes generic and you have several manufacturers jumping in and producing that generic at a much, much lower price, and then family gets too low for some of them to survive, they stop doing it and go on to something else. maybe another generic. and a couple or maybe even one company hangs on it would seem because of supply in demand that that company would be able to raise their prices. are there any government rules, regulations, laws, pharmacy benefit managers, something that would cause them not to be able to raise their prices even though the market would certainly let them do that otherwise? >> yes, congressman. so we have come to understand that this is a complex business

situation where the standard economic principles of supply in demand did not easily apply. and we have manufacturers, purchasers, providers, purchasing ohs and pharmacy benefit managers. so we have multiple forces here all working to the final outcome you would seey with a shortage, a rise in price and profit. but that doesn't apply here so this is why we need the extra analysis that our department's doing and others. and we welcome new information on modeling to really help us understand the root causes better. >> doctor? >> i think the questions that you raised are exactly some of the questions that we have as we really try to understand the roots of this problem. what are the things that could be done to try and prevent these shortages from occurring? or even being at risk in the first place. both of you for those answers.

you know, the federal government tries to do the right thing in many instances, i would hope in all instances. and it seems that far too much of the time they screw it up. and so that's why i ask you those questions. and i hope that you'll continue to look at that. so the market forces can continue to prevail. then i don't think we would be faced with these shortages. back. gentleman yields that is a round of questions for the subcommittee members. a couple of members of the committee who have joined us. the chair recognizes the gentleman for questions. >> thank you, chairman, very much. first of all, for his recognition, since i'm not a member of the subcommittee, but also for having this hearing. and i appreciate the testimony from the two witnesses today. i got involved in this issue some time ago because an

oncology doctor in my district, dr. chuck dibbs, brought this issue to my attention, my staff's attention. and the drug specifically that i recall he mentions, and i'll try and say this right, understand is a cancer -- ovarian cancer drug, apparently a very effective drug. and i'm not a doctor, but that's what i'm told. what was the f.d.a.'s role in interrupting the production of that drug? can you speak to that? >> can i speak to that very generally. several companies that produced dexarubicin, one of them which was a major supplier also was the same producer for the

citerabicine. some were the same. there were facility issues, production delays because of, you know, chronic problems in an aging facility is probably the best way to summarize it. what f.d.a. did was we worked with the other two producers to facilitate their ability to increase production. it did take a while. as i said, these are complex products to make. companies can't just ramp up production overnight. but in the meantime, a fourth company came in with a new version of the product and helped to make up the supply. so we worked -- we make sure to expedite review of that fourth company's april application and inspections necessary in order to turn this around. >> doctor, do you have any comment on that? >> i think she summarized it it well.

>> so you feel like you've taken all the steps. is now available on the market again and without shortage? is that accurate? me.y expert tells yes. there is another version of the drug sort of a special formulation that has a sole source that continues to be a problem. but, again, that's a different company. >> all right. >> same company. >> dr. coe, you mentioned glass and metal injectables, i think you were discovering which sends shivers up everybody's spine. i've also heard, though that with a new technology -- with the new technologies, the scientists are able to see deeper into the drugs than we've ever seen before. and parts -- again, this is your field, not mine. but are we looking deeper and finding things we never knew was there before? and is that really a problem? from a health standard.

or is it a question but may play a role? >> well, again, those examples, congressman, are very graphic examples of the quality issues that we're facing. i must say, though, that again the f.d.a. has worked with companies. so in the case of particulate matter, pieces of glass, pieces of metal, first to identify the issue but also have have been advances in filtering systems, so we can filter those out. make those drugs then safe to inject into patients. so that's another example of regulatory flexibility that has marked this chapter of our history. >> so i guess the end of my time is about to expire to ask questions -- clarifying that for the short night. it's the sense of urgency. i applaud you for bringing people together and trying to figure this problem out. but as i'm hearing from both dr. dib and others in --

dr. dibb and others in my comes in this patient the drug is not available, they've been prescribing it for years, it's effective and works they can't get it. i know my own mother had ovarian cancer and died from it. so i have this sense of patient urge six know you feel that, both of you. we all do. if there's a way we can play a constructive role here, whether it's the bill on notification, she's put a lot of work into this. you know, we just need to do everything we can to be a partner in this, to find a solution. i look forward to working with both of you and members of this committee to the extent they'll let me play a role. with that, i would yield back the balance of my time. >> the chair thanks the gentleman and recognizes the gentle diagnose lady from colorado for -- gentlelady from colorado for five minutes for questions. i want to thank my colleague from oregon for the free commercial announcement. mr. chairman, thank you for letting me participate. it's good to be back in my old stomping grounds. as i know you've been discussing

, congressman rooney and i have introduced in a bipartisan way that preserving access to life-saving medications act which creates an early warning system between f.d.a. drug companies and providers so that we can respond to these drug shortages quickly and efficiently. do i think that this bill would solve the root problems of the drug shortage crisis? no. but do i think it's a necessary first step? absolutely. and i appreciate the witnesses coming here to talk to the members of this committee. this bill came up because mr. rooney and i independently going around meeting with our hospitals and our doctors, and suddenly they started saying to us, you know, i was in the middle of a chemotherapy treatment of a child and suddenly i couldn't get the drug. and it just seemed to us -- i'm sure it didn't happen immediately, but it seemed like it did doctor, you're shaking

your head. do you want to comment on that? >> well, to the prescriber, you know, they're not following websites, they just know they can't get the drug. and they have a patient who is ill and needs it today or tomorrow and not in two months when the supply can be re-upped. that's a very difficult position to be in as a physician. and even worse as a patient. >> and is there some reason why these shortages have increased recently? either one of you. >> we are trying to understand that. some of the things that we have identified is that these are products that are complicated. most of the products that have been problematic are complicated to produce. there are a limited number of producers. and they are all working, many of them are working, in it facilities that are aging and

have had chronic challenges in maintaining production. product quality. >> yeah. and, you know, i think before i got here, mr. chairman, you discussed the current system, reporting system for companies that don't have competition. and it's a voluntary system. even though it's much more limited, it's really worked. in 2010, 38 drug shortages were avoided when given advanced notice. and i just want to give a couple of examples. in august of 2009, hospera notified the f.d.a. of their intention to discontinue a drug in 2010 due to low volume. the drug is often critical for neo-natallal care. the company received a note back from the f.d.a. drug shortage in september 2009 thanking them. and then in march 2011, the

other supplier of potassium fosate recalled its product because of of a quality issue. so what happened then is in april of 2011, the f.d.a. made hospera aware of the drug shortage caused by the recall and asked them to assess their ability to return to manufacturing. and then in that same month, hospera told the agency that they would return to manufacturing potassium foscate so that the patients could be served. and the f.d.a -- and so it worked. but that's on a very limited basis. so i just think that this could really work. i guess i want to ask you, doctor, in my minute remaining, how will it work if we enact legislation like this to get the information into the provider's

hands that there's an impending drug shortage? because you folks have had some experience with it. >> sure. and congresswoman, first of all, thank you for your leadership on this issue. it's very, very much appreciated. we all feel that establishing highest level of communication as early as possible about any potential shortage can give us the opportunity all to be proactive. that's just not f.d.a. and h.h.s. but also providers, hospitals, and patients. so if we can do this together, understand that a potential shortage is on the horizon, as soon as possible make that information available to relevant parties and ultimately to patients and the public, then all work together in a proactive way. right now we are in a situation that you summarized very well where the reporting is voluntary. oftentimes the f.d.a. does not know until it's too late. and then patients are stuck in iss dire situation, which

just not acceptable. so we are looking forward to greater emphasis on early notification and communication. >> great. thank you so much. >> thank you, congresswoman. thanks ther gentlelady. before we go to panel two, we have a request for a follow-up. panel one, without objection. >> thank you. office had looked into i think vincristine, and we heard back from you of a toxin in the product. and it was unclear where in the manufacturing process that had been introduced. now, obviously that's an issue. and frankly i called my constituent and said the f.d.a. did the right thing. it's very disturbing to me that endotoxin should be in the product. so euphemistically speaking about manufacturing problems, but really they're significant.

so is it a pattern when we're saying manufacturing that, no, there's actually some sort of contamination such as endotoxin for which in their g.m.p. they do not know where it's entering? because that's a process problem that is of tremendous concern. >> the answer is yes. that's exactly the kind of thing that we're concerned about. when a product -- when you find a product that was endotoxin in it, first thing one needs to do is figure out how it is getting in there in the first place. and there are multiple steps in production where that could be occurring. but figuring it out is not easy. and it can take a very long time to determine that. and then a long time to fix it. and it's particularly -- we see this with metal shavings in medicine, glass shards in vials. all things that would be unconsciousable to give to patients. but the key is, being on top of

those good manufacturer practices and maintaining facilities to avoid those kinds of events. and where you have facilities that are in 100% production mode all of the time, it's often difficult to maintain your facilities and modernize them in a way that's needed to, again, assure -- for a company to assure that they are producing a quality product. >> thank you. >> the chair thanks the gentleman. i believe another follow-up. >> as said earlier, classic economics would suggest that when a product is in demand, prices should rise and the market establish a new equilibrium. yet we're now in the seventh consecutive year with more shortages than the year before. i'm also curious why the market has failed to establish a

equilibrium because as discussed public pricing constraints. and as i understand these constraints apply to brand name drugs and not generics. is that correct? that they only apply to the name brand and not generics? >> well, congressman, those economic issues are precisely the ones that we are analyzing right now. and we have -- especially our assistant secretary for planning and evaluation, looking at principles and a modeling that could help us predict where we need to go in the future. so thank you again for raising these issues. these are very, very complicated business and economic models we to find. >> the generic drugs are where we're seeing most of the drug years.es in recent >> that's right. >> if there is that distinction, is that the problem? >> well, we do know that it's

older generic sterile injectable that make up about 3/4 of these shortages. so that's where we are, indeed, focusing our attention. >> i don't know if either asked you -- if you said you were going to get back to them. but i would really like to get some answers. obviously you're not prepared or you don't feel you have an answer today. but i'd like you to get back to us through the chairman if you could. happy to, congressman. again, i did mention we have an upcoming report from the f.d.a. that will give further economic analysis intensely underway right now. >> is that going to relate to this or you don't know for sure? >> hopefully we'll get a better understanding of root causes. >> all right. mr. chairman, if he could get back to us on that. i know many of us have sort of asked the same question. i really would like to know. >> sure. thank you. chairman would yield

on this point. >> go ahead. >> i thank my friend for following up on this debate and this question of the but in my opening statements, i didn't just focus on the government pricing. i did say insurers, too many so all in this together. and the market will work -- if the market's going to work, it will work. i want to correct the record i wasn't just picking on -- >> i understand. i just wanted to bring up the public program aspect. whenever you can get back to us on it. i understand -- to be perfectly honest, a lot of the questions that we've asked today we've gotten a response and we have a little better idea. but i almost feel like more questions have been raised than answered today. and that's not anybody's fault. that's kind of where i feel we are right now, mr. chairman. >> all right. thank you. if you'll respond to the questions in writing, we'll get those to the committee members. i look forward to reading your

report. thanks to the first panel. >> thank you very much. >> thank you. we'll call at this time panel two. our second panel consists of seven witnesses. our first witness is the vice president of sales and marketing for tiva health systems and testifying on behalf of tiva pharmaceuticals. next is mr. john gray, the president and c.e.o. of health care distribution management association. our third witness is the corporate director of pharmacy at roush medical center in chicago. our fourth witness is the chief operating officer of premiere, inc. next we will hear from dr. charles pinley testifying on behalf of the american society of clinical oncology.

we also have mr. richard paletti, vice president of operations at lancaster general health. and finally, the director of the cancer institute of new jersey. all of you for coming. your written testimony will be entered into the record. we ask that each you have would summarize your testimony in five-minute opening statements. you may begin. >> thank you, chairman. chairman pitts, ranking member pallone, and distinguished colleagues within the sub-committee and full committee, thank you very much for the opportunity to be here today. as referenced by the chairman, my formal testimony has been submitted to you. i am more than willing to answer questions specific to that testimony throughout the questioning period. and i will summarize my remarks in my opening.

i am by as president of sales and marketing representing teva pharmaceuticals which is a global leader in brand, generic, biologic a pharmaceutical products. we are a market leader in many of the markets in which we serve. in the united states, we are the market leader in generics. products. we have a vast portfolio including many dosage forms including oral solid presentations, injectable presentations, including a significant portfolio of oncology, generic injectable presentations and i look for during the questions to share some insight specific to that important category. as reference, we are a market leader. teva is a market leader and we embrace the responsibility that comes with being a market leader. in that context, i am happy to

be here today. one side note -- as all of us have been, we have personal stories as relates to family, friends, people we know, individuals that have been impacted by not being able to get medication. my particular situation, i have friends and family as well. given the role i play, they reach out to me hoping i committed to everest. many times, i cannot and it is very challenging. at the same time, given the role i play, i hear from patients and i hear from family members of patients and i hear from constituents and i hear from physicians looking to the manufacturer to ask the questions why. we respond and we certainly understand that at the same time, i see every day when i go to work hundreds and hundreds of people working tirelessly around the clock sparing no expense to do whatever we can to return to

historical production volumes so we can get these critical products back to market. this is a very complex multi- state issue and it will require the coordination and communication amongst all the stakeholders to resolve this issue. as noted in earlier testimony, there are many factors that impact the drug shortage issue. whether it be api being sourced available, we have discussed that very the industry has experienced in manufacturing challenges and i will go into greater detail. there has been regulatory impact on facilities. as required, the fda regulates these complex facilities and these products to assure that the manufacturing community is operating within full cdmp compliance to provide the highest quality of products to

all of us in this room. we understand that and as a manufacturer, we certainly embrace that. most of the shortages are unanticipated. those charges can have a boomerang affect up and down the supply chain. as noted in earlier testimony, there are a handful of manufacturers that sometimes are unable to pick up the lost supply from another manufacturer and we will go into detail around that as well. what are we doing specifically to address drug shortages issues? we have significantly invested in enhancement of our facilities as well as our quality systems. we have unrestricted access to our resources globally to prioritize those people in those facilities that require the work that needs to be done to get the product back to market. we have embarked on a very

aggressive redundancy plan. there is no requirement to a manufacturer to have a secondary or tertiary facilitate qualified to manufacture these products. we have identified in combination with drug shortage division, the most critically necessary products and we have five fda does approve facilities that we have put a team in place that is actively working on redundancy planning for these critical products. as referenced, there has been extraordinary collaboration within the fda branches as a relic -- as it relates to mitigating these challenges. i can speak to a couple of different references. there was a discussion earlier in testimony around coronation of the importation of products to alleviate critical job shortages. there was as the civic instance where we worked with the fda to bring in a product called lukovorin that is used in

chemotherapy. we brought it in and we had a significant amount of resources to work collaboratively and we were able to help mitigate that problem. the solutions we are looking at, recognizing it is a multi- stakeholder issue, as it exists today, there is tremendous cooperation within the drug shortage group and the manufacturing community. there is no formal process. it is an informal process. i can speak on behalf of teva and other manufacturers that we all collaborate with the fda. we take that very seriously. we are responding where we can. the example mentioned earlier, i received a phone call to do what we can. we were able to work in collaboration and get products to market and we continue to

prioritize those types of products. during questions, i will be more than happy to go into greater detail as to how we are seeing the coordination of effectiveness and how we would like to see a greater communication of months multiple-stakeholders' beyond the manufacture and fda. going forward, we had seen discretion by the agency deployed to allow earlier availability of key products. that is working. we would like to see a process in which we can get in on the front end to potentially mitigate potential problems while incorporating remedial steps that have no impact or concern to the patient. i apologize for going over my time. >> mr. gray you are recognized for five minutes. >> i am president and ceo of the

health care distribution management association in arlington, virginia. i am pleased to provide some overview of the pharmaceutical distribution system and in former committee on efforts regarding critically important issues around a drug shortages. hdma is a national association representing america's primary health care distributors. each business day, our 34-member companies insure that nearly 9 million prescriptions, medicines, and health-care products are delivered safely and efficiently to nearly 200,000 pharmacies, clinics, hospitals, nursing homes and others. approximately 90% of par pharmaceutical sales slowed for our companies. efficiencies have set our members apart to annually contribute about $42 billion in value to the nation's health- care system. federal law defines wholesale drug distribution as the

distribution of wholesale drugs to others. wholesale distributors are licensed entities down by a series of federal and state laws. our tester does not comply with license requirements in every state they operate. it is important to note that hdma our primary distributors. they buy predominantly from pharmaceutical manufacturers and sell only to appropriately licensed customers, the vast majority are pharmacies or health-care providers. pharmaceutical products are distributed through a cordon in its supply chain in this country. pharmacies and other health care and the general to place orders for prescription orders by 8:00 in the evening and receive deliveries the next morning. the average distribution center in this country is nearly 2000 orders per day. it warehouse maintains about 30 days of inventory levels. this number varies by product, subject to demand, seasonality, cost and other matters.

pharmaceutical products with special handling require other arrangements. we also have receivables risk- management, customer validation, order management, inventory management protracting, returns and recalls. for pharmacy and for other customers, we provided equal an array of services including ordering, assistance with stalking its cause of for information and accounting and credit support. in the case of the inventory management, distributors can fill customer orders six or seven days per week, 365 days per year. that limits the of need for large inventory levels. some distributors serve to maximize the efficiency between manufacturers and health-care providers by managing a complex network of products and systems by officially providing mechanisms for the transformation of information and product area the unique

position of distributors and our close relationships, we are aware of the impact of drug shortages on patients. addressing the drug shortage is difficult for the entire health community because the shortage typically appears with little or no warning and often requires significant resources to manage preparedhdma and our member companies work hard to improve the supply chain. we try to mitigate the impact of the drug shortage. all the distributors do not manufacture products, they play an important role to coordinate and share information about drug shortages. distributors are typically notified of the shores by a manufacturer or provider/pardon. once that information is received, distributors communicate with their manufacturing partners about product availability to understand the scope and expected duration of any shortage for the distributor works as quickly as possible with customers to fill orders to the extent they can do so based upon purchasing history or to

identify alternative products in the supply chain. there is a delicate balance between the need to share information at the proper level and prevent an environment for panic buying. hdma has worked with the american society of pharmacists and congress and other partners to share expertise about the whole drug supply chain gori we are also working with our distributor members and manufacture providers to update guidelines on improving communication between supply chai -- supply chain partners. we hope we can treat to the better management into its entirety. we believe the health care industry as whole must continue to work together towards collaborative solutions and mitigate the impact of the shortages and impact on the stakeholder, the patient. i thank you for this invitation to participate and i look forward to your question us.

>> good morning. thank you distinguished members of the subcommittee for holding this hearing. i am the corporate director of pharmacy at the medical center in illinois. i am here today because i cannot serve my peasants are caregivers for the shortages of medications, some of them critical. while there is no single solution that will immediately solve the problem of drug shortages, there are things we can do to help address this issue. first, a bipartisan legislation from both houses of congress would enable the fda to require the drug manufacturers report -- to report confidential when they experience an interruption in the production of their product. this early warning system will help the fda work with other manufacturers to wrap up production when another company experiences a problem.

moreover, the bill's call upon the fda to work with manufacturers and develop continuity of supply plans which could help to identify backup sources, ingredients, and produce redundancies and inventory to serve as reserves. some have argued that this legislation will not have any impact. we disagree. you have already heard this morning from the fda that in 2010, 38 drug shortages were avoided and in the last year, 99 drug shortages were avoided when the agency was given advance notice. for their opponents argue that it will lead to according. hoarding. we know this already occurs. how do people find out about drug shortages before others? we don't know all the answers to this question. we know that early warning to the fda will make sure that

everyone has the same information at the same time. simply put, the public benefit of an early-warning system far outweighs the risks hoarding and other areas such as bio terrorism, pandemic, and natural disasters. we develop action plans and communication channels among necessary responders. why would we approach drug shortages any differently. ? health system pharmacists have been collaborating with other conditions and members of the supply chain to work with the fbi to address this problem. we believe the fda should have an vote necessary resources to speed up the regulatory process to address drug shortages. other alternatives include improved communication between fda field personnel and the drug shortages program to assess the comparative risk of public are many potential enforce an action will cause or worsen a drug shortage.

exploring incentives for manufacturers to continue or re- enter the market, a generic user fee program to speed approvals, and ensuring the agency has the funding it needs to carry out its mission. many of you sitting in this room sometime over the next several months is going to receive news that you, a family member, or a friend has been diagnosed with cancer and need surgery or has been admitted to an intensive care unit. or as a premature baby or grandbaby that requires nutritional support for a lasting you want to hear is that we don't have first-line medication. we don't want to say that the medication we have would serve us as well or that we are delaying the treatment until you are able to obtain drugs that are in short supply. these are all situations i and my clinical cressy sat --

clinical pharmacy staff have had to manage over the last year. from our perspective, drug shortages represent a national health-care crisis. we don't have one single solution that we have offered a number of solutions that together and help resolve this problem. thank you all the members of the committee for the opportunity to provide input on this problem. >> we are in the middle of the votes. we have 14 votes. we will try to get a couple more before we go and recess for the boats and we will come back. >> good morning. chief operating officer of the health care alliance. premier zone, the use of collaboration to leave the transformation to a high quality and cost-effective health care and one way we do this by aggregating the buying

power of 2500 hospitals to get the most effective medical supplies and drugs at the best prices. i thank the committee for leading efforts to address drug shortages. the number of drug charges has tripled since 2005 and many of these medicines are essential to patient care. premier set out to understand the extent of the problem for a survey and we found that between july and december 2010, more than 240 drugs were in short supply or completely unavailable in 2010. over 400 generic equivalents were back ordered for more than five days. many of the drugs noted as backward in 2010 have remained unavailable or in short supply in 2011 and 80% of the apostles reported that shortages resulted in the delay or cancellation of a treatment. drug shortages also carry a cost and, an estimated $400 million through the purchase of more expensive labor costs grew don't

have the ability to measure the financial impact entirely. we are working to diminish these costs by determining ran it back during capabilities and whether they can supply the market. we look for alternatives of capabilities if they don't meet demands for instituting an early-warning system for hospitals to notify us of shortages, once notified, we determine the scope of the problem and communicate with the fda. we create more predictable volumes and stability in the market. we hope people do everything they can to help patients get the drugs they need. instead, we have seen the great market vendors taking advantage of the problem, offering to sell a shortage of product at high prices. we compared other prices to our present average marcus were 650% and the highest markup was

4500%. a vial to treat high blood pressure that sells for $25.90 was offered for $1,200. mark up reports out for drugs that true leukemia, 3100% for drugs to help cancer patients retain bone marrow. 45 percent summer marked 1000% above normal and 1/4 were marked up to nine%. where and how gray market vendors are getting these medicines, no one knows. how can the integrity of these drugs be ascertained which is a question that you know. that is what premier has taken a position that pharmacies should avoid these vendors and stick to primary distributors. in times of shortage come up pharmacies may need to look elsewhere. we would develop a set of best practices which includes verifying the products fees, licensure, and verifying a vendor is authorized to sell the product in confirming the vendor

is a wholesale distributor. we need to fix the drug shortage crisis. we wanted to consider the following. speedy approval process for medically necessary drugs that appear to be in shortage. encourage fda to engaged stakeholders and discussions to determine whether a drug is necessary. the objective is to prioritize drugs that are necessary for treatment and may be at risk for shortages. grant dea flexibility - fast-track approval of ingredients for necessary drugs in shortage. work with manufacturers to slow the trend of acquiring law materials outside the u.s.. require manufacturers to notify the fda planned supply interruption to work in the

remaining information to increase production. establish an early warning point of contact at the fda. i think the committee -- i thank the committee for the opportunity to share what we have learned about drug charges and the impact it has on the safety and health of our community as well as our health care costs. we stand ready to assist congress in finding ways to insure a safe and reliable drug supply. guest: thank you. we appreciate your patience. we've got five minutes left for a vote. i think we will break here and come back. as soon as the last vote is over. we'll continue the testimony then. >> i want to ask a minute -- consent to submit the record of congressman matheson. >> the subcommittee stands in recess. until after the last vote. you have a long time where you can go eat.

host: caller: [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] [no audio] >> thank you for your patience and a thoughtful testimony. we will resume the testimony with dr. pindley? >> good afternoon.

at to you and the remainder of the subcommittee. i'm a practicing oncologist in nashville, tennessee. i spend a majority of my time taking care of patients and i am pretty uncomfortable in this environment. i've heard talk about the impact of drug shortages of my patients. i speak on behalf of the american society of clinical oncology. our 30,000 members and their patients thank you for holding this hearing. drug charges have reached crisis proportions in oncology. we hope that this hearing will better friend potential solutions. large and small practices are having challenges treating their patients. the situation this morning you heard was -- is worsening. drug sales in the diocese have tripled and almost all cancer types are affected, limb -- leukemia, lymphoma, ovarian cancer and others. shortages are forcing us to

change the way we treat our patients. often a drug in short supply potentially has no reasonable substitutes. our practice treats many patients diagnosed with aml. that is a curable disease. there is a simple component of the treatment but that agent has been and remains intermittently in short supply today. physicians have been forced to help tell patients that this potentially georgia drug is not immediately available to them. treatment delay can result in bad consequences for these patients. there are alternative drugs but there are less effective and more side effects or that are dramatically more expensive. the standard treatment for non hodgkin's lymphoma known as the chop their paper in a colleague share of the story of a young

woman diagnosed with lymphoma during pregnancy. that is a complex situation which does not happen very often. it involves the potential risk for the mother and child. the woman had to be treated with a substitute, one for which the risk to the baby is not as well-known and may be less effective treatment for her leg,. oncologist and patients should not have to make such difficult choices. i am currently tree in national firefighter who was responding b therapy. the price of such drugs can be up to 100 times more expensive than the drug normally chosen especially if the subject is a brand name drug. when the mainstay generic drug lucovorin went short,

physicians had to treat with an alternative. one does is approximately $90. we're threatened by drug shortages because of a drug the course of the study becomes unavailable. we understand there are many causes of this problem and a number of them involve the manufacturing process. market factors appeared to be a key driver in this rapidly escalating crisis. shortages in cancer drugs were almost exclusively in generics, sterile, and injectable which are generally inexpensive drugs of the low profit margin. companies that expressed by detecting complications men that have the incentive to invest resources required to update quality problems. there does not appear to be a

single solution to the crisis. our primary expertise is in patient care. we would offer these potential solutions which we would encourage the committee to explore. first, congress should urge abbreviated new drug applications for drugs vulnerable to a shortage of a way that does not compromise safety. because this amounts to a public health crisis, congress could work with medicare to address high pricing and content for all to low-cost generic drugs. congress should pass s-296, the bipartisan legislation that would give the fda power to manage the shortages. consider tax incentives to enable generic manufacturers to continue to support vital drugs. update their facilities or end of the market to produce the drugs vulnerable to a shortage. asko will remain an active

partner to the problem. the risks of necessary treatment is a heavier burden for families to bear. it is absolutely unacceptable medication therapy should add to that stress. we must revolt -- resolve this crisis immediately. we appreciate leadership on the sea to and we stand ready to do everything we can to assess. >> we now recognize the gentleman from lancaster. >> good afternoon. i want to thank the committee for convening this hearing. i am vice-president of operations at lancaster general health in lancaster, pennsylvania. my comments will address the daily challenges we are experiencing as a result of increasing judge shortages -- drug shortages. hospitals are being asked to restructure to meet the quality, safety, physical constraint and

benefits standards expected in today's world. . at lancaster general, we work hard to maintain a culture of quality and patients' safety largely based on fundamental building blocks of standardization for will elimination of waste and variability. direct conflict with the safety aspects. the lack of an early-warning system regarding impending shortage is one of the greatest challenges we face as health- care providers. we sometimes learn about shortages or their severity when products are not received in our daily shipments.

we have received last month of only 4352 of the 4444 line items processed represent a kill rate of about 80%. in other words, 892 line items ordered in august or not received. every disruption in the medication supply, we update protocols, procedures and various technologies. we must disseminate effective educational alternatives not always ready to leave the miller -- familiar to first-line buyers. staffers allowed virtually collaborate -- staff works collaborative late. we contemplate how we might maintain their way in a patient presenting to the trauma center without the availability of a

paralyzing agent. neonatology is wonder how to best provide nutritional care to fight prematurity. these experts are searching for alternatives. we may not have the medication necessary to treat a patient elements. in our opinion, this issue represents the national health care crisis. relieving in minimizing a portable drug services requires long term solution and short- term innovation. this requires system changes and increased capacity. we would establish say an early- warning system. that would help to avert or medicaid drug shortages proactively. establish and improve communications between fda and manufacturers to develop evidence-based allocation plans for critical drug therapies. secure the pharmaceutical supply chain and direct pharmaceuticals

to our most needy patients. we want to encourage drug manufacturers to stay in, we enter or enter the market specifically if everything is in south -- short supply. i want to thank the committee for holding this hearing. lancaster general offers its continued support and commitment to develop solutions that will help prevent and mitigate risks caused by drug shortages, thank you. >> dr. de paulo. >> good afternoon. i and director of the cancer institute of new jersey, the state of new jersey's national cancer institute comprehensive center. i also speak as a number of the american association for cancer

research. thank you for convening this hearing in recognizing the impact that the current drug shortage problem is having on our patients and our ability to advance cancer research and improve patient outcomes. you have heard about the effects of drug shortages on treating patients. as a director of in a designated cancer center and oncologist myself, i have the same frustrations regarding our patients and a negative impact of drug shortages. this impact is not only immediate for the patients in our clinics today but also affects the future care of cancer patients is the next generation of cancer therapy is driven by today's clinical trials that are critical to meeting the national goal of improving the outcome for cancer patients. shortages of drugs, as you heard today, is a complex problem. there a number of ideas regarding was causing them how

they can be remedied. to discuss how this growing involve of shortages a drugs that been made for decades are affecting our best cancer care, are clinical trials, and is directing our ability to continue on our trajectory of positive patient outcomes. the number of drug shortages has more than tripled over the past six years. a marked impact of patients taking drugs. most shortages in our college -- in our ridgy in oncology.

the shortage is predicted to worsen. some drugs are used to treat cancer of different varieties for the shortage are now affecting clinical trial options of patients with cancer. deuced the uncertainty of being able to obtain many of these probes, and room of the patients in clinical trials has been delayed or stopped. many of these drugs that are in short supply are part of the standard regimen in which new treatments are added or compared with in a clinical trial. many of the drugs in the shortest list are also used in our look national cooperative group trials. approximately 50% of active corporate group cancer clinical trials involved drugs. many reports into examples in which web sites are unable to enroll patients to a lack of drug supply. investigators in the clinical studies are unable to treat new

patients when the drug supply is not available. patients on study sometime shares and there's a concern about results when a substitution occurs. it is important to remember the impact from the drug shortage is a chronicle tiles today and we will have a long-term effect on cancer research and future treatment for cancer patients. clinical trials represent the final step in the long process of developing new therapies that improve the accommodation. when a single researcher discovers a new drug for treatment, that particular drug is often best added to existing treatment in combination and/or .ested in paris currently we are running out of

the existing drugs. what makes clinical trial runs of a drug even temporarily, the trial results may be compromised. an enormous amount of work and expense is wasted. this means that during a clinical trial, the shortage of only a few weeks in an existing drug might mean delays in years of developing a new drug. in other words, the drug shortages of today can have a ripple effect on the availability of new drugs and treatment comminations tomorrow. today we estimate that one in two men and one in three women will develop cancer. more than half a million americans are expected to die of their disease which is more than 1500 people per day or more than one per minute. these numbers seem staggering but we have made great strides in our ability to diagnose, treat, and prevent cancer and had -- and are at a most promising time. the american association for

cancer research this week issued a progress report marking 40 years of progress by the organization. most adults are living longer which is an increase. in the period from 1990-2007, death rates for cancer in the u.s. decreased by 22% for men and 14% for women. the challenge we now face it to continue to return ground- breaking designs into like carrying spare the current drug store is in our ability to treat cancer patients at all. an inability to have best treatment for our patients in general and in but clinical trials is a serious impediment to our goal.

thank you. >> the chair thanks to john and thank all of our seven witnesses for your thoughtful testimony. we will get questioning at this time. i will recognize myself for five minutes. can you walk us through what happens from your perspective and there is a drug shortage? who notifies you? how much warning you get? what do you need to do did nobody will in your and new england. may -- many times to fight drug order does not come, the buying and receiving process, and for the receiving process we did i get a medication on order. the buyers of the falloff, a wholesaler, has to fight at that as a temporary situation. that would relay into an investigation of 100-150 indoor

locations we look at what we have on hand and how much we use and a day-to-day basis to estimate how much supply we would have if we continue business as is. based on the information again, we have to compete -- field a team. pharmacists, nurses, the specific stakeholder positions depending on what medicinal it is. we look to the indications that look for alternatives. we look at how critical the shortage is. based on that, we have to agree action plans and sometimes it involves the pharmacy manually filling orders. in one instance last october, this was the tipping point of the drug shortages with a goal -- with a drug called flexino

coleen. >> is there any way at present to anticipate a sharper shortage? >> for online web sources, as good as the information is based on what the drug companies reveal and was published, we have not -- we have an active surveillance programs that goes out to the fbi website and key resources to look at that information. sometimes it is published with alternatives. the user -- the university has been helpful in that regard. it is only as good as the information available and many times no information exists until we self-report. let's go down the line. what is the main reason for a drug going to sure as and how was your company working with of that? our primary point of contact when we become aware of a shortage for any number of

reasons, we could have a manufactured lot rejected during release testing. that means that after you finish your manufacturing process, every in checkable goes through about three of four weeks series of tests. if those tests fail for quality, or unspecified reasons, you reject that lie. if we anticipate a show -- shortage -- the point was made that there would matabele post that information because that can trigger additional behavior where the awareness of a potential shortage can lead to the purchasing of another generic product or even another comparative start date which can drain the supplies as well. we coordinate with our hospital partners and distribution partners. >> however you worked with the fda to alleviate a shortage?

>> we worked extremely well with them. there have been many instances where we have collaborated. through the drug shortage group, they have played quarterback on this. it is not a formal process for they do a fantastic job of pulling instances together. there have been at least three occasions where we had submitted a prior approval supplement. by definition of that, that is an extensive review and that indicates we have had significant changes to product of process which would typically take long. they have been able to execute and get those approved in about a three-month period that allows us to get those products to market. >> mr. gray, can inventory create the impression of a drug story? a mentor and management practices are actually across the supply chain.

our members focus on the delivery side, the manufacturers, and the production side and that is a process developed over the last 25 years in the consumer goods area. that is to spread out the predictability of manufacturing as well as alerting the manufacturer, a wholesaler, and the retailer when shortages -- when resources are not available. the management programs of their to spot the shortages the sense that before they happen. that is what has been developing since last night in as. -- since the late 1980's. i'm not sure there is a connection there. the mentality behind this to identify shortages is not there. >> people often pay more than the primary distributor would pay. if they charge more for the drug, they're responding to the

market. can you contrast that with the labour market? >> i can speak to seven -- secondaries. vendors onlyily sell to licensed retailers. we are usually under contract pricing. if we sell them down to a provider, it is usually a contract price already preset. i do not know what secondary would do with that product. thank you. you stayed there is no one he stressed the importance of enacting legislation to require manufacturers to notify the fda of possible shortages. why does this require legislation to accomplish?

why does it need to be done on a confidential basis? when there is a leak or all of them, stop fixing your figure in a paragraph to explore the reason and you need to solve the problem. this legislation fixes your finger in dull and the damp and stops the league. we have heard from testimony today from the fda that they have been able to basically aboard 99 drug shortages this year with regard to early warning systems. we believe that is needed. i am not in favor of regulation. anything i put in my body or mouth, i want to make sure that is manufactured in the right way. we want to assure is done correctly and we support the fda in terms of their role. say, they need to be able to have the power and jurisdiction to enforce early

reporting of shortages and the other thing i said was really bus import does get the word out to a ready decision time. it is beyond me sometimes have a drug product plan and that drug crusher. there are only certain places you get those drugs from. i think we need the regulation in order to solve the problems we have right now. >> thank you. we have heard that often the end uses of drugs that going to shortage of very little u.s. -- in advance warning. a surge in a proper refund that the preferred anesthetic is not available but only after the patient is prep and the operating table. how does this happen? >> for the most part, i have not

necessarily heard that. for the most part, there is strong communication that occurs in hospitals and doctors are made aware of what is happening from a shortage especially if they do prep for these procedures. they have to go about figuring out what are the potential clinical alternatives. >> dr. penl;ey, how many drugs that you used in your practice regularly go into shortage? it seems there are a thon -- by number of drugs that go into shortage. >> it is around 23 oncology drugs. those are very commonly used doses. we would use muslim in our practice. >> is there any way to anticipate a shortage? >> i practice level it is difficult. we get information the same way others do through the fda

website or the hospital pharmaceutical will serve as an information gathering and distributing service for our members. there are times when the stains are going to be prolonged shortages. which we try to come up with the best available worker brownson situation where we have to make substitutions. we try to bring together the best models so they can come up with a workable and reasonable solution. >> thank you dr. perry and your description of the impact of drug shortages on the few tricky. you mentioned that 50% of the cooperative group trials involved drugs that are subject

to a shortage. that sounds like it should have a devastating affect on cancer research. can you give us an idea of the magnitude of this problem? >> as we are all concerned with the shortage even worsening, already we are seeing a number of trials even within our cancer center. we take care of patients with the best family tree ferns and offer clinical trials for patients want that option. those clinical trials gear toward our discoveries. if a clinical trial is compromised because it needed to substitute a particular drug for another drug or sometimes clinical trials will not allow substitution of all the work that went to the discovery getting to the point of the clinical trial. we have made gains and cancer

research overall but ultimately, the discoveries in terms of the targets in allowed and the comparison to these existing drugs or the addition of these new targeted agents to existing drugs make it very difficult to continue this. the statistics related to data we have been given regarding the cooperative group trial. those are usually the large national trials. most of the trials don't contain a placebos to the existing drug as part of the clinical trial. this is already very difficult and concerning problem. and the problem may worsen. >> i think my time is up so the ranking member, i thank you. i will yield to mr. pallone. >> thank you, mr. chairman. let me get unanimous consent to put in the record the statement

from my gut -- from my guest, i will go back to what you said, mr. chairman. doc de pauoa is from my district. do you have an example of a clinical trial that was halted because of the drug shortage? is there an actual example? >> there are a number of examples. trials that were about to launch that we have made, we have made the plans and development to start the clinical trial. most of them have to do with trials where a new rug is added

to existing therapy. we have had difficulties in one or two trials were a new drug was added to a combination that included paxel as one particular example and the trial was held in terms of initiating the trial. would end up happening is in the clinic, we have concern in offering patients who come to the center led to redding -- looking for these options. a drugot sure of the big supply. the young patients with breast cancer was unrolled and doxel was included. the doctor along with a, is drugs required the patient to be treated and jay's the drug from madness of oil to another age in which has concerns about

compromising the trial. there's also a delay involved looking at options and changing the drugs because the trial allowed this. taken together, any one of these weeks, months, but delay is really delay getting an answer. just as more importantly, peasants are coming because they're concerned that in that case goes set option may have a what they're looking for enough that they're looking for these options in critical trial. >> how do you think the drug shortage in? the future of cancer research and treatment? are you concerned?

>> i think it will be important. i think this is important that everybody gets together in a the root causes. it is concerning especially the does worsen. the statistics would indicate that it is. i think we need to keep pushing forward. we need the discovery of the basic science and leading into trendsetting into clinical trials. it is concerning. thank you. i want to ask mr. kafwer from teva a couple of things. a frequent cited reason for

shortages is manufacturing problems. we have heard this rhetoric we've heard that sterile, injectable drugs are hard to manufacture. that may lead to a foreign city -- a shortage of you were a plumber. there are circumstances outside your control that can interfere with your ability to deliver a product. are these problems relate -- all these problems relate to this shortage of drugs. can't manufacture avoid these problems? >> one thing we need to understand that by the nature of a sterile manufacturing facility, it is sterile and it is a very complex manufacturing environment. picture people in space suits kind of doing the prep work. an oil man in a string

facility, it is different each technology has its own defined manufacturing line our manufacturing suite. you cannot manage -- manufacture better toxic consult -- and call the product. many of the products, some of them are a powder which has a unique manufacturing suite enables quickfill line. it is possible that within one manufacturing facility that you have a disruption in just one suite. one of the questions we have heard repeatedly is specific to and colleges. it is a very dynamic and complex environment. over the last couple of years, the industry has had some disruption within those manufacturing suites that are in the stages of recovery. we are manufacturing products.

we are in a slow build at its -- it is impacting patients as the channel has testified today. >> you can hear this -- you could see this hearing on medical shortages in the cspan video library. we're going live now to mountain view, california where president obama is taking place at a town hall meeting about jobs. this is hosted by late in. the president will take questions from students present and a link in questions. speaking now is jeff wiener. >> companies have been born in this area. think back to the semiconductor revolution, the age of computing, and the internet. most recently, the rise of social networks convicts hundreds of millions of people around the world in milliseconds. perhaps more important are the behavioral changes taking place as a result.

we share information, knowledge, ideas and opinions. it is fundamentally transforming the world. , the way we want work, the way we live. it is changing the way we work which is where old and in its focus. we connect hundreds of millions of people around the world. by connecting talent with opportunity. 120 million members is what we have a global basis and that is growing at 2 members per second. when we talk about connecting talent with opportunity, we're not just referring to enabling people to find their dream jobs. we are also talking about enabling people to be great at the jobs they are already in which is what we do day in and day out. our dream is even bigger than that. there are 153 million people in

the american work force. there are 3.3 billion people in the global work force. ultimately, our vision is to create economic opportunity for everyone of them. whatwhat is somewhat unusual abt this vision it isn't -- it is not simply manifested by the employees of the companies but our members as well because every individual joins the linkedin network is in a position to in turn create economic opportunity for others. we are very fortunate today b.b. -- to be joined by several of our members and we will be hearing from them shortly. lastly, on the subject of economic opportunity, there seems to be one number on everybody's minds these days. 9.1%. in the unemployment rate in this country. over 14 million americans are unemployed. that number grows to north of 25 million when you factor in those who are underemployed and

marginally attached to the work force. there is one number you may be less familiar with. that is 3.2 million, the number of available jobs in this country. 3.2 million. we have everything we need to begin to put this country back to work. the raw materials, the basic building blocks, and perhaps the most in portland, but will of a nation. what we need is the way. with the american jobs act, our president is leading the way. ladies and gentlemen, it is my great honor and privilege to introduce the president of the united states. [applause]

thank you. thank you. thank you very much. in nice crowd. -- a nice crowd. and i must say, jeff, you warmed them up very well. >> thank you, mr. president. >> thank you for your hospitality. let me begin by saying how excited i am to be here. every time i come to silicon valley, every time i come to this region, i am excited about america's future. and no part of the country that ever present, i think, the essence of america than here, because what you see is entrepreneurship and dynamism, forward orientation, optimism, believe that if you got a good idea and you are willing to put in the sweat and blood and tears to make it happen, that not only can you succeed for yourself,

but you can grow the economy for everybody. it is that driving spirit that has made america an economic superpower. but obviously we are in a period of time right now where the economy is struggling and a lot of folks all across the country are struggling. and so, part of what i hope to do is to have a conversation with all of you about how can we continue to spark the innovation that will ensure our economic success in the 21st century. how can we prepare our work force to be able to plug in to this newly economy -- new economy. how can we recognize that in this competitive environment, there are all other opportunities for linkedin for interconnectedness and people to work together and spread ideas around the world and to create value, but at the same time,

understand there are perils as well. if our kids are not properly educated, if we don't have an infrastructure that is world class, if we are not investing in basic research and science -- if we are not doing all the things that made us great in the past, then we are going to fall behind. we've got a short-term challenge, which is how to put people back to work right now. i put forth a proposal, and american jobs act, that will put thousands of teachers back into the classrooms that have been laid off due to downturns in state and local budgets, that will make sure we are rebuilding our infrastructure, taking extraordinary number of construction workers who have been laid off with housing bubble going bust and putting them to build roads, schools, laying broadband lines, all the things that help us make a success. and also make sure that we are providing small businesses the kinds of tax incentives that

will allow them to hire and allow them to succeed. i have sent to congress, i understand there is an election 14 months away -- said to congress, i understand there is an election and it is tempting to say we will not do anything before november of 2012 but the american people cannot afford to wait. the american people need help right now. and all the proposals we put forward in the american jobs act will not only help us now, but will help us in the future. it will lay the foundation for our long-term success. the last point i will make -- and then i will get to questions -- it is all paid for. it is paid for in part by building on some very tough cuts in our budget to eliminate waste and things we don't need that we have already made, a trillion dollars over the next 10 years. we proposed an additional half a trillion dollars over the next 10 years of spending cuts and adjustments on programs that we want to keep intact but have not

been reformed into long. but, what i also said it is in order to pay for it and bring down the deficit at the same time, we will have to reform our tax code in a way that is fair and it sure everybody is doing their fair share. i said it before and i said it again. warren buffett's secretary should not be paying a lower tax rate than warren buffett. somebody who is making $50,000 a year and a teacher should not be paying a higher effective tax rate than somebody like myself or jeff who has been incredibly blessed -- i don't know what you make, but i am just guessing. who have been blessed by the incredible opportunities of this country. and i say that because whenever america has moved forward it is because we have moved forward together. and we are going to have to make sure that we are laying the foundation for the success of future generations and that means each of us is doing our part to make sure we are

investing in our future. with that, thank you so much for the terrific venue. i look forward to a bunch of great questions, both live and through whatever other linkages we have here. >> you got it. we are going to be going back and forth between folks in the audience and some previously generated questions from the linkedin group. we will start our first question from linkedin member shall pinter -- chuck painter. >> i am from austin, texas. i have been sales in the plastics industry for 20 years. i lost my job in 2009 and fortunate enough to find another position. my question is, what can we do as american citizens to unite ourselves for a healthy economy? >> first of all -- are you a native of austin, because that is when my favorite cities?

>> i am a native of charlotte, north carolina, and relocated to austin and i love it. >> austin is great. charlotte is not bad. that is the reason why i am having like a midget in charlotte because i love north carolina as well. how long did it take you to find a new job after you got laid off? >> it took nine months. >> nine months? >> yes. >> that is one of the challenges a lot of folks are seeing out there. if you've got skilled people with experience in an industry. that industry changes, and you were fortunate enough to be able to move. some folks because of the decline in the housing industry are having trouble with mobility and finding new jobs and relocating in pursuit of opportunity. >> yes, sir. >> the most important thing we can do right now is to help jump-start the economy, which has stalled, by putting people back to work. not surprisingly, i think the most important thing we could do

right now is to pass this jobs bill. think about it -- independent economists have estimated that if we pass the entire package, the american jobs act, we would increase gdp by close to 2%, we would increase employment by 1.9 million persons. and that is the kind of big, significant move in the economy that can have ripple effects and help recovery takeoff. there have been a lot of disputes about the kind of impact we had right after the financial crisis hit. but the fact is, the vast majority of economists who look at it said the recovery act, by starting infrastructure projects around the country, by making sure that states had help on their budgets so they did not have to lay off teachers and firefighters and others, by

providing tax cuts to small businesses -- and, by the way, we cut taxes about 16 times since i have been in office for small businesses to give them more capital to work with and more incentives to hire -- all those things made a big difference. the american jobs act is this -- is specifically tailored to putting more of those folks back to work. it will not solve all of the problems. we still have a housing situation in which to many homes are under water. and one of the things we proposed as part of the american jobs act is we are going to help reduce the barriers to refinancings of the faults can get record low rates, which will put more money into people's pockets. it will have tax cuts not only to small businesses but almost every middle-class family. it means they have more money in their pockets. that means they will be able to spend it on products and services which provide traditional incentives for businesses to hire folks like you. so, it is the right step to take right now.

long term, we are going to have to pull together our around making sure our education system is the best in the world, our infrastructure is the best, continuing to invest in science and technology. we've got to stabilize our finances, and we've got to continue to drive down health care costs, which is a drag on our whole economy. and we've got to continue to promote trade, but make sure the trade is fair and that the intellectual property protection, for example, is available, while we're doing business with other countries like china. so there are a lot of long term objectives of got to pursue. right now, though, the most and for nothing i could do for you, even if you already have a job, is to make sure your neighbors and friends also have jobs because those are ultimately the customers for your products. >> thank you. >> thank you, chuck. >> we would now like to take a question from the audience. anyone interested? >> this young lady right here. >> do we have a microphone, please? >> i have a question actually

for my mother who is going to be 65 next march. she lives in ohio, which has a very high unemployment rate. she has a ged. she has also worked in food service. she is currently unemployed and just got approved for section 8 housing, social security and food stamps -- she wants to know, when can she get a job and what will happen to social security and medicare? >> first of all, where does your mom live in ohio? >> mentor, on the east side of cleveland. >> tell mom, hi. you get points for being such a good daughter and using her question to tell me what is on her mind. >> you have no idea. [laughter] >> mother-in-law lives at home, and the white house, so -- [laughter]

let's talk about social security and medicare. because this has obviously been an issue that has been discussed a lot of the press lately as we think about our long-term finances. you can tell your mom that medicare and social security will be there for her. guaranteed. there are no proposals out there that would affect folks that are about to get social security and medicare. and she will be qualified -- she is already starting to qualify for medicare and she will be qualifying for social security fairly soon. social security and medicare together have lifted and tired generations of seniors of of poverty. our most important social safety net. and they have to be preserved. now, both of them have some long-term challenges that we got to deal with. but they are different

challenges. social security is actually the easier one. it is a pure, simple math problem, and that is right now the population is getting older. some more people are going on social security. you've got fewer workers supporting more retirees. and so, if you don't do anything, social security won't go broke. but in a few years will happen is more money will be going out band coming in, and then over time people who are on social security would only be giving -- getting about 75 cents times for every dollar they thought they would be getting. -- 7 5 cents for every dollar they thought they were getting. if we want to make sure social security in there for future generations we've got to make some modest adjustments. when i say modest, i mean, for example, right now social security contributions are capped at a little over $100,000 out of earnings. that means the vast majority of

people pay social security taxes on everything they earn. but if you are earning a million dollars, only one-tenth of your income is taxed for social security. we could make that modification. that would solve a big chunk of the problem. medicare is a bigger issue. because not only is the population getting older and more people are using it, but health care costs have been going up way too fast. that is why part of my health care reform bill two years ago was, let's start changing how our health care system works to make it more efficient. for example, if your mom goes in for a test, she shouldn't have to then -- if she goes to another specialist -- take the test all over again and medicare pay for two tests. that first test should be emailed to the doctor who is the specialist. right now that is not happening. what we said it is let's incentivize providers to be a more efficient job and over time we can start reducing those costs.

i have made some suggestions about how we can reform medicare. but what i am not going to do is what frankly the house republicans propose, which was to belcherize medic -- be voucherize medicare. so we will be pushing back against that kind of proposal. that raises the point i raised earlier. if people like myself are to paying a little more in taxes than the only way you balance the budget is on the backs -- are not paying a little more in taxes than the only way to douse the budget is on the backs of people like your mom, whereas i can afford to pay more in taxes. that is on medicare and social security. in terms of her finding a job -- the most important thing we can do right now is to pass the american jobs act, get people back to work. because, think about that, if

she had been in the food services industry, that industry is dependent on people spending money on food -- whether it is in a restaurant or cafeteria, or buying more groceries. and if a construction worker and a teacher or a veteran have a job because of the programs that we propose in the american jobs act, they are going to be spending more money in food services and that means that those businesses are going to have to hire more and your mom is going to be more likely to be hired. >> one of the other issues, though, is the matter -- there is a big age gap between her and other folks willing to come in and make the work for less money. >> that is a challenge. it is tough being unemployed if you are in your 50's or early 60's, before retirement. that is the toughest period of time to lose your job. it is never fun to lose your

job. and it is always hard in this kind of deep recession. but it is curious for folks and nearing retirement and males worry about pot if they have enough to retire. one of the things we are also proposing, separate from the jobs bill, is we've got to do a better job retraining workers so they and their second or third or fourth careers are able to go back to a community college, maybe take a short six-month or a one-year course-trains them on the kinds of skills that are going to be needed for jobs that are actually hiring, or big businesses actually hiring night duty right now. we have done great work working with community colleges to try to make sure businesses helped design the training programs so that -- somebody who unrolls like your mom, if she goes back

to school, she knows after six months she will be trained for the particular job this business is looking for. all right? thanks so much. tell her i said hi. >> ok. >> we are going to go to the linkedin group. thousands of questions submitted. one of them from linkedin member marla hughes from gainesville, florida, the owner of meticulously clean apartment and home cleaning service. as a small-business owner, regulation and high taxes are worst enemies when it comes to growing my business. what are you going to do to lessen the onerous regulation and taxation -- taxation of small businesses? >> it is hard to say exactly what regulations or taxes she is referring to because obviously it differs with different businesses. but as i said, we actually cut taxes first -- for small businesses 16 times since i have been in office. so, taxes for small businesses are lower now than they were when i came into office.

small businesses are able to get tax breaks for hiring, they are able to get tax breaks for investments -- capital investments. they are able to get tax breaks for hiring veterans. they are able to get tax breaks for a whole host of areas, including, by the way, a proposal we put forth that says there should be no capital gains tax on a startup to encourage more small businesses to go out there and create a business. in terms of regulations, most of the regulations that we have been focused on are ones that affect large businesses like utilities, for example, in terms of how they deal with safety issues, environmental issues. we have been putting forth some

tough regulations with respect to the financial sector because we can't have a repeat of what happens in 2007. and the fact of the matter is, if what happened in wall street ends up having a spillover effect to all of main street, it is our responsibility to make sure we have a dynamic economy, a dynamic financial sector, but we don't have a mortgage brokerage operation that ends up providing people loans that can never be repaid and end up having ramifications throughout the system. so, you are going to hear from, i think, republicans over the next year and a half that somehow if we just eliminated pollution-control or if we just eliminated basic consumer protections, that somehow that in and of itself will be a spur to growth. i disagree. but there are some regulations

that have outlived their usefulness. what i said to all the agencies and the federal government -- number one, you have to always take costs as well as benefits into account when you are proposing new regulations. number two, don't just dissatisfied with applying that analysis to new regulations. look back at the old regulations to see if there are some we can start weeding out. we initiated the most aggressive look back provisions when it comes to regulations where we say to every agency, go through all the regulations you have on your books that flow through your agencies and see if some of them are still necessary. it turns out that a lot of them are no longer necessary. well, let's get rid of them if they outlived their usefulness. i think there are some regulations that had to do with transportation sector, for example, that did not take into a fact that everybody operates on gps right now.

adjust ande got to adapt to how the economy is changing and how technology is changing. and we've already identified about $10 billion worth of savings just in the initial review, and we anticipate it will only be a fraction of some of the paperwork and bureaucracy and red tape we will be able to eliminate. but i will never apologize for making sure we have regulations in place to make sure your water is clean, that your food is safe to eat, the peanut butter you feed your kids is not going to be contaminated, making sure that if you take out a credit card, there is some clarity about exactly what it is going to do and you are not seeing a bunch of hidden fees and charges you did not anticipate. that has always been a part of what makes the marketplace work, if you have a smart

regulations in place, it means people providing good value and products and services, those businesses are going to succeed. we don't want to reward folks who are gaming the system or cheating. i think that is how most americans feel about regulation as well. they don't want more than is necessary but we know there are some things we've got to do to protect ourselves and our environment and our children. >> thank you for your question. now we are going to take a question from another linkedin member, and i.t. analyst from chicago, illinois. esther -- >> chicago is all right, too. >> as jeff said, i am from chicago. recently unemployed. my fear is the longer i am unemployed, the harder it is going to be for me to be employed. it seems to me employers are hiring people who are currently employed because they are in touch with their skills said. what programs do you think

should be in place for an individual like myself to keep in touch with our skills, be in demand, marketable, and eventually get hired? >> first of all, you obviously are thinking ahead about how to keep your skills up, and the most important thing you can do is to make sure that whether it is through classes or online training or what have you, that you are keeping your skills that sharp. we as part of the american jobs at our actions supporting legislation in congress that says employers cannot discriminate against somebody just because they are currently unemployed. that does not seem fair. it does not make any sense. but the most in preventing probably we can do for you is to make sure the unemployment rates generally goes down, the labor market gets a little tighter so

that employers start looking beyond just the people who are currently employed two people who have to read this goal but a huge have just been out of the market for a while. passing the american jobs that will be important. there is legislation and there it that says you cannot be discriminated against just because you don't have a job. the other thing we can do is during this interim as you are looking for a job, making it easier for you to go back to school if you think there is some skill set that you need, making it economical for you to do it. one of the things we did in the last two and a half years -- it used to be the student loan program was run through the banks. and even though the federal government guaranteed all the loans, so the banks were not taking of a risk, they were taking about $60 billion out of the entire program. which meant there was less money to actually go directly to students. we ended that.

we cut out the middleman and said let's use that money, expand the availability of pell grants, increasing the amount, that each -- each grant a student could get, and through the process you have millions of people all across the country who are able to actually go back to school without incurring the huge debt loads that they have had in the past. although obviously the cost of a college education is still a really high. but if we can do more to make it easier for you to keep your skills up even if you are not already hired, hopefully that will enhance your marketability to employers in the future. just looking at you i can tell you are going to do great. >> thank you. >> thank you. >> thanks, esther. our next question is from linkedin member wayne.

from phoenix, arizona. spent 25 years flying aircraft for the u.s. navy and now program director for american express. wayne? >> good morning, mr. of president. >> i am from phoenix, arizona, where i am a program director -- retired in 2007. when i retired, networking was essentially how i got all of my jobs after retirement. how the vision the government's role in integrating networking tools to aid veterans who are leaving the service and getting jobs? >> it is a great question. first about -- let me thank you for your service to this country. we are very grateful. [applause] but you were extraordinarily skilled, and even then, it sounds like you had to rely on

informal networks rather than a formal set of processes for veterans in order for you to find a job that uses all your skills. we have not done as good a job in the past in helping veterans transition holds of the armed services as we should have. i will give you an example. i actually had lunch with a group of veterans from the iraq and afghan wars up in minnesota. the young man i was talking to had just gone back to school. he was getting his nursing degree. he had worked in emergency medicine in iraq, multiple deployments. probably dealt with the most incredible kinds of medical challenges under the most extreme circumstances, had received years of training to do

this. but when he went back to nursing school, he had to start as if he had never -- never been involved in medicine at all. so, he had to take all of the same classes and take the same debt burden for taking the classes as if i had just walked in and could barely put a band- aid on myself. but he had to go through the same process. that is an example of a failure on the part of both dod and the va, department of defense and veterans administration, to think proactively how could we help make the transition. what we are saying is let's have sort of a reverse a boot camp. as folks are thinking about retiring, as they are thinking about being discharged, let's work with them while they are

still in the military to say, is there a way to credential them so that they can go directly into the job and work with state and local governments and employers so that if they've got a still said that we know is applicable to the private sector, let's give them a certification, let's give them a credential, that helps them do that right away. we also started to put together a network of businesses. i actually asked for a pledge from the private sector. and we've got a commitment now that 100,000 veterans will be hired over the next several years. gates a network, and maybe they will end up using linkedin -- i don't know. but what we want to is to make sure that whether it is the certification process, the job search process, whether it is resume proration, whether using electronic networks, that we are

using the capacity of the veterans administration and the department of defense and all of the federal agencies to link up together more effectively. because not only is the federal government obviously a big employer in itself -- and we significantly increase the hiring of veterans within the federal government, including, by the way, disabled veterans and wounded warriors. but the federal government is also a big customer to a lot of businesses. there is nothing wrong with a big customer saying it to big businesses, you know what, we are not going to tell you who to hire, but here is a list of extremely skilled veterans who are prepared to do a great job and have shut showed incredible leadership skills. you have 23, 24, 25-year-old leading men into battle, handling multimillion-dollar

pieces of equipment, and they do so flawlessly. those skills should be able to translate directly into jobs. the last thing i will say is the american jobs act will also be helpful because it provides additional tax incentives for companies to hire veterans. thank you. [applause] >> thank you for your service. let us turn to the audience. a lot of hands going up. mr. president? >> you kinda put me on the spot. that guy in the glasses right back here. >> thank you, mr. president. job, but that is because i have been lucky enough to live in silicon valley for a while and work for a small

startup company down the street who did quite well. so, i am unemployed by choice. my question is -- would you please raise my taxes? [laughter] [applause] i would like very much to have the country to continue to invest in things like pell grants and it infrastructure and jobs training programs that made it possible for me to get to where i m. and it kills me to see congress not supporting be expiration of the tax cuts that have been benefiting many of us for so long. i hope he will stay strong in doing this. >> what was the start of, by the way? >> it is a search engine.

[laughter] >> worked out pretty well. look, let me just talk about taxes for a second. i made this point before, but i want to reiterate this. so often the tax debate gets framed as a class warfare. and look -- as i said at the outset, america that is success is premised on individuals, entrepreneurs, having a great idea and going out there and pursuing their dreams and making a whole lot of money in the process. and that is great. that is part of what makes america so successful. but as you just pointed out, we are successful because somebody invested in our education, somebody built schools,

somebody created incredible universities. i went to school on scholarship. michele, her dad was what was called a stationary engineer at the water reclamation district, never owned his own home but always paid his bills. he had multiple sclerosis, struggle to get to work every day but never missed a day on the job. never went to college. but he was able to send his daughter to princeton and on to harvard law school. we benefited from somebody somewhere making an investment in us. i don't care who you are, that is true of all of us. look at this room. look at the diversity of the room -- people here. a lot of us -- parents came from someplace else, our grandparents came from someplace else. they benefited from a public school system or incredible diversity network or and the structure that allowed us to

move products and services are around the globe, or scientific research. silicon valley is built on research that no individual company would have made on their own. because you could not necessarily capture of the value of the nascent internet. so the question becomes, if we are going to make those investments, how we pay for it? now, the income of folks at the top has gone up exponentially over the last couple of decades. whereas the incomes and wages of the middle class have flat line. over the past 15 years. so, this young lady's mom, who

has been working in food services, she does not have a lot of room to spare. those of us who have been fortunate, we do. and we are not talking about going too punitive rates that would somehow inhibit you from wanting to be part of a startup or work hard to be successful. we are talking about going back to the rates that existed as recently in the 1990's when, as i recall, silicon valley was doing pretty good. and well-to-do people were doing pretty well. and it turns out, in fact, during that period, the rich got richer. the middle-class and expanded. people grows out of poverty because everybody was doing well. so this is not an issue of do we somehow try to punish those who have done well. that is the last thing we want to do. it is a question of how can we afford to continue to make the

investments that are going to propel america forward. if we don't improve our education system, for example, we will all fall behind. we will all fall behind. that is a fact. and the truth is that on every indicator -- from college graduation, math and science scores, we are slipping behind other developed countries. and that is going to have an impact in terms of if you are a startup, will you be able to find an of engineers. it is going to have an impact in terms of, is the infrastructure here good enough that you can move products to market. it is going to have an impact on your ability to recruit top talent from around the world. and so, we all have an investment in improving our education system. now, money is not going to solve the entire problem. that is why we initiated reforms

like race to the top that means we will have higher standards for everybody. we will not just have kids talked to the test but we want to make sure we and our teachers. we also want to hold them accountable and improve how we train our principals and teachers. so we are willing to make a whole bunch of reforms, but at some point, money makes a difference. we don't have enough science teachers in the classroom, we are going to have problems. somebody has got to pay for it. and right now we have the lowest tax rates we have since the 1950's. and some of the republican proposals would take it back as a percentage of gdp, back to where we were in the 1920's. you can't have a modern industrial economy like that. so, i appreciate your sentiment. i appreciate the fact that you recognize that we are in this thing together and we are not on our own. and those of us who have been successful, we've always got to

remember. >> i know a lot of people in that same situation and everyone has said to me they would support an increase in their taxes. so, please. [applause] we are going to get to work. it thank you. >> thank you for your question. the next question was submitted to the linkedin group, it actually comes from a linkedin employee, teresa sullivan. a two-part system. do you think our public education system and unemployment rates are related? what if any overall and education is necessary to get americans ready for the jobs of tomorrow rather than the jobs of 20 years ago? >> there is no doubt there is a connection long term between our economic success, our productivity, and our education system. that is indisputable. when we were at our peak in terms of growth in the 1960's and 1970's, in large part it was because we were doing a better job in training our work force

than anywhere else in the world. now the rest of the world has caught up or is catching up. they are hungry. and as i said before, we are slipping behind a lot of developed countries. so, our proportion of college graduates has not gone up, while everybody else's has gone up. proportion of high school graduates has not gone up while everybody else's has gone up. and if you've got 1 billion chinese and indians and eastern europeans, all who are entering into a labor force and are becoming more skilled, and we are just sitting on the status quo, we are going to have problems. now, what can we do? this is a decade-long project. it is not a one-year project. we have been pushing since we came into office to look at the evidence to base reforms on what

actually works. the single most important ingredient in improving our schools is making sure we got a great teachers in front of every classroom. so, what we said is, let's make sure that we hire enough teachers, let's train them effectively, let's pay them a good wage, let's make sure we are putting a special emphasis on recruiting more math and science teachers, where stem education is an area where we are falling significantly behind. make sure they are accountable but also give them flexibility in the classroom so they don't have to do a cookie cutter teacher-to-the attached test approach that prevents them from engaging students. but at the end of the year let us make sure they are doing a good job and the teachers not doing a good job, let us retrain them and if they are not able to retrain we should probably find

in a different line of work. we've got to have top-flight principles and leadership inside the schools. on --also got to focus you know, there are some schools that are just drop out factories were less than half of the kids and the graduating. a lot of them, the students are black and brown. but that is also the demographic growing the fastest in this country. so, if we don't fix those schools, we are going to have problems. we said to every state, you know what, focus on the lowest performing schools and tell us what your game plan is to improve those schools performance. and it may be that we have to also in some cases rethink how we get students interested in learning. ibm is engaged in a really interesting experience in new

york where they are essentially setting up schools similar to the concept that was talking about with community colleges, where they are saying to kids pretty early on, as early as eighth grade, we are going to design a program -- ibm worked with the new york public schools to design a program -- and this is not for the kids in the top 1% above the ordinary public school kids -- you follow this program, you work hard, ibm will hire you at the end of this process. it suddenly gives kids and incentives. they say -- the reason i am studying math and science is because there is a practical outcome. i will have a job. and there are practical applications to what i am doing in the classroom. that is true in high-end jobs but also true -- we want to do more to train skilled workers even if they don't have a four- year degree. it may be that more the concept

of apprenticeships and the concept of a rigorous vocational approach is incorporated into high schools, so that kids can actually see a direct connection between what they are learning and a potential career, they are less likely to drop out. we will see more success. one last point i will make about this is, george bush actually was sincere, i think, in trying to improve the education system across the country through something called no child left behind. that said we will impose standards, that is going to be accountability and if schools don't meet those standards we will label them as failures and they are going to have to make significant changes. the intent was good. it wasn't designed as well as it could have been. in some cases, states actually lowered their own standards to

make sure they were not labeled as failures. there was not enough assistance given to these schools to meet the ambitious goals that had been set. so what we have said is, look, we will provide states some waivers to get out from under no child left behind if you can provide us with a plan to make sure kids will be college and career ready. we will give you more flexibility but we will still you hold -- hold you accountable and we will provide you the tools and best practices that allow you to succeed. the last point i will make on this -- there is also a cultural component. we as a country have to recognize that all of us are going to have to up our game and we as parents need to instill in our kids a sense of educational excellence. we've got to turn off the tv set. i know it is dangerous to say in silicon valley, but put away the video games sometimes, and all the electronics -- unless a

school related -- and we just have to get our kids more motivated and internalizing that sense of the importance of learning. if we don't do that, we are going to continue to slip behind even if some of these school reform approaches we are taking are successful. >> our next question comes from linkedin member robert holley joining us from charlotte, north carolina. after a promising career and financial-services, robert was unfortunately recently laid off. robert, what is your question? >> good morning, mr. president. as just mentioned, i have a 22- year very successful career in the i.t. management, but i find myself displaced. not only that, i look at the statistics -- 16.7% for african- americans. my question would be -- and not

just for the african-americans but also for other groups that are suffering -- what would be your statement of encouragement for those looking for work today? >> what i would say is just given your track record, given your history, thought seeing you stand -- seeing you stand here before this group, you are going to be successful. you've got a leg up on a lot of folks. you've got stills -- skills, experience from a track record of success. right now your challenges -- not you, it is the economy as a whole. by the way, this is not just an american challenge, this is happening worldwide. i hope everybody understands. our biggest problem -- part of the reason that this year, where at the beginning of the year the economists estimated -- and financial and in the -- analyst estimated the economy would grow

at about 3.5%, and that has not happened. in part it has to do with what happens in the middle east and the arabs bring which disrupted energy prices -- arab spring which disrupted energy prices and cause consumers to pull back because gas was getting so high. what happened in europe, which -- they have not fully healed from the crisis back in 2007 and never fully dealt with all of the challenges that their banking system faced. it is now being compounded by what is happening in greece, so they are going through a financial crisis that is scaring the world and they are trying to take responsible action, but those actions have not been quite as quick as they need to be. so, the point is that economies all around the world are not growing as fast as they need to. since the world is really interconnected, that affects us

as well. the encouraging thing for you is that when the economy gets back on track in the ways that it should, you are going to be prepared to be successful. the challenge is making sure that you hang in between now and then. that is why things like unemployment insurance, for example, are important. part of our jobs act is to maintain the unemployment insurance. it is not the end all be all, but it helpful to meet their basic challenges. and by the way, it also means that are spending their money and they are recirculating it into the economy, so it is good for business is generally. some of the emergency measures we are taking and have proposed to take bridge the gap to where the economy is more fully healed. historically, after financial crises, recessions are deeper and they last longer than after the usual business cycle recessions. so, i guess the main message i have for you is, the problem is

not you, the problem is the economy as a whole. you are gonna be well equipped to succeed and compete in this global economy once it is growing again. my job is to work with everybody i can, from the business community, to congress, to not for profits, you name it, to see if we can speed up this process of healing and this process of recovery. in the meantime, we will make sure that things like unemployment insurance that are there to help people during tough times like this are going to continue to be available. and since you are in i.t., if there are areas where you need to be sharpening your skills, as the young lady here mentioned, we are going to make sure that there are resources available for you to be able to go back -- back to school and do that.

thank you. >> thank you. >> that was our last question. we are going to begin to wrap it up. but before i turn it over to you for concluding remarks, i just want to say thank you and let you know how much we appreciate the work you are doing. i know i speak to a lot of people who say i can't think of anything more important than creating economic opportunity when it comes to profoundly and sustainably improving the quality of an individual's life, the lives of their family members, the lives of the people they in turn can create jobs for, and in hard hit american said his seat -- cities and developing countries around the world, these faults are creating role models for the next generation of entrepreneurs and professionals they did not know was possible. on behalf of myself, on behalf of the visionary founder hoffman without which this would not been possible, our employees, our members, on behalf of our country, thank you, mr. president. [applause]

>> thank you so much. thank you. let me just say, these have been terrific questions. and i so appreciate all of you taking the time to do this. i appreciate linkedin helping to host this. and for those viewing not in this circle but all around the country, maybe around the world, i appreciate the chance to share these ideas with you. look, we are going through a very tough time. but the one thing i want to remind everybody is, we've gone through tougher times before. the trajectory, the trend of not just this country but also the world economy, is one that is moral, more linked, -- more open, more linked, that offers

greater opportunity, but also one that has some hazards if we don't prepare the people with the skills they need to compete. if we don't make sure we continue to of the best infrastructure in the world, we are going to have problems. if we are not continuing to invest in basic research, we are going to have challenges. if we don't get our fiscal house in order in a way that is fair and equitable so that everybody feels like they have responsibilities to not only themselves and their family but also to the country that has given them so much opportunity, we are going to have problems. so, i am extraordinarily confident about america's long- term future, but we are going to have to make some decisions about how we move forward.

what is striking to me is when we are out of washington and i am talking to ordinary folks, and i don't care whether they are republicans and democrats, people are just looking for common sense. the majority of people agree with the prescriptions i just offered. the majority of people by a wide margin believe we should be rebuilding infrastructure. the majority by a wide margin believe we should be investing in education. and majority by a wide margin think we should invest in science and technology, and a majority believe we should maintain programs like social security and medicare to provide a basic safety net. the majority of people by a significant margin but -- believe a way we should close our deficit is a balance of cutting out those things that we don't need but also making sure we have a tax code that is fair and everybody is paying their fair share. so, the problem is not outside

of washington. the problem is things have gotten so ideologically driven and everybody is so focused on the next elections and putting party ahead of country that we are not able to solve our problems. that has got to change and that is why your voices will be so important. the reason i do these kinds of events is i want to hear from you directly -- and i also want your voices heard in the halls of congress. i need everybody here to be speaking out on behalf of the things that you care about, and the values that made this country great, and to say to folks that you have elected, to say to them, we expect you to act responsibly and not act in terms of short-term political interests. asked in terms of what is going to be good for all of us over the long term. it is that spirit that all of you represent -- if that spirit

that all of you represent starts asserting itself all across the country, then i am confident the 21st century will be the american century just like the 20 the century was. thank you very much, everybody. god bless you. [applause] ♪

♪ [applause]

>> ladies and gentlemen, please stay in your seats for the next few moments. thank you. >> tonight on c-span, former defense secretary robert gates. he talks about the future of the military, the political climate in washington and the transfer of power in afghanistan. >> all combat forces from all countries, all foreign countries will be out of afghanistan by december of 2014. so the question is it seems to me is one of pacing between now and the end of 2014.

and the -- so the variable is how fast you bring our forces out. the other variable is how fast and well can you train up the afghans to take our place. i think this is a conversation i had with petraeus and with a lot of our leaders in iraq and afghanistan over the years. i would tell them the hardest thing that you're going to have to decide is that inflection point where these guys doing it adequately is better than us doing it excellently. >> we'll show the entire speech from the national constitution center tonight at 8:00 eastern on c-span. >> most all of google's problems are self-inflicted because they don't play by the rule of the game and they don't obey the law. >> if you are wondering whether or not you are getting an honest

result from google go to bing or yahoo! or facebook and you can figure out if you are getting the fair results. >> a look at competition and google's business practices with scott cleland and david balto tonight at 8:00 eastern on "the communicators" on c-span2. >> which part of the u.s. constitution is important to you? that's our question in this year's student camp competition open to middle and high school students. make a video and tell us why. be sure to include more than one point of view and videos of c-span program. there is $50,000 in total prizes and a grand prize of $5,000. for the details go to studentcam.org. >> friday republican

presidential candidates met and made comments about the american conservative union annual meeting. the organization's florida straw poll was won by her man cane on saturday. we begin with remarks by michele bachmann followed by mitt romney. this is about half an hour. >> hi, how are you? >> well, it's my pleasure to introduce to you our first speaker who is aspiring to the highest office in the land. somebody who has been a true champion for us conservatives, fighting the good fight when it is tougher to fight it and there were lonelier voices. she has always been there with us. ladies and gentlemen, there is such a thing of walking the walk. one of the things that inspires me the most is people who live what they talk about. this mother of five children and foster parent to 20 some children has put endless hours on the line to make america a better place where it counts and

that is starting in our home. she is an accomplished tax attorney, a great legislative leader and frankly the only presidential candidate who won a contest today in iowa. please join me if giving a warm, warm welcome to one of our champions, the great michele bachmann. [cheers and applause] >> good morning. good morning. good morning. it is wonderful when you're a minnesota girl to wake up in florida. you can't have a bad day. good morning. can't you feel it? barack obama is going to be a one-term president. and that road to the white house goes straight through the state of florida. and i know we can count on floridians to make him a

one-termer and take the country back. right? my name is michele bachmann. i'm running for the republican presidential nomination for 2012 because i know that we have the vision to turn the economy around, create millions of jobs and you have my guarantee, i will not rest until we repeal obama care. we can do better. ronald reagan had a vision of limited government. that's what our founders gave to us. we are a constitutional republic and we're proud of our constitutional republic. because of his vision, he was able to do the impossible. after jimmy carter did a number on our economy, ronald reagan came in with a completely

different vision. you see, there are two visions of our constitution. one is the real version of the constitution. which is a limited government with enumerated powers, the other one is an expansive view of the man who served longer for president than any other, a democrat named franklin delano roosevelt and he said this, to live under the united states constitution is the -- he said the united states constitution is the most marvelously elastic compilation of rules of government ever written. is that what our constitution is? not at all. what we have is a limited view and calvin coolidge had a different view. he said it is the greatest political privilege that has be rks n accorded to the american

race to live under the constitution. that's my view, too. [applause] in fact, george washington said in his farewell address, the person who occupies the white house is given a trust. he didn't even call it the president executive trust. that's what you get to choose here in florida. you get to choose who you are going to entrust the highest office in the land to take hold of this treasure that was given to us 235 years ago. we are a tremendous nation. unlike any nation that has ever been birthed in the history of mankind. no other nation has given the depth and bredth of freedom of this nation. this unparalleled vision that was given to us by our founders, every generation has successfully forged -- every

generation has forged one more link on the chain until today we have been given this magnificent nation. but do you know for the first time in the history of the united states parents aren't sure if their children will have the same opportunity that they have. almost three out of four americans today say that. for the first time in american history, that's a level of pessimism that is unparalleled in our nation's history. it's no wonder. when you look at what barack obama has done, his signature issue being obama care. obama care has been the greatest taker of our freedoms of any

legislation out there. because obama care covers us from cradle to grave. the federal government has mandates and dictates over our lives from cradle to grave. that is why the first member of congress to introduce the full scale repeal of obama care. and that's why i'm committed as the nominee of the republican party, i won't rest until i can elect 13 more like minded united states senators so we have a filibuster-proof majority in the senate and i'm thinking -- [applause] i'm thinking of the pattern of a senator marco rubio. what do you think? that is what i want to do. i'm committed. i'm committed to seeing this done. that's what we have to in our

nominee, someone who has the fire and the will and the vision to do this. someone who sees what the problems of our nation is, but also sees the potential beauty, the challenges, what we can be. ronald reagan told us, he reminded us of what john winthrop said in 1630, we are the shining city on the hill. that is who we are. greatness is what we were created to be. a majestic nation is what we were meant to be. and a majestic, magnificent, great nation is, again, what we can embrace if we have that leadership. i know we can. [applause] and it isn't just obama care. it is the issue of immigration. because what we've seen with president obama is that he has opened up our borders not closed our borders. as president of the united states i will build a fence on

our southern border against illegal immigration. and we will not have taxpayer subsidized benefits for illegal immigrants or for their children. with president obama we have seen him subject to crony capitalism, most recently in the example of cylindra? this was one of the great benefits of the stimulus program. $535 million to go to a political donor of president obama and you can always count on vice president joe biden to tell you the truth. and vice president joe biden said this about the loan guarantee program, the stimulus program and cylindra program is

exactly what the stimulus program was all about. greed, grab and corruption and now president obama is proposing a son of stadium luss. stimulus one was bad enough. we don't need to sequel. and president obama wants to pay for this by taking away the mortgage tax deduction, taking away the charitable deduction and deduction for taxes we pay on stavet and local government. i'm a former federal tax litigation attorney. i've seen how devastating high taxes are on job creation. i'm a job creator. my husband and i started a successful company from scratch. small business is the miracle job creation agent of this country and profit is a good thing.

you see, there's a difference in how we view the role of government. and that's why in this particular election we have to understand something that is extremely important as conservatives. every four years when we look at the presidential race, we are repeatedly told as conservatives that we have to go stand next to the wall or stand in the back of the room because in that election we're told we have to give the nomination to a moderate or to a safe candidate. in other words, we're told that we have to settle. well, i'm here to say to you i have no doubt in my mind that president obama now has one of the lowest job approval ratings of any president in modern times and he hasn't reached the basement yet. his approval ratings are going lower.

i have no doubt that president obama will be a one-term president. no doubt. as a matter of fact, i say get ready, florida, you need to recruit candidates from everyone to the dogcatcher to the city council to the school board to the state assembly, to the senate, all the way up to the president of the united states, find the candidate that most reflects your values, who you believe will actually go to washington and change washington and fight for what you believe. if there was any election when we conservatives don't settle, it's this election. this is the election when we can have it all. don't settle. have a candidate who is right on obama care. who has fought against obama care. who gets it is a job killer, who gets that it has stolen $500

billion out of medicare, who gets the job-killing aspects. ubs this week said the number one reason we aren't seeing employers hire people is because of obama care. i get that. we can't get rid of obama care with an executive order or with a waiver. it will never happen. you have to pull it out root and branch. otherwise we'll have socialized medicine in this nation forever. you see, 2012 is it. this is our only chance to get rid of this bill. otherwise it will so me tsa size -- metastisize into the united states fabric. our nominee has to get how you get rid of obama care. how you get rid of it and have the political will and the backbone and the courage to do it.

and behind this little blue jacket, you need to know there is a titanium spine. so don't settle. don't settle. we need a constitutional conservative for our nominee. someone who is not ashamed to be a national security, peace through strength, pro-military conservative. i am. we need to have a strong, no nonsense fiscal conservative who will stand up against giving barack obama a $2.4 trillion blank check and say have at it. i did. that's what we need in our nominee. we need a true social conservative who is not ashamed to stand for marriage, who is not ashamed to stand for life, who is not ashamed to stand for religious liberty and who has demonstrated that. that's what we need in this election and we need a nominee whose not ashamed of the tea

party, who is willing to stand up for our tea party and tea party values. who believes we are taxed enough already, who believes government should not spend more money than what they take in and who is not ashamed to say that the government should act within the bounds of the constitution. you see, we don't settle this time. if there's ever been a year that we don't settle and sit next to the wall and go to the back of the bus, we conservatives have to say, no, this is our year. this is our time. and we're going to have our nominee. so let's take this movement all the way to 1600 pennsylvania avenue. we can have it all. send a message. tell the country we're going to send a message through florida that we are going to have a

constitutional cob soift and we are going to take the country back and make barack obama a one-term president. god bless you, florida. vote well. i love you all. god bless you. god bless the united states of america. you're beautiful. thank you, florida. god bless you. what a wonderful gathering. god bless you. god bless you. thank you. >> boy, that was better than coffee. thank you very much. well, it's my pleasure to be here again to introduce to you

someone who i've had the pleasure to get to know very well. both he and his wife are just great americans. and i first -- i have known them for a long time, but got to know him really well as he was traveling the country as chair of the national governors association. they did do a great job. they raised a lot of money and did get a lot of conservatives elected to do that. which is typical of what i think his purpose in life had been after he did so well in the private sector. that is to help america be great. from taking over failed -- a failed team for the olympics and bringing glorey to america in the winter olympics to taking over as governor as the most complex, liberal, democratic led state in the country and taking on these challenges. probably been to florida more

than anyone i remember running for president. he has been here a lot. he will be here a lot more. you saw him at center stage last night. he is doing a great job taking the fight to the president. that is what we need to do. ladies and gentlemen, one of the leading contenders for this nomination, someone i'm proud to call a friend, governor mitt romney. >> good morning. good morning. got some notes here. i don't know if i'll get a chance to look at them. i have a few thanks i would like to say. florida is lucky to have a guy like al leading this effort. al, thank you. i see david and al's family is here.

appreciable your work, by the way, to is slurs and leadership of florida. you have in this state men and women who decided you are going to balance the budget, not raise taxes, turn down federal money that has heavy strings attached to it and by doing so, by the way, you had your evaluation by the rating agencies upgraded. the outlook for florida upgraded at the time the nation was downgraded. florida was upgraded. congratulations on that courage and the good work done by the people here in florida. i thought this morning, i talk a bit about what it is like going from the business world into government. what is similar and what is different. i'm asked all the time is it harder being in business than government? no. if you make a serious mistake in your job, you might lose your

job. then you might end up losing your house. if you run an enterprise that employees other people you might lose all their jobs. it is very unforgiving in your enterprises. in government, the four years i spent there, i was surprised. when some people messed up they just blamed the opposition party that is interesting in washington today. you are seing a president who doesn't know how to govern, who doesn't know how to lead, who doesn't know how to balance the balance sheet but knows how to campaign and blame. we need a president who knows how to lead. now i found some other differences between the private sector and business world and government. one is the use of data. in the real world in the private sector you look at numbers and try and figure out how those numbers inform what you are going to do. in government they have tons and tons of data.

they produce mounds of information and data. they just don't look at it. i mean, i came into office they said the best thing you can do to improve your schools is reduce classroom size. i said well has anyone looked to see if the data supports that. and they looked at me like i was speaking a foreign language. we had 351 different cities and towns in massachusetts. we test our kids every year to see how they are doing so i could find out from every school district their average classroom size and how well their average child was doing. i plotted the one versus the other, classroom size against student performance and guess what? there was no relationship at all. as a matter of fact, the district that had the smallest classrooms and spent the most money per pupil, cambridge, scored in the bottom 10% of how the kids were doing. so the data is used in the private sector. by the way, what was the answer

to improving schools? school choice. recruiting the best teachers, make sure we evaluate how our kids are doing. we put in place the john and abgal scott scholarship program. if you take the exam and pass in the top quarter of those who take the exam you are entitled to four years tuition-free at our colleges and universities. by the way, you have to be a legal resident of the united states to get that. there is competition that goes on in the real world in the business world. a lot of people in government don't understand that. they don't understand for instance that we are in a pitched competitive battle with other nations around the world. of course we trade with other nations. we're the most productive and in ventive nation in the world. so we must trade to have a strong economy and have the highest incomes. trade is a good thing.

don't forget ewe are in competition. when politicians work together to put trade agreements in place they have to understand they have to make those work for us and not just the other guy. we are competing right now in particular with china. you may have noticed. and china isn't playing by the rules. now a lot of people would cheat if they could get away with it. we have been letting them get away with it for decades. they manipulate their currency. it means this. they make their southern si seem like it is worth less by pegging it to the dollar. their products sell 30% lower they would if they were fairly marketed. as a result of that our businesses have a hard time competing. it is time to recognize cheaters for what they are. on my first day in office i will issue an executive order identifying china as a currency

manipulator and allowing us to put tariffs on their goods where they are cheating and killing american jobs. there is another difference between government and the private sector. people in government don't tend to understand the power of incentives. they think, for instance, if you raise taxes a whole lot it won't make any difference in the way people behave. they calculate they will keep doing what they did in the past. they add up the new numbers government is going to get. it doesn't work that way. i remember the budget in our state had a line for homeless shelters. i said what is this sub account here for hotels under homeless shelters. oh, governor, you have to understand, if someone comes to a homeless shelter and we're full we tell them to go to a hotel and we'll pick up the bill. i said i bet the word gets around, you know. so i changed the incentive.

i told them immediately put in place this new rule. which is if someone comes to a homeless shelter and it is full you tell them you will make room. the person who has been there the longest, three, four, five months, they get to go to the hotel. before that incentive went into place guess how many rooms we were renting in massachusetts? 599 a night on average. tens of millions of cost. after we changed that incentive, you know how many rooms we rent a night? zero. zero. incentives make a difference. now i hope the folks that care about immigration understand that power as well. i love legal immigration. this is the land of opportunity and freedom. i want people all over the world to come to this country legally. there are 4.7 million people in line hoping to come here

legally. i want the best and the brightest and the freedom lovers of the world to get in line and ultimately become legal residents of the united states of america. [applause] but for that to happen we have to stop illegal immigration. because illegal immigration is an enemy of legal immigration. i was at the border in san diego with border patrol agents, big fences there. they say 100 people are able to get through even with the fences there. i said what do we have to do? they said number one, you have to have a fence. you can't have places that are just open. there were places even in san diego people could virtually walk through. number one, you have to have a fence. you have to have enough border patrol agents to patrol it. number two, you have have this country turn off the magnet. i said what do you mean the

magnet? he said you are drawing people in here with employers who hire folks -- that hire illegals. you are drawing people in to get benefits in in this country they can't get in their home country. you have to have an e-verify system to identify who is here legally and crack down on employers who hire illegals. and you heard us last night in that debate. one of the things i still can't get over is the idea that a state would decide to give a $100,000 discount to illegals to go to school in their state. it is simply wrong to create that kind of magnet. it cannot be sustained. >> my friend, governor perry, said if you don't agree with his position on giving that in-state tuition to illegals, that you don't have a heart.

i think if you're opposed to illegal immigration it doesn't mean that you don't have a heart, it means that you have a heart and a brain. [applause] legal immigration, good for america. illegal immigration, something i will stop if i'm president. [applause] now, let me mention one more thing that's a big difference. between the private sector, business and government. and that is if you spend your life in the private sector, you fundamentally understand how the economy works. what it is that motivates an individual to say, you know what, i'm going to take everything i've saved over 30 years of my life, 30 years of my career, rather, i'm going to take all that siveb saved and invest it in this new franchise that i've signed up for and my family and i are going to work in this thing and see if we can't get it to grow.

that's not an easy decision to make. i'm going to go to my pamptes and friend a -- parents and friends and ask for their money, too. that is a difficult decision to make. people who have been in the private sector understand how the economy works. at the level of job creation, which is employers, entrepreneurs, innovators taking a risk, making an investment. people who work at government all their life just don't understand that. the president spoke to a jobs summit, of senior executives of american corporations and he said to them, you all have lots of cash on your balance sheet, how come you're not using that cash to hire people? i'm glad you laughed. because that's just exactly what a number of the executives did. i'm told they looked down at their shoes and said, that is the dumbest question i've ever heart. they said, we don't hire people because we have cash, we hire people because we have customers. and the key --

[applause] don't be jealous of enterprises with cash, encourage the economy. i remember time and time again, just being distressed at the fact that people inside government don't understand how the economy works. and that's why when this economy was in a slide, as the president came in, he did everything wrong. because he doesn't have a clue how the economy works. he put in place -- [applause] he put in place a stimulus that didn't stimulate the private sector. instead it added over 100,000 jobs to the governmental sector. he put in place the one thing that private sector entrepreneurs can't deal with -- uncertainty. in health care, uncertainty. in financial services, uncertainty. in labor relations, uncertainty. in energy policy, uncertainty. and so businesses pulled back.

look, i can't wait to get america right again. not by throwing little cups of stimulus gasoline on the fire, that doesn't do it. the right answer is to rebuild that fire fundamentally, to make america strong and know how to do it because i've done it time and time again. [applause] you heard me say last night, i'll say it again, and know this, all across america, at kitchen tables, there are people sitting with their calculators and chair check books wondering if they can make ends meet. all across america. sitting across kitchen tables. there are people filling out job applications. recognizing that there are at least 100 or 200 people applying for the very same job they're applying for. right now people are scared, they're worried. they don't need to be. this is the greatest nation in the history of the earth for a lot of reasons. [applause]

one of those reasons is that our economy is robust and powerful and inventive and has always been a job-creating machine. i know how to make that happen again. i put together 59 things i do, not just to put a little stimulus on the flame, but to really rebuild the economic engine that's america. and to make sure that we can compete with anyone in the world. i'm convinced that given the patriotism and the hard work and the innovation of the american people, that despite our challenges, jihadists that want to kill us, iran about to become nuclear, israel under extraordinary stress, russians resurgent, china becoming a great power, $14 trillion-plus in debt, $62 trillion nun funded liabilities, $62 trillion. that works out, according to "usa today" to $532,000 per household. think of that. we've got challenges and an economy in the doldrums, despite all those challenges given the strength of the american people our love of

freedom, our love of this land, if we have leads that are will tell the truth and live with integrity and who by virtue of their life experience know how to lead and where to lead our economy, we will remain the engine of economic vitality we've always been -- vitality. we've always been the strongest nation on the earth and the hope of the earth. i intend to be one of those leaders with your help. thank you so much. good to be with you this morning. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> watch more video of the candidate, see what political reporters are saying and track the latest campaign contributions with c-span's website for campaign 2012. easy to use, it helps you navigate the political landscape, with twitter feeds and facebook update from the campaigns, candidate bios and the latest polling day at that, plus links to c-span media partners in the early primary and caucus states.

all at c-span.org/campaign2012. and now more from the american conservative union conference in florida, former house speaker and presidential candidate newt gingrich outlined his contract with america and promises to reshape the government. from orlando, florida, his remarks are about 15 minutes. >> well, thank you all very much for allowing me to come and join you and thank you, al. al's doing a great job with cpac and a great job with the american conservative union. i'm just thrilled at his continued leadership and he's a neighbor of my daughter, so we've known al for a long time. i'm delighted to be here. i wanted to tell you for a couple of minutes what we need to get been and i want to start by saying, i'm not going to ask any of you to be for me for president. because if you're for me you're

going to vote go home and say, i sure hope he fixes it. and i want to report to you, this is my serious conclusion, having studied margaret thatchers, having worked with ronald reagan, having worked with the contract for america and having watched the last 10 years. i believe we are in so much trouble. i believe the scale of what we have to change is so much bigger than barack obama. yes, yes, we need to defeat barack obama and that would be a good thing. but it's not by itself sufficient. we're faced with an academic system which refuses to teach american history and refuses to recognize american values. [applause] we're faced with a news media dominated by the language and values of the left. we're faced with federal judges who do not have a clue what the constitution is all about and

have lost all propriety. [applause] and we're faced with entrenched bureaucracies who believe that we are no longer citizens but rather are subjects and instead of being our servants they now believe that we should serve them. and all of that is reinforced by public employee unions whose number one the question question is give me more. let me just be clear. i think this is the heart of why i'm running and the conversation that we had for months with our family before we decided to run. i am running because i believe the scale of change that we need is so deep and so serious that i have come to ask you to be with me for eight years, not just for me. i've asked to you take on the responsibility of deciding that you're going to help every day convince your members of

congress and if you can't convince them, you're going to work every day to replace them. i came to say -- [applause] i need your help, frankly, because on the scale of change i'm going to describe, we're not going to get it all right. abraham lincoln in december of 1862, at a time when the civil war was going very badly, wrote a message to congress and he said, i'm paraphrasing, as what we are facing is new, we must think anew. and if we can disenthrall ourselves from the past, we will save the nation. now he was saying it not on behalf of abandoning america but on behalf of saving america. and more than any person, abraham lincoln resurrected the declaration of independence as the core of our beliefs.

because he believed that the deleak ration was exactly right -- declaration was exactly right. that we are endowed by our creator with certain inalienable rights among which are life, liberty and the pursuit of happiness. [applause] now, this is central to defining america. we're the only country in the world, this is what american exceptionalism is all about. we're the only country in the world that says our rights come from god and god says to each one of you personally that you're sovereign. you're the center of power. and you loan power to the government, which is why our constitution begins, we the people. this is the opposite of barack obama and the european socialist model in which government is the center of power and government -- this is why it makes perfect sense for obama to say, i think you're making too much money.

the key question to ask him is, who are you to define for americans what they're allowed to make? [applause] the arrogance of this administration makes perfect sense. many of you understand it's not an american administration. it is a european socialist administration transplanted to the united states. [cheers and applause] the arrogance of the environmental protection agency makes perfect sense if you understand that the bureaucrats there no longer understand america. they're a transplant of the brussels bureaucracy which believes it can dictate to europe. because there's no european tradition of the citizen being sovereign. we are citizens, we are not subjects. and i'm asking you to be with me, to re-establish citizenship in america. [cheers and applause]

i'm also going to ask you to be very inclusive. and this will jar some republicans and some conservatives. we always talk about outreach. outreach is when five white guys have a meeting and then call their friends. inclusion is when everybody's in the meeting. and let me tell you, one of the key definers between nulet gingrich and barack obama next year is going to be very simple. he is the best food stamp president in american history. [applause] i want to be the best paycheck president in american history. [cheers and applause] there is not a precinct in florida, there's not a neighborhood in florida, there's not an ethnic group, there's not an ideological group that wants their children to spend their life on food stamps instead of paychecks and

we have to have the courage to include every american who wants to have paychecks in our coalition and we will be the largest majority in modern history if we have the courage to include everyone and listen to everyone. now, it will be tumultuous. you get the other 60% or 70% of this country, that would be 180 million, 200 million people. you invite 180 million americans to a family picnic, it's going to be a really weird get-together. and so we have to learn to be happy and casual about the fact we have a lot more arguments internally because we're going to be so big. it's inevitable we're going to argue occasionally. but that's fine. that's what governing is all about in a free society. now, next thursday in des moines i'm going to outline a 21st century contract with america. it is going to be bigger, it's going to be deeper and more profound. [applause] we are in greater trouble than we were in 1980 when i campaigned for ronald reagan. we are in greater trouble than

we were in 1994 when we unveiled the first contract with america. so this approach which i'm going to outline in des moines next thursday is going to be more fundamental and more profound and is going to rely on citizenship and citizens being with me and actually implementing it. it will gradually grow over the next year. one of the key components will be action immediately. when i am sworn in, immediately after the inaugural address we'll take an hour and we will sign between 50 and 200 executive orders that will decisively reshape the government as of that day, operating within the law, the using of power that goes all the way back to george washington. [applause] in the next few weeks you'll be able to go to nutegorg and suggest your own -- nute.org and suggest your own executive orders.

they'll all be available to the entire country for the last month of the campaign and as i debate the president, if he says, i'm for that, too we'll pull out the executive order and let him sign it there during the debate. [applause] now, i don't know what all the executive orders are, but i know what the first one's going to be. sometime around 3:30 or 3:45 on the 21st of january, 2013rks i will sign executive order number one which will abolish all of the white house czars effective as of that moment. [cheers and applause] executive order number two will re-instate ronald reagan's mexico city policy that no u.s. taxpayer money is spent on abortions anywhere in the world. [cheers and applause]

and we will have an executive order that day which will instruct the state department to move the u.s. embassy from tel aviv to jerusalem because we should honor and recognize israel. [cheers and applause] there are two things i do know how to do because i've helped do them. i do know how to liberate the american people so they can create jobs, no politician creates jobs, but they can create circumstances to kill jobs, this is called the obama model, or they can have programs to create jobs, this is called the range model. this month in 1983, september, third year of his presidency, the american people created 1,100,000 new jobs because ronald rage had not right ideas. last month the american people created zero net new jobs because barack obama has totally wrong ideas about class warfare and bureaucratic

socialism. so i will have in the crth and the contract will have a very powerful job creation model based on lower taxes, less regulation and american energy plan and praising the people who create jobs as opposed to attacking them. we know it works. when i was speaker we brought unemployment down from 5.6% to 4.2%. when i worked with reagan in the 1980's we had a dramatic increase. the range recovery laid on our current population, we created 25 million new jobs in seven years. that's why i can talk about a food stamp president versus a paycheck president. we know how to create jobs. we also know how to balance the budget. when i took office we were committed to a balanced budget constitutional amendment and we were committed to balancing the budget. people thought it was impossible. we reformed government, we reformed welfare, we reformed medicare, we controlled spending, we cut taxes, the first tax cut in 16 years, biggest capital gains tax cut in history, precisely to create jobs.

the best way to balance the budget is to take people off of unemployment, off of food stamps, off of welfare and give them a job so they're paying taxes. [applause] the best social program is a job. and america only works when americans are working because to be a citizen you have to be self-sufficient and you have to be capable of taking care of yourself without being dependent on the positions -- politicians. it's that straight forward. we'll have a program for balancing the budget and creating jobs. but i'm also going to pick up on ronald reagan's farewell address where he spoke specifically about his concern about american history. as you know i'm a historian by training, i believe deeply in history. my wife is here and i'm very proud that she has a book coming out this weekend called "sweet land of liberty." it's aimed at 4-year-olds to 8-year-olds. it introduces them to american history and has ellis the elephant take them through american history. i recently wrote a book called "a nation like no other"

designed to deal with american history and i want to let all of you know, i actually believe all the words that i wrote that are in my book. [laughter] [applause] and we recently made a movie called "a city upon a hill". the reason i'm giving you this is it seemed to confuse some political reporters and some political consultants. i think we're in a cultural conflict with the left. in which knowledge of history is a key part of this. they've tried for two generations to create amnesia. they've tried for two generations to make sure young americans didn't learn about being american. i believe we should go on the opposite direction. i believe every first generation immigrant should have to learn american history to become a citizen and i believe every young person should have to learn american history. [applause] because this is cpac and because i think that you've

play played such an important role in the conservative movement for a generation, let me close with one new issue that nobody's talked about and don't have time to go into detail but i'm going to give several major speeches in the near future. the time has come to rebalance the constitution. there is no provision for judicial supremacy in the constitution. in fact, the exact opposite is true. [applause] alexander hamilton wrote in the federalist papers, the judicial branch would by definition be the weakest of the three branches and it would always lose a fight with the executive and legislative branches. i want to promise you that a key part of my campaign is to ensure that we implement what hamilton said, that we rebalance the constitution, that we teach the judges that they are in fact our servants, not our dictators, that they in fact should obey american history and the american constitution.

[applause] with your help -- [cheers and applause] i want you to be with me for the next eight years. thank you, good luck and god bless you. [cheers and applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> watch more video of the candidates, see what political reporters are saying and track the latest campaign contributions with c-span's website for campaign 2012. easy to use, it helps you navigate the political landscape, with twitter feeds and facebook updates from the campaigns, candidate bios and the latest polling data. plus links to c-span media partners in the early primary and caucus states. all at c-span.org/campaign2012. up next, the american

conservative union conference in florida. we hear from rick perry. >> ladies and gentlemen. a great chairman, thank you all. it is great to be back in florida and at cpac. it's a place where the seeds of conservative ideas are so sewn, intended, invigorating our party and i might add in doing so, the health of our country as well. and it's good to be with friends. let me share shah with you. when i had the last privilege of being in your company, this last february, i was just one of many governors, millions of americans who were deeply concerned about the federal government that had grown too big and too brazen, that willfully neglected its constitutional duletties and i might add was assuming some

that was never supposed to have to begin with. struggling for stability this country that was struggling for stability on the seeds of an economic storm like a ship without a rudder. in the intervening months little has changed to right america's course. millions of people remain unemployed, the number of americans on food stamps has reached all-time high, american credit rating was downgraded for the first time in the history of this country, washington's instationble desire to spend our children's inheritance on these failed stimulus plans and other misguided economic theories has given us record debt and left far too many unemployed. nearly 2.5 million of our citizens have lost jobs under this administration.

$4 trillion in debt has been add to our children's burden, one in six work-eligible americans cannot even find a job. now, washington they call this a recovery. and the rest of america we call it a failure. [applause] our president, the great promiser of hope and change, he has delivered neither. what he's delivered americans don't want. his latest idea is one of the most offensive to date. this week president obama had the audacity to propose to veterans that they should be required to pay $200 when they turn 65 years old in order to get their medicaid benefits.

[audience booing] that she should pay higher prescription drug -- mr. president, the men and women of our military who have served our country with courage every single day have already sacrificed enough. [cheers and applause] the least could you do, mr. president, is to have the courage to cut a government bureaucracy instead of cutting their benefits. [applause] this president says it takes shared sacrifice to get our economy moving, but i want to say it again, mr. president. our veterans have already sacrificed enough for this country. leave them alone.

[applause] you know what's especially bothersome to me is consider the waste that we know exists in government today. there was a report revealed this last week that bureaucrats in washington were spending money on $16 muffins. yeah. go figure that one. you know you want to be in the muffin business, don't you? don't tell me there's not waste to be cut and don't ask us for more of our money, mr. president. [cheers and applause] we can't afford four more years of the high unemployment, of the failed stimulus, of the record debt, of the misplaced priorities. it's time for a change. if when i say change i'm not talking about the rhetoric of change, i'm talking about the record of change. as can conservatives, we know

that values and vision matter. it's not who is the slickest candidate or the smoothest debater that we need to elect. [applause] we need to elect the candidate with the best record and the best vision for this country. the current occupy ant of the white house can sure talk a good game. but he doesn't deliver. as a matter of fact, remember president clinton? man, he could sell ice crube cubes to eskimos and the next day be against ice cubes. [laughter] the alternative is candidates who stick to principle, stand their ground because they believe in something. our shared conservative values are worth fighting for. we don't need to back down. we need to push through to that shining city on a hill. as president reagan said, we need bold colors, not pale

pastels. [applause] as governor, i have led baseded on a few guiding presents. number one is don't spend all the money. have some fiscal restraint. keep your taxes low. a regulatory climate that is fair and predictable and reform the legal system to create jobs. [cheers and applause] we passed medical reform that attracted 20,000 new doctors to texas and i might add a loser pay law to level the legal playingfield. [applause] i've cut taxes that equal better than $14 billion worth of tax relief since goinging governor. and one of the ways that i will

revive the economy of this country when i'm president is by scraping that thing called obamacare. see, the model for socialized medicine has already been tried and it failed. not just in western europe, but in massachusetts. and i'm not alone in that thought. mr. romney's talked economic -- top economic advisor published a study last year that thank said that the massachusetts plan, quote, was the main components are the same as obamacare. in fact, he said, what's happening in massachusetts gives us a window into this country's future. last week we got that glimpse of america's future under obamacare.

coorling to a -- according to at that study by the beacon hill institute, governor romney's misguided health care mandate, it slowed income growth and cost massachusetts 18,000 jobs. if romneycare costs massachusetts 18,000 jobs, just think what it will do to the rest of this country if it were obamacare as applied to this country. romneycare drove up private insurance costs by $4.3 billion in massachusetts. it cost taxpayers in florida and across this nation another $4 billion in medicaid and medicare costs. obamacare is expected to cost $27 billion more in my state over the next decade. government mandated, government-run health care

costs too much. it kills too many jobs. it gets in between you and your doctor, whether it's passed in massachusetts or washington, d.c. and as president i will oppose any big government health care plan that costs jobs and raises the tab on taxpayers. [applause] as your president i want to make washington, d.c., as inconsequentialal in your life as i can make it. we have tried, we have tried 2 1/2 years of government trying to stimulate the economy. it's time to let the private sector grow the economy. we need a flatter, broader, fairer federal tax code. we need to restore investor confidence by eliminating federal regulations from those activist agencies like the ian:. -- like the e.p.a. we need to cut the spending,

reduce the debt, so that our children inherit a country as promising as the one that our parents gave us. you see, i grew up, as al shared with you, in a small farmer community west of fort wort, texas. -- fort worth, texas. we didn't spend a lot of time looking around for government to help us out. if a neighbor was sick, we all pitched in together to gather their crops or manage their livestock. in my case we didn't even have indoor plumbing until i was 5 years old. the son of tenant farmers, i promise you one thing, i wasn't born with four aces in my hand. like i a lot of you, i viewed the pathway to success as the

product of hard work and we continue to reject the idea that washington is our caretaker. the nanny state was not needed for our forefathers who carved out of this winderness this greatest nation that the -- wilderness this greatest nation that our world has ever known, the nanny state didn't groom our gratest jean ration who freed millions of people from oppress in world war ii, the glan state didn't inspire innovation and technology, the innovation of wealth or the entrepreneurial spirit in this country. if we want to get america working again, we need washington to get out of the way. [cheers and applause] with your help and people like you all across this great country, that is exactly what we will do. we will get america working again and take this country back to the great values and the principles that have made america wonderful. god bless you. thank you all for coming out to

be with us today. [cheers and applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> all right, my fellow

americans. here we are. great to be with you. well, it's my pleasure to introduce to you our next guest , our former republican two-term governor of new mexico, i like that second term, means that folks thought highly of you the first time around. and he's committed to lowering taxes, winning the war on drug abuse, protecting civil rights and revitalizing our economy. a little bit about his track record, for those of you who may not be familiar with it. he was known for his commonsense business approach to governor. he eliminated new mexico's budget deficit, cut the rate of growth in state government in half, privatized state prisons, left office with a billion-dollar surplus. more importantly he reduced over 1,000 state employees with no firings. during his term as governor he experienced 14 tax reductions in eight years. the longest period without a tax crines in the state's history. ladies and gentlemen, help me give a warm welcome to one of

our gladiators for this job, governor gary johnson. ♪ i won't back down ♪ >> thank you. so, i'm going to take advantage of this and kind of treat this as a job interview. i am running for president of the united states. i'd like to get the republican nomination to do that. so i want to let you know that i think i'm unique in the field in that i'm the entrepreneur. iverb been an entrepreneur my entire life. i started working construction jobs when i was 17 because they were the highest paid. i've paid for everything that i've had since i've been 17. but anyway, i started a one-man handy man business in earthquake -- albuquerque in 1974 and in 19 4 had 1,000

employees. i was the largest construction employer in the state of new mexico. [applause] i sold that business in 1999, no one lost their job and go figure they're doing better than ever. imse also an athlete. i think you want an athlete in this job. i think you want somebody who sets goals and has the determination and the will power to go out and make things happen. i climbed and summitted mount everest in 2003 and i want to tell you -- [applause] i want to tell you that i did that having broken my leg a couple of months before i left for in a pal. i had a full fracture of the tibia and as is life, things go wrong. and you can take what goes

wrong and you can quit, or you can take what goes wrong and just expect that that's going to happen and move forward and that's what i did and i was fortunate enough to stand on top of the planet. i have run for two political offices in my life. governor of new mexico and re-election as governor of new mexico. i promised to bring a commonsense business approach to state government and i would like to think i delivered on that in spades. i vetoed 750 bills while i was governor of new mexico. [cheers and applause] putting that into perspective, that was more vetoes than the other 49 governors in the country combined. it really made a difference. i'm promising as president of the united states to submit a balanced budget to congress in the year 2013.

[applause] i am promising to veto legislation where expenses exceed revenue. i'm going to argue to you that if i'm elected president of the united states promising to do those two things, that even if congress overrides that budget, that will become closer to being balanced than if you're going to elect a president that's promising to do that over a 15 or 20-year period because that's the only proven -- prudent thing to do, it's not going to happen, that's going to be business as usual. [applause] i'm also advocating throwing out the entire federal tax system. [cheers and applause] and replacing it with the fair tax which is a consumption tax -- [cheers and applause] which will absolutely set the stage for tens of millions of

jobs to be created in this country because it replaces, it does away with all federal tax. income tax, the department -- the internal revenue service, corporate tax, business tax. it is, as the name implies, it's fair. you make more money, you'll pay more fair tax, nobody will avoid paying fair tax. it will promote savings. look, no corporate income tax, why as the business person would you start up, grow a business, nurture a business anywhere in the world other than the united states given that as a business environment? come on. release the private sector to do just that. and that includes balancing the federal budget. that means reducing federal expenditures by 43%. i'm going to submit that balanced budget. that means medicaid and

medicare. medicaid and medicare. i reformed medicaid in the state of new mexico. we had a better health care network, we saved a whole bunch of money. if the federal government would have block granted the state of new mexico a fixed amount of money, 43% less than what we were currently spending, done away with all the strings and the mandates, ike would have overseen the delivering of health care to the poor in new mexico. i believe the same would hold true for medicare. give this back to the states, 50 laboratories of innovation, 50 laboratories of best practice, that's exactly what would happen. and that's what we need to see happen. washington topdown has us in the state that we're in right now which i believe will be a monetary collapse unless we fix this.

social security, it's not cutting social security. social security is a problem that is small relative to medicare. but we fix social security simply by making it a system that takes in more money than what it pays out and without raising taxes here's how we do that, we raise the eligibility age, we have a means testing and a means testing can entail very simply if you paid in x amount to social security, then you're only going to get x amount back if you have a certain level of income. seems fair to me. that we change the escalator built into social security from the wage index to the inflation rate. that we have an option to self-direct social security funds. this is the way that we fix social security. [applause] defense. the question here is, can we

provide this country with a strong national defense and cut military spending by 43%? yes, we can. and the operative word here is defense as opposed to offense as opposed to nation building which is what we continue to do. i was opposed to iraq from the get-go, i thought there was not a military threat from iraq. i thought we had the surveillance capability to monitor that. if they were to have rolled out any weapons of mass destruction. i thought we could have gone in and dealt with that. i thought if we went into iraq we would find ourselves in a civil war to which there would be no end. afghanistan, i thought -- i think this is a great example of what we should be using our military for. we were attacked, we attacked back and after having been in afghanistan for six months we wiped out al qaeda. that was 10 years ago.

we're building roads, schools, bridges, highways and hospitals in iraq and afghanistan and other countries in the world and don't we have those same needs here in this country? [applause] reducing military spending by 43% depends on strong military allies. we have to share this responsibility with our allies. we're a strong ally of israel, we will remain a strong military ally with israel. i have been to israel, i've talked to netanyahu. they don't want foreign aid, they just want our support which will always be there and deliver that support. our european allies, so much has been made of these infrastructure projects, transportation infrastructure projects in europe. health care in europe, we've

picked up the tab, they haven't had to. this needs to be shared worldwide and we need to have a vigilance against the war on terror, on terrorism, and we will have that vigilance. we can have a strong military defense and we can cut the military budget. this, the military budget, the biggest threat to our national security is the fact that we continue to spend more money than what we take in. when it comes to this country and the solutions, i'm a free market guy. i am not a tariff guy. i think there's a magic to free markets. so when it comes to education when it comes to free market -- >> we love you. >> we do, we do. when it comes to health care, when it comes to energy, free

market solutions when it comes to these categories, i would have never established the department of homeland security . i would not have done it. i think it's very duplicative. i would have never established t.s.a. i would have left that to the airlines and i dare say today that airline security would be as safe and less intrusive. right now i am the most googled name on the planet because last night i came up with a witty sentence on doing poop -- on dog poop. [applause] i was really grateful to be onstage last night, to be able to talk about what does need to take place in this country. i appreciate that opportunity. i appreciate that opportunity right now, to be in front of

you, telling you what it is we need to do in this country. we need to balance the federal budget now. i'm promising to do that. i am proud promising to veto where expenses exceed revenue. i am promising to do that. i am promising to advocate on behalf of a fair tax, throw out the entire federal tax system, replace it with the fair tax, reboot the american economy to real growth, to real opportunity moving forward in this country. thank you very much. [cheers and applause]

>> ok, here we are again. i think i'm going to put my book in the right order. well, ladies and gentlemen, it's my really distinct pleasure to introduce to you someone who got elected in 1991 to congress, at the time he got elected i thought he was like 15 years old when i saw him. and of course reminded because he reminded me he to be 25. he still has those youthful good looks. he went in 1995 to be one of the youngest senators we've had and served there from 1995 to 2007. from 2001 to 2007 he happened to have had the republican senate conference and was a third highest ranking republican at his young age in the senate. and well deserving of the honor. the only thing i got to tell

you is he got an undergraduate degree from penn state and we -- you know, we floridians feel about penn state and football. it's a great school anyway. he went to -- got an m.b.a. from the university of pittsburgh. he's a very bright, talented and committed three legs of a stool ranking conservative and join me welcoming great former senator, rick santorum. [applause] >> thank you, thank you, thank you very much. i appreciate the introduction, even though the jab at penn state was not appreciated. particularly since the university of florida kicked our rears in the bowl game this year. [applause] my brother a university of

florida grad so it's been a tough year. tough year living with him. thanks so much for giving me the opportunity to be here. it was a great night last night and today. we got a chance to see some real differences between the candidates and, you know, folks were saying, well, we shouldn't have these disputes on the debates. i disagree. i disagree. these debates are about trying to find out who has the medal to be able to go up against the barack obama and national media machine that is going to take them apart piece by piece and be able to stand up, fight back and deliver the principles that our conservative parties believe in. that's what this race is about. it's finding that right person. who can stand up and when times are tough and when the heat is on, deliver. ladies and gentlemen, the reason i'm running for president is because i think i've been that candidate over the course of my career, who has stood up, taken the heat in a tough state, and been able to

win elections. when i'm first elected in 1990, i ran in a 60% democratic district against a 14-year democratic incumbent, was given absolutely no chance to win the race. in fact, the head of the congressional committee wouldn't even meet with me because he said there was no -- i had no point in meeting me because i had no chance in winning. i sort of felt that way a few months ago when i was in this race. but i believed that someone had to go out and fight for the principles that made this country the greatest country in the history of the world. [applause] so i went out undeterred, karen and i, my wife and i had just got married, we went out and knocked on 20,000 doors and we had some debates. in those debates, let's just say the local press reporter, the pittsburgh press, which no longer exists, the reporter said, you picked him up, threw

him down, stomped all over him, spit on him for good measure and in two weeks' time we went from single digit recognition to winning that race because i was able to stand up and articulate the vision, the conservative vision for this country and mobilize people to go out and win an election. in a 60% democratic district in a bad election year, 1990. and then i went down to washington, d.c., and did something that those of you who have not followed my career, you got to remember, i haven't just stood up and fought for conservative principles, i stood up and fought against corruption, i stood up and fought against the politics of washington, d.c., and i won. i worked with john boehner and a group called the gang of seven and we found corruption with members of congress actually having interest-free loans at the house bank and it had been going on for decades. had been reported for decades. no one decided they wanted to do anything. i did.

with john boehner we went up there and exposed it. and members of our own party were threatening me. both parties were coming after, you can't do this, you're going to ruin our political careers. know what we did? -- know what? we did. [applause] and republicans lost seats, democrats lost seats and i -- we went after the chairman of the ways and means committee, the most powerful man in the congress at the time, a guy by the name of done, and he went to -- dan, and he went to jail because we stood up and fought for the right principles. fight something great, winning is better. right? i fight and i win and i got re-elected. how did i get re-elected? they took my district, we lost two seat, probably to florida.

in the 1992 redistricting. hope you enjoyed them. one of them was mine. and they put me in with a 24-year democratic incumbent, gave me no chance to win, 72% democratic district, 2/3 of it was brand new district to me. election day came around, george bush was running for re-election in 1992, got 29% in my district, i got 61% and was re-elected by the largest margin anyone in that area had ever seen. [cheers and applause] why? because i stood up for what i believed in and i worked hard to make sure that the people that i represented i was accountable to. i ran dish then ran for the united states senate and while i was running i did something, i was on the ways and means committee and i drafted a bill called welfare reform. and it became part of the contract with america and i ran for the united states senate against an incumbent who was -- whose campaign was managed. you want to talk about going up

against the best the democrats had to offer? i did it in a state with registered democrats and republicans who hadn't voted for a president since 1988 and i took him on the issue of what was the issue? hillarycare. the man who i ran against was the author in the senate of hillarycare. you want someone who has run a national-type election on the issue of health care in a swing state that we need to win the presidency against the best the democrats have to aumbings you're looking at a guy who did it and did it in style and we won. [cheers and applause] and i didn't go to washington, d.c., and become someone who just thought, well, i better play it safe to get re-elected. i took the lead on welfare reform, ended a federal entitlement, something that we're going to have to do a little bit in this next -- in this -- after this election. i did it, we need to do it again with food stamps, we need to do it with housing programs, education programs, medicaid, all of those things.

i did it. i fought the fight and we were able to go out to the american public, bill clinton vetoed that bill twice but why did he eventually sign it? not because he wanted to, but because i was on the floor battling ted kennedy and daniel patrick moin hand and talking to the american public and the public got behind us for the vision that we laid out and he was forced to sign it. i win election victories and i win victories on the floor of the senate because i'm able to go to the american public and get them behind us. the beauty of reagan was not his great policies, it was his great ability to get those policies -- the american people behind those policies and get them passed and that's what we need in a leader in this country and that's what i delivered, not just for welfare reform but also moral cultural issues. there's nobody on this race who has a record of standing up for life like i did. the partial birth abortion ban act, i did. [cheers and applause]

and for six long years we fought and we fought and clinton would veto our bill, and you know what? we kept coming back. even after the supreme court struck it down. and this is another important difference between me and everybody else in this race. i don't take the idea that the supreme court or the courts are somehow a superior branch of the government. they are not. [cheers and applause] and i'm the only one in this race that actually has done something to show that i won't just answer the question, what are you going to do about judges? well, i'll support, you know, judges like scalia and thomas and alito. yeah, i'll do that. that's not enough, folks, because the next president who is a democrat is going to put folks like ginsburg and briar back on the bench. no, we have to break the mold here and i did. they struck down the partial birth abortion bill and you know what i said when george bush got into option think? went over to charles kennedy, the two of us were able to work together. we drafted a bill that said the

supreme court, you're wrong. you're wrong. it is constitutional what we passed. and we wrote a bill with the first two sections, almost a legal brief, telling the supreme court why they were wrong and saying, we have as much say as to what is constitutional in this country as you do and we're going to stand up for the constitution interpreted the right way. [cheers and applause] and we won. the supreme court flipped their decision and said it was constitutional. ladies and gentlemen, there's a lot of people up there who said they're going to check the boxes and they pledged to do this and this and this. but there's somebody in this race who hasn't just taken a pledge, he's taken the bullets for the conservative cause. i fought on moral cultural issues, i fought on national security issues, we had this debate last night and we're seeing it with more and more republicans getting quees area

and queesier about america's role in the world. ladies and gentlemen, if we are not the preeminent power in this world and we are not setting the agenda, if we're not the strong horse in the world, someone else will be. it is not sufficient, it is not sufficient to say we'll just erect walls and i'm for a border fence, unlike some in this race, it's not sufficient to say we'll just erect walls and withdraw and everyone will leave us alone. when have we ever seen that be the case? ladies and gentlemen, there are people out there who hate us not because what have we do, they hate us because of who we are. they hate us because we stand for things that they find an thetcal to their moral point of view. and it's not just the radical islamists, you know here in florida it's the socialists in central and south america, it's eming in southtswho are teami

america. it is because they want us off the beat because they want to dominate the world. they want to spread their venom around the world. if we do not have a reaganesque policy, we will be the generation that not only loss this country because of our debt, because of our freedom being taken away by the government, but we will allow the world to sink into since it despair. spto that is air charge, to stand strong for the principles that made america the greatest country in the history of the world and spread this constructive role. we have something to be proud of, not apologize for.

this is the most important election in your lifetime, and i do not care how old you are. this election is about whether america in its very essence will continue, whether it will be free and safe and prosperous. if "obamacare" is implemented with the re-election of barack obama, we will lose the freedoms our founders fought for and die for. that is why it is incumbent upon each and everyone of you in florida to get involved and to back a candidate who has proven

they will stand tall and be offset and stand for what not they just believe in, but has the track record of showing they can do it and will to live in spite of all the odds, in spite of all the buffets that will come against them. i have done it. no one else on the panel last night has done what i have done, and can win a state. no one else has won a swing state. no one else has defeated a democratic candidate up on that panel. i did not change the policy when i decided to run for president. i did not change my party. i stood for what i believed in. i stood for the conservative cause. if you stand for me, we will have the next president of the united states. thank you.

>> nothing like little action. there is a doctor in the house. that doctor who delivered 4000 babies -- that is a lot of babies to bring into this world. as he and his wife have five

children, they have 18 grandchildren, graduated from duke university school of medicine, the same school as all of our kids, so that is a good way to identify with a great national leader. and the great thing about congressman paul is he has been delivering this message for a long time, and frankly there is a lot of folks in washington who are not listening, but they are listening now. i remember congressman paul's said when so many in washington establishment would not pay attention to. i have always had a warm spot for a man who stands up for what he believes in and fights for what he believes in, and this man has never stopped fighting,

and they are beliefs that more and more americans cherish today. give a warm welcome to congressman ron paul. >> thank you very much. the is great to be here. a lot of enthusiasm. but we have a lot of major problems in this country, but there is a revolution going on in this country today. there is a very healthy revolution that has been going on for the last four or five years, and it has then designed to deal with problems we have because we have drifted far too away from our constitution, our individual liberties, and sensible foreign policy, and the people are not only tired of it, they are sick of paying for it because we're out of money

and we have to do something about it. i see the crisis we are in as an attack on liberty. personal liberty sells a lot of problems. the founders understood this. they detested the king. they knew and understood exactly what the agreement. that meant that people had a right to their life, they have a right to their liberty, and it did not come from the government, taking from our creator, and they also believe you have the right to key the fruits of their labor. they did not give us an income tax, that is the reason we got the precise reason we got the income tax later on. the 20th century was not kind to us and our financial system

ration, our debt, our foreign policy. 1913 was a bad year. it was 1913 we got the income tax which was encouraging spending, but we also got another pirro that became very detrimental and some day we are going to get rid of it, and that is the federal reserve system of 1913. the reason the federal reserve is so important and one of the reasons i got involved in politics, in 1971, we severed all the kids of our money to gold, which meant the founders ideas were ejected. the founders understood something about the runaway inflation of the continental,, so they put in the constitution. you cannot use anything as -- at gold and silver as legal tender. when they ripped the first coinage act, anybody who

counterfeited would get the death penalty. there is a lot of counterfeit thing going around. the one thing is we have a terrible situation. if you believe that the old silver coins and gold coins and the constitution is right and you use that money, you could be arrested. your money could be confiscated and they could say you are a terrorist and that you are counterfeiting. what do we do with the real counterfeiters? we leave them alone. why is that important? if you're against big government have to understand monetary issues. there is a group up in washington that loves to spend and less money on the tourism, that we have to be in every country in the war. we are now in 135 countries. we have 900 bases overseas, and

it is not defending our country. we have less security. we need to bring a bunch of those troops home. we also spend for the entitlement system. the entitlement system is based on the system that rejects the system of rights. you have a right to eat what you are in, but the entitlement system says he did not have a right to keep what you are. to people who want something from you, they can send a government agent who can steal it. we have had quite a few generations to believe in this, and when their goods and services are not forthcoming, they are going to be upset. the reason the entitlement system is dangerous is it is sold out on the idea we are on to help the poor. sure, help the poor. if you look carefully it helps the rich. that is what the entitlement

system does. the best example of this was the housing bobble, which went on for -- bubble, which went on for a number of years. people bought houses and the prices of the house went up. they borrowed more money against their houses. the bubble burst and it collapsed. both political leaders of both parties said we have to bail them out. or we will have a depression did the tree is if they had not bail them out, wall street would have had a depression. we bailed out the people who made a lot of money. they were in finance, building, mortgage businesses. they were in the derivatives business.

they dumped it all on you, so they bail out the people who ripped us off and dumped those securities on us. the federal reserve now, with money they created, they hold $1 trillion of derivatives and worthless assets. that is why your money value goes down. that is why your prices go up. that is why education costs so much. the whole concept of money coming to the rescue of the rich and dumping on the poor. how often do we as libertarian'' get blamed and say, you mean you do not want the government to take care of everybody? you heartless people. the true compassion comes from liberty. free market, sound money -- is the answer to our economic

woes. it will not create perfect economic equality, and that is what socialists want. they are good at achieving it at a very low level, and people are equally poor. that is not what we want. what we want this opportunity for people to work and keep what they aren't. they need that government to be involved, but it should not be the regulator, they should not be the fixer of the interest rates. they should not be bailing out the rich. in a free market, there are strict regulations. property rights. you cannot take another person's housparty. if you mess up, what should happen? you should go bankrupt. the other people should not bail you out.

if you do well, you have the right to keep what you are not. -- you earn. the other area we have suffered in last decades has been a loss of personal liberty. there had been a lot of different things happened, but symbolic abuse is the abuse we've been conditioned to put up with at our airports. also if has led to other silly things. the government believes they have to tell you everything you have to do with a personal life and your economic life. there will not be too many in here who care personally about this, but it is symbolic. in this day and age, our government has decided there are not you are allowed to drink raw milk.

that is going too far. the solution to many of these problems can be found in the understanding of personal the verdict. it is the issue that the founders delivered to us and we have unfortunately rejected it. we have embarked on deficit financing, policing the world, running everybody's personal life, and we have an economic crisis because we spend money we do not have. we have to think of freedom has been one issue -- the personal is exactly the same as york's economic -- exactly the same as your economic liberty. this is what we were given, and unfortunately we have been so careless and we have allowed this to slip away. it is true, this is a generation

that has to make a decision, and there is a lot of young people that are excited about looking into this in detail, endorsing the idea that the federal reserve system is a fraud, we do not meet income taxes, we should allow young people to opt out of social security. therefore, there is every reason to be optimistic about what is happening if we follow through. the revolution, a non-violent revolution, but if we do not achieve what we want to achieve in bringing us back to this understanding of liberty, i believed it could lead to some violence in this country which is stirring up already in this world. we have to change the attitude. it is not like i have to invent it or you have to invent it because it is what was given to us by our creator, but it was also delivered us with the best package ever, the freest, the

most prosperous country, and what do you have now? an attack on civil birdies, -- civil liberties. thank you very much. >> ok, the gentleman i am about to introduce we know right off the bat there are two great things about him. he is a man of faith and a man of courage. a man who was diagnosed a few

years ago with stage four cancer, and for a family, including ours where that hits close to home, imagine having a low chance of survival, and believing in the lord and your chances, and here is he with us today. an amazing story of courage. when i talk about discipline, imagine this -- leading a company with 400 burger kings and then after that, beating got odfather's pizza. i would be 250 lbs. if i were standing up here today. what an example of discipline. he came up by his bootstraps, worked his way up the ladder, and become one of the most

successful businessmen in america, and he is here to share that dream and experience and why he is the right guy to lead the country. one of the great things about him is he is catching on. i cannot believe the number of times i get around and people come to me and tell me they like the pizza guy. i get that time again. he is building up a significant network of supporters, and the second thing i love about him is 999 plan. i am not want to steal his thunder, other than we had a nice event this past wednesday, and it had steven moore as our guest of honor. he is one of the smartest guys in the business. stephen was telling us how impressed he was with herman

cain's plan, we had a discussion about his plan and why it made a lot of sense, and that is the bottom line. he makes a lot of sense. troy me in welcoming herman cain. >> thank you, thank you. thank you very much. thank you. let it be [unintelligible] that the tragedy of life does not lie in not reaching your goals. that tragedy lies in having no goals to reach for.

it is not a calamity to diet with dreams unfulfilled, but it is a calamity to have no dreams. america is a nation of dream makers and dream achievers. fathers werening dreamers. and they got it right. president reagan described that dream as a shining city on a hill, that all of the other countries looked up to. but of late, that shining city on a hill has started to slide down the hilltop, because we

have become a nation of crises, and every crisis polls as a little further down that hill, and the shining city on the hill, but the good news is when america is at its weakest, we are still the greatest country in the world, and they are still looking up to us. we do not have to remain a nation of crises. we can change it. one of the greatest things about america is its ability to change, its ability to be resilient, its ability to fix its problems, and greatest crisis is a severe crisis of leadership in washington, d.c., in the white house. our biggest crisis. if you change the leadership,

you will change the outcome. we're not going to get a different outcome until we change the leadership, and that is what you do, and that is what i do. and next to national security, the greatest challenge we have is this economy. the economy, so goes so many other solutions to other problems. a lot of people talk about china and the threat we have from china. china is doing this and china is doing that. let me tell you what the cain strategy is dealing with china on all these issues -- a and the rest of the world and we will not have to look back. outgrow them.

how do we do that? we have an economic crisis. we have an economic crisis, and a plan that the president put forth is not a fuel in the engine, which is the business sector. my plan does. i call it 999, the 999 plan. first thing we do in order to get the 999 plan going is throwing out the current tax code because it is broken. sometimes he cannot fix something, and it cannot be fixed. 999, we impose a 9% business flat tax, a 9% personal attacks , and a 9% national sales tax, and it replaces all corporate

taxes, all personal income taxes, other than the new 9%. it replaces the capital gains taxes we place, and it also replaces the estate tax and the biggest one that everybody pays is the payroll tax. it replaces that. 999 replaces all those taxes in order to make this one of the most business friendly nations in the world. and when we give businesses certainty, they will expand, they will grow, they will keep r, and jobs will come back to america. our economic challenges not only an economic imperative. it is a national security imperative. china is just sitting there

waiting for this economy go off the cliff. they are holding the majority of our debt, and if our economy collapses, that is exactly the weak point that they want us to be. but i can tell you that in a cain presidency, that is not going to happen, not on my watch, and not with the people of this country. and here is how we make that happen -- three simple things -- stay informed, stay informed. that is why you are here. that is what you get on internet, why you talk your friends and neighbors, you got to stay informed, because many of you have heard me say stupid people are running america. don't be amongst the stupid.

stay informed. secondly, stay involved. people want you to believe that what you do as part of this movement does not matter. is it does. the reason that they want to call you names or call me names -- is because they want to intimidate us into in not letting our voices be heard, and the last time i chest, according to the founding fathers, when they talk about those on alienable rights, life, liberty, and the pursuit of happiness, if you keep reading that same document, and went on to say that when any form of government becomes destructive of those ideals, it is the right of the people to alter or abolish it. we have got some altering and abolishing to do.

it is our right. it is our right. and then thirdly, state inspired. stay inspired. believe that we can take this nation back. if i did not believe we could take it back, i would not be running, because i believe that we can take this nation back. you believe that we can take this nation back. and my inspiration comes from you and a lot of other sources, but one of my biggest when i saw mys, first grandchild in 1999, the first thought was, what do i do to make this a better nation and a better world? i did not know the answer then.

i did not know that it meant running for president of the united states of america. but when you are a man of faith, you know that in life there is your plan and then there's got plan.- dog's -- god's plan. 's plan oning to god this journey. if you do what you can do and i do what i can do, i know that we can succeed at taking the shining city on the hill back to the top of the hill. that is our challenge and that is what we can do, because as president the reagan used to remind us, freedom is never more than one generation from extinction. it m